Estate Planning

Estate Planning for Disabled Heirs

Published on: September 14, 2011 | by Ettinger Law Firm

Last week the Wall Street Journal‘s “Family Values” blog discussed the often challenging estate planning issues faced by families who are providing for a disabled loved one. Our New York estate planning lawyers know that more families are in this situation than some might suspect. The latest U.S. Census data shows that roughly 12% of the population has a severe physical or mental disability. When planning for the future it is particularly important for these families to closely consider how they want to leave assets to their heirs because of the effect that the asset transfers may have on their disabled relative’s access to public assistance.

Budget shortfalls are causing many state and local governments to cut support services to these residents. A common cost-cutting measure includes tightening income restrictions for those seeking to qualify for medical benefits and support services. As a result, it is vital that all families structure inheritances for disabled heirs so that they are not disqualified from the government help that they will likely need. Yet, research shows that two-thirds of parents and caregivers with disabled loved ones do not have plans in place to account for the long-term needs of these vulnerable heirs.

This is particularly unfortunate, because there are planning strategies that exist specifically to assist families in this situation. For example, a special needs trust can be used to leave assets to heirs with disabilities while ensuring that they keep government benefits like Medicaid and Supplemental Security Income (SSI). Before this trust was available parents were often forced to disinherit their disabled children lest they lose all their government support. Now, those who create a special needs trust can leave assets for the child’s use beyond that which they will receive from the government. Families can set aside funds for clothing, education, entertainment, household goods, healthcare costs, and many other future wants and needs for their disabled relative.

Estate Planning Tips For Providing One Child a Larger Share of Inheritance

Published on: September 12, 2011 | by Ettinger Law Firm

There is often a default assumption that local parents wish to provide all of their children with equal shares of an inheritance as part of their New York estate plan. However, no two families are identical, and there are a variety of reasons why some parents feel it necessary to provide different assets to each of their children upon their death. The ability to tailor an inheritance using rules different than the default to suit a family’s specific desires is one of the main reasons why local families seek the assistance of New York estate planning lawyers. As one lawyer put it, “there’s nothing so unequal as the equal treatment of unequals.”

Most families take a variety of factors into account when deciding how to distribute their property. For example, one child may already be more financially successful, another may have a larger family of their own, and yet another may be estranged from the family. In other cases a parent may have already helped one child while alive–such as by providing down payment money on a house–and want that prior help to be reflected in the inheritance.

A Wall Street Journal story this weekend discussed how many families have questions about the best way to go about giving one child a larger share than another. Trusts are usually a more effective estate planning tool than a will. However, if a will is used, it is important that certain steps be taken to ensure that the uneven child distribution is capable of withstanding legal challenge. Part of that process involves being open and honest with family members about the inheritance so that children know about the terms while you are alive. This minimizes the surprise factor and may quell later suspicions. Having these conversations is often difficult, so as an alternative a video or instruction letter can be included with the estate planning documents to explain why a certain decision was made.

Many Middle Class Families in New York Use Trusts in Estate Plan

Published on: September 6, 2011 | by Ettinger Law Firm

One of our New York estate planning attorneys, Bonnie Kraham, Esq., recently authored an article that shares information on the increasing use of trusts in the estate plan of many local middle class families. The story was published in this weekend’s Times Herald-Record, and explains the various types of trusts that residents can use and the way that each holds and transfers property. Unfortunately, there remains a misconception among some local community members that creating a New York trust is a project only for the wealthy. That is not the case. As attorney Kraham notes, there has been a “living trust revolution” over the past few decades where many middle class families have discovered the ways in which these legal entities can be used to avoid probate, save taxes, and protect assets.

All trusts begin with a written agreement, and each includes at least three necessary parties. These include a “grantor” who creates the trust, “trustee” who manages the assets, and “beneficiaries” who use the trust assets. For example, the three roles may be filled when a senior couple creates a trust (grantors) to be managed by their lawyer (trustee) to provide for the couple’s children (beneficiaries). The three roles need not be filled by different individuals, however. Often a grantor will also act as beneficiary, so that they can still use those assets while they are alive. Following the written agreement which establishes the trust, assets are transferred into the entity by way of “retitling.” This involves changing the name on accounts, mutual funds, and stock certificates to the name of the trust, and transferring title to property to the trust.

The two main types of trusts are testamentary and living. Testamentary trusts are created only after an individual’s death pursuant to their will, while living trusts are created while a grantor is still alive. Living trusts are an increasingly common way for many families to transfer assets at death. Among other benefits, a living trust can help families avoid probate, saving time and expense in closing the estate.

Proper New York Estate Planning Necessary to Combat Possible Legal Challenges

Published on: August 24, 2011 | by Ettinger Law Firm

Our New York elder law estate planning attorneys are proud of our work as counselors at law, acting as trusted advisors for the clients who count on us. In this capacity we spend each day meeting with community members to understand their family dynamics and listening to their concerns and fears about the planning process. By familiarizing ourselves with the unique circumstances of each client we are able to anticipate possible challenges to their plan and ensure that all the bases are covered ahead of time. In this way we can use our knowledge and experience to help clients pass on their assets and protect those assets in a seamless manner that avoids legal challenges and court proceedings.

