New York Estate Planning & Elder Law Blog

Family Disagreement Over Special Needs Trust Leads to Court Battle

Published on: September 26, 2011 | by Ettinger Law Firm

A New York special needs trust is usually the premier method for local residents to provide a disabled child with financial assistance without disqualifying them from receiving government benefits like SSI and Medicaid. Our New York estate planning lawyers know that providing adequate resources for children with special needs is particularly important today because of the increasing life expectancy of disabled youth. The resources needed by these individuals are often substantial, necessitating very careful planning. All families in this situation must ensure that they seek out professional assistance to learn what legal arrangements are best for their unique situation. No two families are identical, and so specialized help is essential.

Failure to seek out experienced legal aid when dealing with these trusts often results in government benefit penalties, negative tax consequences, and damaging family turmoil. Earlier this month Special Needs Answers reported on developments in a complex legal case related to family disagreement over a special needs trust. The case stems from a trust that was set up in 2002 for an 18 year old high school student who suffered severe brain damage after suffering a heart attack. A lawsuit was filed and settled on his behalf against school officials who failed to take action which would have limited the brain damage. The settlement funds were placed in a special needs trust.

The young man died five years later without a will. Per the rules of intestate succession in the state, the trust funds–valued at $8 million at the time of the young man’s death–were supposed to be split between his parents. The child had been estranged from his father for most of his life, but the victim’s mother did not discuss her specific family situation when the trust was created. In order to avoid having her ex-husband share in the fund assets, the mother had a disclaimer drafted and convinced her ex-husband to sign it by claiming it was a document related to burial. The former spouse initiated a legal challenge when he eventually learned that he had signed away his share of $8 million. The ensuing legal battle lasted several years. It was only this year that a local court ruled that the mother acted wrongly in trying to deceive her ex-husband into signing the disclaimer. The estranged father will be allowed to collect half of the funds left in the trust.

Medicaid Asset Protection Trust Is Important Tool for New York Seniors

Published on: September 19, 2011 | by Ettinger Law Firm

A Medicaid Asset Protection Trust (MAPT) is one of the best tools available for seniors who do not have long-term care insurance to protect their assets from the staggering cost of nursing home care. This weekend our New York elder law attorney, Bonnie Kraham Esq., had a story published in the Times Herald-Record where she explained the value of this trust for local residents. The article highlighted the specific ways that a MAPT can help local seniors save assets for their family and dispelled misconceptions that some have about creating the trust.

A MAPT is a legal entity that a resident creates with the help of a professional to protect assets from being consumed in order to pay for long-term caregiving costs in the future–usually nursing home care. To create the trust, a resident transfers assets (such as the family home) into the separate legal entity and names someone other than themselves or their spouse as trustee to manage the assets in the trust. The senior may then be able to keep those assets down the road while still qualifying for Medicaid assistance if needed to pay for nursing home care.

Contrary to some misperceptions, local seniors who create a New York Medicaid Asset Protection Trust do not forever “lock up” all of their assets or lose the power to alter what happens to their property. The lifestyle of the senior who creates the trust is usually unaffected, because they still receive pension checks and Social Security checks directly, and they retain the exclusive right to use their home just as before while keeping their home tax exemptions. These trusts are irrevocable, but New York law actually allows the trust to be revoked with written consent of all involved parties. In addition, the individual who creates the trust can amend it to change the beneficiaries at any time.

Grandparents Day is Reminder of Importance of Long-term Care Planning

Published on: September 15, 2011 | by Ettinger Law Firm

While it slipped under the radar this year for many families, the first Sunday after Labor Day is Grandparents Day. As explained this week in the Daily Local, the holiday has been the topic of a presidential proclamation every year since 1978. More recently it has been used as a time to raise awareness of the continuing needs of many grandparents in nursing homes and the importance of helping our elders conduct long-term care planning. Considering that the majority of area seniors remain concerned about their future quality of life, our New York elder care attorneys know that all occasions are good ones to discuss these long-term care issues.

The non-profit association which champions Grandparents Day each year explained how the group has been working to help families take steps that will keep their elders in their own homes, instead of nursing homes. Efforts to transition away from nursing home care are growing in popularity nationwide. Our New York elder law estate planning lawyers have long recognized that most area seniors would prefer to “age in place,” receiving the additional care that they need without being forced to move into a nursing home or other long-term care facility.

However, the financial realities of these situations often mean that it is only those who have taken steps to prepare for this time in their lives that ultimately have the freedom to stay at home. For example, residents who visit a professional early enough to discuss these matters often decide to invest in long-term care insurance (LTCI). This insurance can ensure that the resources will be available when necessary to pay for at-home care when a senior is in need of extra assistance with day-to-day tasks. It is difficult to put a price tag on the peace of mind that comes with knowing one has done everything in their power to ensure that their quality of life will remain as high as possible no matter what the future holds.

