New York Estate Planning & Elder Law Blog

Developments with the New York Estate Tax

Published on: April 9, 2014 | by Ettinger Law Firm

We often discuss the importance for local families to account for the New York estate tax. Far more media coverage is given to the federal tax, and some local residents are under the mistaken assumption that the state law mirrors the federal. It currently does not. Even families who do not have asset to trigger the federal tax may still need to plan appropriately for the New York tax on estates.

However, if current plans are carried out, in a few years .there may be much more congruence between the state and federal rules. That is because earlier this month New York changed exemption levels for the estate tax. Previously, assets over $1 million were exposed to the tax at a 16% top rate. Now, however, the exemption level is raised to slightly more than $2 million ($2,062,500). Not only that, but that level is set to steadily increase or five years until, in 2019, the exemption level matches the federal exemption amount at that time (projected to be $5.9 million).

Important Provisions in the Estate Tax Law

April is Financial Literacy Month – Plan for Your Future

Published on: April 8, 2014 | by Ettinger Law Firm

In the spirit of raising awareness of sound money management, April is officially deemed “National Financial Literacy Month.” The U.S. Senate even passed a resolution on the matter a few years ago. The National Foundation for Credit Counseling usually leads the yearly effort, and many others in the financial world also use the occasion to discuss important money matters.

For example, Money Management International, a non-profit credit counseling agency, created a robust website sharing a variety of resources for consumers: www.FinancialLiteracyMonth.com. The website provides helpful tools on basic financial information, income worksheets, debt load calculators, financial goal tracking, and more.

While much of the information is focused on very general money management skills, if recent poll data is accurate, a majority of Americans remain far behind in prudent planning. Consider that a recent National Foundations for Credit Counseling (NFCC) survey found that over 60% of Americans do have any sort of budget. In addition, the survey found that nearly one in three Americans do not put anything from their annual income toward retirement savings. It is perhaps no wonder then that “retiring without having enough money set aside” is the most commonly cited financial issue that worries Americans according to the NFCC survey.

Guardianship Law To Go in Effect in New York

Published on: April 7, 2014 | by Ettinger Law Firm

“Granny Snatching” is probably not a term you are familiar with hearing. But, believe it or not, over the years elder law advocates have popularized the concept to explain a problem affecting fights over guardianship of seniors. Specifically, granny snatching refers to a problem where a elder guardian (usually close friend or family member) suddenly loses their rights when the senior moves into a different state than the one where guardianship was established.

This situation can exacerbate family feuding and increased elder abuse risk. That is because the jurisdictional matter opens the door for one relative (who does not have legal guardianship) to physically move the senior elsewhere. The former legal guardian then faces significant challenges being reunited with their loved one because the new state’s failure to recognize their authority.

Currently, this is a risk for all families that move into (or out of) New York. Per existing state law, a guardian needed to bring new guardianship proceedings upon moving into the state. At the same time, New York residents that move elsewhere risked having their guardianship ignored by the new state. This poses very real administrative problems for seniors most in need of help with various day-to-day financial and well-being issues.

Alzheimer’s, Medical Testing, & Long-Term Care Insurance

Published on: April 4, 2014 | by Ettinger Law Firm

Rather extraordinary claims were recently made by researchers in a Nature Medicine article that may forever change the long-term care planning landscape.

Scientists from Georgetown University are claiming to have developed a blood test that can determine whether an individual will develop dementia symptoms within two or three years. Their findings suggest the test is 90% accurate. While few are questioning the researchers methods, it is still to early to know if the results will hold up in future studies. This initial group consisted of only 525 total participants (all over age 70), with only 28 of that group ultimately developing symptoms. More efforts are already underway to test larger groups and potentially verify the results.

While this test offers nothing in the way of a direct cure to prevent Alzheimer’s or minimize symptoms, it still may eventually lead to treatments. That is because some research argues that all previously attempted therapies failed because they were only begun after someone showed the symptoms–at which point it may have been too late. However, if this test proves accurate, then treatments can begin earlier that may actually be effective.

Do Not Act Too Quickly After a Passing

Published on: April 2, 2014 | by Ettinger Law Firm

Much of estate planning involves preparations that can streamline matters in the aftermath of a death. The probate process can be long and drawn-out, forcing families to wait months before working out the basic details of asset transfer. Alternatively, by using trusts, the process can be far more seamless, saving time and taxes. Trusts are important for all New York families, not just those with significant assets.

