Elder Law

Trusts: The Planning Tool You May Not Know Alot About But…Really Should.

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Trusts are an important piece of your estate planning arsenal; the reasons why can differ depending on the type of Trust. There are many types but I will not be discussing them all or going into great detail.

My Series has an Elder and Special Needs Law focus, so the later discussion of specialized Trusts (in the coming weeks) will go into more detail. For example, when discussing Medicaid Planning, I will delve into the Medicaid Asset Protection Trust. When discussing Special Needs Planning, I will explain the types of Supplemental Needs (a/k/a Special Needs) Trusts.

As is my intent throughout the Series, I will be laying a foundation that can carry you forward.

Generally, the Grantor’s objectives can also determine the type of Trust.  The Grantor is the person who creates the Trust for either their own benefit or for others.  Some may refer to a Grantor as a “Trustor.”

Another concept to understand is that a Trust is a fiduciary agreement, where the Grantor names a person or persons, called a Trustee or Co-Trustees, to hold/manage assets for the beneficiaries.

A Trust distinguishes itself from a Last Will and Testament, in that the former is not subject to Probate. In the second article from the Series, I defined Probate as the judicial proceeding wherein the Court names an Executor who then marshals and distributes the decedent’s assets to the beneficiaries.

When an asset is non-probate, it means that it passes directly to the named beneficiary. For example, a life insurance policy is a non-probate asset.

When discussing Trusts, whatever asset(s) is/are named within the Trust (if the Trust was drafted or written correctly) will “pass” directly to the named beneficiary without a Court proceeding. But as an example, if it is residential property the beneficiary needs to effectuate a deed change for ownership to change legally.

As I mentioned at the beginning of the article, there are many types of Trusts so they all start with these two:

  1. Inter Vivos (Living) Trust and
  2. Testamentary Trust

All Trusts will first fall under one of the above categories.

First, the Testamentary Trust

A Testamentary Trust is one that is established through the Grantor’s Last Will and Testament or interestingly enough …an Inter Vivos Trust.

A Testamentary Trust can be revoked at any time during the Grantor’s lifetime, if the Last Will and Testament where it is created is modified or revoked.  Once the Testator of the Will dies, the Testamentary Trust becomes Irrevocable (i.e. permanent).

Likewise, if the Testamentary Trust provision of the Inter Vivos Trust is modified/removed, or if the Living Trust itself is terminated, so is the Testamentary Trust.

And whatever objectives an Inter Vivos Trust aims to accomplish, a Testamentary Trust can (pretty much) do the same.

The Inter Vivos Trust

An Inter Vivos or Living Trust is one that is established during the Grantor’s lifetime. There are many types- again-depending on the objective(s).

Briefly, an Inter Vivos trust can be created (and this is not an exhaustive list):

  • To shield assets from potential future creditor
  • To hold life insurance policy (ies)
  • To hold money
  • To hold property -residential or commercial
  • To hold assets for minors
  • To provide for different beneficiaries at different times (i.e. a surviving spouse and then to Grantor’s children after spouse death).
  • For the benefit of a charity
  • As a Credit Shelter or Family Trust (estate tax benefits)
  • To provide for a non U.S. Citizen spouse
  • To produce a lifetime financial benefit to the Grantor and/or the beneficiaries
  • To produce a tax benefit for the grantor and/or the beneficiaries

In the Inter Vivos Trust category, there are two further sub categories:

1.     Revocable Trust and

2.     Irrevocable Trust

A Revocable Trust is one where the Grantor retains control; it can also go by the name Grantor Trust. The Grantor can:

– Amend or modify the terms (i.e. remove, buy or sell assets from the Trust) and/or

– Replace/change the beneficiaries of the Trust and/or

– Name themselves a beneficiary and/or

– Terminate the Trust altogether.

The Grantor can act as the Trustee.

The assets in the Trust remain in the Grantor’s estate.

