New York Estate Planning & Elder Law Blog

Taking Back Control with a Living Trust

Published on: August 23, 2024 | by Ettinger Law Firm

In the fall of 1990, some thirty-four years ago, your writer first heard of the proposition that if you set up a living trust your estate doesn’t have to go to court to settle – the so-called probate court proceeding for wills. Having spent the previous eleven years as a litigation attorney, and having faced numerous problems probating wills, this sounded too good to be true.

At the time, some of the best estate planning lawyers were in Florida. Perhaps you can guess why. In any event, off I went to Florida to train as an estate planning lawyer and, upon returning, closed the litigation practice and founded Ettinger Law Firm in April 1991, to keep people just like you, dear reader, out of probate court.

The reason I was so excited about the living trust, and continue to be so to this day, is the concept of taking back control from the courts and government and giving it back to you and your family. After all, who doesn’t want control over their affairs?

Protecting Your Future

Published on: August 9, 2024 | by Ettinger Law Firm

“Protecting Your Future” has been Ettinger Law Firm’s slogan since we began in 1991. These words have deep meaning to us and our clients. Following are the eight ways an Ettinger Elder Law Estate Plan protects your future:

Makes sure your assets go to whom you want, when you want and the way you want. This can be all at once, at stated ages, managed by someone re responsible, leaving someone out and preventing them from challenging, protecting heirs from themselves, etc.

Takes a social approach to estate planning by fleshing out potential sources of conflict ahead of time and taking steps to prevent discord and preserve family harmony.

Second Marriage Planning

Published on: July 12, 2024 | by Ettinger Law Firm

In second marriage planning, a co-trustee is sometimes recommended on the death of the first spouse. While both spouses are living and competent they run their trust or trusts together. But when one spouse dies, what prevents the other spouse from diverting all of the assets to their own children? Nothing at all, if they alone are in charge. While most people are honorable, and many are certain their spouse would never do such a thing, strange things often happen later in life. A spouse may become forgetful, delusional or senile or may be influenced by other parties. Not only that, but the children of the deceased spouse tend to feel very insecure when they find out their stepparent is in charge of all of the couple’s assets.

If you choose one of the deceased spouse’s children to act as co-trustee with the surviving spouse there is a conflict that exists whereby the stepchild may be reluctant to spend assets for the surviving spouse, because whatever is spent on that spouse comes out of the child’s inheritance. Then what if stepparent gets remarried? How will the stepchild trustee react to that event? What if it turns out the stepchild liked the stepparent when his parent was living, but not so much afterwards?

Here is where the lawyer as co-trustee may provide an ideal solution. When one parent dies, the lawyer steps in as co-trustee with the surviving spouse. The lawyer helps the stepparent to invest for their own benefit as well as making sure the principal grows to offset inflation, for the benefit of the deceased spouse’s heirs. The stepparent in this case takes care of all their business privately with their lawyer. The trusts cannot be raided. These protections may also be extended for IRA and 401(k) money passing to the spouse through the use of the “IRA Contract”. Surviving spouse agrees ahead of time that they will make an irrevocable designation of the deceased spouse’s children as beneficiaries when the IRA is left to the surviving spouse, and further agrees that any withdrawals in excess of the required minimum distribution (RMD) may only be made on consent of the lawyer.

Book Review: “SuperAging” by David Cravit and LarryWolf

Published on: June 26, 2024 | by Ettinger Law Firm

Subtitled “Getting Older Without Getting Old” this new book starts with the premise “…imagine bringing a whole lifetime of knowledge, experience, skills, talent, relationships, wisdom (and, let’s face it, money) to two or three more decades ahead of you in which to leverage all those assets into an ongoing wonderful experience.” With the Baby Boomer generation far outliving and “outhealthing” any prior generation, we are in the era of the “superager”, founded upon seven pillars.

Attitude: Believing in exciting new possibilities, optimism is a major life extender. Purposes and goals are a result of an active curiosity about the potential for the gift of these years. Practice a positive thinking booster program everyday. Search for “positivity apps” and get daily positive quotes. They work!

Awareness: Whereas older adults previously accepted the advice of professionals as gospel, today’s superagers are avid consumers of information. The challenge today is the approach to information gathering and the curating of the “informational torrent”. Tips and techniques for searching and filing your information are provided.

Medicaid Asset Protection Trust (MAPT) v. Life Estate Deed

Published on: May 3, 2024 | by Ettinger Law Firm

Clients often ask whether the home should be deeded to the client’s adult children, while retaining a life estate in the parent or whether the Medicaid Asset Protection Trust should be used to protect the asset.

While the deed with a life estate will be less costly to the client, in most cases it offers significant disadvantages when compared to the trust. First, if the home is sold prior to the death of the Medicaid recipient, the life estate value of the home will be required to be paid towards their care. If the house is rented, the net rents are payable to the nursing facility since they belong to the life tenant. Finally, the client loses a significant portion of their capital gains tax exclusion for the sale of their primary residence as they will only be entitled to a pro rata share based on the value of the life estate to the home as a whole.

All of the foregoing may lead to a situation where the family finds they must maintain a vacant home for many years. Conversely, a properly drafted MAPT preserves the full capital gains tax exclusion on the sale of the primary residence and the home may be sold by the trust without obligation to make payment of any of the principal towards the client’s care, assuming we have passed the look-back period for facility care of five years.

