5 Thing You Should Know About Asset Protection Trusts

1. Inventory everything. Make a complete list of your assets and debts. It's a good idea to do this on a regular basis (say, every six months or so). Remember to think broadly. For example, do you own a vacation home or have retirement assets? Do you hold stock in another company? These can have lots of value and may wind up being taken away in litigation.

2. Research exemptions and protective entities.A few of your assets may be exempt from creditor actions because of federal or state laws. These typically include your personal residence, your pension or retirement fund, and your life insurance policy. As for all other assets, consider setting up so-called protective entities, such as domestic trusts and offshore trusts. "You can layer the protection by using multiple entities. You can go even further and equity-strip the assets. This means taking loans against the assets or refinancing them. This makes the asset less attractive to creditors," says Presser.

3. Avoid personal guarantees. A personal guarantee is when you pledge to be personally responsible for a debt. The result is that you essentially lose the protection of your company's corporation status. True, a bank will likely require a personal guarantee (this is the case of loans guaranteed by the Small Business Administration). If so, try to minimize the impact. One approach is to put a time limit on it (say, for one year) or to specify a particular asset as collateral. Some suppliers will try to get a personal guarantee. Don't do it. Find another supplier.

4. Be wary of the contracts you sign. While your company's corporate structure may provide some protection, it may not be enough if there's a tort action or claim for fraud. In such cases, you may have personal liability. This is why it's important to provide liability protection in your contracts. This includes capping damages and even disallowing certain types of damages. Also, make sure you sign contracts on behalf of your company—not in your name, to avoid the chance the contract could later be considered a personal guarantee.

5. Buy insurance. While asset protection can be extremely helpful in avoiding personal liability, a creditor may still be determined to go after your assets. That's why it is important to have insurance protection. Liability insurance covers damages for personal injuries and property damages that other people cause (such as your employees). Property insurance covers your company's assets. You may even consider an umbrella policy to cover exposure that goes beyond property insurance. As should be no surprise, carriers try to avoid paying claims. To get the best coverage, it's a good idea to have an attorney look at the policy.

Which leads me to repeat: For any kind of asset protection, it's smart to get the advice of a qualified attorney or tax expert. You'll likely be dealing with complicated questions.

And the costs? Putting together a basic asset protection plan generally ranges from $2,000 to $10,000, at least for small businesses with revenues below $1 million and an owner with a net worth of less than $500,000. And the earlier you start, the better. The costs will be much lower, and the overall protection should be greater.

As you know, running a business is quite risky regardless of the economic environment. Even top companies fail. Spend the time now to look at your potential liability exposures and see how asset protection will help lower your risks. Source: www.BusinessWeek.com

New! Funny Legal Blog!

Be sure to read our #Funny #New #Blog "Law And Humor" filled with entertainment from the legal world! http://lawandhumorny.blogspot.com/ 

Choose the Right Lawyer for Special Needs Planning

As many consumers have found, the search for professionals knowledgeable in the area of special-needs estate planning, and the protection of assets and benefits, can be very frustrating. Although many estate planning lawyers will assure clients of their ability to perform this specialized work, parents should be extraordinarily cautious in deciding which lawyer to retain.

There are a relatively small number of lawyers who have come to the law through the human services professions, equipped with the practical knowledge necessary to evaluate clients and their disabilities. Parents should seek financial planners who are familiar with the expenses of raising a special-needs child.

Most important, special-needs trusts should not be boilerplate documents. Every individual with special needs is unique. The document should show understanding of the person's situation and capabilities.

Parents and beneficiaries can also use special-needs trusts to support advocacy and charitable organizations through charitable remainders, which can be incorporated into the trust. In this way, parents can not only insure the livelihood of their own children, but also guarantee the security of those with disabilities for years to come. Source: NYTimes.com

Call The Law Offices of Inna Fershteyn & Associates Today!

Client Questions

Call The Law Offices of Inna Fershteyn & Associates Today!

