New York Estate Planning & Elder Law Blog

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.

New York Elder Law Estate Planning for Couples with Age Difference

Published on: June 22, 2012 | by Ettinger Law Firm

Every New York estate plan is slightly different, because no two individuals are identical. Yet, many similar situations and challenges present themselves to different couples which often involve similar planning strategies. For example, one issue facing some residents is planning for married couples who have a significant age difference.

Perhaps the most obvious issue involves overall financial planning. With age differences, one spouse is likely to outlive the other, perhaps by a considerable length of time. The younger spouse may therefore feel more comfortable taking on certain risk than the older spouse who is more likely to suffer from short-term financial dips. It is important to balance the interests of both partners.

For New York elder law estate planning purposes specifically, couples of different ages require unique planning so that time horizons are meshed. Retirement planning can be tricky if one spouse plans on working longer. Similarly, long-term health care planning will be implicated by the age differential. One spouse may need extra care earlier, though it is usually not prudent to automatically assume that the younger spouse will be able to provide the needed care.

Inheritance Disputes Among Children While Parents Still Alive

Published on: June 20, 2012 | by Ettinger Law Firm

Family inheritance disputes are legion. In most cases that make headlines, a famous individual passes away without conducting thorough estate planning and various family members publicly feud to get their fair share of the individual’s wealth. Our New York City estate planning attorneys often advise clients that these sorts of disputes are not only for the famous or even the wealthy. Family disagreements regarding an inheritance are quite common, particularly when no planning is done and the matters must be left up to the court-centered probate process.

Not only that, but sometimes feuding occurs even before the family matriarch or patriarch passes away.

For example, a recent Sacramento Bee letter explored a situation where two siblings seemingly isolated an aging mother from other siblings. Claims of undue influence and abuse were made. The three ostracized siblings were left wondering what options were available to ensure they received their share of the inheritance.

Is 80 the New 65?

Published on: June 18, 2012 | by Ettinger Law Firm

New York elder law estate planning is all about putting plans into place to designate inheritances, account for taxes, plan for disability, and otherwise provide peace of mind to account for long-term financial concerns. However, part of the challenge of the process is realizing that the future is unknown. It is impossible to determine with precision how long one will live, what finances are needed, and what care is required as one ages. Not only is speculation inherent in some of this planning, but changing government policy, medical advances, and societal cultural changes must be taken into account when conducting this estate planning.

No More Retirement Age?

For example, a recent Business Times article discussed statements made by representatives from Wells Fargo that the concept of a retirement age “is going the way of the typewriter, another 20th-century relic.” Instead of retiring at 65, say the executives, most won’t retire until age 80 or beyond. The claims were made following a Wells Fargo survey which found that at least ¼ of all respondents did not believe they’d be able to retired until they were 80 years old. On top of that, most thought that they’d never actually be able to stop working with some extra income needed after retirement.