The assets in the Trust are taxed as part of the Grantor’s estate (personal income tax, Form 1040); the Trust is not a separate entity.

A Revocable Trust becomes Irrevocable at death of the Grantor.

NOTE: Beneficiaries do not pay tax on distributions since Grantor has already done so.

An IrrevocableTrust is one where

– The Grantor cannot amend or modify the terms and/or;

– The Grantor cannot terminate the Trust and/or beneficiaries;

– Once created (and funded), the Grantor has no control over it;

– The Grantor no longer has ownership rights over the assets within the Trust; and

– The Grantor cannot act as Trustee.

The Grantor could only have the right to the assets, if they named themselves a beneficiary. The Trust would need certain provisions/distribution language included to accomplish this. If done incorrectly, it could prejudice the Trust’s objectives.

The assets in an Irrevocable Trust move out of the Grantor’s estate.

The Irrevocable Trust is taxed as a separate entity (Form 1041).

The Irrevocable Trust is an attractive option for Grantor’s looking to protect assets from potential future creditors or to limit or eliminate estate taxes.

NOTE: Beneficiaries do have to pay income taxes on the distributions.

So, there you have it, a bare bones primer on Trusts. If you remember the above, all the puzzle pieces will (hopefully) fall into place as we continue along in my Series.

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If you liked this article, please “like,” comment and share with others. I would love your feedback!

If you’d like to learn more about me and my law practice you can go here or, si hablas español, here.

The Power of Attorney: The Document You Cannot Live Without

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In my last article I spoke about the Health Care Proxy, a document that governs all health care and medical decisions. This week I will be addressing the Power of Attorney, the most powerful (and abused) document in anyone’s set of planning documents.

I will try to explain this legal document in a succinct yet clear manner. This is all elemental so remember, no deep dives.

The Case of Jane and John Smith

Last week I provided the hypothetical of Jane and John Smith. I am going to revisit their story and provide different details, to illustrate the importance and power of this document.

Jane worked as an accountant and left her job at a small firm to focus on a full-time screenwriting career. At the time of the accident, she had been writing full time for a little over a year and a half. John worked as an assistant principal at a Manhattan public elementary school.

They lived in a renovated three-story brownstone in Bushwick (Brooklyn). John purchased the brownstone as a then fixer upper well before meeting Jane. Two years prior to the accident, he took out a second mortgage in the amount of $450,000 to finance the major renovations with the hopes of renting out two of the three apartments.

 John also owned an apartment in Forest Hills, Queens he inherited mortgage free from his grandmother. He had been renting out the apartment for approximately $2000 per month and used those funds to assist in paying the $3000 mortgage on his brownstone. 

Jane and John held a joint savings account amounting to $100,000 at the time of his accident. He also held some investment accounts, jointly with Jane, worth about $300,000.

A year after the accident, financial problems began to surface. Jane’s work as a screenwriter was inconsistent, therefore so was the income. However, being a screenwriter allowed her to spend more time with John at his long- term rehabilitation facility.

 Jane has been paying $13,500 per month for the facility with the money in John’s investment accounts. She knows this money will not last and she will need to solicit long term care Medicaid for John sooner rather than later.

 She has maxed out their joint savings account. She has been able to pay the mortgage but, at times, with difficulty. As much as it pained her to think it, she believes she needs to sell the brownstone as it was too much to manage.

 She wants to keep the Forest Hills apartment as an income producing property.

John never executed any Advance Directives, and this included a Power of Attorney. At this point, Jane’s hands are tied with respect to properties she does not own. 

(As I mentioned in my previous article, there is a (costly) solution. It will be addressed next week).

Like a Health Care Proxy, the “POA” (the abbreviated term utilized by attorneys) is an Advance Directive. It is a document that is only valid when the person who executed it, also referred to as a Principal, is alive and incapacitated. The person who carries out the document’s intent is, again, the Agent.

A POA should have two Agents that either act separately or together. 