(718)333-2394

1517 Voorhies Ave. Brooklyn, NY 11235

Visit the Law Offices of Inna Fershteyn & Associates

-94% of All lawsuits in the world originate in the United States.
-You can be sued as a Business Owner, or simply because you cannot afford to pay your medical bills.
-Attorney Inna Fershteyn specializes in Estate Planning, Asset Protection, and Medicaid Planning.
-Her Mission is to safegaurd your assets from all potential creditors.
-Visit the Law Office of Inna Fershteyn & Associates and find out how you can protect yourself, your business, and the future or your children.

Citywide G&T: 5,450 qualify, 300 get offers

Summary of the total G&T offers for 2011-2013.From the New York City Department of Education

There were thousands of disappointed families when the city finally mailed offers to elementary Gifted and Talented programs on Friday. This year a record number of children - close to 5,500 -- qualified for the five more selective citywide programs, yet only about 300 offers were made, according to the Department of Education. That means there were slots in citywide schools available for only about five percent of eligible students.

Overall, the chances of snagging a seat in either a district or citywide G&T program were slim, especially in districts where there were high numbers of eligible students. Only 68.5 percent of eligible kindergartners got an offer. Since all G&T programs begin in kindergarten, the odds of getting a seat decrease each succeeding year. For 1st grade, 51 percent of applicants received an offer; in 2nd grade, 34 percent got an offer and in 3rd grade, only 29 percent. In total, just 54 percent of applicants in those grades were offered a seat, a significant decrease from the 72 percent offered a seat in 2012. After 3rd grade, placement in G&T programs is based on standardized state test scores.

Parents must accept their offers and register by June 28 (two days after the last day of school) or forfeit their seat.

This year's admissions process was fraught with delays after it was twice discovered that errors had been made by the testing company Pearson in calculating scores on the assessments, one of which wasnew this year. The offer letters were further delayed when parents filed a lawsuit seeking to have the scores invalidated due to Pearson errors and what they charged was an unfair advantage to siblings of current students. Siblings are given priority in admissions over higher-scoring non-siblings. A Supreme Court judge on cleared the way for the offer letters to be mailed after June 7.

The districts with the highest number of eligible kindergartners were Manhattan's districts 2 and 3. Only 45 percent of District 3's 411 applicants got an offer. Just over half of the eligible applicants in District 2 -- 54 percent -- got offers. There were 459 offers out of 842 applicants in that district.

As in previous years, four districts did not have enough qualifying students to offer a program for incoming kindergartners. Offers were made to 10 or fewer students in District 7 in the South Bronx, District 12 in the central Bronx, District 16 in Bedford Stuyvesant and District 23 in East New York. Those students are eligible to attend programs in other districts. 

To qualify for a district gifted program, students must score at the 90th percentile on the assessment. This year the city did not guarantee a place for all those who scored high enough to enroll because, it said, not enough parents enrolled in the past.

 "We have found that in past years, many families opted not to take their offer, since it may not have been close enough to home for families with young children," the DOE said in a statement.  "Last year, only 58.5% of families accepted. As such, eliminating the guaranteed offer, which many families likely would not have accepted, contributed to the lower percentage of students receiving an offer this year." 

This year, the DOE added additional G&T kindergarten and 1st grade classrooms, according to its spokesperson. In Manhattan there will be new programs at PS 15 on the Lower East Side and PS 111 in District 2 on the West Side which will offer both kindergarten and 1st grade G&T classes next fall.

In Brooklyn, PS 93 in Bedford Stuyvesant (District 13) will open both kindergarten and 1st grade G&T classes. PS 316 in Prospect Heights (District 17) and PS 149 in East New York (District 19) will offer kindergarten G&T. PS 164 in Borough Park (District 20) will open both kindergarten and 1st grade classes.

Queens will get two new programs: PS 68 in Ridgewood (District 24) will have new kindergarten and 1st grade G&T as will PS 121 in South Ozone Park (District 28). PS 188 in Bayside (District 26) will take in two kindergarten classes instead of one for the fall. PS 214 in College Point (District 25) will get a new program for 1st-graders.

