7 STEPS FOR RETIRING WEALTHY AND PLANNING YOUR ESTATE: By New York Estate Planning Attorney Jason W. Stern

As a practicing NY estate planning attorney I can tell you from experience the first step towards planning your estate is in fact planning your estate. From my years of practicing I have come to some very practical realizations that will help you both in the planning of your estate and in retiring with some degree of wealth.

Naturally, in our current economic environment doing either of these can often seem unattainable. However, as their attorney I see first hand over and over again amongst my wealthier NY estate clients what attributes they share and the steps they took to create and preserve their wealth. Retiring wealthy and having an estate plan do not happen on their own. There is no magic bullet, and without some structured discipline, planning and hard work, retiring wealthy will not just happen one day. Each year the average life expectancy in our country rises and the amount set aside for social programs goes further into arrears. If you do not take the appropriate steps today you may not like your financial future tomorrow.

I have compiled the following steps, which I have learned from my years of experience as a NY estate planning attorney to help you get to where we all want our estates to be.


Unfortunately our younger generation has acquired a wait and see approach to retirement that they undoubtedly inherited from their parents, the baby boomers. Back in the 1950’s when the baby boomers were raised, the Federal Government was flush with money, the population was152,000,000, and the average life expectancy was nearly 10 years less than it is today. America today is faced with a population of more than double, 352,000,000 people, who are living on average to almost 80 years of age. All of these factors spell crisis and stress for the social services programs provided by the Federal Government.

As such, for those of us who want to retire early, wealthy and properly, starting today is critical. Whether you are in your 40’s, 30’s, 20’s or even your teens it is never too early to start. The quicker you formulate an estate plan the sooner you can start implementing the tools and strategies necessary to achieving your financial goals.


Most of my wealthy clients have considerable money invested in equities. Many of whom have taken it upon themselves to learn and implement their own investing strategies depending on their comfort levels and knowledge of the market. As their NY estate lawyer I can tell you that over a long enough period of time there are very few investment vehicles that perform better than the stock market. However where there is reward there is risk. It pays to get a book, preferably one written by or about Warren Buffett and familiarize your self with the equities markets. Once you have a knowledge base of the markets to build on, you will be able to start tracking and purchasing equities in your portfolio while taking the risk and guesswork out of the market.


I know this sounds contrary to everything you have been taught by people you believed were experts. Investing for retirement and building an effective strategy requires planning, and how can one plan for something without knowing the rules? One of the most crucial pieces of information regarding your estate is the tax code. For instance, the Unified Credit is the amount of money a married couple can distribute within their estate without being subject to the nearly 70% estate “death” tax when calculated with the New York State estate “death” tax. Simply stated, a married couple can pass $10.5 million dollars without their estate being subject to a dime of Federal Estate Tax.

Why is this significant? As an experienced NY estate planning lawyer this is the first thing that I need to know before planning an estate. If your estate is well below this amount we can breath easier knowing your children will not be hit with a $7 million estate tax bill once you are gone. However, if your estate is approaching the magic $10.5 million dollar number, I will know that it is time to take some drastic measures such as the creation of a Family Limited Partnership or the creation of irrevocable trusts.


Once again, as a NY estate planning attorney, I look at the world through the eyes of quantitative numbers. Personally, before I invest my money, I need to know what the consequences are of those investments. Pursuant to Congress’s most recent Fiscal Cliff Legislation passed on January 1, 2013, a new era of tax law was made permanent. One of the most critical components was the tax on dividends. A dividend is a cash disbursement made by a company, usually quarterly, to shareholders of the company’s stock from excess profits not reinvested. Quite literally a dividend is a company paying you to lend them your money. We used to have something called interest, which was when a bank rewarded you as a depositor for keeping money with them, but those days are long gone. A good stock will pay an investor a dividend anywhere between 1.5% to 5% which is literally 15 times better than most banks will pay in interest.

Why is a dividend good?

Unlike interest that is taxed as income, usually between 30%-45%, a dividend is taxed at the Federal rate of 15% for any households reporting less than $450,000.00 in annual income. Lets do the math for a minute and see how the dividend’s tax structure blows away interest.

