New York Estate Planning & Elder Law Blog

Family Feud Forever: Dr. King’s Family Squabbles Continue

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

Dr. Martin Luther King Jr. left behind a legacy of peace and understanding, but he may have been surprised by the legacy that his estate is forging. Last Friday, a Fulton County Superior Court Judge declined to make a ruling in a dispute over two items left behind by Dr. Martin Luther King Jr, his Bible and his Nobel Peace Prize. Fox News reports that the case over these two items is likely to go to trial, with King’s estate, controlled by his two sons, against their sister, Bernice. This is only one of many lawsuits that have crept up in years past over the legacy of Dr. King.

Managing Estate Assets and Legacies

Dr. Martin Luther King Jr’s estate is not technically what many would consider an estate in the traditional sense. It is not a probate estate, with his assets being liquidated according to his will. Rather, Dr. King’s estate is the for-profit Martin Luther King Jr. Estate Inc. with his three surviving children being the sole shareholders and directors. As the sole shareholders and directors, his three children control Dr. King’s name, image, likeness and his possessions.

Elders Right to Live in the Community

Published on: June 16, 2016 | by Ettinger Law Firm

In 1999, the United States Supreme Court ruled in Olmstead v. L.C. that, consistent with the Americans with Disabilities Act, individuals with mental disabilities have a right to live within their community as opposed to an institution, if professionals have determined that the patient’s ability to adapt and live in their community is appropriate, the patient can be reasonably accommodated and the move to community living offers a less restrictive setting. Following this ruling, President Clinton then directed all states to evaluate individuals in mental hospitals, as well as nursing homes and state institutions to determine whether they could too be acclimated back into their communities. Due not only to the major expenses facing Medicaid and maintaining nursing homes, this was thought to be a possible solution to overcrowding and retaining civil rights for those affected individuals.

However, in the decade and a half since the Supreme Court ruling and the President’s policy statement, the government has done little comparatively to remedy the problem. This has resulted in too many disabled and handicapped people remaining in institutions against their will and left without a method of recourse. While the federal government can control state spending for nursing homes and how Medicaid is spent, the community based care programs that so many disabled and handicapped people are seeking care from are optional.

Yet, Medicaid only pays for about 40% of all long term care services, thus, major bills are still piling up on patients, and in states such as South Dakota, the state with the highest percentage of individuals in nursing homes that have a low need or no need at all the services provided for the institution, they are forced to remain in the institution to receive any kind of care. With over 1.4 million individuals in nursing homes throughout the United States, some states are taking active steps to address the issue by allocating a portion of Medicaid funds to in-home care.

What’s In a Name? Publicity Rights of Deceased Celebrities

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

What’s In a Name Depends on Who You Are. It Could Be Hundreds of Millions According to the IRS

There has been an ongoing battle in recent years between decedents’ estates and the Internal Revenue Service (IRS). While it is only to be expected that the IRS attempt to collect as much as it can, their recent focus has turned to a rather contentious area in their quest for collections: intangibles. This category that includes property interests like computer software, patents, copyrights, publicity rights and literary, musical and artistic compositions can be difficult to put a price.

Most recently, the estate of former singer Whitney Houston has been fighting off an inexplicable valuation of Ms. Houston’s publicity rights, according to The Hollywood Reporter. Ms. Houston’s estate is just one of many in recent years, most notably, Michael Jackson, who are embroiled in heated tax claims over the valuation of certain assets, most contentiously the valuation of the celebrity’s public image. How exactly does the IRS come to the conclusion of the worth of the decedent’s image, and why are valuations of this intangible so hard to get right?

Back to Basics: No Contest Clause in New York Wills

Published on: June 10, 2016 | by Ettinger Law Firm

One of the many goals of estate planning is to limit the amount of fighting that will occur once a person passes on, and there are many ways to achieve that goal. Often this involves making sure that all the proper requirements are observed when executing documents, careful drafting of trusts and keeping estate planning documents’ terms clear and concise. None of these tools however serve as a disincentive to a disgruntled family member who feel that they were unjustly treated as beneficiary. For that purpose, many New York estate planners may turn to the ‘No Contest’ or ‘In Terrorem’ clause.

