Articles Posted in Estate Planning

Estate planning is difficult, but for loved ones with special needs, the process can be particularly challenging. Besides worrying about the type of care your loved one will receive, you are likely overwhelmed with many other questions including who will manage finances and whether the person will be able to receive benefits without being disqualified from receiving government assistance. Fortunately, there a variety of strategies to protect your loved one including ABLE accounts and special needs trust. While it can be tempting to view these two accounts as similar, there are some substantial differences between the two.

The Role of ABLE Accounts

Relative newcomers on the estate planning scene, ABLE accounts allow individuals with disabilities a way to save some assets without interfering with eligibility with government assistance programs like Medicaid and Supplemental Security Income. A person is permitted to have only one ABLE account and if assets in the account exceed $100,000, this excess will count towards that individual’s $2,000 resources limit for SSI eligibility. 

If you’ve been asked to help a loved one manage their assets, you likely know that there are many complex issues to consider. One question that many people in this situation are often left wondering is whether it is better to be added to a bank account as a joint account holder or if it is better to establish a separate estate account. While it can be quicker and often easier to simply add a person as a joint account holder, the joint account will also be left the sole account holder after the loved one’s death. 

The alternative is to open an estate account which will be responsible for paying bills associated with the deceased person’s estate. This article reviews just some of the most substantial advantages that people realize by opening estate accounts. 

# 1 – Reduced Risk Exists with Estate Accounts

If you finally wrote your estate plan in 2019, you likely know just how difficult it can be to sit down and write an estate plan. Even after creating these documents, there are still several  obstacles that can occur and prevent you from achieving your estate planning goals. As a result, this article takes a brief look at some of the estate planning mistakes that you should be careful to avoid as the year comes to an end.

# 1 – Not Understanding Your Estate Plan

Some people don’t both to read and review the terms of estate planning documents after they’ve been created by an attorney. Other people let their spouses take care of estate planning and merely sign where is necessary. Not knowing the terms of what you are signing can lead to many serious estate planning challenges. While you need not be able to call up estate planning laws by code number, you should still understand the basics of how your estate plan will work.

One of the most repeated pieces of estate planning advice is to routinely review and update estate planning documents. It is particularly important to revise estate planning documents following major life changes or if a beneficiary under a will passes away before the testator does. If a person fails to make the necessary estate planning changes, there is a substantial risk that the gift will “lapse” and the property will end up being transferred to others in what might be an undesirable manner.

What Does it Mean if a Gift Lapses

If a gift lapses, this means that it cannot be transferred as provided under the terms of a will. One way in which New York law attempts to deal with lapsed gifts is through anti-lapse statutes. New York’s anti-lapse statute states that if an individual who would have received property under another person’s will passes away before the testator, the gift will pass to the deceased individual’s children. 

Based on data compiled by the United States Department of Agriculture’s 2017 Census, there were approximately 33,438 farms in New York in 2017. This includes 6,886,171 acres that are currently in production. As anyone who lives on a farm can tell you, life on a farm is unique in various ways. 

This is particularly true for families who are engaged in estate planning. One of the biggest challenges that many farm families with estate planning is deciding exactly how to pass on the family farm. Farm families must assess how the farm will likely perform decades from now. When multiple children are involved, dividing the farm among family members can also be challenging.

Creating an estate plan that will properly handle farm succession is critical. Not doing this means that a family might leave its children financially vulnerable. Not to mention, a farm is the most valuable asset that many farm families own. According to data compiled by the United States Department of Agriculture, the average value for a larger family farm was approximately $4.5 million in 2014.

Recently, after a mother in Oregon lost her four-year-old son in an accident, the woman to take the boy’s body back to the family’s ranch home. While the mother wanted a little more time with her child, she was instructed by a medical examiner that this request was not capable of being fulfilled. After navigating the various regulatory hurdles, the family ultimately took the boy home and placed him to rest on the property. During this time, the boy’s mother learned that Oregon law, there are no requirements that a person purchase the services of either a funeral director or funeral home. 

Despite the lack of regulations, people rarely decide to hold a home funeral. Not only does this story emphasize one of the reasons why family members should know the rights of loved ones, but this story is also a reminder that medical professionals are also sometimes not familiar with the rights of surviving loved ones. The family’s journey in helping hold a home funeral also inspired the family’s creation of a website, Oregon Funeral Resources & Education. 

The Role of Home Funerals in New York

Not seeing medical providers when necessary. Being financially exploited by others. Not being able to take care of financial situations due to incapacity. These are just some of the common problems that people encounter without a proper guardian. In these situations, it often becomes necessary to petition the court so a more appropriate guardian can be appointed to control the incapacitated person’s affairs.

The Dangers of Guardianship Law

Guardianship is a powerful area of law and if not properly considered can lead to some substantial challenges. Failure to adequately plan for guardianship can lead to a person losing their rights including the ability to choose where they live and how their finances are handled. Some estate planning experts argue that guardians have too much power, which has led to cases of some guardians taking advantage of vulnerable adults by either denying them medical care or taking advantage of the adult. 

The Internal Revenue Service recently announced that beginning in 2020, the first $11.58 million of a taxable estate is not subject to federal estate taxes. As a result of these changes, a majority of estates will not be subject to federal taxes. Even though estate planning is not as big an issue for many estate planners as it once was, family conflict is becoming more common for families during the estate planning and administration process. 

While conflicts tend to occur more often among blended families who often must deal with multiple marriages and children from current or former marriages, conflicts are also a common occurrence among the closet knit of families. As a result, this article reviews some important steps that close-knit traditional families should remember to follow during the estate plan process to avoid conflicts.

# 1 – Communicate Your Wishes

Recent changes are coming for wills. Many states have begun to pass legislation that will result in the introduction of electronic wills, which combine the formality of traditional wills in a digital format. Written using an electronic device, these devices are then electronically signed and validated by the creator. 

It is important to understand that electronic wills do not abandon the formalities of traditional wills including signatures and witnesses, but instead attempt to update these elements to the digital era.

The Roots of Electronic Wills

If your children are younger than the age of age, it is worth considering how you would like to pass on your assets. Because trusts are growing in popularity, this article reviews some of the important issues that you must consider if you are considering creating a trust for your children.

# 1 – There Are Associated Costs

There are several hidden fees associated with trusts. If you do select this option, you will need to appoint a guardian who will oversee assets for the child in case something happens to you before the child reaches the age of 18. A trust guardian must be bonded and must routinely file paperwork with a court of law, which will likely require the assistance of an estate planning lawyer.