Estate Planning

Reasons to Revise Your Estate Plan

Published on: May 19, 2023 | by Ettinger Law Firm

Estate planning is not written in stone. Instead, estate plans should be revised and reconsidered when various major life events occur.

Marriage may or may not involve a prenuptial agreement. Regardless, it may call for adding your new spouse’s name as beneficiary on insurance policies, on a will or trust, power of attorney, health care proxy and deeds.

Serious illness requires that you give thought to appointing someone to handle your affairs and making sure they have the documents needed to discharge the responsibility. You may want to add a second person to share the load or as a back-up. It is also the time to consider asset protection strategies should long-term care be needed one day, either at home or in a facility. One of the biggest mistakes we see, as elder law attorneys, is that the family becomes so focused on the medical side of things that they fail to focus on the legal side until it is too late.

Contesting a Will

Published on: April 26, 2023 | by Ettinger Law Firm

In order to contest a will, the objectant must have “standing”, meaning they would legally be entitled to a share or a greater share of the estate if the will was declared invalid. “Standing” alone, however, is insufficient. There must also be grounds for contesting as provided below.

1. Undue Influence: Independent caregivers and caregiver children who end up being named primary beneficiaries under the will are often scrutinized for having prevailed upon the decedent to leave them the lion’s share of the estate. The various means alleged may be physical or mental abuse, threats and isolation of the disabled person. Even non-caregivers who had influence over mom or dad may be challenged where they end up with more than their fair share. As with any court proceedings, proof of the claim will need to be made.

2. Improper Execution: The formalities for executing a will must be strictly observed. The formalities include that the witnesses believed the decedent was of sound mind, memory and understanding. There must be two witnesses who signed in the presence of the testator and of each other. The testator must declare in front of the witnesses that they read the will, understood it, declare that it is their last will and testament and approve of the two witnesses to act as witnesses to the will.

If You Don’t Understand the Plan, You Don’t Have a Plan

Published on: April 19, 2023 | by Ettinger Law Firm

So many people who come in to see us do not understand the estate plan they have or do not know what is in their current plan. Some of the reasons for this are (1) time has inevitably blurred their memories, (2) the plan may be written in legalese and was never properly explained to them, (3) they may have misconceptions and misunderstandings of what their plan is; and (4) their lawyer may have lacked the knowledge required to find the right solution for their family in the event of death and disability. To this we say, “if you don’t understand the plan, you don’t have a plan.”

Ettinger Law Firm developed a process, in use for over thirty years, to avoid these problems. First, we offer a free initial consultation to go over the pros and cons of having a will or a trust and the differences between revocable and irrevocable trusts. So many people have misconceptions about trusts based on what friends have said or what they have read on the internet. For example, many clients are afraid to create an irrevocable trust because they think they will lose control. We explain why that is incorrect and how you can still change the trustee, change who you leave it to, take money out and even how you can revoke an irrevocable trust!

After the overview provided in the initial consultation, we give you a copy of our plain English book, “Elder Law Estate Planning”, and advise which chapters apply to your situation — maybe an hour or so of reading. We also invite you to watch the thirty minute estate planning video at trustlaw.com.

Trusts Create Order Out of Chaos

Published on: March 17, 2023 | by Ettinger Law Firm

At Ettinger Law Firm, we are fond of saying “trusts create order out of chaos” — for three major reasons:

First, as noted in previous columns, an ever-increasing number of Americans suffer a period of legal disability later in life. Without your own private plan for disability, consisting of a trust and a “prescription strength” elder law power of attorney, you run the risk of a state appointed legal guardian. Do you want the people you choose to be in charge in the event of your disability, with the freedom to act immediately in your best interests, or do you want the state to appoint someone who will require court permission to protect your assets and your family — which permission is sometimes denied. A guardianship proceeding is expensive, time-consuming and stressful — in other words, chaotic. Trusts create an orderly process whereby your appointed trustees consult with your elder law attorney and are free to act immediately without court interference.

Secondly, trusts avoid probate court proceedings on death whereby wills, even though supervised by an attorney, with two witnesses and a notary, must first be proven to be valid in court proceedings. The client has no control over probate court proceedings – the time they will take or the amount they will cost. Typically, it takes months and, not unusually, one to two years or more. Meantime, property cannot be sold and assets cannot be reached to pay bills. In other words, chaos. With a trust, the trustee may act immediately upon death, list property for sale and access investments and bank accounts.

Powers of Attorney Are for Everyone

Published on: November 11, 2022 | by Ettinger Law Firm

What happens if you have an accident or an illness whereby you are unable to handle your legal and financial affairs? Many people incorrectly believe their spouse is legally able to handle their affairs. Similarly, a parent has no legal authority to handle the affairs of a child, once the child attains the age of majority – eighteen years.