While it is prudent to handle legal and financial details in a timely fashion following a death, as a practical matter, it is important to not “overdo” it. A helpful article from Mondaq offers a few thoughts on ways that family members can “jump the gun” and cause more complications by rushing to deal with various matters.

Causing More Complications

Outrage After Seniors Kicked Out of New York Nursing Home

Published on: April 1, 2014 | by Ettinger Law Firm

Elder care advocates are understandably up in arms following reports about questionable evictions from a Brooklyn facility catering to seniors. The sad situation is a reminder of the continuing struggles faced by so many local families in their quest for quality, reliable long-term care and support. It is also a troublesome sign that most communities remain drastically unprepared to provide the aid that will be needed in coming decades as the New York population ages.

NY Nursing Residents Evicted After Facility Closure

As reported by the NY Daily News last month, a group of over 100 Brooklyn seniors are currently scrambling to find alternative living arrangements following the announcement of the sudden closure of the Prospect Park Residence. The Park Slope facility has been a home for senior for over 15 years. But that will end in May, as the facility is slated to shut its door by the beginning of June.

Federal Estate Tax “Portability” – Should It Always Be Used?

Published on: March 27, 2014 | by Ettinger Law Firm

The idea of “portability” is an important part of many estate plans. Portability is technically an informal word referring to a federal tax-saving option using the deceased spouse’s unused exemption (DSUE). Essentially, portability is a tool for married couples that, when used prudently, can shave millions of dollars off an estate tax bill.

Under the current law, assets under $5.34 million are exempt from the federal estate tax (though the New York tax kicks in far lower at $1 million). Importantly, there are unlimited tax-free transfers allowed between spouses. That means that if one spouse dies and leaves everything to the other, then there will not be a federal estate tax burden, regardless of how many assets are passed on.

However, when the surviving spouse passes away and transfers those assets to others–perhaps adult children–then the tax would apply to assets over the individual exemption level of $5.34 million. But portability changes that. Instead of using only an individual exemption, a surviving couple may be able to use any unused exemption from their former spouse in addition to their own. This means that up to $10.68 million may be exempt from the tax. In short, portability can save an estate millions of dollars in taxes.

Don’t Leave Your Planning Up to a Coin Toss

Published on: March 25, 2014 | by Ettinger Law Firm

A headline-grabbing story last week in the New York Post offers a good reminder of the need to be crystal clear in certain estate planning situations to avoid drawn-out legal battles.

According to reports, two siblings are engaged in a dispute over how to divide up an inheritance that they are to split from their uncle. The two men are the nephews of David Barrett, a well-known Manhattan interior designer who passed away in 2008 at the age of 85. Per the terms of Barrett’s estate planning, his $5.6 million estate is set to be split between the two men.

However, the division of those assets into two is apparently not going smoothly.To help determine how the various assets are to be split, an executor of the estate apparently recommended that a coin toss be used. For example, to determine ownership of a painting valued at around $45.000 a coin toss was performed, with the younger brother winning.

Back to the Basics: NY Medicaid Eligibility & Protecting Assets

Published on: March 24, 2014 | by Ettinger Law Firm

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.

Good News Following Ulster County Nursing Home Sale?

Published on: March 21, 2014 | by Ettinger Law Firm

The face of New York nursing home care has been changing in recent years. The traditional model of individual counties throughout the state owning and operating facilities to provide care to ailing seniors is being phased out in may places. Instead, the counties are selling the homes to private companies to operate. The moves are spurred in almost all cases by financial realities–the facilities are too expensive for the county to operate.

Understandably, elder advocates worry about the effect of the change on senior care. In the past, some analyses have suggested that privately-run nursing homes, on average, show more “deficiencies” than their public counterparts. The assumption is that private homes are motivated by profit and more willing to cut resources to residents and refuse to pay wages for the best caregivers in order to boost their bottom line.

But is is important to remember that no two homes are identical, and “averages” do not mean that all privately run homes are rampant with neglect and need to be avoided. Early reports out of Ulster County, for example, offer a hopeful reminder that quality decreases may not automatically follow private nursing homes sales.