Blog Posts
Elder Law and Advocacy
Aging in Place: NYFSC’s Home Sharing Program Offers a Unique Housing Solution for NYC’s Aging Population
The housing crunch in New York City is real. Exorbitant rents and climbing interest rates have led many further into debt, all but ruled out homeownership for most, and forced countless seniors to reconsider their plan to “age in place” in the space they have called home for decades. New York City’s Foundation for Senior Citizens (“NYFSC”) may have a solution in its established “Home Sharing Program.” What Is It?: NYFSC’s free Home Sharing Program has been in existence for the last 30 years. Its mission is to help link senior or adult “hosts” with unused private spaces in their homes or apartments with appropriate adult “guests.” The hosts and guests share their abode and the related expenses and perhaps forge a friendship along the way. The only age requirement is that both must be over the age of 18, and either the guest or host must be 60 or older. How Does It Work?: The NYC program (and similar programs in other cities) has a comprehensive screening process to match hosts with the right guests. Social workers provide a formal intake to screen applicants to consider lifestyle, work schedule, and collective needs for socialization. The host and the guest must have three solid professional recommendations and endorsements to ensure they are suitable candidates. The housing coordinators also assist with negotiating home-sharing and financial specifics to ensure the arrangement works for both parties. What are the Benefits?: Home or apartment sharing can provide homeowners and tenants additional income by renting out spare rooms and space. This is particularly helpful in expensive cities like NYC with high housing costs. The cost of long-term care is multiplying each year. Likewise, the guest’s contribution can ensure that a senior who no longer can afford to reside in their home can remain now that the guest is sharing the carrying charges of the home or apartment. Similarly, guests who find themselves out of options due to unaffordable rents might be able to find the perfect housing arrangement in a neighborhood that they thought was out of their reach. In addition to the obvious financial benefits, coordinated housing can foster a sense of community by connecting people who may not have otherwise interacted. When they work well, such arrangements can lead to the formation of relationships and mutual support between hosts and guests. This is particularly useful for seniors who tend to become more isolated as they age. Beyond companionship, there is a real opportunity, particularly in NYC, for cultural exchange and a richer understanding of different lifestyles and backgrounds, which can, in turn, contribute to a more diverse and interconnected community. In addition to building community and an exchange of cultures, an intergenerational arrangement may provide both parties the opportunity to give and receive advice from someone who is further on in life. Learn More: Certainly, this option is not for everyone, but perhaps it is an option that might work for those who wish to age in place as they age. For more information about this program or similar programs in your town or city, contact your local county office on Aging.
January 31, 2024
Estates and Trusts
Wealth with Wisdom: Leaving Educational Legacies in Your Estate Plan
As estate planning attorneys, we guide our clients in distributing their wealth to the next generation efficiently. However, Guy Fieri and Shaquille O’Neal recently made headlines by stating that their children need to earn two degrees to inherit from them. There is a trend articulated in the headlines, namely that tying inheritances to education goals, especially the size of inheritances from celebrities like Shaq, should contribute to the personal and intellectual growth of your children. Conditions requiring certain educational milestones or that an inheritance may only be used toward this goal in order to inherit from a loved one can be a powerful way to leave a lasting impact. The following are a few tips to consider when exploring the idea of leaving assets in your estate plan with educational conditions for your children, emphasizing the importance of combining financial legacy with a commitment to lifelong learning. The Purpose of Leaving Educational Legacies: Empowering Future Generations: When a condition of education is articulated in an estate plan, a message is received. That message, stating that education is a prerequisite to receiving an inheritance, not only encourages your child to pursue additional education but also sends a message that you believe life is more than just financial security, that education is a prerequisite to obtaining that financial security. It is the hope of many of my clients who choose to have educational prerequisites in their estate plan that they not only instill the importance of learning but perhaps demonstrate that education can empower them to also accumulate wealth for future generations. Fostering a Growth Mindset: A requirement that a child meets an educational condition can also encourage a “growth mindset.” Many clients see this condition as a conduit to inspire their children to embrace the challenge of higher learning. So many of our clients who worked hard to accumulate their own wealth have concerns that simply handing over an inheritance will mean that their own child will never face the challenges that the client has faced nor understand the value of “hard work” or the “struggle” to succeed and accumulate wealth. Placing a “two degrees” condition on an inheritance might be a way for your child to not only prove to themselves that they are up to the challenge, but the hope is that further education will also better equip the child to not only manage the inheritance more efficiently but also have a greater appreciation for that inheritance. How to Create Educational Conditions: How the Funds Can be Spent? Your Will or Trust is your “universe,” and therefore, it can define the educational conditions and expenditures as you see fit. For example, an inheritance can be left in trust, and distributions might only be made for tuition and educational expenses related to pursuing a college or an advanced degree. You may even specify what portion of the inheritance can be allocated to cover the costs associated with pursuing a degree and further define those expenses (i.e., books and transportation but not living expenses). The requirements can be even more granular to state that an inheritance can only be used to pay for graduate school in a particular field of study that a parent deems worthwhile. Educational Attainment Milestones: Like Shaq and Guy, many clients determine that their child’s entire inheritance is conditional upon earning a degree. As Shaq said so eloquently, “No cheese without two degrees.” Guy has made public statements following Shaq’s lead. Unless the O’Neal and Fieri children earn two college degrees each, they will not inherit at all from their fathers. Milestones like these are easy to add to an estate plan and are easily enforceable. As already mentioned, the spirit behind the milestones is to foster that growth mindset and empower their family’s future generation to ensure a more educated family tree. The hope is that the more educated the child, the more responsible they will be in managing those assets and preserving the wealth for generations to come. Important Details to Consider: Flexibility: Life is unpredictable, so it’s important that your estate planning documents are drafted in such a way that it is possible to adapt to life’s changing circumstances, particularly for your children. It is essential to design your educational conditions with flexibility to accommodate unforeseen challenges or opportunities for your children. Perhaps this means that you should extend the scope beyond traditional education to include opportunities for professional development, ensuring your children are equipped for success in their chosen fields. What happens if your child, while responsible and hardworking, is not college-bound? Conditions can also be tied to earning a vocational degree or being gainfully employed. Additionally, conditions can be tailored to encourage entrepreneurial ventures to foster their creativity or business acumen. Communication: Communication is key! If you want to empower your children and foster a growth mindset, you need to share this with your children. Therefore, it is so important when these types of estate planning conditions are imposed that they are communicated transparently to your children so that they have the opportunity to meet and exceed the conditions. It would be best to discuss your intentions with your children so they fully understand the conditions, how the funds can and cannot be used, and your rationale for imposing these conditions. Trusteeship. It cannot be understated how important it is to appoint a Trustee who will not only enforce the terms of your educational conditions but also understand and respect them. A trustee will enforce the terms of the conditions to ensure that all of the terms are met by your children. Most importantly, the trustee will be your voice long after you’re gone and can help communicate those educational conditions to your children so that they can successfully manage their inheritance and their future security. In conclusion, leaving assets in your estate plan with educational conditions for your children is a profound way to extend your influence beyond your lifetime. By intertwining financial legacies with a commitment to education, you not only provide for their immediate needs but also empower them with the tools to thrive intellectually and professionally. As you plan for the future, consider the legacy of wisdom and knowledge you can pass on to future generations, leaving a lasting impact on their lives.