There are many authorities that can be conferred in a POA and, often, one person cannot do it all or may not have the aptitude for certain tasks. It does make sense to allow both Agents to act separately. When agents act together, this means they must agree on a course of action. This could lead to conflict but, to be fair, so can Agents who act separately.

Rule of thumb: Think responsibly and cautiously about who you select to act as your Agents. They do not need to be your spouse, child or close family member. If they happen to be and are appropriate, then so be it.

There should also be named successor Agents in the event your original Agent(s) are unable to serve for any reason.

The criteria for incapacity are the same as defined for the Health Care Proxy. The person can no longer make decisions, because they are

–      unable to verbally, or through other means, communicate and/or;

–      cannot comprehend what is being told to them;

–      it is usually a neurocognitive issue, and/or;

–      developmental or intellectual disability, and/or;

–      at times combined with a psychiatric illness.

And yes, some people will execute a Power of Attorney to permit others to act on their behalf even when they possess their cognitive faculties but present with limited to no mobility.

The Subjects Under a Power of Attorney

What powers does a Power of Attorney confer on the Principal’s named Agent, the person with the authority to act on their behalf?

Few to many. Narrow to broad.

It depends on the Principal’s level of comfort with ceding control as well as their expressed wishes. However, an effective Power of Attorney needs to cover a lot of bases and the one you download off the internet is not going to pass muster.

The subjects addressed in your boilerplate POA:

–      Claims and Litigation;

–      Banking transactions;

–      Bond, share and commodity transactions;

–      Real Estate transactions;

–      Benefits from governmental programs or civil or military service;

–      Health care billing and payment;

–      Tax matters;

–      Estate transactions;

–      Business operating transactions;

–      Retirement benefits;

–      Insurance transactions;

–      Personal and family maintenance;

–      Chattel and goods transactions; and

–      “All other matters”

On its face, the above subjects appear to be comprehensive. They cover every facet of your life outside of health care and medical decisions. But do they really protect you as the Principal?

From the perspective of an experienced Elder Law or Trusts and Estates attorney, the above provides insufficient to minimal protection, in that the language is too generic and open to any interpretation—usually of the narrow kind. It is also missing other subject matters that are important to an aging population and those with special needs.

It is simply not tailored to the Principal, his/her life and future needs.

A Minute on the Banks and Financial Institutions

Let’s talk about the banks and financial institutions. They are not known for their POA “friendliness.” They will often ask their customers to complete an institutional POA, even though this is not necessary-or is it?

If you look at a standard/template POA it simply states, “banking transactions.” What exactly does that mean? Whatever the person looking at the document determines it to be—and it will often not work in the Agent’s favor.

I can say the same thing for every single category listed. Additionally, the “all other matters” language is akin to a catch all provision in a contract -and not a good one.

The Statutory Gifts Rider

Another mistake people make when it pertains to a POA? The absence of a Statutory Gifts Rider, which for this article’s purpose is defined as an accompanying document that permits the Agent(s) to make gifts of money in excess of $500. The sole gifting provision in the POA only allows gifting in an amount up to and including $500. The additional gifting authority found in the Rider is vital in the area of Medicaid Planning, a future series topic.

An experienced Elder Law attorney will further flesh out the above subjects when drafting a POA and the Statutory Gifts Rider. Furthermore, they will also include and expand the following topics; this is definitely a general and non-exhaustive list:

–      Trusts (creating, funding, modifying, termination, etc.)

–      Medicaid Planning

–      HIPPA (access to confidential medical records)

–      Beneficiary Designations (modifications, etc.)

–      Powers of Appointment

–      Statutory Elections

–      Domicile and Residence (changing the Principal’s home setting as well geographic location, etc.)

–      Estate Transactions (receipt, waivers, consents and releases, etc.)

–      Real Estate transactions (sales, leasing, transfers, etc.)