On Staten Island, PS 60 will add a kindergarten G&T and PS 53 will add a program for both kindergarten and 1st grade.

Students scoring in the 97th percentile and above are eligible for a citywide slot but in reality, all slots are taken up by siblings of current students or those who score in the 99th percentile at the five schools. Parent groups have been lobbying for an increase in citywide programs, but the only change proposed this year was for STEM, the Queens citywide program now housed at PS 85, to become a K-8 school in 2014.

Students who moved to New York City after the deadline to sign up for 2013 testing may sign up now and be tested the week of July 8. See the DOE's website for more information. No word on how many seats might be still available for those students!

Testimonial for The Law Office of Inna Fershteyn and Associates

www.BrooklynTrustAndWill.com

(718)333-2394

Attorney, Inna Fershteyn, Medicaid Fraud, Asset Protection, Estate Planning, Wills, Trusts, Lawyer, New York, New Jersey, Brooklyn, Testimonial

New Video: New York Top Asset Protection Attorney, Law Office of Inna Fershteyn and Associates, P.C.

www.BrooklynTrustAndWill.com

(718)333-2394

Attorney, Inna Fershteyn, Medicaid Fraud, Asset Protection, Estate Planning, Wills, Trusts, Lawyer, New York, New Jersey, Brooklyn

New Video: New York Top Medicaid Fraud Attorney Inna Fershteyn

www.BrooklynTrustAndWill.com

(718)333-2394

Attorney, Inna Fershteyn, Medicaid Fraud, Asset Protection, Estate Planning, Wills, Trusts, Lawyer, New York, New Jersey, Brooklyn

Your Special Needs Trust ("SNT") Defined

Your Special Needs Trust ("SNT") Defined

You have a special needs trust— or you have been designated as the trustee of a special needs trust— or your child has a special needs trust. What is a trust? What is a trustee? What is a beneficiary? What are all these terms you've never used before even though your first language is English? This article provides you with an overview of the more common terms found in your special needs trust.

What is a Trust? A trust is a legal arrangement in which a person or a financial institution, called the trustee, holds and manages assets for the beneficiary (see definition below). The trust document explains the trustee's authority, how the trust is to benefit the beneficiary, and how and when the trust is to terminate. There are many types of trusts, but this article is focusing on a specific type of trust—a special needs trust.

A special needs trust (SNT) is a trust that will preserve the beneficiary's eligibility for needs-based government benefits such as Medicaid and Supplemental Security Income (SSI). Because the beneficiary does not own the assets in the trust, he or she can remain eligible for benefit programs that have an asset limit. As a general rule the trustee will supplement the beneficiary's government benefits but not replace them. Examples of supplemental needs are costs for sitters, companions, and dental or medical expenses not covered by Medicare or Medicaid.

A first-party SNT, also referred to as a "self-settled" or "(d)(4)(A) trust," is funded with assets or income that belong to an individual with a disability (see definition below) and who is the beneficiary of the trust. In order for the assets of this type of trust not to count for Medicaid or SSI purposes, federal law requires that the beneficiary must be under the age of 65 when the trust is created and funded; the trust must be irrevocable and provide that Medicaid will be reimbursed upon the beneficiary's death or upon termination of the trust, whichever occurs first; and the trust must be administered for the sole benefit of the beneficiary. Typically the funding comes from a personal injury settlement or inheritance the beneficiary receives directly.

