Asset Protection

GERIATRIC CARE MANAGER

Published on: February 18, 2016 | by Ettinger Law Firm

DISTANCE AND PROFESSIONALISM

The New York Times ran an article on December 23, 2015 discussing the distance that the average American lives from their mother. As revealed in longitudinal study published in 2010, half of Americans live 18 miles or less from their their mother. As shown in the graph plotting these distances, the half of Americans who live less than 18 miles usually live extremely close. 40 percent live five miles or less. It seems as if the 40 percent and five mile mark is where the divergence occurs. 55 percent live less than 28, 60 percent live at least 47 miles or less, 65 percent live 80 miles or less and 70 percent live 129 miles. Depending on whether you live in the suburbs, the far suburbs, rural America or in the inner city with a reliable and timely public transportation system, these percentages and distances mean different things. 128 miles is not insurmountable and is actually a common commute if you live in Philadelphia and have to commute to Manhattan.

If you live in Southern New Jersey and have to battle the daily commute to Manhattan the same 128 miles is entirely different. Other factors also play out in your ability to see your parents as often as you want or need to. If you are a busy emergency room physician, working 24 hour shifts, you may not be able to see them anywhere near as often as need be or as you want. If your parents rely on you for basic assistance with medical issues or long term care decision making and you cannot dedicate the time to help them, you may want to consider a relatively under utilized service in the form of a geriatric care manager. In addition to assisting their clients and families make informed decisions, they are professionals who almost always work in the community and have a better working knowledge of different issues that may crop up with one provider or facility but not another.

INHERITING A ROTH IRA ACCOUNT

Published on: February 17, 2016 | by Ettinger Law Firm

ROTH IRA ACCOUNTS ARE FUNDAMENTALLY DIFFERENT

This blog explored the topic of inheriting an individual retirement account (IRA) in a previous blog. It is necessary to explore the topic of inheriting a Roth IRA, as a Roth IRA is fundamentally different from a traditional IRA. Some of the differences between a Roth IRA and a traditional IRA:

Taxing event – The money going into a Roth IRA is taxed prior to going into the account, while a traditional IRA is generally deposited as pre-taxed income and only taxed after withdrawal from the IRA.

PLANNING FOR YOUR SPECIAL NEEDS LOVED ONES

Published on: February 15, 2016 | by Ettinger Law Firm

CREATE A GLOBAL PLAN TO GO INTO EFFECT TODAY

If you are a parent, stepparent, grandparent or caretaker of a special needs child you need to prepare for the day when you are no longer able to physically and financially care for your special needs loved one. While it is not suggested that you stop caring for the special needs loved one today, there is no better time than to start your planning than now and to actually try it out, so as to cure any unanticipated issues now while you still have the mental, emotional and financial wherewithal. First on the list of priorities is to find a standby guardian who can step in and care for your loved one without complication, so as to insure a seamless transition. Better still is to have two caretakers who can assume responsibility for the day to day needs of your special needs loved one. This blog has discussed the wisdom and utility of a standby guardian.

While it is essential for you to discuss these plans with any standby guardian and alternate standby guardian, as any legal responsibility to assume guardianship requires the consent of the standby guardian, it is always best to discuss these decisions with your loved one. Many autistic children do not deal with change very well. As such, having the standby guardian come in to run the show and do what you do on a daily basis is best. The same applies for any alternate standby guardian. It would also be best to discreetly disclose your financial planning, income and expenses with the standby guardian as well as any alternate. Any monies coming in from public agencies or even benevolent societies as well as a review of key service providers would be necessary for the standby guardian to understand if you become incapacitated, disabled or otherwise unable to provide the same level of care that you currently provide for your special needs loved one.

BACK TO THE BASICS – INHERITING AN IRA

Published on: February 15, 2016 | by Ettinger Law Firm

STILL TAXABLE

Death and taxes, the old saying goes, are the only two things in life that are guaranteed. Taxes unlike passing away, can at least be deferred, mitigated and reduced. If your total estate is less than $5.45 million (2016), it is logical to believe that an individual retirement account (or IRA) would pass tax free to your heirs. Indeed this is true, but the taxable event is when the account owner withdraws money in the account. As such, depending on the exact nature of your estate, it may make sense to pass your IRA to your estate, so that your heirs can inherit your IRA. The IRA would avoid being taxed under the estate tax, assuming the whole of the estate is under the estate tax threshold. That does not make the IRA, however, tax exempt or otherwise free of tax liability. In other words, the IRA is a taxable asset, just not taxable under the estate tax, but rather under tax schema that controls distributions of an IRA, namely income tax schema.

ESTATE TAX VERSUS INCOME TAX

HOW TO WRAP UP THE AFFAIRS OF A SPECIAL NEEDS TRUST?

Published on: February 13, 2016 | by Ettinger Law Firm

TRUST SETTLOR GIVES UP CONTROL

When a settlor creates a trust, he/she passes title of the property or asset to the trust or gives cash money to the trust, wherein the trustee invests the money as a fiduciary or manages the asset or asset in issue for the best interest of the trust beneficiary. It is true that in some circumstances the settlor, or the person who created the trust and most likely provided the seed capital, asset(s) or property for the trust, is or can be the trustee. The settlor is also known as the grantor, trustor or even donor; the terms can be used interchangeably. Often enough also, the settlor may not give up complete control of the money, asset(s) or property that he/she otherwise gives to the trust, for the trustee to manage, by, for example, providing for a life estate of the property in the settlor or his/her spouse.