December 22, 2023
Estates and Trusts
When to Review your Estate Plan: The 5 Ds
Originally posted 12/17/2020, no content changes. You finally sat down with an estate planning attorney after years of procrastination and created an estate plan that reflects your wishes: can you file it away with the rest of your important documents and never think about it again? Not exactly. As a rule of thumb, you should review your estate plan every three years or when there are significant tax changes at the state or federal level - much like the changes (likely) on the horizon this January. However, if your life has been touched by the 5 D's - Death, Disability, Divorce, Distance, and/or Descendants you should speak with your estate planner right away. Death When a family member or close friend dies, there are a few reasons to trigger a review of your own estate plan. First, the deceased loved one may have left you a significant inheritance that changes the schematic of your own estate plan from a tax perspective. Receiving a large inheritance will necessitate a review of your plan to ensure that you have considered the tax ramifications of the same. Second, the deceased loved one may have been named as a fiduciary in your estate plan. If you named the deceased loved one as your agent under a Power of Attorney, or Health Care Proxy, it is important to review those documents to make sure that you have an alternate agent and if you do not, you should update those documents right away. In your own Will, if the deceased loved one is a beneficiary of your estate, are you satisfied with who will inherit from you instead of the deceased loved one? It is often necessary to revise the plan of distribution considering a loved one's death. Disability Receiving a diagnosis of an illness or life altering condition for you or a loved one can be overwhelming. In addition to grappling with the realities of a diagnosis, it is imperative to review your estate plan from the lens of that disability. For example, if your spouse is diagnosed with a memory impairment condition such as dementia or Parkinson’s Disease, your estate plan should be reviewed by an elder law attorney to make sure that your assets are held in a trust that will allow for Medicaid eligibility in the future to pay for care one day. If a beneficiary in your Will is now disabled and relies on public benefits to pay for his care, you may wish to revise your own Will to direct that your disabled loved one's bequest is left in trust for him, so that his future inheritance will not disqualify him from the benefits upon which he relies for his disability. If you received a diagnosis, you should make sure that those you nominated as your agents under your Power of Attorney and Health Care directives are the people you still entrust with these particularly important and vital roles. Divorce If your marital status changes - a divorce, or a new marriage, your estate plan will certainly change. In the case of a divorce, each of your estate planning documents should be reviewed. If your estate plan was created during your marriage, it is likely that you chose your former spouse to act as your agent under a Power of Attorney and Health Care Proxy and as Executor or Trustee under your Will or Trust. In many states, a divorce will automatically end such an appointment without changing your documents - but not in every state. In addition to reviewing your documents, you should also consider the assets that have beneficiaries to ensure that your former spouse is not named as a beneficiary on your retirement savings plan, life insurance, and other financial accounts. In the case of a new marriage, it is important you have a discussion with your new spouse about your assets entering into the marriage and your wishes as related to the distribution of those assets in the event of your death. In many cases, spouses enter into pre- or post-nuptial agreements to address estate inheritance issues and estate planning documents should reflect those agreements. Distance If you relocate from the state where your estate plan was created, it is important to have your estate planning documents reviewed by an attorney licensed in your new home state. Laws vary greatly from state to state with respect to rules of inheritance, asset protection, and estate taxes. While states do honor other states' documents under the Full Faith and Credit Clause of the US Constitution, each state has its own forms and provisions that may make a revision of your estate plan in the new state more practical and cost-effective in the future. In addition to your own move, if a fiduciary that you have named in your Health Care Proxy or Power of Attorney moves across the country it should be considered whether it is practical for that person, who now lives in a different time-zone, to continue in that role. It becomes even more complicated in the case of a fiduciary moving out of the United States. In New York for example, if you name a person as your executor who resides in a foreign country, it is unlikely the Court will honor your choice and instead appoint someone else as an executor. Descendants It is imperative to create an estate plan when you have children. In 2020, I generally do not have to remind clients that bad things happen. In the unfortunate event that you and your spouse or partner die with minor children, it is imperative that you make an election with respect to your children's care. A Will should provide a guardianship provision for your minor children in the event of your death. Leaving this information out of your Will or relying on a Will that was created before you became a parent could be catastrophic for your minor children. If you are a single parent, the importance of a Will with a guardianship clause is exponential. If you die without a guardianship provision, anyone in your child's life could petition the court for her guardianship. The court will decide guardianship based on your children's "best interests" - which might not match what you would believe to be in your children's best interests. In the case of a grandparent who excitedly amended her Will to include her first grandchild as a beneficiary, it is important that her estate plan is updated for each new grandchild. With all of this in mind, it is important to think of your estate plan as fluid. Whether it is a new presidential administration or one of the 5 D’s, it is so important to stay in touch with your estate planning attorney and review your estate plan to make sure it is reflective of your current life circumstances.
December 18, 2023
Estates and Trusts
Caught Between Generations: A Roadmap for the Challenges and Strategies of the Sandwich Generation
In the ever-changing landscape of family dynamics and related demographics, a term has emerged in the last few years to describe a group of people who find themselves literally squeezed between the demands of caring for and planning for aging parents and supporting their own children: “The Sandwich Generation.” Personally, finding myself in this unique group, alongside many of my friends, we face numerous challenges and responsibilities, requiring us to balance our caregiving roles for our aging parents and our children while maintaining our own well-being. In this article, we will delve into what the Sandwich Generation entails and offer insight into strategies for effectively managing these often-overwhelming responsibilities that characterize this unique phase of life. What is the Sandwich Generation?: The term “Sandwich Generation” refers to individuals who find themselves entwined in the middle of a generational “sandwich,” positioned between aging parents on one side and dependent (or semi-independent adult) children on the other. Those of us in the sandwich are literally stuck in between, managing both sides. Typically, the individuals who make up the Sandwich Generation are in their 40s to 60s, grappling with the dual responsibility of managing both ends of the generational spectrum. Still, with expanded life expectancy, varied family make-ups, and childbearing years stretching into the 5th decade, age alone does not define membership. The crux of what characterizes the Sandwich Generation is the simultaneous responsibility of providing care and support to both older and younger family members. Challenges The Sandwich Generation Faces: Financial: Navigating the dual responsibilities of supporting both aging parents and children can impose a significant financial burden. From medical expenses and long-term care costs for aging parents to education and upbringing expenses for children, the financial strain can be overwhelming. The strain is exacerbated by the fact that many aging parents do not have the resources or the aforethought to plan for the cost of care properly. Consequently, the onus falls to their adult children, the