A third-party SNT, frequently referred to as a supplemental needs trust, is funded with assets belonging to a person other than the beneficiary. In fact, no funds belonging to the beneficiary may be used to fund the trust. Typical funding comes from gifts, an inheritance from parents or grandparents, and proceeds of life insurance policies. This trust has no provisions to pay back Medicaid upon the trust's termination; rather, the person creating the trust decides how the trust estate is distributed when the beneficiary dies. Source:www.Cacu.com

Dentist Smeared in Spitzer Medicaid Fraud Witch-Hunt Wins $7.7 Million from Former Governor's Staff

A Brooklyn dentist whose career was ruined after the then-state Attorney General made him a poster boy for Medicaid fraud won a $7.7 million verdict Tuesday against two of Spitzer’s former investigators. That was $1.6 million more than Dr. Leonard Morse’s expert estimated the tooth doctor lost as a result of Spitzer’s probe — and, in terms of vindication, priceless. “It took a little more than 2,500 days, but we got to the truth,” said Morse, a 65-year-old father of six from Manhattan. “Now I feel totally vindicated.”

Morse, who accused former Spitzer deputy John Fusto and investigator Jose Castillo in the suit of fabricating evidence against him, also had some choice words for their old boss as well.

“He should be ashamed that this happened in his office, under his stewardship,” Morse said of Spitzer. “His finger prints are all over it.” Morse’s lawyer, Jon Norinsberg, also ripped Fusto as “a perfect storm of arrogance, laziness and incompetence.” Neither Fusto, nor Castillo, work for the AG’s office anymore.

The AG’s office had no official comment, but their lawyers in court told Federal Judge Carol Amon they will appeal the verdict. In his closing arguments, Deputy Attorney General Christopher Miller argued that just because someone is acquitted of a crime — as Morse was earlier — doesn't mean the prosecution had fabricated evidence. “He already had his day in court, he was found not guilty,” Miller said. But Miller looked ashen when the jury, which took just three hours to reach a decision, asked the judge for a calculator.

Spitzer, who resigned in 2008 after getting caught in a hooker scandal, could not be reached for comment.

Morse had a thriving Park Slope practice with 30,000 patients before Spitzer zeroed in on him because 95% of his patients were Medicaid eligible. Morse, in a $75 million suit filed in Brooklyn Federal Court, charged he was the victim of a Spitzer witch-hunt in 2006, when the hard-charging prosecutor was running for governor. After Spitzer's political opponents branded him soft on Medicaid fraud, he targeted Morse, who was one of the top billers in the state, the suit claimed.

Spitzer, who resigned as governor in 2008 after getting caught in a hooker scandal, said through a spokeswoman that he had nothing to do with Morse’s case. Morse was charged with stealing more than $1 million in false billings for dentures. And his arrest was trumpeted in a press release translated into several languages, including Russian and Korean. But the criminal case against Morse fell apart during a bench trial in Brooklyn Supreme Court after Fusto was forced to concede that billing records only showed a theft of $3,000.

Morse was found not guilty of all charges. But he lost his practice and other dentists treated him like a leper.

The delighted dentist said the AG’s office offered him a $100,000 settlement to get him to drop the lawsuit.

“I didn’t consider it for a nano-second,” Morse said. “There’s more to life than money, but I wanted my family to know I did nothing wrong.” Morse also won a new patient Tuesday. As he was leaving the courtroom, one of the jurors asked him to look at his tooth. Source: NYdailynews.com

Why you Need an Estate Plan Post 2013 Tax Act

Estate planning is the process of designating, during your life, the disposition of your assets upon your death in a manner that attempts to eliminate administrative uncertainties, reduce taxes, and maximize asset protection. The process of estate planning typically includes preparation of legal documents such as a Will, but it also includes restructuring of assets and beneficiary designations, all in the context of minimizing taxes and maximizing asset preservation. As part of this process, it even may be advisable to make lifetime gifts to family or charity.

Failure to have an estate plan results in your assets being distributed according to the probate laws in your state, which typically provide that if you are married and have children, your spouse and children each will receive a share of your assets. As a result, your spouse could receive only a portion of your estate, which may not provide sufficient support, and any inheritance passing to minor children will be managed by the court during the children’s minority and distributed to them outright at age 18.  If you and your spouse are both deceased, the court will appoint a guardian for your minor children without input from you.

