New York Estate Planning & Elder Law Blog

Losing Home Over $400 Tax Bill

Published on: July 11, 2012 | by Ettinger Law Firm

Senior care advocates repeatedly remind families that oversight is needed in some cases to ensure seniors do not fall victim to financial exploitation. Having an elder law estate planning attorney involved in the process is one way to provide some professional oversight.

However, beyond protecting against scammers and hucksters, many seniors are facing a new financial crisis that is not rooted in illegal misconduct. When on a fixed income and struggling with confusing money issues, some seniors might face incredibly severe financial penalties for falling behind on certain bills or taxes.

For example, CNN Money reported this week on a growing number of individuals who are losing their homes because they owe relatively small sums. A report from the National Consumer Law Center detailed how some states have outdated laws that allow states to sell tax liens on delinquent properties. Essentially this means that instead of the government having a lien on a piece of property that owed back taxes or bills for services like water and gas, private investors own the lien. The investor then collects interests on the overdue bill or, in some cases, forecloses on the home. Some states allow investors to charge staggeringly high interest rates, from 15% to 50%.

Consider Updating Your Estate Plan Before Remarrying

Published on: July 10, 2012 | by Ettinger Law Firm

Our New York estate planning attorneys frequently remind residents that it is important to update an estate plan following major life changes, such as a divorce or marriage. However, that basic advice may be misleading, because in some cases it is crucial to consider updating the plan before the major life event takes place. That may be especially true in the case of second marriages.

A recent Elder Law Answers article summarized a few points to consider at this time:

-Make sure both spouses are on equal footing. Secrecy at this time is toxic. Both partners should take an inventory and understand what assets and debts are on the table. All planning extends from that base.

Is PACE Program Future of Senior Health Care?

Published on: July 6, 2012 | by Ettinger Law Firm

CBS News recently reported on glowing praise for a relatively small program seeking to help seniors live independently. Known as the Program of All-Inclusive Care for the Elderly (PACE), the program is being credited with helping many on New York Medicaid avoid being forced to move into nursing homes. For example, one New Yorker interviewed for the story is a 65-year old woman who faces a series of health challenges. Her osteoporosis has left her wheelchair bound, as she can only walk in small doses. Like many, the woman faced serious financial setbacks and is currently unemployed. With a history of chronic depression, the woman admitted that if she was forced to move into a nursing home, she doubts she would survive.

Yet, so far, she has been able to avoid the nursing home as a result of PACE. The program allows this woman, any other seniors is similar situations, to live at home and receive support from area day care center. Seniors can visit the center for various services, from coordinated medical care, social work support, and various activities, like yoga.

Our New York elder care attorneys appreciate the immense value of this program which allows more seniors to age in place.

Estate Planning Factors Beyond Taxes

Published on: July 5, 2012 | by Ettinger Law Firm

Taxes undoubtedly play a determinant role in New York estate planning. Understanding how assets can be transferred and passed on while incurring the lowest tax burden is crucial. Yet, it is a drastic oversimplification to assume that planning involves only looking at taxes. The “human” element is often even more important. Each New York estate planning lawyer at our firm understand that creating the best possible plan for each family requires an understanding of the unique family dynamics at play.

These family issues are not always easy to discuss. No one necessarily enjoys sharing information about potential family conflicts, personality issues, or other challenges which influence these decisions. However, as a new article in Financial Planning recently argued, failing to address these details often means that a plan will not work as needed.

What are these “human” factors beyond the legal, tax, and technical issues? The story summarizes them as “lifestyle choices, drug addictions, religious practices, health concerns, charitable goals, and preference regarding the disposition of collectibles and other personal property.”

Tax and Planning Consequences of Affordable Care Act?

Published on: July 3, 2012 | by Ettinger Law Firm

No legal news item last week was bigger than the U.S. Supreme Court’s decision to uphold virtually the entirety of the Affordable Care Act (so-called “Obamacare”). In a move that surprised many observers, in a 5-4 decision the Court deemed the controversial “individual mandate” portion of the measure constitutional on grounds that it constituted a tax. While the court held that the Congress could not pass the law pursuant to its power to regulate interstate commerce, it did find it a permissible use of the legislature’s taxing power.

Now that the matter is reasonably settled, local residents may be wondering how the law affects their New York elder law estate planning, if at all. A recent Smart Money story talked about some of these issues, explaining how certain tax matters will indeed change in the upcoming year as a result of the decision.

A few select rates will change next year. For example, an extra .9% Medicare tax increase will start for various individuals making over $200,000 or $250,000. In addition, some investment income (long-term capital gains and dividends) may face a 3.8% “Medicare contribution tax.” This is in addition to the rising rates if the “Bush tax cuts” expire without renewal.

Helping Aging Parents with Money

Published on: July 2, 2012 | by Ettinger Law Firm

Elder law professionals agree that preventing senior financial exploitation requires acting fast–it is never too early to investigate suspicions about a senior loved one’s finances. As reported in a recent Star-Telegram article, many adult children begin asking questions about their parents finances only when it is too late–after they’ve already been swindled out of a fortune. For example, the article shared the story of a woman who waited to learn mor after noticing some red flags with her parents money management. By the time she started investigating the elderly couple had already had nearly $100,000 taken by another family member over a ten year period.