Sandwich Generation, to solve via their own financial means or provide the required care for their aging parents personally. Time: Members of the Sandwich Generation often find themselves juggling multiple roles and responsibilities. The delicate balance between the demands of caregiving, coupled with professional commitments and personal obligations, can lead to an intense time crunch, resulting in stress and guaranteed burnout. There are simply not enough hours in the day to help everyone in the way they need help. Emotional: Navigating the simultaneous care of aging parents and raising children can be emotionally taxing. Witnessing the decline of one’s parents while safeguarding the well-being of one’s children can lead to a cascade of feelings, including guilt, anxiety, depression, and emotional exhaustion. Throw in the addition of complicated relationships with those aging parents and siblings who have differing opinions on how one’s aging parents should be cared for, and it can be a recipe for emotional disaster. Lack of Support: Individuals grappling with Sandwich Generation challenges often experience a lack of support and resources tailored to their unique circumstances. Family members do not always live geographically near others, which can lead to feelings of resentment for those who can’t be there physically to offer support. Even worse is when family members are within close geographical proximity and still do not offer support, burdening one family member with the overwhelming responsibility of “doing it all.” Strategies for the Sandwich Generation: Foster Open Communication: Talk about it! It is crucial that you foster open and honest communication with your family members. Discuss your caregiving responsibilities and the areas where you need assistance with your spouse or partner, your children, and your parents. Ensuring everyone is aware of the challenges you face in providing care can help set realistic expectations and build a support network within your family. Seek External Support: The time to reach out for help is now! Whether the support is found in your community resources, support groups, or organizations that cater to the needs of the Sandwich Generation, external support is vital. It might be helpful to keep in mind that the community and support groups are free. Connecting with others facing similar challenges in the Sandwich Generation can provide insight, solutions, advice, practical assistance, exchange of information, or just an old-fashioned vent session. Prioritize Self-Care: We all know the anecdote that plane passengers hear at the start of every flight: put on your own oxygen mask first, and only then can you help others. This old adage is something easier said than done. The bottom line is that caring for others begins with caring for yourself. As a member of the Sandwich Generation, make it a priority to engage in self-care activities such as exercise, pursuing your favorite hobbies, and even practicing relaxation techniques. Maintaining your physical and mental well-being is essential to effectively providing care to those around you. Remember, you cannot effectively care for others if you are running on empty. Holistic Financial and Elder Care Planning: Work with a financial advisor, an elder law attorney, and a geriatric care manager to develop a comprehensive plan that considers the financial, legal, and emotional needs of both your parents and children. Explore potential benefits, government programs, legal documents, and long-term care options to alleviate the financial and legal strain. The time to plan is now. Delegation is Key: You simply cannot do it all. Do your best to identify tasks that can be delegated or shared among family members, friends, or hired professionals like those mentioned in number 4 above. You can even involve your children in age-appropriate caregiving responsibilities to assist their grandparents or take away some of your burdens so that your attention can turn to your aging parents. Do not hesitate to seek assistance from your siblings or other relatives to distribute the workload more evenly. Embracing delegation is crucial for maintaining balance and effectiveness in your caregiving role. Embrace the Power of Technology: Utilize technology to streamline caregiving tasks. Explore online scheduling tools, medication reminders, and telehealth services. Embracing technology can help save time, reduce stress, and improve efficiency in managing both your aging parents’ and your child’s care. Leverage technology to empower those far-away family members to contribute to caregiving by paying bills remotely, scheduling doctor appointments, or even ordering groceries online. Embracing technology ensures a more streamlined and collaborative approach to managing the care of both your aging parents and your children. For those of us who know, being a member of the Sandwich Generation can present numerous challenges. Still, navigating these responsibilities successfully with the right strategies and support is possible. The key is finding a balance between caregiving roles and your own well-being. While the role remains challenging, no matter how many solutions are identified, it is possible to thrive while supporting both the older and younger generations in your family. Click here to listen to my podcast, The Sandwich Generation Survival Guide.
December 5, 2023
Estates and Trusts
23 and Me (and who?) and your Estate Plan
Originally posted on 12/10/2022, content updated on 11/27/2023 With the holidays just around the corner, the advertisements for the home DNA test kits are everywhere: For only $99, give the gift of your family tree! In fact, a local restaurateur told me recently that one night he had two separate tables of families “meeting” both for the first time, after receiving their DNA results from one of these kits. Suffice it to say, the direct-to-consumer DNA test kits are adding an element of surprise to many family gatherings. Finding out about a long-lost half-sibling can be great news (or startling news,) but it can also throw an estate plan into chaos. In New York, as in many jurisdictions, estate planning attorneys like myself draft estate planning documents such as Wills and Trusts with language referring to one’s “issue”. In the legal world, a person’s issue is defined as children, grandchildren, and their lineal descendants – in short, the genetic line. Using a term like “issue” is common in estate planning documents so that a person’s lineal heirs are covered in one’s estate plan, even in the event of an untimely death of a younger-generation family member. For example, I might draft a Will that states: “I leave my entire estate to my surviving issue” – which in laymen’s terms means: I leave everything to my children and lineal descendants. Now, suppose your father, who was married to your mother for his adult life, fathered a child unbeknownst to him with someone other than your mother. You are contacted by this child via one of these genetic testing sites and told that you have been identified as their sibling through your father’s bloodline. In the meantime, your father dies with a Will that leaves his estate to his “issue”. Does this newly discovered sibling factor into your father’s estate plan? You bet he might. The path to prove heirship to a decedent in New York is often complicated and rarely direct. If Dad knew about the child and openly acknowledged his relationship, then it would be much easier. In these cases, the New York Courts have accepted an “openly acknowledged” child outside of a marriage as an heir, even without genetic testing. In the example of an “unknown” heir or a child that was never acknowledged, the court most often requires DNA testing to prove heirship, along with other evidence to prove the relationship. So far in New York, the courts have not accepted a self-administered DNA test as independently sufficient to prove heirship. Further DNA testing is required by an approved DNA testing lab to meet the New York standard. However, what is important to note is that an unknown heir obtaining information from a DNA home test kit, might be enough to convince a court to take a harder look at who are the children of the decedent. Preliminarily the results from a home DNA test kit could provide that child enough standing to halt any distribution of the estate until the matter can be further investigated and the child is provided an opportunity to prove his relation. As sophisticated science becomes more available to the general public, the law will inevitably change to accommodate the accessibility of this information, particularly as it relates to estate planning. So, if you find a DNA testing kit under the tree this year resulting in a surprise branch of your family tree, it might be important for you to meet with an estate planning attorney.