–      Employment of other professionals (to assist the Agents in handling the Principal’s affairs)

–      Reimbursement issues for the Health Care Agent

–      Enforcement proceedings against banks or financial institutions

–      And even the naming of the Agent as a Guardian, should the question of formal guardianship arise during the period of incapacity

To close, I will return to my hypothetical. Can you see some of the problems Jane Smith is facing in the absence of the POA?

At this point in time, she has no authority to 1. Sell the brownstone, much less collect the proceeds from the sale, 2. Transfer the Forest Hills apartment to her name, 3. Do any type of preliminary Medicaid planning (or spend down) for her husband, 4. Establish new bank or financial accounts for her husband, 5. Establish a Trust for her husband’s benefit, and/or 6. Move her husband to a different facility if she wanted to.

A properly drafted POA would have made most of, if not all, the hurdles non-existent.

This has been my longest article in the Series (thus far) and even so, I could still write more. All the topics I have and will discuss are important, but Advance Directives are unique, in that they are literally living documents.

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If you liked this article, please “like,” comment and share with others. I would love your feedback!

If you’d like to learn more about me and my law practice you can go here or, si hablas español, here.

“The Greatest Wealth is Health”​ -Virgil

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Health is something most of us fail to appreciate, especially when we are young.

Health is something we only true value when we lose it.

There is a sense of helplessness that comes with being ill. There are many things in life that are out of our control and, under some circumstances, certain medical situations can be unpredictable, unimaginable and devastating.

But there is something we can all do to preserve our wishes when it comes to health care decisions and even end of life issues.

Advance Directives are written statements that are valid during a person’s life but onlywhen they are incapacitated. There are two Advance Directives you should know about. I will be addressing one of them in this article; the next article in the Series will address the other.

Incapacity, for brevity’s sake, is when a person is unable to make their wishes known because they cannot communicate verbally or otherwise, or is incapable of processing or understanding information due to neuro-cognitive deficits caused by any number of medical conditions.

The document is a Health Care Proxy and it is vital to any person alive. The latter statement is not an exaggeration.  The following hypothetical will, hopefully, drive the point home.

Jane Smith and John Smith are in their forties. They have been married for eight years with no children.

John comes from a large family, while Jane is an only child.

Neither has any major medical issues and are in seemingly good health.

Then one day, Jane and John are driving down a local road when they are in a head on collision with another driver who ran a red-light driving way over the 25 miles per hour speed limit. John is ejected from the car.

Jane was wearing her seat belt, while John was not.

While John survived the accident, he was very seriously injured. He suffered a traumatic brain injury when his head hit the glass, he was ejected from the vehicle and his body hit the pavement.

Unfortunately, he never regained full consciousness. He has not spoken in over a year and will only briefly open his eyes but does not focus on anything or anyone. He cannot feed, toilet or clothe himself. He is confined to his bed. He was placed on a mechanical ventilator to assist with breathing since he was unable to do so on his own. A tracheostomy was also performed.

The neurologists are unsure of what John can hear or understand, but they do not expect a reversal of his condition.

John had, one more than occasion, told Jane that he did not want to be kept alive through artificial means if he were to suffer an accident that left him in bad shape. Jane wanted to honor those wishes.

John’s siblings, however, objected to Jane’s plans. They wanted to keep their brother alive at all costs.

Who did the hospital listen to? Neither side. They kept him alive through artificial means because that is what hospitals are supposed to do. There was no Health Care Proxy (or a Court order) which allowed the medical staff to follow anyone’s directives regarding care and life sustaining measures.

Jane’s status as John’s legal wife carried no weight when it pertained to health care decisions, particularly life sustaining measures.

NOTE: There is a solution to the above scenario—and I will address this later in the Series.

This is a terribly sad hypothetical, but it is a composite of real life situations I have run into repeatedly through my guardianship practice. It is more common than you think and more emotionally devastating than I have painted here.

What would have changed in this scenario if a Health Care Proxy had been in place?