When Considering Inheritances, Baby Boomers Fear Children’s Financial Acumen

Published on: September 15, 2011 | by Ettinger Law Firm

Professional inheritance planning continues to rise in popularity among all classes of society as more and more seniors reach retirement age and come to appreciate the legal tools available to help in their planning efforts. Interestingly, a new poll discussed in Time magazine this month explains that many of the newest retirees from the Baby Boomer generation have doubts about their heirs’ ability to manage an inheritance. This is a common concern, and our New York estate planning lawyers work with many clients in this area who are specifically tailoring their plans to account for it.

The new survey found that only 49% of millionaire Baby Boomers indicated that leaving money to their children was a priority in their estate planning. When analyzed closely it is clear that the polling figures do not indicate that these parents have stopped worrying about the well-being of their children. Instead, many of them have deep concerns about the effect that a large inheritance will have on their offspring. For example, one-fifth of survey respondents felt that their children would simply squander the inheritance and a quarter of these seniors thought that receiving too much money would only make their heirs lazy. Perhaps because of this, a majority of these retirees admit that they keep their children in the dark about their exact net worth so as to prevent expectations about what will be left behind.

Fear about the financial sense of children has long been a concern for local community members. For decades, attorneys at our New York elder law estate planning firm have worked with residents who were worried about a family member’s ability to handle money. Fortunately, tailoring inheritance plans to account for spendthrift children is exactly a benefit one derives from seeking professional help in this area. A variety of trusts exist which allow parents to pass on the assets they feel appropriate to their heirs in a way that guards against their fears that the inheritance would be wasted, abused, or usurped by a non-relative.

Estate Planning for Disabled Heirs

Published on: September 14, 2011 | by Ettinger Law Firm

Last week the Wall Street Journal‘s “Family Values” blog discussed the often challenging estate planning issues faced by families who are providing for a disabled loved one. Our New York estate planning lawyers know that more families are in this situation than some might suspect. The latest U.S. Census data shows that roughly 12% of the population has a severe physical or mental disability. When planning for the future it is particularly important for these families to closely consider how they want to leave assets to their heirs because of the effect that the asset transfers may have on their disabled relative’s access to public assistance.

Budget shortfalls are causing many state and local governments to cut support services to these residents. A common cost-cutting measure includes tightening income restrictions for those seeking to qualify for medical benefits and support services. As a result, it is vital that all families structure inheritances for disabled heirs so that they are not disqualified from the government help that they will likely need. Yet, research shows that two-thirds of parents and caregivers with disabled loved ones do not have plans in place to account for the long-term needs of these vulnerable heirs.

This is particularly unfortunate, because there are planning strategies that exist specifically to assist families in this situation. For example, a special needs trust can be used to leave assets to heirs with disabilities while ensuring that they keep government benefits like Medicaid and Supplemental Security Income (SSI). Before this trust was available parents were often forced to disinherit their disabled children lest they lose all their government support. Now, those who create a special needs trust can leave assets for the child’s use beyond that which they will receive from the government. Families can set aside funds for clothing, education, entertainment, household goods, healthcare costs, and many other future wants and needs for their disabled relative.

Estate Planning Tips For Providing One Child a Larger Share of Inheritance

Published on: September 12, 2011 | by Ettinger Law Firm

There is often a default assumption that local parents wish to provide all of their children with equal shares of an inheritance as part of their New York estate plan. However, no two families are identical, and there are a variety of reasons why some parents feel it necessary to provide different assets to each of their children upon their death. The ability to tailor an inheritance using rules different than the default to suit a family’s specific desires is one of the main reasons why local families seek the assistance of New York estate planning lawyers. As one lawyer put it, “there’s nothing so unequal as the equal treatment of unequals.”

Most families take a variety of factors into account when deciding how to distribute their property. For example, one child may already be more financially successful, another may have a larger family of their own, and yet another may be estranged from the family. In other cases a parent may have already helped one child while alive–such as by providing down payment money on a house–and want that prior help to be reflected in the inheritance.

A Wall Street Journal story this weekend discussed how many families have questions about the best way to go about giving one child a larger share than another. Trusts are usually a more effective estate planning tool than a will. However, if a will is used, it is important that certain steps be taken to ensure that the uneven child distribution is capable of withstanding legal challenge. Part of that process involves being open and honest with family members about the inheritance so that children know about the terms while you are alive. This minimizes the surprise factor and may quell later suspicions. Having these conversations is often difficult, so as an alternative a video or instruction letter can be included with the estate planning documents to explain why a certain decision was made.

Bankruptcy Filings Among the Elderly Are Rising

Published on: September 9, 2011 | by Ettinger Law Firm

The economic conditions of the past few years have placed many families in difficult financial circumstances. Few demographic groups have been spared, and our New York elder law attorneys know that the situation has affected many seniors in our area. Echoing that trend, a forthcoming article in The Elder Law Journal explains how there has been a sharp increase in the number of elderly community members filing for bankruptcy.

According to the latest data available, those over sixty five years old account for seven percent of all bankruptcy filings. This is a marked increase from rates over the past two decades. For example, senior citizen bankruptcies represented only four and half percent of the total in 2001 and roughly two percent in 1991. The new research on the topic found that medical debt was one of the most commonly cited reasons for the filings by these community members. The often staggering cost of care required by seniors makes it a virtual necessity for all local residents to conduct proper New York long-term care planning to ensure that they are not financially devastated by these medical and caregiving bills.