November 27, 2023
Estates and Trusts
Holiday Harmony (or Hubbub): Disinheriting with Finesse
Whether it is the result of a discussion about politics, a few too many after-dinner drinks, or a shift in a family relationship, after every major holiday, calls from clients increase requesting a change in their estate plan. Regardless if you wish to reconsider who shall serve as guardian for your minor children in the event of your death or to disinherit a family member, things change. The good news is that an estate plan is fluid, and if drafted properly, removing someone from your estate plan is not as complicated as one might assume. Where to start? First things first, you should not make this change to your Last Will and Testament on your own. In New York, defacing a Last Will and Testament, writing notes in the margin, or crossing out someone’s name is generally insufficient to change a Will. In the worst-case scenario, markings on a Will, or defacing it, could even revoke the entire Last Will and Testament, not just the portion you wish to change. Can you make a change? In a word, yes. Wills are revocable and amendable at any time before you die, as long as you have the requisite mental capacity to make this change. In fact, a Will is not an enforceable legal document until your death. And generally speaking, you can leave your assets to anyone you choose, whether they are related or not. Likewise, aside from certain protections for your spouse, you can disinherit almost any family member from your Will. In fact, other than the State of Louisiana, no state even requires that you leave assets to your adult children (minor children are entitled to support from your estate). The protections in place that will not allow you to disinherit your spouse entirely due to public policy reasons will be addressed in a future article. Similarly, with a change to a named guardian for your minor children, you may remove the named guardian from your Will at any time and replace them with someone you believe is more suited for the job. For single parents, it is important to note that naming someone other than the child’s surviving parent as guardian of the minor child is generally insufficient unless there are extenuating circumstances that would render the surviving parent an inappropriate guardian for your minor child. Why make a change? The most obvious reason people make changes to the beneficiaries of their Will is due to family conflict or estrangement. However, there are many other reasons that one may wish to consider making a change. It may be that your beneficiary was recently diagnosed with an illness and, due to that illness, may need to apply for means-tested government benefits. If that is the case, assets that you may leave to that person may be attached by his creditors, like Medicaid, or worse, the inheritance could disqualify him from a much-needed public benefit. One of your beneficiaries, who may have had a greater financial need when you created your Will, may no longer be in a dire financial situation and simply may not need the financial support. Alternatively, one of your beneficiaries may have shown themselves to be financially irresponsible with her own assets, and you may wish to reconsider leaving funds to someone who does not have the ability to properly manage those assets or set up a trust instead to direct how those funds can be used. Suppose one of your beneficiaries is going through a protracted divorce proceeding or is in a marriage that is likely to dissolve. In that case, you may want to reconsider leaving assets directly to that loved one, as the inheritance could end up with your beneficiary’s former spouse. In the case of making a change to your minor child’s guardian, there are all sorts of reasons to replace a guardian. The named guardian may not be as connected to your family or your child as she once was when the Will was first established. Perhaps the named guardian does not live geographically close to your family any longer, and you wish to consider a more local choice for your child to remain in the event of your death. Similarly, if the guardians you chose were married at the time you signed your Will but are married no longer or have had a significant change to their own lifestyle, they may not be the right choice as guardians of your minor children now. There may be a change in the guardian’s religious or political beliefs that are now quite different from your own and could influence how you would otherwise wish your children to be raised. Regardless of the reason for the change of heart, it is important that a change in guardianship be articulated in a properly executed Will; otherwise, such an appointment could be unenforceable, and a court would determine the best guardian for your child. How to make the change? It is important for you to contact an estate planning lawyer to make the above changes to ensure that they are effective. In addition, when making a change that could alter your entire estate plan, it is important that you communicate to the attorney drafting the change your reasons why the change is being made. In the event that one of the disinherited beneficiaries challenges your Will upon your death, the more information the lawyer has to support this change, the less likely a challenge by a disgruntled beneficiary would be successful in his challenge. For practical purposes, it is best practice to mention the related beneficiary who would otherwise inherit specifically in your Will. For example, when disinheriting an adult child or sibling, it is recommended that you include their name and state that “for reasons known to them” or “not for lack of love and affection,” they are not a beneficiary of the Will. This mention does two things. First, if the disinheritance is not for conflict or any other reason, it is a kind gesture to say so to ensure there are no misunderstandings about why you chose to disinherit them. The second reason why a mention of this person is important is so that the disinherited beneficiary cannot make a case to challenge the Will by saying there was a drafting error or they were unintentionally omitted. By the same token, if a person would not be otherwise entitled to inherit from you, in the example of a more distant family member, an in-law, or a friend, there is no reason to mention that they have been excluded from your Will. In conclusion. If your Thanksgiving holiday was full of more conflict than stuffing, contact our office, and we can provide you with the proper guidance to make a change. Similarly, if you are concerned that your current Will that already disinherits a family member could be challenged by him, you may wish to consider a trust that is harder for a disinherited family member to challenge. Either way, your estate plan is your own, and you have a right to ensure that those who inherit from you and those who serve as guardians for your minor children are the individuals that you choose.
November 17, 2023
Estates and Trusts
A Gift from the IRS? A Holiday Miracle
The holidays are nearly upon us, and for many, this means holiday cheer, baking, and our endless gift lists. What should also come to mind is the “gift” that the IRS bestows upon all of us, which is the ability to make many gifts to our loved ones free of taxes, together with the benefits that accompany making those gifts. Below is a handy list of gifts that should be considered as we close out 2023. Annual exclusion gifts: In 2023, an individual can make annual gifts of up to $17,000 per recipient to an unlimited number of individuals free from any gift tax. Married couples can double this gift to $34,000 per recipient to an unlimited number of individuals. This benefit is called the “annual exclusion amount” because the gift is excluded from gift tax for the calendar year in which the gift is made. The annual exclusion is a “use it or lose it” benefit, meaning that your ability to gift for that year ends after the year has passed. Not only are annual exclusion gifts an effective way to pass wealth to family members and others, free from estate or gift taxes, but these gifts also have the added benefit of reducing the gift-giver’s taxable estate that would otherwise be subject to an estate tax upon his death. These annual exclusion gifts can be made “outright” and paid directly to the recipient to qualify for the annual exclusion. Certain gifts can even be made to the recipient in a trust if it is properly structured. Lifetime gifts: Gifts exceeding the annual exclusion amount are sometimes referred to as “lifetime gifts.” When “lifetime gifts” exceed the $17,000 or $34,000 annual exclusion amount in the case of a married couple, it reduces the federal estate tax exemption of the gift-giver. For example, the current federal estate tax exclusion is $12.9M for each person. This means that at the federal level, the gift-giver can either gift during their life or die with $12.9M. Therefore, if the gift-giver gifts $117,000 to a recipient in 2023, $17,000 of the gift will qualify for the annual exclusion amount for 2023. The remaining $100,000 gift will reduce the gift-giver’s lifetime estate tax exclusion by $100,000, thus reducing his available estate tax exclusion credit from $12.92M to $12.82M at death. The other benefit of making more significant lifetime gifts that exceed the annual exclusion amount is that it removes the value of the gifted assets from the gift-giver’s estate. Removing assets from the gift giver’s estate can be particularly useful when the gifted asset is expected to appreciate in the future. By gifting those highly appreciable assets out of the gift-giver’s estate now, the gift-giver’s estate will pay a reduced estate tax at their death. Lifetime gifts should be strongly considered at the present time as the federal estate tax exclusion of $12.92M is set to “sunset” at the end of 2025. This means the amount of assets you can die with that will not be subject to an estate tax will plummet from $12.92M free of estate tax to only approximately $6.8M free of estate tax. Therefore, making gifts now to take advantage of the current $12.92M estate tax exemption is something to consider. Charitable Giving: Most appreciate the many benefits of gift-giving to a favorite charity: it feels good to make a positive impact while simultaneously supporting a cause that is meaningful to the gift-giver. Many are unaware, however, that there are trusts that can be established to provide the gift-giver with an income stream, a tax break during the gift-giver’s life, and a gift to one’s favorite charity at death. A charitable remainder trust does just that: it allows the gift-giver to make a contribution to the trust for the charity while simultaneously providing a partial tax deduction for the gift and an income stream to the gift-giver or her loved ones. The tax deduction the gift-giver receives from funding a charitable remainder trust is based on the type of charitable remainder trust created. The deductions, depending on the type of charitable remainder trust, are then calculated by several factors, including the present value of the charity’s interest, the assets “donated” to the trust, how long the trust will likely remain and/or the annual “payout” rate to the income beneficiary. In addition to the present tax benefit enjoyed by the gift-giver, the gift-giver can also name herself or a loved one as the beneficiary of the present income stream from the assets donated to the trust. Based on how the trust is set up, the gift-giver (or nominated income beneficiary) can receive income annually, semi-annually, quarterly, or monthly. The IRS requires that the annual income stream must be at least 5% but no more than 50% of the trust’s assets. After the specified term of the trust or upon the death of the last income beneficiary, the remaining trust assets are then distributed to the designated charitable beneficiaries. The charitable beneficiary (or beneficiaries) can be public charities or private foundations. Moreover, the trustee can be provided the power to change the trust’s charitable beneficiary (or beneficiaries) during the lifetime of the trust, if necessary. Gifting can be an integral part of one’s estate plan. Gift planning, especially involving trusts, can be complex and highly individualized. It is crucial to consult a knowledgeable estate planning attorney to ensure that the gifts made are properly structured and comply with tax laws at the state and federal levels, especially as the tax laws change over time. Please get in touch with me directly to discuss these or other gift-giving options before the end of 2023.
