Trusts and Estate Planning

It is never too early for estate-planning; you own financial assets and property, you should designate a plan for them.

Everyone has an “estate” regardless of the size. The law dictates how your assets are taxed, who can reach your assets, who will inherit your wealth and a manner already decided without your involvement. Therefore, it is up to you to acknowledge that you have an estate and an estate plan, and for you to decide whether you want to change the estate plan provided to you by default by the law. You want to ensure that your wealth is protected, and when you are gone your loved ones will receive the financial assets that you’ve accumulated. Here at Katz Law Firm of Cedarhurst, our lawyer team specializes in estate planning. Our experts can provide you with the expertise you need to manage your estate and successfully plan for your future. We assist our clients with all of the following estate planning services:

  • Wealth-Transfer Planning
  • Asset Protection
  • Wills and Will Substitutes
  • Inter-Vivos Trusts (Revocable and Irrevocable)
  • Testamentary Trusts
  • Income, Gift, Estate, GST, and Capital Gains Tax Planning
  • Property Transfers (brokerage accounts, condos, coop shares and various forms of real property)
  • Business Formation and Planning (using one or more LLC, LLP, GP, S Corp, C Corp)
  • Business Succession Planning
  • Power of Attorney and Gift Riders
  • Healthcare Proxies and Living Wills
  • Burial Directives
  • Probate and Estate Administration
  • Estate Tax and Accounting Services


A wealth transfer plan is crucial to prepare your family members and loved ones for their inheritances while addressing possible disputes before they become an issue. Wealth transfer plans can help families make better decisions regarding inheritance, and they’re intended to provide transparency for you and your family’s money values and goals. A wealth transfer plan makes everything clear in regards to who receives assets, which assets they receive, and when they receive those assets. During wealth planning, you’ll be able to address questions with your family, before an estate plan is penned.

What is wealth-transfer planning?

Wealth-transfer planning is a financial planning strategy for individuals who wish to designate a beneficiary or beneficiaries, as well as how their financial assets will be transferred to those beneficiaries after the death of the wealth-transfer plan owner.

What is the process?

Wealth-transfer planning starts with your vision. We’ll work with you to determine your plan for your estate, your financial future, and the transfer of your funds to family members and beneficiaries. While planning for wealth transfer is a key goal, we’ll also spend time discussing all of the following considerations:

Your Healthcare Costs: Your current and upcoming healthcare costs should be weighed when determining your beneficiaries and the distribution of your estate. Healthcare costs can deplete your retirement savings, so they must be accounted for when determining how to transfer your estate. We’ll help you plan for your future healthcare costs, as well as your wealth distribution.

Donations: If you intend to donate any of your assets, it’s essential to determine how much of your estate is donated, and it’s important to communicate with your family to inform them of your intentions. We’ll assist you in charting out all of the philanthropic causes that you’d like to support.

Family Education: Do you have family members that you’d like to support through educational funding? You can set aside college funds for those family members. We’ll work with you to set up tax-advantaged college savings plan for family members that you’d like to help through higher education.

Your Family’s Living Expenses: Do you have any family members who rely on you for financial support? Ensure that your estate continually provides the support on which your family depends. We’ll make sure that your wealth continually aids your family.

Decision Making: It’s crucial to establish a decision-maker, should you contract Alzheimer’s or dementia. During wealth-transfer planning, we can designate a decision maker to make decisions on your behalf.

Family Wealth: As we mentioned, you’ll have to designate beneficiaries and distribution conditions for your financial assets. Distributing your wealth will likely be the most intricate portion of wealth-transfer planning. We’ll work with you to formulate a succinct plan for your finances, and we’ll collaborate with you to discuss that plan with your beneficiaries.

Why should you consider wealth-transfer planning?

Wealth-transfer planning is a good idea for anyone with a family, complex assets, or anybody weighing any or all of the aforementioned considerations. Again, one of the main goals of wealth-transfer planning is to open up communication between you and your beneficiaries. We’ll make sure that all parties involved know what to expect for the future.

Whether you are an individual or a business, protecting your assets is important. You want to protect your financial wealth against lawsuits, and dictate what happens in the event that a death or divorce takes place. A skilled lawyer can identify potential threats to your assets and help you form a plan for protection. If you have a business, there are many more threats to your assets, and you need to take care to protect your financial future.

What is asset protection?

You don’t want to lose your wealth. Asset protection is a strategy that ensures that your assets remain in your control, even when creditors threaten to collect on unprotected assets. We’ll work with you to put an asset protection plan in place in order to keep your assets secure from potential creditors.

It’s important to understand that asset protection is a preemptive measure to ensure that your assets are secure. Creditors can’t claim properly protected assets. Assets are often placed in trusts in order to protect them.

How do trusts protect my assets?