If the Proxy was properly drafted, executed and witnessed, the Principal (in my hypothetical, John) would have named an Agent (his wife, Jane) to make health care decisions. And John’s wishes would have been followed. No extraordinary measures would be taken to prolong his life. He would be given medication to make him comfortable and to lessen and eliminate physical pain.

An Agent must be a person the Principal trusts, who is reliable and responsible and who has displayed a pattern of good decision making. They must be a person who can act decisively under pressure.

If in my hypothetical, Jane is a person who is indecisive, unreliable or buckles easily under pressure then she is not a good candidate to be John’s Agent. It is undeniable that she loves her husband but she may not make the best decisions in a life or death situation. Remember, it is always about the Principal’s best interests and wishes, not about the Agent’s feelings or self-interest.

Here are some important points I wish to highlight about the Health Care Proxy.

·      An Agent must be at least eighteen years of age. I would not recommend a younger person as an agent unless they have demonstrated maturity that defies their chronological age.

·      The Principal should inform the person they want to name as Agent of their decision prior to executing the actual document. The Agent can either accept or decline to act in that capacity.

·      A listed Alternate (“back up”) Agent is ALWAYS a good idea. And the same criteria I cited above for the Agent would be applicable here. Someone must be available to step in for the Agent if they become unable to serve in that capacity.

·      The Health Proxy should be for an indefinite period of time. I have rarely encountered a person who wants it to expire under a certain set of circumstances or on a specific date. How can any person know the future?

·      A Principal should always discuss their wishes with the Agent during capacity. The Health Care Proxy allows an Agent to follow a Principal’s wishes as he or she “knows them to be”—i.e. they do not need to be memorialized in the document.

·      However, the Principal is well within their right to elaborate on, limit or expand those powers within the document. The instructions can be brief or pages long. It is a highly personal document and the decisions that follow are personal as well.

·      A Health Care Proxy also addresses routine medical care, like doctors’ visits, medications, course of treatment, hospitalizations, surgical procedures and overall health. It covers all medical decisions, including “end of life.”

·       “End of life” treatment can also be explicitly addressed in the document.

  •  “End of life” includes, but is not limited to, mechanical respiration and ventilation as well as artificial nutrition and hydration, cardiopulmonary resuscitation (CPR), surgical procedures, blood transfusions, and even antibiotics.
  •   You can specify medical conditions by category and state what treatments you want or want withheld (examples of conditions are coma or an unconscious state with no chance of reversal, a terminal illness, or brain damage- like John in my hypothetical).
  • The Principal can either request that all life sustaining measures be taken or that they be withheld if a meaningful recovery is medically impossible and/or if the Principal’s diagnosis would not allow them to live a full or independent life. What a quality life means to the Principal differs for every person.
  •  The Principal must sign the document.
  • The Principal’s signature must be attested to by two witnesses who then also sign the document, but notarization is not required.
  • The witnesses have no right to read the Health Care Proxy. They are there to attest to the Principal’s state of mind as well as the voluntary nature of the document execution.
  • The Agent is never to be a witness.
  • The Health Care Proxy should be kept in a place accessible to family and emergency medical personnel; it’s location should be known to anyone who is important to you-especially your Agent. Copies should be made available to family and your physicians.

It is not a secret document.

Every person, once they reach eighteen years of age, should have a fully executed Health Care Proxy among their most personal and important documents. Your life is the most precious gift. When you are no longer able to speak for yourself, others should treat your life in accordance with your beliefs- with respect.

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This article is part of a LinkedIn Series Pilot I was invited to participate in.

If you liked this article, please “like,” comment and share with others. I would love your feedback!

If you are a subscriber to the Series, thank you.

If you aren’t a subscriber, please consider doing so to follow my Series along to to its conclusion.

If you’d like to learn more about me and my law practice you can go here or, si hablas español, here.