October 30, 2023
Estates and Trusts
Every Woman For Herself
Originally posted on 1/6/2021, content updated on 10/18/2023 I read a statistic that stopped me in my tracks: women are four times as likely to be a widow than men are to be widowers. Anecdotally, most of us know that women tend to outlive their partners but the fact that it is four times as likely should give us all pause. It should also prompt us as women to make sure that we have our proverbial houses in order, especially as we begin a new and brighter year ahead. How does one ensure her house is in order? Start with a list. The list should identify the assets that she owns, what the value of those assets are, and how she owns those assets. What are your assets? For practical purposes and for this exercise, your assets should be considered anything that you own that has value. Most people understand that their real estate, bank, brokerage, and retirement accounts are considered assets, but there are other items that might not immediately come to mind when you consider assets. Collectibles, artwork, expensive jewelry, interests in business, intellectual property, digital assets, inheritances, and insurance policies are also assets and often have significant value. It is important that these not-so-obvious assets are identified. How do you own those assets? Assets can be owned in various ways: jointly with or without rights of survivorship, assigned percentages, in a trust, and solely are just a few examples. If you are married, you may own your primary residence together as “joint tenants with rights of survivorship” with your spouse. This means that if your spouse predeceases you, your home will pass to you by operation of law. If instead you own vacation property as tenants-in-common with your brother and he dies first, his share will pass to his own heirs – which might not be you. This is an important distinction because if you own property with your brother and his children are the heirs to his estate, his 50% ownership of the property will pass to them. If that is the case, his children may want to sell the property. Do you have the finances available to buy them out? Or do you want to own property with your brother’s children? Maybe. But maybe not. What is the value of your assets? Asset valuation is a moving target. The market value of real estate and equities fluctuate daily so asset valuation should be updated at minimum, on a yearly basis. Even more complicated is determining the value of business interests, intangible assets, and specific tangible personal property that may be unique in nature. Take for example an art collection: oftentimes it is necessary to engage an art expert qualified in that particular genre to determine the market value of a piece or an entire collection. Or, even more complicated, the valuation of a closely held business in which you are the sole proprietor: what the value is during your life may not be the same after you die. It may be necessary to engage an expert to evaluate the value of your role in a business with or without you. Why is it important to understand the value of your assets? In a word, taxes. Depending on the value of your assets and who you plan to leave your assets to when you die could mean the difference in hundreds of thousands of dollars in taxes owed to the state or federal government upon your death, if not more. Knowing what your assets are worth will enable you to plan properly for who should inherit those assets and in what proportion. Beginning with a simple list is a good start in getting your own house in order; the list will better enable you to take the next step in planning. Knowing what you have will allow you to consult the appropriate professionals to create a functional estate plan that will serve your long-term goals and, in the end, protect you and your loved ones. After all, in the end, it is (four times as likely to be) every woman for herself.
October 18, 2023
Estates and Trusts
Have You Got the Power (of Attorney)?
Originally posted on 11/19/2020, content updated on 10/04/2023 The New York Durable Power of Attorney is an integral part of every estate plan, but it is also the one document that clients are most trepidatious about signing. Their concern is not unfounded. The Power of Attorney quite literally grants someone else the power to make decisions about another’s finances, property, business matters, taxes, gifts, investments and all things related. Why Do I need a Power of Attorney? Anyone over the age of 18 who has a bank account should have a Power of Attorney. If you own assets in your name, no one else can assist you in managing those assets if you cannot manage the assets yourself due to a short-term illness or incapacity, without a Power of Attorney. Many incorrectly presume that a spouse or family member can simply step-in and make any necessary financial transaction for another without a Power of Attorney in place; this is not the case. In fact, retirement assets, real property (even if owned jointly,) and solely-owned assets may not be accessed by anyone, including a spouse, unless she has a Power of Attorney signed by you, giving her permission to access those assets – even for simple tasks like paying bills. How Does the Power of Attorney Work? The Durable Power of Attorney allows you, the principal, to appoint another person, an agent, to make financial decisions for you. The decisions that you allow your agent to make can be tailored to your specific situation. Sounds easy, right? Not exactly. There is a tension that exists between giving your agents all the powers available under the law to act for you and very narrowly tailoring those powers to specific situations. Make the Power of Attorney too broad and your agent could step into your shoes and make any and all financial decisions on your behalf – decisions that you might not want another person to make for you. An overly restrictive Power of Attorney could very well leave your agent in a position where she cannot assist you in managing your assets in the way that you intended or in your best interest, rendering the Power of Attorney useless. Another important point is that Powers of Attorney are effective the moment you sign them, even prior to your incapacity. Practically speaking, your agent has the ability to use the Power of Attorney right away, which can be a worrying prospect. As such, it is vital that you choose someone who will act in your interest and not outside of the scope of what you intended. It should be noted that Powers of Attorney can be revoked at any time if the principal has the mental capacity to do so, and it is no longer effective upon the death of the principal. Who Should be your Power of Attorney? The who is the most important part of the Power of Attorney. Because your agent can be granted sweeping powers under your Power of Attorney if you allow it. She must be someone that you trust implicitly to make decisions based on the guidance you provided to the agent, and if you never gave direction, then the agent must act with your best interest in mind. Your agent should be responsible, honest and detail-oriented. The good news is that when New York State amended the law relating to the Power of Attorney in 2009 (and again in 2010,) it included the provision that the agent you appoint must also sign the Power of Attorney accepting your appointment of her and recognizing that she has a fiduciary obligation to the principal. The form explicitly advises the agent that in accepting the role, any transaction that she makes must be done in the best interest of the principal, not of the agent. The agent also has a fiduciary duty to keep receipts and documentation for transactions made under your Power of Attorney, never to co-mingle funds with theirs, and to avoid conflicts of interest. If your agent does not follow your wishes, or acts against your best interest, your agent could be held liable for violating the law. What Happens Without a Power of Attorney in Place? If you become incapacitated and you never got around to signing a Power of Attorney, or because you were too fearful of trusting someone as your agent, the only option is guardianship. A guardianship proceeding is a very serious legal process in which another party is required to appear in court and prove to a judge with medical evidence that you are not able to manage your own finances. The judge may appoint a family member, a friend, or a lawyer (whom you never met before) to take control of your finances. The court proceeding itself, while not only emotionally difficult for those involved, is quite expensive and should be avoided if at all possible. It is crucial that the option of a Power of Attorney be discussed with your estate planning lawyer. You should take great care in considering not only who should fill the role as agent, but also which powers you may wish to grant the agent.
October 4, 2023
Estates and Trusts
What’s a Healthcare Proxy and Why Should You Have One?
