Articles Posted in Trust Transfers/Gifts

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.  

The New York Medicaid program is a critical lifeline for millions of residents. Unfortunately, many remain confused by some of the complex details. It is common to have only a fragmented understanding of how Medicaid works from random discussions with friends and neighbors or by hearing snippets of news clips discussing the program.

One of the most misunderstood aspects of the system is the “spend down” requirement. Medicaid is a need-based program, and so qualification requires one to have assets below a very low threshold. But that does not mean that everything you own will be lost before qualifying for Medicaid.

Medicaid Misunderstandings.

After discussions with New York elder law attorneys, many individuals seek to protect their assets by creating a trust and assigning a specific family member as the “trustee” of that trust. Most are aware that the trustee will make decisions about the distribution of an estate following the death of the “grantor”–the individual whose assets were placed in the trust. It is important to remember, however, that the trustee is taking on specific legal duties. A trustee is more than a mere title indicating that the individual will help handle affairs; it is an acceptance of very specific responsibilities owed to all beneficiaries.

Unfortunately, with the recent passing of a loved one, stresses are at their highest at the very moment when a trustee is required to fulfill their duties. This often leads to complications between family members.

For example, the Napa Valley Register shared a story about an all too common occurrence involving a dispute with a trustee. A man died with a living trust. He left his estate to be administered by a trustee–one of his five children. Some of the children helped in the organization and distribution of the man’s assets, while some did not. Shortly after all of the matters appear settled, one of the children who was not involved began to wonder whether they received a fair percentage. They asked the sibling who was a trustee for an accounting of the distribution, and a protracted disagreement among the family members ensued.

This situation often occurs in our area, as living trusts and the designation of a family member trustee are common components of a New York estate plan. As the children in the above situation show, there remain legal issues of which to be aware following the creation of that trust plan. Trustees are fiduciaries, which means they owe a duty of competence and loyalty to those who seek to benefit from the trust–often a group of siblings. Even if some of those family members initially seem indifferent to the distribution process or are unwilling to help, the trustee must never act in a way that could treat certain beneficiaries unfairly.
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by Michael Ettinger, Attorney at Law funding.gifThe Medicaid Asset Protection Trust (MAPT) is a technique commonly used by elder law attorneys. It consists of an irrevocable trust, usually set up by a parent of parents sixty-five and older. One or more of the adult children are named as “trustees” to manage the trust for the benefit of the “beneficiaries” who remain the parents during their lifetimes. For example, the parents retain the right to the exclusive use and enjoyment of the home and the income from all of the trust assets. The establishment and “funding” of the trust, i.e. retitling the home and the investments in the name of the trust, starts the five year look-back period running. After five years, those assets become exempt and are protected from the costs of long-term care.

Once the MAPT is established, there are certain things the parties can and cannot do. Below are a list of the “Do’s and Don’ts” concerning the MAPT.

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