Welcome Back
Schanker and Schanker PLLC is a premier Estate Planning law firm. We offer legal services for sophisticated Estate and Gift Tax planning, Decedent Estate Administration and Probate services, Business Succession Planning, Charitable Giving, Special Needs Planning for persons with disabilities, simple Will planning, and all aspects of Elder Law planning including Medicaid planning and applications. Our website, www.schankerlawfirm.com, provides detailed information about our practice and the services we offer. It also is an excellent resource for articles of interest about Estate Planning and Estate and Gift Tax Laws. A copy of each newsletter will always be available on our website.
Estate Planning is so much more than just tax planning. There is a considerable decision-making process. Schanker and Schanker PLLC has over 40 years of experience in counseling clients for their Estate Planning needs.
As always, we encourage feedback from our readers. If there are any topics you wish for us to specifically address or elaborate on, please email us at: andrea@schankerhochberg.com
Charitable Giving
New York Law places no limitation on the amount that an individual's estate can give to charity. Charitable giving can provide valuable benefits such as deductions on estate taxes, income taxes, and capital gains. There are many efficient options for giving to charity, including a Charitable Remainder Trust, a Charitable Lead Trust, a Donor Advised Fund, and/or a Private Foundation.
With the proper tax planning strategies, charitable contributions can reduce your capital gains tax liability. The donation of highly appreciated assets allows you to deduct the fair market value of what you donate from your income taxes, and you may also minimize capital gains taxes of up to 20%. For example, if you purchased stock worth $200,000 ten years ago that is presently worth $350,000, selling it would require paying long-term capital gains tax of roughly $35,700. If you instead donate the stock to charity, zero dollars in capital gains tax is paid, and the charity receives the full market value of your contribution. This is true not only for highly appreciated stock, but also for highly appreciated bonds, real estate, artwork, antiques, and other valuable collectibles.
A charitable remainder trust is an irrevocable trust under which one or more persons receives a stated distribution each year for a fixed time period, not exceeding 20 years or for the life of those persons. At the end of the trust term, the balance in the trust must be paid to qualifying charities. A charitable remainder trust is very useful for providing income security to one or more individuals while also creating an income tax and/or estate or gift tax benefit for the donor. If you gift a highly appreciated asset to the charitable remainder trust and the trust liquidates the asset, the proceeds are added to the trust with no capital gains paid, and the donor receives a charitable income tax deduction.
A Private Foundation is a nonprofit charitable entity created, generally by a single benefactor, set up solely for charitable purposes. A private foundation relies on funding from a single individual, a family, or a corporation, which receives a tax deduction for donations. Because a private foundation is under the control of the donor, the donor determines the mission of the foundation, where funds shall be invested, who will be included on the board, and how funds shall be distributed. A private foundation can continue in perpetuity, giving it the opportunity to become a living family heirloom that can be passed down for generations to come.
A common concern most people have regarding charities is picking which ones they would like to name as beneficiaries of the Trust. It is important to note that while you are living, you can change the named charities at your discretion. If you are curious about which nonprofits align with your values, www.charitynavigator.org is a wonderful free online resource.
We invite you to contact an attorney at Schanker and Schanker, PLLC for a consultation to learn more about charitable planning and to discuss your particular goals.
Pet Trusts: Who Will Care for Your Pets Upon Death, Incapacitation, or Hospitalization?
A pet, according to New York law, is personal property, and just as you cannot name a car as a beneficiary under a will, you similarly cannot name a pet. The best protection you can provide for your beloved pet, to ensure they receive proper and suitable care, is to create a pet trust assigning a permanent pet caregiver and earmarking money for your pet.
In the event of the disability and/or death of a pet owner, a pet trust is a legally enforceable mechanism for providing care and maintenance of your pets. In creating your pet trust, it is important to nominate a willing and capable caretaker who is best suited to care for your animal companion and follow your instructions for care and maintenance. Additionally, a pet trust can appoint a monitor to watch over both the Trustee and the Caretaker to ensure compliance with the trust terms. Upon the death of your pet(s), the trust will terminate, and any additional funds left in the trust shall be designated to a beneficiary of the trust creator's choosing. Schanker and Schanker PLLC is available and ready to assist you with any questions you may have about creating a pet trust for your beloved companions and to help prepare your trust.
Why Creating a Will Should Be at the Top of Every Parent's To-Do List
As a parent, there are numerous reasons why you should prepare a Will. A Will provides legal guidance ensuring that your children receive the personal property and monetary distributions that you wish for them to have. A Will also appoints a guardian whom you trust to care for your children in the event of your own untimely passing.
In the event of your passing, the surviving spouse (who is also the biological parent) shall receive custody of your children. However, if you were your children's sole living biological parent upon your death, or if your children's surviving biological parent is incompetent or missing, the Court will appoint a guardian. The Court-appointed guardian may have very different parenting ideas and values than you do, so it is important and essential to create a Will so that you can choose the guardian of your children.