Originally posted on 12/10/2020, content updated on 09/13/2023 It is vital to have a proper health care directive in place in the event you become sick and cannot independently advise your health care providers of your wishes. In 1991, the New York Health Care Proxy Law established the right for an adult to nominate another person to make medical decisions for her in the event she is unable to effectively communicate her wishes independently. The goals of establishing this standard in New York was to avoid confusion when a medical decision needed to be made for someone who could not do it herself, to identify the person who could communicate those wishes, to ensure the wishes would be carried out, and most importantly, to withdraw treatment when the proxy decides that it would not be something that the patient would want or that continued care is not in the patient’s best interests. How the Health Care Proxy Works The Health Care Proxy document only goes into effect when you are unable to effectively communicate your wishes to your health care providers. The proxy allows for the appointment of two people, referred to in the document as “agents”, in the order in which they are named. The order of the proxies in the document determines the order in which medical personnel will consult with them about decisions that need to be made about your health. Agents are not permitted to act together in New York because joint action could lead to disagreement, which of course undermines the purpose of the document. The medical decisions that an agent might make on your behalf can range from the most basic like the dispensing of antibiotics to the suspension of artificial ventilation which might end your life. The Health Care Proxy also provides instruction regarding organ and tissue donation in the event of your brain death. How to Choose Your Agents Your agent must be 18 years of age and does not have to be someone related to you. While it is true that many choose a family member like a spouse or an adult child for the agent role, there is no requirement that your agent be related to you. In fact, some choose a close friend or trusted advisor to fill the role of an agent so that a family member’s emotion does not factor into a health decision, particularly a decision that could end your life. Others nominate their religious advisor so that treatment is based on their faith’s doctrine to guide the medical decision. Regardless of the individual you choose, it is imperative when considering someone for the role that you nominate a person who will speak for you regarding the type of care that you would choose for yourself, if you could articulate your own wishes: this person should not substitute thier wishes for your wishes. Instead, you should choose an agent who understands your wishes as they relate to any and all health care decisions, including life-saving measures, and who will articulate those wishes to your health care providers. This person should be someone who understands and respects your feelings about living and about dying, and fully comprehends the quality of life that you wish to live. In addition, the person should be comfortable advocating for you with health care providers and dissenting family members alike. How to Communicate Your Wishes The discussions that you have with your agent are so important because this is the information she will rely on to make decisions for you if the need arises in the future. These discussions with your agent often evolve over time. Your feelings about living and dying and the type of care that you may want are oftentimes influenced by age, a life-limiting diagnosis or even someone else’s health crisis that you have witnessed. Verbal discussions had with a proxy are legally sufficient for the agent to make a decision regarding any and all of your medical care, but many individuals take it a step further and also put a Living Will in place to illustrate certain wishes in writing. In short, Living Wills are documents that explain your thoughts about medical care and heroic measures. Often Living Wills go into detail about “heroic measures” to sustain your life including artificial nutrition, hydration, and ventilation. It is important to note that Living Wills are not substitutes for Health Care Proxies in New York and should only be used to supplement information provided to the agent. Who Should Have a Copy It is necessary that your agent not only know that she was appointed by you, but that she also has a copy of the document itself. With the prevalent use of cellphones, it is commonly recommended that your agent take a photo of the Health Care Proxy under which she is nominated so that it is readily accessible in any emergent medical situation. You should also provide copies of your Health Care Proxy to any of your treating physicians for their records, in addition. Finally, it should be noted that, even if after reading this article, you never get around to completing a Health Care Proxy, all is not lost. New York State passed the Family Health Care Decisions Act (“FHCDA”) in 2010 that gives guidance on what to do if someone does not have a Health Care Proxy in place. The FHCDA allows for family members to act as your “surrogate” and make health care decisions for you, including decisions to withdraw life-sustaining treatment. However, you are not able to choose which family member will speak for you, so it is not a sufficient substitute for a Health Care Proxy.
September 13, 2023
Estates and Trusts
Estate Planning for Professional Athletes: The Playbook for Success on and off the Field
Professional athletes are no strangers to the limelight, but beyond the enthusiastic cheers of the fans lies the need for careful planning that extends far beyond their playing days. Estate planning can easily be forgotten amid the hustle and bustle of a rigorous training schedule and a busy sports season. In this article, we will delve into the unique considerations that professional athletes should consider when crafting a comprehensive estate plan. The Play: Understand the Game of Estate Planning Estate planning involves more than just the drafting of a Last Will and Testament. A proper estate plan creates an overall strategy to manage the professional athlete’s hard-won assets during their lifetime. A well-drafted plan also ensures a smooth transition of assets to the athlete’s loved ones in the event of an injury or following one’s death. As a professional athlete, income streams, investments, intellectual property, and property ownership are customarily quite complex. Over the course of one’s career, an athlete may move frequently, acquiring assets in different jurisdictions with different laws along the way. They may also experience significant and volatile swings in their financial outlook that necessitate a review of an estate plan more often than most. In addition, due to the dynamic lifestyle of the professional athlete, close relationships may also change rapidly. It is vital that the professional athlete collaborates with tax professionals, financial advisors, and estate planners who have experience in handling the ever-changing and unique planning needs of athletes. The Starting Lineup: Wills and Trusts A Last Will and Testament is certainly one of the cornerstones of an estate plan. Most understand that Wills can assist in outlining how assets are distributed upon death. What many do not know is that Wills can also designate guardians for minor children and appoint a trusted advisor as the executor to carry the terms of a Will. Trusts are an even more powerful tool for athletes. Trusts provide much-needed privacy, minimize taxes, and allow for tailored distribution of assets to beneficiaries over time. The benefits of a Trust are often critical for an athlete, particularly if they have young children or heirs who require financial guidance. The MVPs: Powers of Attorney and Healthcare Directives One of the most challenging hurdles that athletes must face is injuries. More than any client, creating advanced directives is of the utmost importance for professional athletes who may face injury more regularly than others. Designating an agent under a power of attorney ensures that a trusted person nominated by the professional athlete can manage the likely complicated financial affairs in the event of injury or incapacity. Likewise, healthcare directives outline medical preferences and can empower a chosen individual to make medical decisions on behalf of the injured athlete if they cannot do so Game Strategy: Tax The substantial earnings of professional athletes are often subject to high tax rates. Those tax rates vary from state to state and from year to year. Implementing a tax-efficient estate plan can help minimize the tax burden on the professional athlete and their heirs. A properly created estate plan must include strategies like lifetime gifting, charitable giving, and utilizing trusts to preserve a professional athlete’s wealth and legacy. Protecting A Legacy: Intellectual Property Considerations An athlete’s brand, image rights, and related intellectual property assets continue to generate income long after the playing days are over. Including provisions in an athlete’s estate plan that address how these assets are managed and protected is essential. Harnessing this intellectual property involves setting up corporate structures to handle licensing and endorsement deals and ensuring a stream of income for the athlete’s beneficiaries – all of which must be appropriately allocated in an athlete’s estate plan. Team Collaboration: The Agent, the Manager, The Accountant, and the Lawyer Just as winning championships requires teamwork, a successful estate plan relies on effective and regular communication and collaboration between various trusted professionals. A professional athlete’s manager, agent, financial advisor, accountant, and estate planning attorney should work in tandem to ensure that all aspects of a professional athlete’s overall plan align with their goals and protect their interests and their family’s interests for years to come. Revise the Playbook: The Moving Target of an Estate Plan The life of an athlete is dynamic on nearly every level, and their estate plan is no different. Major life events, such as marriages, divorces, birth of children, disability, or even the death of a loved one, require the professional athlete to constantly assess their estate plan playbook. Changes in an athlete’s home state or playing career can immediately impact their financial circumstances, which will accordingly warrant adjustments to their estate plan. Professional athletes must regularly review and update their estate plans to reflect their current situation, location, and aspirations. Professional athletes spend their careers preparing for the “big game” — an estate plan is no different, but it requires a different kind of strategy. It is not just about preserving wealth, fame, and fortune; it’s about securing a legacy, providing for an athlete’s loved ones, and ensuring their hard-earned assets are properly managed. By assembling a winning team of experts and crafting a comprehensive estate plan, professional athletes can confidently stride into the future, both on and off the field. If you are a professional athlete, a loved one, or a sports agent, please contact me so that together, we can ensure that the professional athlete’s legacy and loved ones are secure for years to come.
