New York Estate Planning & Elder Law Blog

Ademption: A Stumbling Block To Your Estate Plan

Published on: September 20, 2016 | by Ettinger Law Firm

Your estate plan exists to make sure that your wishes are known and fulfilled. In particular, you have a will to make sure that your family is provided for and that your assets go to the people you want to care for and believe are deserving. However, failure to keep your will up to date or not managing your assets while keeping your will in mind can cause major problems with ademption.

Ademption and Your Will

Ademption occurs when the property that the Will leaves to someone is not present in the Testator’s estate when the Testator dies. Ademption only applies to specific bequests which are particular pieces of personal or real property.

What is a Delaware Directed Trust?

Published on: September 18, 2016 | by Ettinger Law Firm

A directed trust is a type of investment trust that appoints a particular trustee, usually a bank or firm, to administer specific aspects of the trust. Trustees who are responsible for directed trusts generally have a number of other professionals who assist in their administration of the trust by providing investment recommendations and distribution recommendations to the beneficiaries. By delegating these duties, the trustee as well as the beneficiaries are benefitted because the beneficiaries now are receiving expert advice in areas such as investing, while trustees can focus on maintaining the purpose of the trust and can in some cases limit their liability, depending on the state law.

Delaware directed trusts are a specific type of directed trust that is administered in the state of Delaware. Trustees will recommend that a trust be held and administered in Delaware depending on the nature of the assets that a party holds and what they seek to do with those assets. Many advisors or trustees will recommend a Delaware directed trust if the grantor, or maker of the trust, had assets that are concentrated, illiquid or difficult to manage. Illiquid assets are those assets which cannot be sold without a substantial drop in value or assets and are unique in that they are difficult to sell because there is not an immediate demand or interest by investors to purchase the asset. Other examples of concentrated or difficult assets that may be suited for Delaware directed trusts include stocks or other securities which have historical value to the family or that the beneficiaries think will perform well long term. Here, the trustee can continue to be responsible for managing the diversified assets, while an investment advisor can work with the beneficiaries in handling the concentrated asset.
Other benefits of this type of trust involves protecting the grantor’s interest by appointing a trust protector who will act on the behalf of the grantor to ensure his or her goals come to fruition, which includes the ability to remove a trustee they feel is not following the grantor’s wishes. A distribution advisor can also be appointed to assess what is important in their specific situation when making future distributions. Additionally, in the majority of situations, Delaware’s tax laws apply to trusts as well. Delaware courts also do not require court filings in an effort to maintain the privacy of individuals and grantors can restrict a beneficiary’s access to some information, depending on the situation and trust.

Back To Basics: Preventing Will Contests

Published on: September 16, 2016 | by Ettinger Law Firm

Every family has at least one horror story of a death in a family turning into a protracted legal tragedy well documented publicly by a probate court. An angry heir dissatisfied with their share of inheritance or a disinherited family member desperately trying to claim a stake of the predeceased’s estate contests the will and alleges a whole manner of improprieties in order to invalidate the will or one of the bequests made under it. A testator considering a future will contest can take steps to protect his or her estate from challengers and minimize the negative effects that a challenge can have.

Destroy All Previously Revoked Wills

A common occurrence in the probate court is for someone who was to inherit under an older version of a testator’s will to present the revoked copy as the testator’s true and most recent will. This can only happen though if the testator does not take proper steps to discard and make it apparent that an older will is now revoked. Writing ‘void’ or ‘revoked’ on each page of an older will or physically destroying the will shows everyone that the will is no longer valid.

Back to the Basics – The Notice Act

Published on: September 14, 2016 | by Ettinger Law Firm

Rising Medical Bills

Experiencing a life threatening accident or injury is one of the scariest and most confusing times in a person’s life, but what further complicates these emotional times are the staggering medical bills received after, without warning. In an effort to combat receiving these unexpectedly high bills and further open communication between hospital and patient, The NOTICE, or Notice of Observation of Treatment and Implication for Care Eligibility, Act will change the way patients are notified about potential costs incurred.

Starting in August 2016, this Act requires that hospitals throughout the country notify a patient about their status as either ‘inpatient’ or ‘observation’ status. When classified as an inpatient, Medicare will cover all, or a substantial amount, of the costs of medical bills incurred by the patient if they are covered under it. However, if the patient is classified as being under observation, Medicare may no longer be responsible for the bills incurred and the out of pocket costs fall on the patient, which has commonly been unbeknownst to the patient until release or weeks later when the bill is received. In order for an elder to receive care at a nursing home following a hospital visit, they must have spent three days in a hospital under inpatient status.