The use of trusts is one of the key ways that our New York estate plans help clients stay out of the courtroom. Unlike wills, trusts do not require court proceedings to settle, both in this state and in other states where property might be owned. Avoiding probate saves the time, stress, and high costs of the legal proceeding.

Besides avoiding probate, our New York estate planning attorneys work hard to craft plans that cannot be successfully challenged by those who may be upset by client decisions. This is where taking the time to understand the family dynamics of each client is essential. It is important to anticipate ahead of time individuals that might have hurt feelings because of the details of a plan or become disgruntled upon learning of a client’s decision regarding their assets. Unfortunately, family disagreements arise frequently in these situations, often leading some upset individuals to challenge the legality of the plan in an effort to overturn it.

Common Pitfalls of Pet Bequeaths

Published on: August 22, 2011 | by Ettinger Law Firm

The most recent survey from the Humane Society found that there are at least 78.2 million owned dogs and 86.4 million owned cats in the United States. The data indicated that nearly 40% of all American households own a dog while roughly 33% own cats. Pet ownership rates are near the highest ever reported. In addition, many owners go to unprecedented lengths to integrate their animals into their families, from including them in annual Christmas card photos to ensuring they have a spot in all family vacations.

Considering the close bond so many families have with their animal friends, it is only natural that they would want to provide for them in an estate plan. Our New York estate planning attorneys know that in our area pet trusts are no longer only for the rich, famous, or eccentric. Recent research has shown that somewhere between 12 and 27 percent of pet owners provide some provisions for their animals in their wills. Many families have visited our office and expressed a wish to take legal steps to ensure that their beloved pet will have the resources they need for as long as they need them in the future. In fact, we have set up a relationship with providers of these services at www.PetEstates.com to help clients gain the peace of mind of knowing that their animal will be protected after they are gone.

It is vital to have professional help with these matters, because haphazard planning could risk leaving your pet without any support. A recent Reuters article took a look at these common pet trust pitfalls. Many large, high-profile pet trusts have been severely curtailed by judges. Ensuring that the trust includes only a reasonable amount necessary to account for the animal’s well-being is important. Many problems can also be avoided if the trust names a caretaker who is willing to comply scrupulously with the terms of the trust. On top of that, if a trust names a final resting place for the pet it is important to check that the location will accept the animal. Most pets cannot be buried in mausoleums for humans in the United States.

Estate Plan Still Needed to Divide Properly Equally Between Children

Published on: August 18, 2011 | by Ettinger Law Firm

Some local residents believe that they do not need to worry about creating a New York estate plan if they only want to divide all of their assets between their children equally. These community members are under the incorrect assumption that the default legal rules will ensure that everything works out as they wish. Unfortunately, this is rarely the case.

This weekend My SA News discussed this all-too-common mistake of voicing intent to be even-handed with asset distribution but not taking the proper legal steps to carry out that intent. For example, the story used the real example of a family with two parents and five daughters. Both parents had been married to one another their entire lives with no divorces. They did not conduct any estate planning because they always explained that they wanted everything to be divided equally among their children at their death. They did not even have wills drafted.

However, their actions did not reflect that voiced intention, and there was no plan in place to protect the family. For example, after the father died, the mother deeded the family home to the first sister. Later, a second sister deeded another house to the mother, but upon the mother’s death that sister wanted the home back. A third sister visited an attorney and asked for help. She wanted the family home and the second home to be divided equally among the children as the parents always wished.

New Website Services Offers Online Method of Distributing Personal Property

Published on: August 10, 2011 | by Ettinger Law Firm

Most New York estate plans have various components and include several legal documents. Most will have a Revocable Living Trust, Medicaid Asset Protection Trust, or both. A pour-over will is also frequently added as a failsafe to cancel an old will and ensure that any assets left outside the trust are brought into it after death. The plan will have various other facets, including a Power of Attorney, Health Care Proxy, burial instructions, and other final instructions for a family.

In addition, a common practice is to leave a list which indicates which valuables will go to each heir. This list is usually handwritten and specifically requests that a trustee honor its terms. In this way, if a client changes their mind about the distribution of their personal property they can simply handwrite a new list without needing to visit their attorney to cement the change. This step is important because many local families experience in-fighting when trying to distribute sentimental personal property without the guidance offered by a New York estate plan. When more than one family member wants the same item, the stage may be set for strong disagreements that often profoundly and permanently affect relationships. Most family members are under immense stress at the time of a passing which makes the situation even worse.