Risk All, Lose All…

A ‘no contest’ clause in a New York will states that a beneficiary who unsuccessfully challenges the validity of the will is prevented from inheriting under the will. Testators include these clauses in their wills in order to dissuade beneficiaries from taking action against the estate, the idea being that no one will want to risk losing out on their inheritance by risking an unsuccessful challenge.

New York’s Family Health Care Decisions Act

Published on: June 7, 2016 | by Ettinger Law Firm

In a previous post about healthcare and end of life decision making, we discussed the importance of the election of a healthcare proxy or agent. However, not everyone is able to make these advanced plans prior to an unexpected incapacitation. In June 2010, New York enacted the Family Health Care Decisions Act in order to address the issue of healthcare decision making for those individuals who do not have a predetermined healthcare agent or have not left instructions with a living will or Do Not Resuscitate Order.

The Family Health Care Decisions Act allows for the appointment of the patient’s family member or close friend to act as a ‘surrogate’ and step in to make medical decisions for the patient if they have become incapacitated and do not have prior designations made. Similar to a health care proxy’s ability to make decisions, this only applies when the patient is incapacitated. The Act lays out the order of priority that surrogates would be named, starting with a court appointed guardian if one exists, then the spouse or domestic partner of the incapacitated person, followed by adult children, a parent if still alive, a sibling, and then a close friend. Once elected, the surrogate is able to make all decisions regarding healthcare for the person, subject to some limitations. If the patient objects to the election, their objection prevails, absent a court finding that there is reason to override the patient’s decision. Additionally, if the patient made determinations prior to incapacitation while hospitalized, and in the presence of two witnesses, the surrogate’s consent is not needed for any life sustaining treatment, the patient’s wishes will prevail.

Adult Patients

Health Care Proxy: What is Their Role in my Health Care Decisionmaking?

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

End of life planning can be a very daunting task and is one many individuals do not want to face, however, actively addressing any future healthcare scenarios or issues in the event you are no longer fully capable, can save all parties involved from making painful or difficult decisions during emotional times. When thinking about the possibility of future incapacitation, it is important to know the different estate planning tools available in order to be adequately educated on your power to assign an agent to act on your behalf.

Health Care Proxy & Their Influence

When determining what your wishes would be in the event you are no longer able to make your own medical decisions, whether due to incapacity or illness, electing a healthcare proxy will help ensure that the decisions you made prior to incapacitation are honored. A healthcare proxy is an established health care agent named by you, as recognized under New York law, that can make healthcare decisions for you ONLY upon incapacitation, whether that incapacitation is temporary or permanent. Health care proxies are one of a few types of advance directives; it is also worthwhile to consider making a living will and filling out a Do Not Resuscitate Order. Assigning a healthcare proxy as well as making a living will ensures you not only have someone to carry out your wishes, but also have a way to notify loved ones about the decisions you have made for the end of your life.

PROTECTING YOUR INDIVIDUAL RETIREMENT ACCOUNT FROM CREDITORS

Published on: June 4, 2016 | by Ettinger Law Firm

STATE SPECIFIC PROTECTIONS

The current aggregate value of retirement assets in America is roughly $21 trillion, with individual retirement accounts (IRAs) amounting to the largest single investment asset. While many, if not most, types of retirement assets and accounts are protected against creditors, the IRA is not necessarily one of them. The various protections for IRA are dependent on the amount, how long ago you put the money into your account and the state or jurisdiction you live in. Employer sponsored plans are covered by protections found in federal law, so it is much easier to talk about what protections exist for such plans. The Employer Retirement Income Security Act of 1974 (ERISA) created a large host of protections for employees, including protections against creditors, except when the creditor is the Internal Revenue Service (IRS) or a spouse or former spouse for debt incurred through domestic relations.