September 8, 2023
Estates and Trusts
Trusts and Estate Planning Tips for the LGBTQ+ Community
Pride Month is an important time for celebrating the LGBTQIA+ community and promoting equality, acceptance, and visibility. Estate planning is a crucial aspect of personal financial planning for individuals and families, regardless of their sexual orientation or gender identity. Here are six trusts and estate planning tips for the LGBTQ+ community that may be particularly relevant during Pride Month: Wills and Trusts: Creating a will or a trust is essential for ensuring that your assets are distributed according to your wishes after your passing. Without a valid will or trust, your estate will be subject to intestacy laws, meaning New York State will determine who will inherit from you and in what proportion. The rules of intestacy may not align with your intentions or benefit your chosen beneficiaries. By creating an estate plan, you have the opportunity to specify how you want your assets to be distributed, including to your chosen family, friends, or organizations. Beneficiary Designations: Review and update your beneficiary designations on all of your financial accounts, including retirement accounts, life insurance policies, and other financial accounts. Ensure that the named beneficiaries reflect your current wishes. If you are in a relationship that is not legally recognized, it’s imperative that your loved one is designated as a beneficiary. Healthcare Directives: Consider creating advance healthcare directives such as a healthcare proxy and a living will. These documents allow you to appoint someone to make medical decisions on your behalf and outline your preferences regarding medical treatments and end-of-life care. Selecting a trusted person who will respect your wishes, including your chosen family or partner, is crucial to ensure your healthcare wishes are honored. If you do not have these documents in place, many states, like New York, allow your next of kin to make end-of-life decisions for you. Guardianship for Your Children: If you have children or dependents, it is vital to establish guardianship arrangements in case something happens to you. Ensure that your estate plan specifies who you want to care for your children and provide for their well-being. This is especially important for couples who are not legally married or who may face additional legal complexities in some jurisdictions due to the lack of protection or recognition of LGBTQ relationships. Your Local LGBTQ+ Laws: Understanding the laws and regulations regarding LGBTQ+ estate planning in your jurisdiction is so important. Laws can vary by country, state, or even local jurisdiction, and they may impact your ability to protect your chosen family, distribute assets, or claim inheritance rights. Consulting with an estate planning attorney who has experience in LGBT estate planning is imperative. Nondiscrimination Language: When drafting estate planning documents, you should consider including non-discriminatory language to ensure that your wishes are carried out without prejudice or discrimination based on sexual orientation or gender identity. This will help protect your loved ones from potential challenges to your estate plan based on discriminatory interpretations or actions. Please feel free to contact me to navigate the legal complexities of LGBTQ+ estate planning and to ensure that your estate plan aligns with your goals and values.
June 27, 2023
Estates and Trusts
Special Care with Special Needs Trusts (SNTs)
Providing Security and Care for our Disabled Loved Ones I was inspired to write about Special Needs Trusts (SNTs), a legal tool that can provide security and care for our disabled loved ones, as I was waiting to cross Madison Avenue. I stood beside a woman in a wheelchair as the traffic whizzed by, impatient pedestrians hovered and huffed to move around her chair and I thought of how vulnerable she must have felt at that moment – or maybe more accurately, how vulnerable I felt on her behalf. It made me think of so many of us when planning for our loved ones with special needs: financial security and long-term care can be especially triggering. Years ago, family members had to disinherit their disabled loved ones to ensure that their public benefits were not disturbed by an inheritance. Funds meant to support the disabled loved ones were left to someone else to manage, which often led to disaster. As a result, the concept of Special Needs Trusts (SNTs) was born. SNTs became a powerful tool to address these concerns and ensure that individuals with disabilities could maintain their eligibility for government benefits while maintaining access to the necessary financial resources. What is a Special Needs Trust (SNT)? A Special Needs Trust, also known as a Supplemental Needs Trust, is a legal document that holds funds for the benefit of a disabled person; the funds in an SNT are not “counted” by the government. The primary purpose of an SNT is to enhance the disabled person’s quality of life by supplementing government benefits without jeopardizing their eligibility for essential programs such as Medicaid and Supplemental Security Income (SSI). Three Types of Special Needs Trusts First-Party Special Needs Trust: A First-Party SNT is funded with the disabled individual’s own assets, such as an inheritance, personal injury settlement, or accumulated savings. The trust allows the individual to maintain eligibility for means-tested benefits. Upon the disabled person’s death, any remaining funds must reimburse the government for benefits received during the disabled person’s life. Third-Party Special Needs Trust: A Third-Party SNT is created and funded by someone other than the disabled individual. Parents, grandparents, siblings, or any other loved one can establish a Third Party SNT. Unlike a First Party SNT, there is no requirement to reimburse the government for benefits received upon the beneficiary’s passing – known as a “pay-back provision.” All remaining funds can be designated for the disabled beneficiary’s heirs, the third party’s heirs, or charitable organizations. Pooled Special Needs Trust: Pooled SNTs are administered by nonprofit organizations. Pooled SNTs allow multiple individuals with special needs to “pool” their resources into one SNT. Each beneficiary then has a separate account within the SNT, and a professional trustee from the charity manages the investment and disbursement of funds. This option is particularly beneficial for those without substantial assets or when family members cannot assume the responsibilities of managing a trust. Benefits of Special Needs Trusts Preserving Government Benefits: One of the primary advantages of an SNT is that it enables individuals with disabilities to continue receiving crucial government benefits. The assets held in a properly drafted SNT allow the disabled individual to maintain eligibility for these programs, thus ensuring access to vital healthcare services, income support, and other assistance like housing allowances. Supplementing Basic Needs: SNTs provide a supplemental source of funds that can be used to enhance the beneficiary’s quality of life. These funds may cover expenses not typically covered by government benefits, such as education, therapy, specialized equipment, home modifications, transportation, and recreational activities. Professional Management: Trusts require careful management to ensure compliance with legal and financial regulations. Professional trustees handle investment decisions, disbursements, and record-keeping responsibilities, alleviating the burden of family members and ensuring the trust is managed effectively and in the beneficiary’s best interest. Peace of Mind: By establishing an SNT, families gain peace of mind knowing that their disabled loved one will have the necessary financial resources and care even after they are no longer around. Establishing an SNT can provide a sense of security for both the beneficiary and their family. SNTs play a vital role in securing the future of individuals with disabilities by providing them with financial resources, care, and an enhanced quality of life. SNTs provide families a means to protect their disabled loved ones' eligibility for government benefits while supplementing those needs. If you would like more information on Special Needs Trusts (SNTs) and how these and other legal tools can provide security and care for your disabled loved ones, please feel free to contact me. If you want to learn more about how you can benefit your favorite charity while creating an income stream for you or your beneficiaries, check out my post on Charitable Remainder Trusts by clicking here.
