Articles Tagged with ny elder law estate planning attorney

Every trust document is different; the terms of a trust can vary greatly, giving the beneficiaries either a broad range of power or can limit a beneficiary’s power to only include specific rights. Some of the differing terms of trust include: how the income and principal investments are able to be distributed, when, and under what circumstances, if the objective of the trust is either for growth or to maintain balance, when a beneficiary receives a distribution and under what circumstances, such as age attainment or education attainment, as well as whether the beneficiaries have a right of withdrawal also known as 5 by 5 clause.

What is a 5 by 5 Clause?

A 5 by 5 clause, or right of withdrawal, must be specifically stated in the governing trust. The right occurs once a year generally, and will allow the beneficiary to take up to 5% of the value of the trust out to be included in their current tax year or to take $5,000, whichever is greater at the time. If the trust contains a right of withdrawal, the trustee must notify the beneficiary within a reasonable time of their ability that year to withdrawal and the beneficiary must indicate their wish to exercise the right in part or in total or whether they chose to forego taking the amount. In order for the beneficiary to qualify the income under present interest, and therefore exempt under the gift exemption that year, they must have a vested economic interest to the income and principal of the trust.

As the new year opens it is a good time to review all of your legal estate planning decisions and tweak any previous documents that you think need to be modified. This requires us to get back to the basics of estate planning . For those scenarios that deal with what happens to you in an emergency situation, you have an advanced medical directive, with some level of specificity but not too much. The term advanced medical directive is an umbrella term that encompasses several types of legally significant documents. One of them is a living will. Your living will tells the medical professionals who are treating you, what your wishes are in advance for any number of medical situations.


Underneath the umbrella term of advanced medical directive, there is also the health care proxy. The health care proxy allows for you to appoint a trusted person to act as a decision maker for those scenarios that are not contemplated in your living will and if you are unable to make any medical decisions by yourself. Medical conditions change, different doctors have varying opinions as to the best course of treatment or even over the correct diagnosis. Having a health care proxy will have someone stand in for you to make the best decision under the circumstances. You can limit the authority that you give to the person or only permit the health care proxy go into effect after certain conditions or triggers occur.

No one likes to consider the fact that they may one day need help in managing their affairs, but the fact remains many people will need a fiduciary they can trust to act on their behalf when incapacitated. Typically as part of an estate plan, an individual will execute a power of attorney appointing one or more individuals of their choice to manage their health care decisions and financial matters in the event they can no longer handle their own affairs. Powers of attorney can vary in scope and purposes, and can serve as one method to avoid judicial intervention, including guardianship or conservatorship proceedings.

Guardianship Proceedings

When a health care or financial power of attorney are not sufficient or absent from an estate plan, a guardianship or conservatorship proceeding may be necessary to appoint someone to represent the person suffering an incapacity. In New York, a proceeding for guardianship can be commenced by a variety of parties, including, a distributee of the incapacitated person’s estate, certain fiduciaries, an interested party concerned with the welfare of the individual, or the incapacitated person himself. Incapacity is determined by clear and convincing evidence that the individual is unable to manage their own affairs and is unable to understand the consequences surrounding their inability in such a way that will likely cause harm to themself or others.Courts will consider a variety of factors when selecting a guardian, including the incapacitated person’s specific needs and the capabilities of the proposed guardian in meeting those needs.

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