Diving In: The Last Will and Testament

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Picture it: My office within the last couple of years

I cannot remember exactly when, but I had a consult where an adult son accompanied his mother and with full confidence and pride, told me how he had 1) drafted his mother’s Last Will and Testament, 2) signed it as a witness and 3) was also the Executor. He then showed it to me.

I sat there in complete silence.

I was also appalled.

Do you know why that situation was so problematic?

I am about to tell you by explaining what makes a “Will.” Just a caveat, there are a lot of layers when discussing “Wills.”

Lawyers have written treatises on the subject. Treatises are REALLY big books that take deep dives into different corners of a legal subject and are a reference guide for attorneys.

You will find no treatise here. Remember, this is an elemental series- and a foundation. YOU build on that.

You think you know…but a lot of you don’t

The most well-known estate planning document, by far, is the Last Will and Testament, more commonly known as “a Will.” I think many people have heard sad and downright horrible stories within and outside of their families, about the chaos that can ensue in this document’s absence.

The lack of a Will (and I will be very frank, even its existence) can bring out negative traits in an otherwise “good person,” and can create a monster from a person who already had ill intentions or frayed family ties. Either way, having a Will is far better than not having one.

Therefore, it is the document a potential client will come to me specifically requesting— and nothing else.

No estate planning or elder law attorney worth their law license would ever just draft a will for a person who has never done any type of planning. In my opinion, to do that is malpractice.

I will put this in a different context: If a person is in an accident and both of their arms and legs, all their limbs, were fractured, a physician would cast all four limbs- not just one. All limbs need protection so that bones can fuse back together properly, and the person can resume full mobility.

It is the same with attorneys. It is our responsibility to tell clients what they need, not just go along with that they think they need. More often, they do not know the importance of a document and the long-term consequences of having it versus not.

The Series will go into more detail about this, but I just wanted that point to be clear from the outset.

“Who’s Who” in a Will

Even with most people requesting a Will, many still do not understand the document and its actual function.

We will return to my non-hypothetical from the beginning as a clear example.

·      A Last Will and Testament is a testamentary document. Testamentary means it is a document that creates or transfers an interest or a right to an asset or property. NO ONE, other than the testator and an attorney, should look at this document before the Testator’s death.

  • It should be reviewed and/or revised as necessary. It cannot be utilized in any way prior to the Testator’s death. It becomes important at death.

·      The ONE person who has authority to execute a “Will” is the Testator or Testate(“Testatrix” if you want to be proper and reference a female).

·      When the Testator dies, they become the Decedent.

·      What the Decedent leaves behind in, or outside of, the Will is referred to as an Estate.

At some point after the Decedent’s death, the Will must be submitted to the local Supreme Court (in New York City) in the county where the person died for Probate.

In simple terms, and for this article, it is a judicial proceeding or process that gives a person called an Executor (more on the latter below) the power to collect all the Estate’s assets and distribute them according to the Decedent’s wishes.

The Executor was nominated and named in the Decedent’s Will.

·      Who drafts, or writes, a Will? An Attorney. More specifically, an attorney with experience. Even more explicitly, an Estate Planning and/or Elder Law Attorney who has built a practice around this area of law.

  • This is not snobbery. If a cardiologist cannot diagnose neurological conditions, then an Intellectual Property lawyer whose practice focuses almost exclusively in that area, does not have the experience or knowledge base to handle these types of matters.
  • Your son or daughter, even if they are an attorney, is not an acceptable draftsman. If they are your niece or nephew, then a BIG maybe. In my example, he was not an attorney.
  •  A Staples do it yourself “Will Kit” is not acceptable. Sorry Staples, I like buying my office supplies from you, but I would never go to you for my estate planning needs.
  • You cannot write your own Will, and your high education level or superb writing ability is irrelevant. Will drafting is more technical than creative.

·      A Testator leaves specific assets to the person or persons they name, and this class of people are generally known as Beneficiaries, or Designated Beneficiaries. Some people will use the word “heirs.”