There are a great many types of trusts that are permitted with a great variety of factual scenarios imaginable. For some special needs trusts, however, the trustee must receive assets, properties or monies from a third source, for the sole use by the beneficiary. Many rules apply for the funding and ongoing management of a special needs trust in order for the trust to maintain its privileged position, being excluded from the assets of the beneficiary for government benefits qualification. This blog has already discussed the various elements of special needs blogs, here, here and here. It is important to note that there are important restrictions on trusts, such as what the distribution of the funds can be used on as well the method and manner of initial funding and ongoing funding of the trust. The question should also be asked, how does a trustee wrap up the affairs of a special needs trust? What if the beneficiary uses up all of the funds? Is legally unable to recieve the funds? For any number of reasons. What if the beneficiary passes away and there are still funds in the trust? What then?

UNDERSTANDING CELEBRITY BONDS

Published on: February 11, 2016 | by Ettinger Law Firm

DAVID BOWIE BONDS

As the world learned, David Bowie passed away on January 10, 2016. Mr. Bowie was always on the leading edge of creativity, an advocate for meaningful social change and a musical genius to boot. He started his musical career at the same time as the Beatles, Rolling Stones and the Who and remained just as socially relevant, if not more so, compared to his contemporaries. As well as being a singer and songwriter, Mr. Bowie was also an accomplished actor and painter. More pertinent to the topic of estate planning, Mr. Bowie was a trailblazer in financial or investment products. In 1997, Mr. Bowie issued Bowie bonds, the first of any celebrity bonds. Since their initial offering, many credit agencies downgraded Bowie bonds status to just one level above junk bond status. True to form, Mr. Bowie was a first, with many other talented artists following suit.

BACKGROUND TO MR. BOWIE’S FORTUNE

FEDERAL COURT EXCEPTION TO PROBATE JURISDICTION

Published on: February 6, 2016 | by Ettinger Law Firm

FEDERAL COURTS ARE COURTS OF LIMITED JURISDICTION

There is little question that Federal Courts are courts of limited jurisdiction. If there is neither original jurisdiction, meaning a question of federal law or rights that arise as a result of federal legislation nor complete diversity of the parties, meaning that all of the defendants domicile in a different jurisdiction from the plaintiffs home state, then there is no jurisdiction for a federal Court to preside over a case. In all matters of diversity jurisdiction, the matter has to involve at least $75,000 in property or damages. Certainly at least some probate cases fit into the requirements of diversity jurisdiction. Yet, there is generally a federal Court hands off approach to dealing with probate cases, known as the probate exception to federal jurisdiction.

A famous case from 1946 in the United States Supreme Court held that a federal Court can adjudicate various suits against a decedents estate, so long as they do not assume general jurisdiction over the probate proceeding itself or assume control over the property that is properly in the hands of the state probate Court. Markham v. Allen, 326 U.S. 490, 494 (1946). The meets and bounds of this holding have caused volumes of case law and law journal articles. It was not until 2006 with the celebrity, Anna Nicole Smith case that came before the United States Supreme Court that the Court expounded on the federal probate exception in any meaningful regards. Specifically the Supreme Court held that when one court is adjudicating a claim over a specific piece of property (or in the case of an estate, a bundle of property rights) a second court will not assume jurisdiction over the same property.

FEDERAL TAX EXEMPTION FOR ELDERLY DEPENDENTS

Published on: February 3, 2016 | by Ettinger Law Firm

EVERY LITTLE BIT COUNTS

For those of among us who care for elderly parents or relatives, you do it without expectation of compensation or reimbursement. You dedicate time, money, resources and do it day in and day out and will continue to do so without concern for recompense. That does not mean, however, that you would not take any financial reimbursement from outside companies or or tax exemptions from the IRS. Most people do not realize that caring for an elderly parent or relative comes with some fairly generous tax benefits. There are some very important and precise legal definitions that need to be satisfied before you can properly claim your elderly relative dependent.

TAX LAW DEFINITIONS AS QUALIFYING DEPENDENT

BACK TO BASICS: WRAP AROUND PLAN FOR ALL CONTINGENCIES – ADVANCED MEDICAL DIRECTIVES

Published on: January 26, 2016 | by Ettinger Law Firm

As the new year opens it is a good time to review all of your legal estate planning decisions and tweak any previous documents that you think need to be modified. This requires us to get back to the basics of estate planning . For those scenarios that deal with what happens to you in an emergency situation, you have an advanced medical directive, with some level of specificity but not too much. The term advanced medical directive is an umbrella term that encompasses several types of legally significant documents. One of them is a living will. Your living will tells the medical professionals who are treating you, what your wishes are in advance for any number of medical situations.

HEALTH CARE PROXY

Underneath the umbrella term of advanced medical directive, there is also the health care proxy. The health care proxy allows for you to appoint a trusted person to act as a decision maker for those scenarios that are not contemplated in your living will and if you are unable to make any medical decisions by yourself. Medical conditions change, different doctors have varying opinions as to the best course of treatment or even over the correct diagnosis. Having a health care proxy will have someone stand in for you to make the best decision under the circumstances. You can limit the authority that you give to the person or only permit the health care proxy go into effect after certain conditions or triggers occur.

ADULT PROTECTIVE SERVICES IN NEW YORK – GOAL TO PROTECT VULNERABLE SENIORS

Published on: January 19, 2016 | by Ettinger Law Firm

New York along with every other state, most United States administered territories and even The Bureau of Indian Affairs for Indian Tribes has an adult protective services enabling statute. New York’s adult protective services statute is found in the archaically entitled Title 81 of the New York State Mental Hygiene Law. It allows for the appointment of a guardian over an incapacitated person only after a Court makes two specific findings of fact:

1) The allegedly incapacitated person is unable to provide for his/her personal needs or unable to manage their property and financial affairs; and

2) The person cannot adequately understand and appreciate the nature and consequences of their inability.