The new research on elderly bankruptcies found that one of the main reasons why seniors find themselves facing financial struggles is an unwillingness to ask others for aid with fiscal questions. All local seniors who are worried about their financial well-being should remember that assistance is available. An experienced New York elder care lawyer is able to help local families plan ahead for long-term medical care. This preparation provides the peace of mind that comes with knowing that one’s finances will be protected regardless of what the future holds.

Many Middle Class Families in New York Use Trusts in Estate Plan

Published on: September 6, 2011 | by Ettinger Law Firm

One of our New York estate planning attorneys, Bonnie Kraham, Esq., recently authored an article that shares information on the increasing use of trusts in the estate plan of many local middle class families. The story was published in this weekend’s Times Herald-Record, and explains the various types of trusts that residents can use and the way that each holds and transfers property. Unfortunately, there remains a misconception among some local community members that creating a New York trust is a project only for the wealthy. That is not the case. As attorney Kraham notes, there has been a “living trust revolution” over the past few decades where many middle class families have discovered the ways in which these legal entities can be used to avoid probate, save taxes, and protect assets.

All trusts begin with a written agreement, and each includes at least three necessary parties. These include a “grantor” who creates the trust, “trustee” who manages the assets, and “beneficiaries” who use the trust assets. For example, the three roles may be filled when a senior couple creates a trust (grantors) to be managed by their lawyer (trustee) to provide for the couple’s children (beneficiaries). The three roles need not be filled by different individuals, however. Often a grantor will also act as beneficiary, so that they can still use those assets while they are alive. Following the written agreement which establishes the trust, assets are transferred into the entity by way of “retitling.” This involves changing the name on accounts, mutual funds, and stock certificates to the name of the trust, and transferring title to property to the trust.

The two main types of trusts are testamentary and living. Testamentary trusts are created only after an individual’s death pursuant to their will, while living trusts are created while a grantor is still alive. Living trusts are an increasingly common way for many families to transfer assets at death. Among other benefits, a living trust can help families avoid probate, saving time and expense in closing the estate.

Proper Senior Care Planning Needed to Prevent Elder Financial Abuse

Published on: September 2, 2011 | by Ettinger Law Firm

Earlier this year Congressional hearings were held on the often forgotten problem of elder financial exploitation. Federal officials are still considering a variety of legislative options to protect victims of these crimes and hold wrongdoers properly accountable. Our New York elder law attorneys know that many residents in our area fall victim to predatory actions that often deplete resources built up over a lifetime. The problem takes many forms, from identity theft and scams to manipulation by trusted caregivers. Surprisingly, much financial abuse is perpetrated by friends and family members who exploit the senior’s vulnerability for personal enrichment.

While legislative actions may be helpful to better protect seniors from this exploitation, the first line of defense is proper individual financial preparation. Taking proactive steps to minimize the risk of being taken advantage of is the best way each individual resident can protect themselves. For example, a comprehensive story at TBO News explained this week that identity theft can usually be prevented if simple steps are followed. This includes refusing to give personal information over the telephone, deleting unsolicited emails that ask for personal information, and not carrying Social Security cards and multiple credits cards at the same time. Additionally, seniors should be sure to shred personal mail, stop mail before going on vacation, be cautious with online shopping, and frequently review financial statements.

While identity theft is a common fear, most seniors are much more likely to be financially exploited by family and friends. To guard against this mistreatment, local advocates agree that it is important to have a New York elder care plan in place so that trained eyes are aware of your financial situation. Beyond that, simple steps can help to limit one’s risk of being victimized. It remains important never to give blank checks for others to fill in the amount, sign complicated papers that you don’t understand, or give others unlimited access to financial information. In addition, seniors should always work with their banks to control who has access to funds.

Proper New York Estate Planning Necessary to Combat Possible Legal Challenges

Published on: August 24, 2011 | by Ettinger Law Firm

Our New York elder law estate planning attorneys are proud of our work as counselors at law, acting as trusted advisors for the clients who count on us. In this capacity we spend each day meeting with community members to understand their family dynamics and listening to their concerns and fears about the planning process. By familiarizing ourselves with the unique circumstances of each client we are able to anticipate possible challenges to their plan and ensure that all the bases are covered ahead of time. In this way we can use our knowledge and experience to help clients pass on their assets and protect those assets in a seamless manner that avoids legal challenges and court proceedings.

The use of trusts is one of the key ways that our New York estate plans help clients stay out of the courtroom. Unlike wills, trusts do not require court proceedings to settle, both in this state and in other states where property might be owned. Avoiding probate saves the time, stress, and high costs of the legal proceeding.

Besides avoiding probate, our New York estate planning attorneys work hard to craft plans that cannot be successfully challenged by those who may be upset by client decisions. This is where taking the time to understand the family dynamics of each client is essential. It is important to anticipate ahead of time individuals that might have hurt feelings because of the details of a plan or become disgruntled upon learning of a client’s decision regarding their assets. Unfortunately, family disagreements arise frequently in these situations, often leading some upset individuals to challenge the legality of the plan in an effort to overturn it.