A few online web services have recently sprung up which claim to help families distribute this property in a fair manner. For example, one of the more popular services is eDivvyup. The website essentially sets up a family auction using non-monetary “credits.” A family first selects an “executor” to set up the auction by cataloging personal items, inviting family members to participate, and assigning credits. Each family member then visits the site and places bids on items of interest to them using the non-monetary credits they are provided. The auctions usually work like eBay, spanning anywhere from a day to several weeks. The goal is that by the end of the auction each family member will have gotten the fair chance to indicate which items mean the most to them.

Season Tickets, Frequent Flier Miles, and Other Unique Assets in Estate Plan

Published on: August 8, 2011 | by Ettinger Law Firm

Local residents visit our New York estate planning attorneys for professional assistance to protect and pass on their assets. Many also expect guidance identifying the items that should be considered an asset and included in the planning. Most area families need to consider things beyond homes, cars, investment portfolios, and similar items when creating their New York estate plan.

For example, what happens to frequent flier miles and rewards upon an individual’s death? Many residents spend years and thousands of dollars in airfare racking up mileages and benefits in airline sponsored loyalty programs. A recent article in Payments News explained how many fliers spend time accumulating these “miles” and rewards only to leave them unused at their death. Some reports indicate that as many as 3.5 trillion miles currently remain unused in these programs. Interestingly, each airline has a different policy in place regarding transferability of loyalty benefits at death. American Airlines specifically allows accumulated mileage credit to be transferred to a person named in a court-approved will or estate plan. Other carriers, such as United Airlines, require that a beneficiary be named with the program, a fee be paid, and require an executor to contact the airline before miles can be transferred.

Another asset which one may wish to leave behind is the option to purchase valuable season tickets. Area residents often spend years waiting for the opportunity to become a season-ticket holder for their favorite teams. A post this weekend at The Faculty Lounge recently discussed this topic. Most teams have policies in place that allow an individual’s decedents to gain the right to purchase. However, it is important to closely examine the team policy related to ticket transferability to understand what issues might arise. For example, there may be conflict over who gains the right if several children share in ones’ assets. Many team policies indicate that there will be no transferability if several individuals share in the right and do not agree on a single transferee. Some teams also expressly prohibit a non-relative from receiving the right to purchase the tickets.

Estate Planning is Not Just for Senior Couples

Published on: August 2, 2011 | by Ettinger Law Firm

Some area residents may think that New York estate planning is only for married seniors who have big families and substantial wealth. Fortunately, more and more people are coming to understand that this planning is a necessity for all community members, no matter what their situation in life. The Calgary Herald recently discussed the universal applicability of estate planning by sharing the example of a thirty-six year old mother of two who was recently divorced. The woman had never before seriously considered financial matters, but everything changed following separation from her husband.

It was not long before the mother began to realize that taking care of her family was now squarely on her shoulders–necessitating prudent preparation for long-term contingencies. For example, if she were to suddenly become ill, who would take care of her children? If she became disabled, how would the family survive? The woman began considering these and similar questions before realizing that she wanted the peace of mind of knowing that she had prepared for these possibilities ahead of time. The woman visited an estate planning attorney and learned what options were available to her. She eventually purchased life insurance, disability insurance, and had legal documents drafted to ensure others could make critical decisions on behalf of her family if the need arose.

The mother’s situation is a good example of why estate planning is often particularly important for singles. Those without a partner frequently need to clearly spell out their wishes ahead of time, because fewer people may be around to speak on their behalf. For example, a thirty year old single man may get in an accident shortly before closing on his first piece of real estate. If he has taken the time to create a durable Power of Attorney, the named individual may be able to close on that new home on his behalf. There are countless similar situations that may arise where prior estate preparation can significantly affect an individual’s life.

Parents Grapple with Effect of Inheritances and the Meaning of Money

Published on: June 4, 2011 | by Ettinger Law Firm

New York inheritance planning involves passing on values as well as assets. No matter how large the family estate, most parents think long and hard about how their inheritance will affect the lives of their children. For many there are no easy answers to questions like how new wealth will affect their children’s independence or how much wealth is the appropriate balance between proper inheritance and philanthropy.

As a story last week in the Belleville News Democrat explained, many parents are taking steps to share important information about the meaning of money as part of their inheritance plan. Most families strive to pass on the right amount of money so that children are provided for but still maintain the incentive to work, strive, and succeed.

One hardworking family, including a 60-year old retired teacher and 62-year old real estate broker, explained how they have worked with their now 30-year old daughter on financial matters, noting “We really want to encourage her to develop a personal financial plan, a personal philosophy, and become really familiar with the types of investments.” The family admits that frankness and early discussions about these issues is important. Children should know what to expect and parents should not be afraid to share their concerns with their loved one.

Some are worried that their loved ones may be unprepared to handle the estate that they receive. Those families often face issues with asset planning for spendthrift children. They are aware that their children are poor at handling money or inexperienced with such matters. Many options exist for parents in those situations. For example, trusts are perfect tools to ensure that a child has access to reasonable assets but is unable to abuse the overall value of the estate. In these situations a designated “trustee” manages the actual estate with rules about what the child receives and when they receive it.
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