A typical estate plan provides for the disposition of your assets upon death through a Will and Revocable Trust. The Will designates the executor of your estate, a guardian for any minor children, and directs your probate assets into your Revocable Trust. Your Revocable Trust then provides for the ultimate disposition of your assets. Revocable Trusts avoid the publicity and fees of probate if assets are placed in them during your lifetime or are payable to them at your death by beneficiary designation.  A Revocable Trust can be drafted to take advantage of death tax credits and asset protection upon your death by establishing trusts for your spouse and children that will not be subject to death tax or claims of their creditors. Making provisions for managing your affairs upon your incapacity should also be part of your estate planning. A durable financial power of attorney will allow a designated individual or corporate fiduciary to manage your financial affairs should you become incapacitated without going through the process of having you declared incompetent and a guardian appointed for you by the court. A health care power of attorney allows a designated individual to make health care decisions for you if you are incapacitated. A “living will” can provide that you do not want to be put on life support or receive food or hydration if you are terminal, in a persistent vegetative state, or in the final stages of Alzheimer’s or other dementia.

Do you need tax and asset protection planning as part of your estate plan? Most assuredly you do.  Under current law, there is a credit against estate tax of $5,250,000 per person, so a married couple has a combined credit of $10,500,000. That credit will be indexed for inflation. While this seems like a large figure, if you combine the equity in your home(s) and the value of retirement accounts, other liquid assets, business interests, and life insurance proceeds, are you close? Do you anticipate an inheritance or the sale or your business? Even if currently you do not need extensive estate tax planning, you should consider the income tax implications of your assets upon death, such as what is the most tax-efficient designation for your retirement accounts. Most clients are interested in ensuring that the assets they have worked hard to accumulate are protected from creditors, including claimants, subsequent spouses, spendthrifts, and former spouses of children. By establishing trusts and carefully selecting the trusts’ terms and fiduciaries, clients can protect their estates from these exposures.

Another component of the estate planning process is evaluating your assets and considering whether they should be restructured. If you have an interest in a closely-held business, what happens to that interest upon your death and should a buy-out agreement be considered? Should you be investing in exempt assets such as retirement accounts, tenants by the entireties property, and life insurance? Under the North Carolina constitution, life insurance payable to a spouse and/or children (or a trust for their benefit) is exempt from the claims of creditors of the insured or his estate. If you own liability-generating assets such as rental property, you might consider moving that property into a limited liability entity such as a limited liability company or at least procuring a large liability policy. Are the methods of distribution for your retirement accounts formulated in such a way to maximize asset protection and minimize income and estate taxes? If you have a taxable estate, it might be prudent to make lifetime gifts of your property to others or to charities to reduce your estate by the value of that asset as well as all of its appreciation and future income. Source: NatLawReview.com

New York Top Medicaid Fraud Attorney Inna Fershteyn

New York Top Asset Protection Attorney Inna Fershteyn

New Hazards for Family Estate Plans

You thought your estate plans were finally set? Not so fast. It turns out the "permanent" $5 million estate-tax exemption enacted earlier this year could change after all, sending families back to the drawing board to sort out their strategy. A provision in President Barack Obama's fiscal year 2014 budget calls for lowering in 2018 the estate-, gift- and generation-skipping-transfer-tax exemption limits.

Those limits were just made "permanent" in January at $5 million and indexed for inflation. (This year's exemption is $5.25 million.) The Obama administration proposed lowering the exclusion to $3.5 million for estate and GST taxes, and to $1 million for gift tax. Those amounts—a return to 2009 levels—would no longer be indexed for inflation. All three tax rates would go up, too, with the top rate rising to 45% from the current 40%. But wasn't the $5-million-plus exemption made permanent just four months ago?

"Permanent doesn't mean Congress will never revisit it. It just means there's no expiration date built into it," says Bruce Steiner, an estate-planning lawyer at Kleinberg Kaplan Wolff & Cohen in New York. If the proposal gathers steam and is enacted, he predicts "the same thing as last December, with another big flood of people giving away assets because they can," he says. If you feel like the estate-tax exemption limit has bounced around a lot, you're right. It has been changing every few years since 2001. Even some lawyers who get to charge by the hour are frustrated.