Additionally, regardless of whether there is a living spouse, without a Will a court will have to appoint an Administrator (a family member or public official) who will distribute your assets among family members in an inflexible manner fixed by law, as well as a guardian who will have to manage your minor child's share of your assets. When an individual dies in New York without a Will and is survived by a spouse and descendants, the spouse receives $50,000 and one-half of the balance of the property, and the descendants take the rest. Your spouse would likely be appointed to manage the assets, but it is not guaranteed. If any portion of the assets is needed to pay for your child's education, maintenance, or living expenses, prior court approval to use the funds is needed. The fund managing the monies earmarked for your children must be overseen by both the New York Surrogate's Court and the Court-appointed Guardian of the Property, who is also required to file annual accountings of income and expenses and be paid a reasonable fee.
Your child will have access to the entire share of their distribution when they turn 18. This type of unlimited access to any sum of money may not be something you wish for your child to have at such an early age. A Will can provide for long-term management through the creation of a Trust and set forth age-based distributions for when your children shall receive their share of your estate.
With a properly drafted Will, you will be able to provide the court with guidance on whom you desire to be the guardian of your minor children, as well as structure asset management (remember, minors are considered incompetent in the eyes of the law). Furthermore, advanced planning will ensure that your property is left to those you wish to receive it, in the proportions you choose. We welcome you to contact us to help evaluate your existing planning or to initiate the planning process at (631) 424-5400.
On the Rise: Real Estate Values and Estate Planning
The value of real estate has increased dramatically, not only for residential homes on Long Island and other suburban areas but also for vacation homes all over the country, due to the COVID-19 pandemic, and is standing strong. Consider your Estate Plan and your decisions about the allocation of assets at the time of death to various classes of beneficiaries (charities, family members, friends). In light of the drastically increased real estate values, it may be a wise time to review your Estate Planning decisions.
For example, perhaps you allocated twenty percent of your Estate to a charity, but the presumed value of your real estate at the time you made your Estate Plan was far less than it has become today — is twenty percent still what is appropriate? It is a good time to revisit your Estate Planning if you haven't done so in some time. Please contact our office to arrange for your annual review or to schedule a complimentary initial consultation.
Our main office is housed in an elegantly restored Victorian structure in the heart of Huntington Village. Here, we welcome you and your family into a relaxing, warm setting where we will work together to improve your circumstances and achieve your goals. To better serve our clients and their families, we also have convenient office locations in Midtown Manhattan and New Jersey; we also offer our services to clientele in Florida.
Extensive Services Include
- Complimentary Initial Consultations for Estate Planning, Probate, and Estate Administration matters (not for matters of Elder Law or Special Needs Planning)
- Complimentary Annual Review meetings for existing clients
- Complimentary Family meetings for existing clients
- Tax alert services for existing clients
Meet & Review
Schedule a complimentary appointment to review existing Estate Planning documents in our Long Island Office, our Manhattan Office, or our New Jersey office. Contact us at our main telephone number, (631) 424-5400.
Tax Alert — Immediate Action Required!
- As part of our continuing service to our clients, we are committed to informing you of changes in the tax laws that may have an impact on your estate plan.
- The Democrats in Congress are currently working on the final stages of a new tax act, versions of which make some significant estate and gift tax changes.
- One version proposes to roll back the $11,700,000 estate and gift tax exemption that is currently available to $6,000,000 per person. Another proposal would eliminate valuation discounts for gifts of nonbusiness assets and curtail the use of grantor trusts that are frequently utilized in estate planning.
- We do not know what the final provisions of the tax act will be. There may be some limited opportunities to plan in light of these impending changes in the tax law. Please contact us with any questions.
Andrea B. Schanker, Esq.
Andrea B. Schanker, Esq. — Partner, received her Bachelor of Arts degree in Clinical Psychology from University of Rochester in 1999 and her Juris Doctor from New York Law School in 2002. Andrea is a licensed member of the New York and New Jersey Bar Associations. She is the 2016–2017 President of the Huntington Lawyers Club, a member of the Suffolk County Bar Association, and a member of the New York State Bar Association where she is an active member within the Trusts and Estates Section and the Elder Law and Special Needs Section. Ms. Schanker is also a member of the American Bar Association.
Ms. Schanker joined Schanker and Schanker PLLC in 2004 as an Associate Attorney specializing in Estate Planning, Estate Administration, Business Succession Planning, and Elder Law. She regularly delivers Estate Planning presentations to professionals in the financial industry and their clients, and advises accountants, financial advisors, and insurance advisors in connection with her areas of expertise.
Andrea lives in Huntington with her husband, Michael Abruzzo, and their daughters, Patricia Gertrude Abruzzo and Sylvia Grace Abruzzo.
GENERAL DISCLAIMER: While we hope this newsletter provides useful information, please know that this newsletter does not predict or guarantee the outcome or result in any particular situation, and no attorney-client relationship exists or is established as a result of this newsletter or its receipt.