May 23, 2023
Estates and Trusts
LGBTQ+ Home Care Law Set to Go Into Effect in New York Next Month
It is no surprise to LGBTQ+ individuals and their allies that nine out of ten of those who identify as LGBTQ+ fear discrimination in medical settings. According to Services and Advocacy for Gay, Lesbian, Bisexual, and Transgender Elders (SAGE), LGBTQ+ people are two times as likely to age alone and four times less likely to have children who might otherwise serve as caregivers and advocates. This means the LGBTQ+ population is even more vulnerable as they age. As a result, and at long last, Governor Hochul signed a law that is intended to address this discrimination related to the medical care received by the LGBTQ+ community in the home care and nursing home setting. Beginning next month, New York State will require that all home health aides, certified nurses’ aides, and personal care aides – essentially the backbone of a senior’s long-term care team– will receive training focused on providing care to patients of diverse sexual orientations, expressions, and gender identities. This ambitious and much-needed law includes several components that will be incorporated into the training program. Much of the training relates to the education of the caregivers to provide comprehensive explanations of various terms related to the LGBTQ+ community. It provides an understanding of why patients with diverse sexual orientations and gender identities or expressions may conceal their identities. The goal of the training is, of course, to incorporate the concerns of these patients and ensure that they receive “person” directed care and to address the unique healthcare needs of LGBTQ+ patients. In light of the nearly 400 anti-LGBTQ+ legislative actions pending in the states across the country, it’s heartening that New York is taking the lead to combat this discrimination, especially for the most vulnerable in the LGBTQ+ population.
May 15, 2023
Estates and Trusts
Charitable Remainder Trusts: A Way of Giving Back by Paying it Forward
Many of our clients look to explore the ways in which they can give back to their favorite charities. One of the avenues worth considering is using a charitable remainder trust (CRT). CRTs are an excellent way to support your favorite charities in the future while providing an income stream now for yourself and your heirs and reducing the estate tax burden to your heirs in the future. How Charitable Remainder Trusts Work A CRT is an estate planning document, similar to a trust, that you might create to manage your assets and avoid probate. To set up a CRT, you transfer the chosen asset(s) to the trust, which a trustee then manages. You can serve as the trustee of a CRT; you could also appoint your spouse, your child, or even the charity. The trustee is responsible for investing or managing the donated assets and distributing income to you and your other income beneficiaries for your lifetime or a specified period. At the end of the trust term, the remaining assets are transferred to the charitable organizations of your choice as a charitable contribution. Types of Charitable Remainder Trusts There are two primary types of CRTs: charitable remainder annuity trusts (CRATs) and charitable remainder unitrusts (CRUTs). A CRAT pays a fixed income stream based on the initial value of the trust assets, while a CRUT pays a variable income stream based on the value of the assets determined each year. Which type of trust you choose will depend upon your personal financial goals and circumstances. A CRAT may be a better option if you want a fixed income stream and are more concerned about the stability of that income. In comparison, a CRUT may be a better option if you wish to add assets over time, are more comfortable with fluctuations in income, and wish to potentially benefit from increases in the value of the trust assets over the trust term. Benefits of Charitable Remainder Trusts Clearly, one of the primary benefits of a CRT is that you can receive income from the trust while also benefiting your favorite charity. The reason why CRTs are particularly useful is because many of our clients have highly appreciated assets with a low-cost basis, such as stocks or real estate. Instead of selling those assets, paying capital gains taxes, and then donating what is left of the proceeds to the charity, a CRT allows you to donate the highly appreciated assets to the CRT and have the CRT sell the asset, thus avoiding the capital gains tax entirely. Moreover, you are entitled to take federal and possibly a state income tax deduction for making the charitable donation to a CRT. Additionally, CRTs can provide significant estate planning benefits. Because the assets in the trust are ultimately transferred to a charitable organization, they are removed from your estate, reducing estate taxes for your heirs. CRTs can be an excellent way to support a charity while also receiving financial benefits. If you are interested in setting up a CRT, it is important to work with a qualified estate planning attorney who can help you determine the best course of action for your individual circumstances.
May 12, 2023
Estates and Trusts
Estate Planning for the College-bound Kiddo
It is college decision time for so many families and their soon-to-be adult children. Most are fretting over the cost of college, what their child will study, and how far from home they will be in six short months. Between those worries, the endless Amazon orders, and trips to Bed Bath and Beyond, is that their college-age kids need a few simple estate-planning documents in place before they leave. Estate planning documents for an 18-year-old? Yes! The two most important documents that your now-adult child needs are a Health Directive and a Financial Power of Attorney, particularly when they are away from home. A health care directive in New York is referred to as a Health Care Proxy. A Health Care Proxy is an “advanced directive” that allows someone else to make health care decisions on your behalf. Most assume that this document is only needed for an older person, but that could not be further from the truth. A Health Care Proxy authorizes you to make decisions for your adult child in the case of a medical emergency when they are away. Most importantly, a Proxy can provide you access to your adult child’s health records and information. Access to your adult child’s health information can be vital to ensure that they are receiving proper care, particularly in light of the collective mental health issues that befall so many of our college-bound children. Every Health Care Proxy should contain a privacy waiver, referred to as a HIPPA waiver, that permits your adult child’s healthcare providers to share your adult child’s private health information with you; without this waiver, doctors and nurses cannot provide you with any information regarding your child’s health including, diagnoses, blood test results, treatment plans, etc. In addition to managing your adult child’s health care concerns, a second advanced directive, commonly referred to as a Financial Power of Attorney, will allow you to assist your child with his finances. Once your child turns 18, they are an adult, and you no longer have access to their child’s bank accounts, their school records, school loans, nor the ability to sign on their behalf. Many parents assume that because they are paying the tuition bill for their child’s college, for example, that they would automatically have access to all of their school information, including transcripts, and that is simply not the case. The power of attorney appoints you as your adult child’s agent to be able to access this information at any time, sign documents on their behalf, open and close bank accounts and renegotiate school loans. While 18 may be the legal age of adulthood, often the financial responsibilities associated with adulthood are best managed with a parent’s assistance, and the Power of Attorney document will provide you the authorization you will need to help your adult child. Certainly, we all wish that there was a guidebook available to help us send our children off safely to their dorms and embark on their new life of independence. In the meantime, having these two simple documents in place, you will be able to provide the assistance and the guidance that your adult child may need when they first leave home.
April 4, 2023
Elder Law and Advocacy
LGBTQ+: NY’s Goal of Aging Without Discrimination
It is no surprise to LGBTQ+ individuals and their allies that nine out of ten of those who identify as LGBTQ+ fear discrimination in medical settings. According to SAGE, LGBTQ+ people are two times as likely to age alone and four times less likely to have children who might otherwise serve as caregivers and advocates. This means the LGBTQ+ population is even more vulnerable as they age. As a result, and at long last, Governor Hochul signed a law that is intended to address this discrimination related to the medical care received by the LGBTQ+ community in the home care and nursing home setting. Beginning in June 2023, New York State will require that all home health aides, certified nurses’ aides and personal care aides – essentially the backbone of a senior’s long-term care team– will receive training focused on providing care to patients of diverse sexual orientations, expressions and gender identities. This ambitious and much-needed law includes several components that will be included in the training program. Much of the training relates to the education of the caregivers to provide comprehensive explanations of various terms related to the LGBTQ+ community and provides an understanding of why patients with diverse sexual orientations and gender identities or expressions may conceal their identities. The goal of the training is, of course, to incorporate the concerns of these patients and ensure that they receive “person” directed care and to address the unique healthcare needs of LGBTQ+ patients. In light of the nearly 400 anti-LGBTQ+ legislative actions pending in the states across the country, it’s heartening that New York is taking the lead to combat this discrimination, especially for the most vulnerable in the LGBTQ+ population.
March 29, 2023