The protections found under ERISA have expanded over time through both Congressional action and judicial interpretation of the law. ERISA plans must provide periodic updates to the employees, information about the plan features, creates fiduciary responsibilities for the plan administrators as well as things such as an appeal process for certain decisions that the employee disagrees with. One large collective group of accounts that are not protected, however, are IRAs. IRAs, as the name implies, are owned by an individual and thus do not fall under the protections of ERISA. Most protections for IRAs are found in state law.

PROPOSALS TO LIMIT THE GENERATION SKIPPING TRANSFER TAX EXEMPTION

Published on: June 1, 2016 | by Ettinger Law Firm

PROPOSAL TO MOVE BACK TO PREVIOUS TRUST LAWS

As this blog discussed in the recent past, dynasty trusts are trusts that allow for a benefactor to pass wealth on to future generations via various legal mechanisms that allow a trust to carry on for literally hundreds of years, overcoming the traditional rule against perpetuities that limited trusts to a life in being plus 20 years, thereby ending the legal life of a trust essentially at about 90 to 100 years. In March, 2016 President Obama submitted a proposed budget that includes a provision that would effectively eliminate these state trusts at about 90 years.

Every year, the Department of Treasury prints what is called a green book which outlines proposals, which, among other things, contains suggestions that the presidential administration believes are needed and appropriate changes to the law, policy or other regulatory and legal matters. It also contains information regarding exceptions and issues that are unique to dealing with the federal government. Under President Obama’s proposal, as found in after page 190 in the green book, this would be done by eliminating the generations skipping tax exemption at 90 years from the date of its creation.

BACK TO THE BASICS – HOW TO BE AN EXECUTOR

Published on: May 30, 2016 | by Ettinger Law Firm

AN IMPORTANT AND SOMETIMES THANKLESS JOB

There are times in life when we all will have to do or engage in a thankless job. One such time is when a close friend or a family member asks you to be the executor of their estate. The difference between an executor and an administrator of an estate is small but noteworthy. An executor is someone who is appointed by the terms of the will itself to administer the estate. If there is a trust document to convey property to heirs, they are then known as trustee.

An administrator is the title for the person who appointed to administer the estate by the Court when someone dies intestate, or without a will, or when the appointed executor refuses or cannot complete the task. In either event the probate Court Judge must approve of the selection. A recent survey by U.S. Trust found that three-quarters of high net worth individuals choose a family member or close and trusted friend to be the executor of their estate and two-thirds of the same people chose a friend to be the trustee for their testamentary trust. The process is started when the executor presents the will and a death certificate to the Surrogate Court in the County in which the deceased resided. The Court then issues letters testamentary to the executor, which is when the hard work begins.

WHAT DOCUMENTS TO KEEP AND WHAT TO SHRED

Published on: May 27, 2016 | by Ettinger Law Firm

SPRING CLEANING TIME MEANS CLEARING OLD PAPERWORK

With tax day over and the need to collect and forward any number of financial and tax documents to the government and with the coming of spring, it is time to turn to spring cleaning. The question should be asked, what paperwork can I throw out, should I throw out and what paperwork should I keep. To be accurate, you should never throw out any financial paperwork, you should shred or incinerate such documents. It is inevitable that in any such endeavor, you will come across documents that matter for purposes of your estate planning, such as wills, trusts and the various financial documents that speak to your estate planning. In any event, you should rely on a system to help you collate these important documents for future use.

You should keep certain original documents in an easily accessible but safe place, such as a fire proof safe or perhaps even a safety deposit box. Things such as birth certificates or adoption paperwork, licenses and passports, marriage certificates, judgments of divorce, military discharge papers and social security cards. Other documents do not necessarily need to be kept as an original, they should be regularly review, at least bi-annually, if not more often. Documents such as a will, trust or other testamentary documentation will be kept by your attorney or law firm, but it still always best to maintain a copy or, better still, several copies on hand.