When you establish a trust, you transfer your assets into a protected entity. When a trust is properly established, these funds are no longer considered to be “your” property, and therefore, they cannot be attained by creditors who may seek to resolve debts in the future. In addition, trusts offer confidentiality where only the Trustor (person setting up the trust) and the Trustee are aware of the trust, the property within the trust and the terms of the trust. A trust may be created so that even a beneficiary of a trust will have limited access and knowledge of the trust, based on the preferences of the Trustor.

A note about asset protection:

It’s important to note that asset protection plans are put in place before creditors make a claim for your finances. A protected asset may be considered fraudulent if a creditor has already staked a claim on your assets; if you incur debt and have no intention of repaying that debt; or if you made a transfer to a protected asset with the intention of defrauding a creditor.

Why should you consider asset protection?

If you have a mixture of personal and business finances, it’s a good idea to employ asset protection to keep creditors from claiming your assets. With unprotected assets, a business creditor may claim your personal assets, as well as your business assets (and vice versa). Asset protection places certain assets out of the reach of creditors.

Inter-vivos trusts (or living trusts) are created during the lifetime of an individual and control asset distribution both during and after the trustor’s lifetime. Inter-vivos trusts are established while the trust owner is living, and they remain effective during and after his or her death. Inter-vivos trusts can be created to be revocable or irrevocable. Take note, inter-vivos trusts vary from testamentary trusts — we’ll cover testamentary trusts next.

What’s the difference between revocable and irrevocable inter-vivos trusts?

Simply put, revocable inter-vivos trusts may be modified or terminated; irrevocable inter-vivos trusts cannot be changed and they will only terminate per the terms of the trust (when the funds run out or as determined by the trust contract).

With a revocable inter-vivos trust, several terms of the trust may be adjusted. The trust owner can change beneficiaries, the assets in the trust, and how those assets are distributed. With an irrevocable inter-vivos trust, all those components remain fixed.

Why should you consider inter-vivos trusts?

Inter-vivos trusts are an excellent idea for individuals who would like to establish a trust that pays its beneficiaries during and after their lifetimes. Inter-vivos trusts help to mitigate taxation costs, and they’re ideal for those who’d like to provide financial support for beneficiaries while the trust owner is living, and beyond. Inter-vivos trusts provide some asset protection for beneficiaries of the trusts, and they may protect the trust owner from creditors.

A testamentary trust is contained in a will, and, unlike inter-vivos trusts, testamentary trusts only dictate the distribution of assets after an individual’s death. Testamentary trusts are irrevocable, since the trust owner will have passed when the trust begins to pay the beneficiary or beneficiaries.

Why should you consider testamentary trusts?

Testamentary trusts are an excellent estate planning tool to provide some asset protection and to mitigate tax costs. Like inter-vivos trusts, testamentary trusts provide some asset protection for beneficiaries of the trusts. Beneficiaries may still have some degree of control over the funds of the testamentary trust asset, yet this asset will be protected from the beneficiaries creditors.

Deciding what form of trust you should create is important, and you should seek legal counsel to make sure your assets are distributed correctly. As we’ve mentioned, trusts can be used to avoid the heavy taxation that can occur after an individual’s death on their assets. There are numerous trust types which can help to protect your assets and to mitigate taxation costs. Among them are income trusts, gift trusts, estate trusts, and generation-skipping trusts. Let’s go over a brief outline of these trust types, and capital gains tax strategies:

Income Trusts: Income trusts are set up to receive financing from your sources of income. These trusts can receive interest, royalties, dividends, rental payments, business profits, etc.

Gift Trusts: A gift made via a trust can be made in order to exceed the limits on annual gift tax exclusion. As of 2018, a gift of $15,000 dollars or less may be given without taxation. Gift trusts can be larger, and they can mitigate tax costs. In addition, you can have the trust make gifts on a certain schedule (so you do not have to remember deadlines, birthdays or special occasions). Also, the Trustee can be instructed to make gifts upon a beneficiary reaching a milestone or accomplishment (e.g., graduation or marriage), and even serve to incentivize the beneficiary to meet certain conditions or obtain certain goals in order to receive a gift or additional gifts. The options and benefits which a trust can offer in gifting are limitless, beyond the tax-driven reasons which one might not consider before speaking with a specialist in drafting trusts.

Estate Trusts: An estate trust is established to minimize the taxation of estate funds. Like other trusts, a trustee holds estate assets for beneficiaries. Beyond estate tax benefits, there may be other income tax benefits and non-tax related perks which facilitate handling the assets of the deceased, along with probate and other administrative matters which are triggered upon death.