Without a power of attorney, you would have to apply to a court to be named a legal guardian. These proceedings are expensive, time-consuming and fraught with peril. The judge has no obligation to name the spouse or parent as legal guardian and may appoint a stranger. For example, the judge may feel that the spouse or parent has a conflict in that they are the beneficiary of the incapacitated person’s assets, or the judge may decide that someone else has more knowledge and experience in handling such matters.

Who should you choose as your “agent”? In our experience, the vast majority of powers of attorney name the spouse first and one or more of the children second. While on its face this seems reasonable, experience has shown it may not be a good idea. We often need to use the power of attorney when the client is quite elderly and infirm. Often, so is the spouse at that time. Son or daughter wants to step in and help out with bill paying, etc. only to find they are unable to use the power of attorney for dad unless they can prove that mom can’t.

The Secure Act and Your IRA

Published on: November 2, 2022 | by Ettinger Law Firm

The Secure Act governs distributions from IRA’s and other retirement plans. After the death of the account holder, most named beneficiaries are required to take the funds out over ten years.

While the IRS has not finalized the regulations, the safest approach is to take minimum distributions for the first nine years, based on the life expectancy of the beneficiary. More may be taken, and taxes will be based on that amount. The way the minimum distribution works is as follows. Let’s say the beneficiary has a life expectancy of forty years when the account holder dies. In the year following the account holder’s death they must take one-fortieth, the following year one-thirty-ninth, and so on until year ten when they are required to take the retirement account balance in full.

There are a few exceptions to the ten year rule. Spouses may roll the inherited IRA into an IRA of their own and continue it for their own lifetime — generally waiting until they are 72 to start taking required minimum distributions (RMD’s) unless they need the funds earlier.

Avoiding Guardianship in New York

Published on: October 13, 2022 | by Ettinger Law Firm

For the ever-increasing number of those who become legally incapacitated later in life (i.e. unable to handle their legal and financial affairs) having a legal guardian appointed looms as a distinct possibility.

A guardianship proceeding may be commenced by a hospital, nursing home, assisted living residence, family member or a professional involved in the affairs of the “alleged incapacitated person” or “AIP”. These proceedings arise for various reasons such as the facility looking to secure payment or a family member or professional finding that the AIP is either not handling their affairs well or is being taken advantage of financially.

Once the proceeding is commenced a vast bureaucratic process begins to unfold. Notice of the proceeding and of the date and location of any hearings are sent to all interested parties, including all immediate family members.

Estate Planning for Pets

Published on: October 5, 2022 | by Ettinger Law Firm

In the event of their death, many people wish to provide for the adequate care and feeding of their beloved dog, cat, bird or other pet. Here is an abridged version of New York’s statute authorizing a trust for your pet;

The intended use of the principal or income, of a trust for the care of a designated domestic or pet animal, may be enforced by an individual designated for that purpose in the trust instrument. Such trust shall terminate when no living animal is covered by the trust.
No portion of the principal or income may be converted to the use of the trustee or to any use other than for the benefit of a covered animal.

The Value of Revising Your Estate Plan

Published on: July 7, 2022 | by Ettinger Law Firm

You should strive to review your estate plans every few years. While it might not seem like it, many events can occur during this period that impacts your estate planning goals. Besides personal changes, the country also experiences national elections every four years which often lead to changes in estate taxes.

Consider Role Appointments

One of the most critical parts of estate planning is appointing who among your friends and family members will act in the role of executor, power of attorney, and other estate planning positions. You should also question whether the parties you nominate to act in such a role remain fit and willing to act in these positions. It’s also important to remember that the suitability of appointments can change. While a person might seem like a good executor, they might not be a suitable executor a decade from now.

Advice on Removing an Executor from an Estate

Published on: July 7, 2022 | by Ettinger Law Firm

After a person is named an executor, the individual takes on the obligation to adequately and promptly complete the estate’s administration in addition to distributing an estate’s assets to anyone listed as a beneficiary. Assuming that the executor appreciates the duty that he or she owes to the estate and pursues appropriate assistance, an estate’s administration can be performed in a timely manner, and assets are distributed appropriately.

It’s not unique for new challenges to appear during estate administration. This article highlights some situations where a court might remove an executor after paperwork is filed by an estate beneficiary.

A common issue faced by beneficiaries is when executors do not timely administer an estate. Even though estate administration is nuanced, executors have a duty to administer estates in a timely manner. Unfortunately, executors sometimes do not expediently process how an estate should be administered. Instead, executors sometimes take too long to complete estate planning processes.