  • A beneficiary can be a spouse, child or family member, a friend, an organization or institution.
  • In my example the son who was the Will draftsman was a beneficiary of his mother’s estate.
  • A beneficiary cannot draft a Will from which they expect to receive an inheritance. So, if your attorney nephew is a beneficiary he cannot draft it. If your favorite attorney is a beneficiary, they cannot draft it either.

NOTE: A Residuary Beneficiary is a beneficiary who is not left a specific bequest (gift/asset) in the Will. A very simple example of a specific bequest followed by a Residuary Clause is:

I leave (or give/devise/bequeath- they all mean the same thing) my primary residence, located at 123 Mockingbird Lane, New York, NY 10023 to my wife, Jane Smith.

I leave the rest, remainder and residue of my estate, both real and personal, of whatever nature and wherever situated, real or personal property, tangible or intangible, to my only daughter Joanie Smith.”

All those words are meant to cover our butts, I mean, bases. Our aim is to be thorough after all.  

·      Every Last Will and Testament execution (signing) must be witnessed. The Witnesses,two to three of them, should be non-family members or, if family members, those who are not beneficiaries listed in the Will.

  • The purpose of the witnesses is to maintain the integrity of the process. In other words, 1) attest to the testator’s sound mind- their orientation to self, time and place and 2) ensure others that the testator was not unduly influenced, under duress or pressure to sign the document when executed.
  • The witnesses will sign a Self-Proving Affidavit attesting to what I just wrote above.

·      Who carries out the Testator’s wishes? The Executor.

  • The Executor can also be a beneficiary of the Will, but it is not necessary.
  • They can be a family member or a friend.
  • They can be a trusted professional, like an attorney, a financial advisor or accountant.
  • Most importantly, they need to trustworthy people.  Executors have a very important job and what is known as a “fiduciary responsibility” or duty to the beneficiaries. They must be accountable to the beneficiaries for all the assets in the estate, answer all questions, and ensure all assets are given to the named beneficiaries, in the manner intended and that the Estate closes properly.
  • If an Executor does not do their job or if they steal from the Estate, you can have them removed.

There should ALWAYS be an alternate Executor named in the Will, in the event of the Executor’s death, illness, misconduct or deciding to step down from or discontinue the role.

What can go “in” a Will?

Almost everything.

Property: “real property” like a primary residence and other residential or commercial properties you may own.

Property: “personal property” like the objects within your home, your favorite watch, your grandmother’s china set, or your mother’s engagement ring or sentimental objects with great personal value but no great monetary one.

This category includes vehicles for the road, a vessel for the water or, why can’t it—an aircraft for flight in the skies.

Intellectual Property: music compositions or master recordings, original artwork, designs, manuscripts, your written work product or ideas etc. Anything you physically create or anything you create or own in the digital space or “cloud.” And this even includes access to your online accounts.

NOTE: There are more sophisticated techniques to protect property, but remember this Series is elemental. A Will is better than NO Will for almost any property. It’s protection. It is stated wishes, not guesswork.

I will briefly mention property that is non-probate and that can pass outside of a Court proceeding and, for some, AS LONG AS A (INSTITUTIONAL) BENEFICIARY FORM OR DESIGNATION has been completed:

·      Retirement accounts

·      Pension (plan)

·      Life Insurance

·      Property held by two people, a “joint tenancy with right of survivorship” or as “tenants by the entirety”

·      Property held in the name of a revocable or irrevocable Trust

·      Joint Savings Account (Checking accounts are not included here)

·      A bank account “held in Trust for” another person

This is your “primer” on the Last Will and Testament.

I bet you are wondering what happened to the adult son and his mother I mentioned at the beginning of this article? I told him that his mother’s bequests to him in the Last Will and Testament would not survive for the mere fact that he “drafted” a Will where he is an Executor and Beneficiary. If there were other irregularities in the Will drafting (which there were) and in the signing ceremony (which there likely were), the Will could be declared a nullity.