Generation Skipping Trusts: These trusts are designed to prevent unnecessary estate taxes which are separate from regular estate taxes when one transfers assets to a beneficiary who is younger than the donor or grantor by at least one “generation.” In other words, without proper planning, one may gift or leave assets to a beneficiary which can be subject to 40% Federal gift or estate tax + 40% Federal generation-skipping transfer tax (and up to 16% state estate tax in New York)! Did you know that if some of this tax was paid for by the wrong individual, there may be a tax on the payment of that tax, for an additional 16% to 32% tax! Finally, these gifts and taxes can accrue significant interest and penalties if not paid for in a timely manner. The contrast of proper planning (saving taxes, compounding interest and asset growth) with improper or lack of planning (owing a significant amount of the gift to taxes, incurring fines and penalties, etc., can actually lead to the beneficiary owing more money than what was gift to him or her), is simply astounding! Quite often, these matters are not properly planned for and tax benefits and options are lost year by year, some of which can not be obtained as time marches on. Contact us for more information.

Capital Gains Taxes: Normally, when your assets are earning capital gains, they are accruing tax. The same is true for assets held in trust… however, with planning, the way the tax accrues, as well as who and how these taxes are paid for can be properly thought out. When assets in a trust gain value, that value may be taxed, which can be a loss for the beneficiary. Through proper planning, capital gains can be transferred or redirected to avoid, minimize or ensure this taxation is being incurred by the right person or entity with the liquidity and cash flow to afford the tax or utilize the deduction.

A lawyer can advise you on the best way to shield your assets from heavy taxation in a manner where the tax benefits are not even the primary or optimal benefits the planning can effectuate.

Katz Law Firm can help to expeditiously probate and administer estates of all sizes; we can take care of filing your estate tax returns, as well as provide additional benefits with post-mortem planning.

What is the probate process?

Probate is the court’s process of proving a will. A court must decide if a will is a true last testament before transferring assets from the deceased to the beneficiaries. In addition, probate is intended to settle the debts of the deceased. Probate lawyers settle any challenges that may arise during the probate process.

FindLaw notes additional reasons why a probate lawyer may be necessary:

“A probate attorney may be responsible for performing any of the following tasks when advising an executor:

  • Collecting and managing life insurance proceeds;
  • Getting the decedent’s property appraised;
  • Finding and securing all of the decedent’s assets;
  • Advising on how to pay the decedent’s bills and settle debts;
  • Preparing/filing documents as required by probate court;
  • Managing the estate’s checkbook; and
  • Determining whether any estate taxes are owed.”

In short, a probate attorney strives to make the probate process easier for all parties involved, and they’ll work with your best interests in mind.

Take note, if you’re curious about avoiding the probate process in regards to your current estate, we can formulate an estate plan that forgoes the probate process.

We can establish power of attorney and statutory gift rider roles with customized modifications to meet your personalized needs.

What is a power of attorney?

Individuals rely on a power of attorney to make decisions on their behalf. Powers of attorney can make financial decisions, settle claims, purchase life insurance, operate your business, make gifts, employ people, manage a property, and claim debts — depending on the designated type of power of attorney established. A power of attorney can refer to a general power of attorney, a healthcare power of attorney, a special power of attorney, or a durable power of attorney. Speak with a lawyer to determine the proper power of attorney status for your particular scenario.

What is a statutory gift rider?

Without a statutory gift rider, an agent with power of attorney can only make gifts up to $500 in total per year! Also, a statutory gift rider provides much more financial control, as well as flexibility for the agent to make gifts. When utilized properly, one may modify the gift rider so that it has the benefits of providing statutory protection, as well as the benefits contracts offer, namely, customizing and designing the terms and provisions to accomplish one’s personal or unique objectives in a specific manner one desires. For example, we have designed and modified the statutory gift rider to assist in Medicaid planning, asset protection, multi-generational wealth transfers; enabling the agents with the authority and guidance they need to accomplish what the circumstances call for. Unfortunately, all too often, the power of attorney and statutory gift rider are executed without utilizing the POWER and opportunities they offer.

We can assist in establishing a healthcare proxy, creating a living will, HIPAA authorization, burial directives and other planning relating to one’s health.

What is a healthcare proxy?

Medicare Interactive defines the role of a healthcare proxy well: “A healthcare proxy (also known as a durable power of attorney for healthcare, medical power of attorney or appointment of a healthcare agent) is a document that lets you appoint another person (a proxy or agent) to express your wishes and make healthcare decisions for you if you can not speak for yourself.”

What is a living will?

A living will includes advance directives for an individual (such as a “don’t resuscitate” directive), which are written while an individual can make conscious, precautionary decisions about their future healthcare. In general, the main difference between the two types of forms is that a living will dictates specifically what actions should or should not be taken; a healthcare proxy gives the appointed agent discretion to decide based upon the circumstances and therefore is more flexible and adaptive to a given situation.

Katz Law Firm would love to partner with you to create an estate plan that protects your assets, and we’ll work with you to adequately plan for the future. Many people put off estate planning until it is too late, and their assets do not make it to their intended recipients intact. It is never too early to start estate planning, so call us today to get started.