Keeping Your Life and Assets Private

Published on: September 14, 2016 | by Ettinger Law Firm

Prince’s lack of estate planning in life has made quite a mess for his potential heirs as we have covered in the past. The slow moving probate proceedings are also preventing his estate from fully monetizing his image and collecting potential revenue. This week though the Minnesota probate judge gave the go ahead for the administrator of Prince’s estate to sell six of the late artist’s properties. This order does nothing to touch the much more valuable part of Prince’s estate such as his likeness, music catalogue, personal home or recording studio.

Your Life Out In The Open

But how exactly do we know the extensive real estate listings and assets held by Prince? That is because court proceedings are public knowledge and any court filings in a probate court are public records. That means that when you pass, if you have to go through probate chances are any assets you have at the time of your death will be catalogued and listed. Probate records include wills, estate inventories, letters of administration and other documents relating to the administration and settlement of deceased persons’ estates. These records also contain information on the property of decedents, the identity and relationships of heirs, and legal actions taken to prove wills and settle estates.

Irrevocable Life Insurance Trusts

Published on: September 12, 2016 | by Ettinger Law Firm

Estate Taxes

When the proceeds from an estate are being distributed after death, many beneficiaries are surprised to find that they receive a substantial amount less than anticipated due to the federal estate tax or the state tax that must be paid on these proceeds. Specifically, life insurance proceeds tend to account for a significant portion of an estate’s worth and are thus included when calculating estate taxes.

When combining what will be taxed from an estate, the executor of the estate must include any of these when reporting on an estate’s proceeds: funds in bank accounts, value of investment accounts, any property including cars and personal assets, life insurance proceeds, retirement accounts or funds, and the value of any business owned.

Qualifying Your Charitable Remainder Annuity Trust

Published on: September 12, 2016 | by Ettinger Law Firm

A charitable remainder annuity trust or CRAT as is it more commonly known is a type of irrevocable trust that is used to pass on property to a charity while still receiving an income from the assets in the trust. The way it operates is that a fixed amount of income or principal is paid from the CRAT to designated noncharitable beneficiaries, usually the grantor or creator of the trust. After a set term the remainder of the trust is payable to charity.

Multiple Tax Benefits

The CRAT comes with many tax benefits due to its charitable nature. The CRAT pays no income tax on its income. The CRAT is not taxed on any gain it realizes upon selling appreciated property either at the time of donation or any appreciation occurring after the donation. Furthermore the grantor of the trust created during his or her lifetime is entitled to an immediate income and gift tax deduction equal to the amount of the present value of the remainder interest passing to charity.

Understanding Testamentary Capacity Under New York Law

Published on: September 9, 2016 | by Ettinger Law Firm

In order to make and execute a valid will under New York law, a person must meet certain requirements. One of these requirements is that the testator or person creating his or her will have testamentary capacity. Testamentary capacity refers to a person’s ability to understand and execute a will. Generally, most people over the age of 18 who have reached legal adulthood are considered competent to make and sign a will. They understand the nature of the document they are creating and signing, the property that will be passed and understand the effects that the document will have after their death.

One of the most common bases for contesting a will is that a person lacked testamentary capacity and for good reason. There are many ways a person can lack testamentary capacity and many of them relate to illnesses and conditions that are common in old age. In particular, challenges arising out of accusations of the testator being mentally incompetent or under undue influence are not rare, especially if the testator is of advanced age.

Mentally Incompetent

Diversification in Your Portfolio

Published on: September 8, 2016 | by Ettinger Law Firm

Depending on the purpose of a trust, a trust may be able to further sustain its’ life and generate additional income by investing the funds originally set aside by the grantor in a variety of investment tools. In order to generate additional income, a professional investor will seek to have a diverse portfolio established in order to mitigate any potentially large losses and keep your funds safe.

While the idea of hitting it big with one major investment is the dream of many, the reality is highly unlikely, thus, investing money in a wider range of areas is beneficial. While the investment team and trustee will be able to best assess the proper investments for your trust funds, each situation will differ and will be influenced by the risk the trust is willing to take as well as the timeline for distribution of funds needed.

Types of Investments

Estate Planning Under 40: Why You Need It

Published on: September 6, 2016 | by Ettinger Law Firm

Making an estate plan tends to be something people ignore until the last minute. These documents are considered important, but only for those who are old or dying. Why would a person under 40 need an estate plan?

Estate planning is a safety net. It is there if the unthinkable happens. If you die or are incapacitated, a proper estate plan can help to make sure your loved ones aren’t left to pick up the pieces.

Decision Making