Client A invests $100,000.00 in a stock with a dividend of 5% yieldClient B invests$100,000.00 in a bank account bearing 5% interest, which would currently be impossible to even find. At the end of the year client A and client B both have made $5,000.00 in appreciation on their respective investments. While Client A’s tax liability on the income from the dividend will only generate a $750.00 tax liability, Client B will be stuck with $2,000.00 of tax liability on his interest as opposed to the dividend.

Compounded over the course of your lifetime the advantages of a quality dividend yielding investment are staggering. You do not have to be a NY estate planning attorney to see that quality dividend yielding stocks are a good way to build wealth.


It is not a coincidence that prosperous people own large portfolios of equities. Aside from the advantages of dividends, which were mentioned above, very few investments provide the average investor with more growth opportunities than equities. However, the difference between the successful investor and the typical retail investor is inexperience. The experienced investor does their homework and researches an investment’s performance over a long period of time before committing to anything. Remember, investing in equities is putting your hard earned money at risk. Before doing so, the savvy investor identifies and acknowledges those risks. An inexperienced investor will often buy a stock that is hot for the moment or upon hearing a stock tip on television without knowing anything critical about the stock. This is often how people lose all of their money and become averse to putting their capital back into the markets.

Remember this is your retirement; nobody is going to take hold of it but you. If putting in some time to become knowledgeable about the market means financial independence for you and your family, why not?


My wealthiest clients did not get wealthy over night and it did not happen by accident. While the average investor who has no idea what they are doing gets killed in the markets, wealthier NY estate clients continue to prosper.


In one word, discipline. Over the past 10 years the US markets have gone from a period of growth and prosperity, through the worst economic climate since the great depression and right back to the highest peaks of financial prosperity our country has ever known. However, while most investors were selling off during the worst financial contraction our country has ever seen in 2008, savvy individuals were buying. The reason why they were buying was because they know the most important rule for building wealth is to buy and hold stock in quality companies for the long term. Savvy investors looked at the dip in equity prices during what has since been dubbed the “Great Recession”, as the single greatest buying opportunity in modern history. While other investors were taking huge losses running for the door, these individuals were snatching up stocks at bargain basement prices.

For these clients, their fortunes literally tripled in a very short period of time. How did these clients know to buy you may wonder? Valuation. While the markets appeared to be at their worst and on the verge of collapse as headlines captured the gory fall of Bear Stearns and AIG, beneath the hype was good news. Looking past the mainstream headlines was the promise of ever increasing earnings for US companies profiting from increased energy independence and productivity. This was represented in the earnings reports and profit and loss statements for many of these stronger companies. Therefore, for the investor who can keep their head about them while sticking to fundamentals, they can be handsomely rewarded.

An investor who acquires a long-term outlook will often weed out more risky stocks. If this savvy investor cannot visualize how a particular company will perform in a 5-10 year time period they will usually pass and put their money in a more predictable medium.


Another advantage to having a portion of your savings in equities is you benefit from what’s known as a stepped up basis. As a NY estate planning attorney I cannot stress how beneficial this is to your heirs. This simply means that if you pass, any equities in your estate will pass to your heirs at their fair market value from the date of your death. This is a crucial way of avoiding any annoying capital gains issues that may creep into your estate. For instance, Client A buys $100,000.00 of a stock in 2003. Client A passes away in 2013 leaving that stock to her only child, B. The stock is now worth $300,000.00. Normally, when one acquires a stock they accrue capital gains at a rate of 20% on any and all underlying appreciation. Had Client A sold this stock prior to her death she would owe approximately $40,000.00 in capital gains tax on the$200,000.00 of underlying appreciation. However since this stock passes through her estate, it is treated as if her heir bought the stock at the current fair market value of $300,000.00, thus saving both parties involved $40,000.00.

For anyone not thinking about planning their estate or financial future, they should start. For those individuals who are further along on the road to retirement there is always more to do. To speak with a NY estate planning lawyer about the status of your estate, feel free to call the Law Offices of Jason W. Stern & Associates today for a free consultation at (718) 261-2444.

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