"We just need stability," says Christine Finn, a lawyer at Marcum LLP, a New York accounting and advisory firm. "With the $5 million limit now [for estate and gift taxes], it's going to be hard to get people back to thinking about the planning they'd need to do if the gift-tax rates go back down to $1 million." Still, ratcheting down the three exemptions and closing other "estate-tax loopholes" would raise $79 billion over 10 years, according to the budget proposal. The budget includes other ways to cut the deficit that could affect family inheritance planning as well. Here's what to watch.

• Discounts could disappear. Now, if you give a family member a minority share in your business, an appraiser legally can discount its value. The reasoning: A minority owner lacks control of the asset, can't liquidate it, can't get income from it unless the business makes a distribution and can't sell it easily. Mr. Obama's annual budget proposals have called for limiting, or getting rid of, such discounts to family members—until now. Gordon Schaller, an estate-planning lawyer in Irvine, Calif., contends that the provision's absence from this year's proposed budget could mean that "they're getting ready to issue regulations to do it, so they don't need to talk about legislation anymore." If that happens, families wouldn't be able to transfer as much wealth effectively tax-free, Mr. Schaller says. So families who have been considering such transfers should make them now.

• GRATs could get watered down. So-called grantor-retained annuity trusts, or GRATs, let people give a portion of an asset's future profits to heirs tax-free. The trusts have been popular tools for passing along battered stocks, especially because GRATs work best when interest rates are low. But GRATs also have been a target in Mr. Obama's budget proposals for several years. The person who sets up the trust gets annual payments adding up to the asset's original value, plus a return based on a fixed interest rate set by the Internal Revenue Service. That rate currently is only 1.4%.

When you give an asset to a GRAT, you retain the right to regular payments for a set time period. What you actually are giving away is any future appreciation on the asset—free of taxes. When the GRAT's term ends, the asset goes to the beneficiaries free of gift or estate tax on the appreciation, even though it has been transferred. The biggest risk is that the owner will die before the trust expires, generally subjecting its entire value to estate tax. Because of that risk, GRATs typically are set up with shorter terms, such as two years. But the proposed budget would require GRATs to have a minimum term of 10 years. The change is expected to generate $3.9 billion in 10 years. "If you're thinking about setting up a GRAT, do it now while you know you can, because you may not be able to do it as favorably tomorrow," Mr. Steiner says.

• Thousand-year trusts could get shortened. In the 1980s, many states adopted a statute that limited family trusts to a 90-year span. But since then, about half the states have repealed that rule or lengthened the "permissible perpetuities period," in some cases to as long as 1,000 years, Mr. Steiner says. Such lengthy trusts can keep large chunks of wealth out of the tax man's reach for decades, or maybe even forever, he adds. But Mr. Obama's budget proposal, echoing provisions called for in previous years, would have the generation-skipping-transfer exemption expire after 90 years, making the assets subject to taxes at that point. Since the proposal would apply only to new trusts created after its enactment, you might want to set up your trust now, Mr. Steiner says.

• Individual retirement accounts could get emptied faster. People who inherit IRAs and other tax-deferred retirement accounts are allowed under current law to "stretch" their withdrawals across their life expectancy, paying income tax only on distributions. The budget proposal would require most heirs, other than widows or widowers, to empty retirement accounts within five years. The measure would raise almost $5 billion in 10 years, the budget proposal claims. The move already has prompted some older adults whose wealth is concentrated in IRAs to consider moving them into trusts to help their families keep up with, and follow, the rules correctly. And people who had planned to convert IRA holdings to Roth IRAs are starting to reconsider. IRA owners have to pay income tax on any tax-deferred assets being converted, but future withdrawals are income-tax-free, even for heirs, as long as they meet holding requirements. If stretching the withdrawals past five years is no longer possible, there could be less advantage to paying the upfront tax bill. Source: www.wsj.com