Unfortunately, each New York elder law attorney at our firm knows that this situation is far from unique. Many seniors, particularly those without outside observers keeping an eye on their finances, find themselves exploited in their golden years. The wrongdoers can be anyone, from family members and caregivers to strangers who gain the senior’s trust.

Financial exploitation takes many forms. In the case described in the article, the elderly parents, in their 80s at the time, had more than 35 different credit-card accounts taken out in their names unknowingly. It took their daughter almost two years to sort out the mess. The solution included giving the daughter a Power of Attorney over the couple’s finances so that the daughter could monitor the situation and identify any problematic issues.

It May Not Be As Simple As Updating a Will

Published on: June 29, 2012 | by Ettinger Law Firm

Most local residents understand that a New York estate plan needs to be updated to account for changing life circumstances. If one is divorced, has a child, has a falling out with a relative, acquires a significant asset, or experiences countless other life changes, then planning documents need to be altered to take that into account.

Unfortunately, some are under the mistaken assumption that this is a very simple, straightforward process involving some changes to a will. Our New York estate planning attorneys appreciate that this sort of thinking often leads to serious problems down the road. Failure to take a full range of issues–beyond a will–into account following life changes may mean one’s plans do not work as desired when the time comes.

For example, the Alternative Press shared an interesting story about a man who wanted to remove a daughter from an inheritance. However, the man only updated his will (and nothing else). The result was the that daughter still received almost half of the man’s estate

Aging Without Fear

Published on: June 28, 2012 | by Ettinger Law Firm

There is no shortage of news stories about the changing demographics in the United States. Advances in healthcare and slowed birth rates mean that a much larger percentage of the country is elderly than ever before–the trend will continue for years to come. Our New York elder law attorneys understand that most discussion of these issues revolves around fear about what these changing demographics mean. However, an interesting New York Times article this week took a different look at the issue, noting that it is wrong to “assume defeat” when considering the challenges posed by an aging population. Instead of dwelling on the challenges, we instead need to embrace the benefits of our increasing longevity and buckle down to get the financial, social, and healthcare concerns raised by the demographics in check.

The article included an interview with Dr. Linda P. Fried, an epidemiologist and geriatrician. She noted that new research needs to “reframe our understanding of the benefits and costs of aging.” Dr. Fried notes an increased focus on science into the aging process, with the potential for positive impacts on social and political policies that address these issues–including many elder law concerns.

Dr. Friend is at the forefront of exciting new research into the aging process, with implications in many different fields, from nationwide healthcare policy to nursing home abuse prevention.

Who is Paying for the Nursing Home Bill?

Published on: June 26, 2012 | by Ettinger Law Firm

Many local residents consider a single issue when hearing about New York elder law planning: who is going to pay for nursing home care? Of course elder law includes much more than simply figuring out the finances of necessary long-term care. But for many families, the crux of this work is receiving help with Medicaid applications, protecting assets, and otherwise putting seniors in the best position possible to ensure comfortable care in old age.

There are different ways to provide for the care. Long-term care insurance is worthwhile for those who plan ahead, while the New York Medicaid program provides support to seniors who have no insurance and otherwise cannot afford the care on their own. Many middle-class seniors are forced to ‘spend down’ their assets in order to qualify for Medicaid. Various legal tools exists, however, (like Medicaid Asset Protection Trusts) to help keep assets in the family while still receiving Medicaid support.

This week many headlines were made across the country as an appellate court upheld a ruling that forced a son to pay a nearly $100,000 nursing home bill for his mother. The nursing home instigated the legal matter by seeking to enforce a “filial law” to collect unpaid long-term care bills.

Should You Take Advantage of Tax Situation Now?

Published on: June 25, 2012 | by Ettinger Law Firm

The New York Times published a story this weekend on the continued uncertainty regarding the gift and estate tax and the questions it raises for many families. As each New York estate planning lawyer at our firm explains to local residents, the current tax situation is in flux, requiring many different considerations when engaging in estate planning. As it now stands, residents can each give up to $5.12 million tax free and then pay a 35% tax rate on any gift above that amount. The tax-free amount will drop and tax rate rise at the end of the year without Congressional action.

The uncertainty about the future of the tax details present very obvious challenges to many families. Giving away money to heirs now means reducing an eventual tax bill down the road. However, there are many questions about whether couples will have enough money to live on themselves after giving large sums to others. Obviously these considerations all depend on the value of the family estate. In general, only comparatively wealthy families are impacted by these issues. But for those families who are “on the cusp” and stand to pay more in taxes when the changes take effect, tough decisions will need to be made in the next six months.

One consideration beyond basic tax savings for estate planning purposes is the amount the any money passed on might grow over the years. For example, if a couple gave their child $5 million to take advantage of the favorable exemption, the gift could grow to nearly $30 million in about 30 years based on reasonable return rates.