Spousal Refusal – Just Say No

Published on: April 12, 2024 | by Ettinger Law Firm

Spousal refusal is a legally valid Medicaid planning option in New York. By way of background, certain income and assets are exempt from Medicaid if there is a spouse. Generally, the spouse at home, known as the “community spouse” may keep about $3,850 per month of the couple’s combined income and up to about $150,000 of the assets or “resources”. Not included in those figures are any other exempt assets, such as a home (up to about $1,000,000 of the equity only) and one automobile. The spouse who is being cared for in a facility is known as the “institutionalized spouse”.

Many a spouse has advised us that they simply cannot afford to live on the allowances that Medicaid provides. This is where spousal refusal comes in. We start by shifting excess assets into the name of the “community spouse”. He or she then signs a document which the elder law attorney prepares and files with the county indicating that they refuse to contribute their income and assets to the care of the ill spouse since they need those income and assets for their own care and well-being. Note that you may not refuse your spouse’s own income over the $3,850 per month exemption as it is not coming to you.

Once the “community spouse” invokes their right to refuse, and all of the other myriad requirements of the Medicaid application are met, the state Medicaid program must pay for the care of the institutionalized spouse.

Health Care Decision-Making

Published on: March 22, 2024 | by Ettinger Law Firm

For health care decision-making, when a doctor determines you are unable to make medical decisions for yourself, New York has the Health Care Proxy. The proxy, or agent, may make any medical decision for you except one – they cannot withdraw life sustaining measures, such as feeding tubes or a ventilator, unless they can prove this is what you actually wanted.

There are two ways to show that, in situations where there is no reasonable expectation of recovery from extreme disability, and there is no meaningful existence, you do not wish to be kept alive by artificial means. First, you may state in your health care proxy form that you have discussed your wishes regarding artificial life support with your proxy and they know what your wishes are or, secondly, you may execute a ‘living will’ which is essentially a statement that you do not wish to be kept alive in the circumstances discussed above.

The primary consideration in choosing an agent is who would be best suited to make these end-of-life decisions. Most people choose a spouse first and one of their children second. Nevertheless, there is no requirement that it be a family member. You may choose whoever you wish. We are often asked if the client can choose two or more of their children to act jointly. For good reason, the Public Health Law disallows this — if the joint agents didn’t agree, how would the doctor know what to do?

Planning for Those You Are Responsible For

Published on: March 15, 2024 | by Ettinger Law Firm

A client came in to see us for their follow-up consultation. The client shared that, in between their two meetings with us, the husband‘s brother had suffered a stroke and was now in a rehabilitation facility. He was a bachelor. He had no power of attorney or health care proxy. He may or may not have had a will — they didn’t know. Further, they were unable to get access to his apartment to clean out the fridge and get his clothes because he had failed to put them on the list of persons approved to enter in the event of an emergency.

One of the most overlooked areas in estate planning is the question of who you are responsible for. Do you have a friend or relative who you know will need to rely on you if something happens? Either they have no one else or everyone else is too far away. If you have the responsibility, then make sure that you have the documents you will need to carry out that responsibility. Otherwise, the challenges become of a magnitude greater.

Similarly, so many of our clients have adult children with young families. Do you know whether your children have wills, powers of attorney and health care proxies?

What is Elder Law Estate Planning?

Published on: March 8, 2024 | by Ettinger Law Firm

“Elder Law Estate Planning” is an area of law that combines features of both elder law (disability planning) and estate planning (death planning) and relates mostly to the needs of the middle class. Estate planning was formerly only for the wealthy, who wanted to shelter their assets from taxes and pass more on to their heirs. But today estate planning is also needed by the middle class who may have assets exceeding one million dollars, especially when you consider life insurance in the mix.

Estate planning with trusts became popular starting in 1991 when AARP published “A Consumer Report on Probate” concluding that probate should be avoided and trusts should be used to transfer assets to heirs without the expense and delay of probate, a court proceeding on death. Trusts are also widely used today to avoid guardianship proceedings on disability, protect privacy, and reduce the chance of a will contest in court.

As the population aged, life expectancies increased, and the cost of care skyrocketed, the field of elder law emerged in the late 1980’s to help people protect assets from the cost of long-term care by using Medicaid asset protection strategies.

Medical Aid in Dying (MAID)

Published on: March 1, 2024 | by Ettinger Law Firm

According to the New York State Bar Association, “medical aid in dying is a medical practice that has been adopted in ten US jurisdictions (WA, MT, VT, CA, CO, D.C., HI, ME, NJ, NM) that allows a terminally ill, mentally capable adult with a prognosis of six months or less to live to request from their doctor a prescription for medication they can decide to self-ingest to die peacefully in their sleep.” New York’s MAID law will be considered by the legislature this year.

Protections in the proposed law include (1) a requirement that two physicians confirm the person is terminally ill with a prognosis of six months or less months to live, (2) the individual is informed of palliative care and hospice options, (3) there is a mandatory mental health evaluation if either physician has any concerns about the person’s mental capacity, (4) the request be in writing witnessed by two people, neither of whom stand to benefit from the person’s estate, and (5) anyone attempting to coerce a person will face criminal prosecution.

MAID is inextricably tied to hospice and palliative care, of which a core value is patient dignity and autonomy. New York ranks last in the country for hospice utilization due to health providers failing to provide information and counseling on these end of life options. Options will now be required to be discussed under a provision requiring “informed consent”.