I never heard back from him.

You can’t help everyone, unfortunately.

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If you’d like to learn more about me and my law practice you can go here or, si hablas español, here.

 

Why I am Doing This

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A number of months ago, LinkedIn invited me to their Series “pilot,” and I began to publish my Series, “Elder and Special Needs Law in a ‘New York Minute'”

I am reproducing the Series here every week.

Super thankful to have been invited to this Series pilot. I must write that as a first sentence.

Now, I will tell you why I titled it “Elder and Special Needs Law in a New York Minute.”

I was born, raised, live and practice law in New York City. It is a fast-paced city, where people oftentimes need an answer—succinctly and quickly.

Elder and Special Needs Law is not a sexy topic, I can admit that.  However, I will strenuously argue that it is important, even vital, to every single person including…you.  If you have not been touched by these areas of law (yet), you will be and already know a person or persons who have confronted legal issues associated with aging, a special needs child or both.

Unfortunately, and all too often, people’s decision to plan is reactive, as opposed to proactive. What I mean by this is, 1) they never thought about, 2) did not want to think about, 3) did not think it was their time to think about it yet (i.e. too young), or 4) thought it was too costly to do…until they could no longer avoid it.  Fear is one contributing factor to this “procrastination,” but cultural taboos around aging, illness, money and death are others.

When they finally decide to plan, some are surprised, disappointed or frustrated to realize that waiting left them with less than desirable options. In these areas of law, time is not necessarily your friend.

The purpose of the series will be to break down these two areas of law into its components, starting with the basics of estate planning and branching out into Elder Law and then Special Needs. When people ask me what Elder Law is, I always reply that it is a “sibling” to Trusts and Estates. Like real siblings, they share important characteristics but are clearly distinct from one another. I characterize Special Needs Law as the youngest, the “baby.”

I am here to teach. I am here to impart understanding. I am here to demystify these areas of law. I do not want people to be afraid.  I promise not to overload you with information. On the contrary, I hope to assist you in creating a foundation, a foundation that is important now, no matter your age, and well into your future.  

If you’d like to learn more about me and my law practice you can go here or, si hablas español, here.

The Tragic Case of Peter Knoll: What Legal Steps Could Have Prevented His Death?

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This morning, I was reading the newspaper– on my smartphone– when a headline grabbed my attention: “Battle Erupts Over Estate of Wealthy Recluse Who Froze to Death Inside his Upper East Side Mansion (you can read the article here http://www.nydailynews.com/new-york/ny-metro-battle-estate-upper-east-side-man-20180722-story.html).

Reading this article led me to another one published on April 23, 2018, a number of months after his death that winter (read here: http://www.nydailynews.com/new-york/manhattan/hypothermia-kills-75-year-old-man-upper-east-side-townhouse-article-1.3949019).

Peter Knoll, a 75 year old Manhattanite and son of a furniture magnate,  froze to death in his apartment.  Con Edison had shut off his utilities in 2014. However and very unfortunately,  they failed to notify the proper adult protective and other city authorities so Mr. Knoll suffered in silence until his death. His close circle of family and friends evidently knew he had no heat in his home, but…nothing was ever said by anyone (as far as we know).

Publicly, there is not a lot known about his life in those last years. There is a brief mention of physical ailments, but the public record is largely silent on whether or not he suffered from any condition that cognitively or psychologically impaired him. My suspicion is that Mr. Knoll was not in his right frame of mind.  And I have some thoughts on that, but before I get to that…

In my professional experience, older people who live alone are often isolated-particularly if they live in a private residence–unless they have involved family or friends to supervise or otherwise “check in” on them.  This is why many older people and their loved ones, opt to have them reside in 1) senior living communities or 2) an assisted living residence. A third option, if finances permit, is to hire professional live in help. If problems arise, they will become known sooner.

It is shocking and tragic that a man of Mr. Knoll’s immense financial  resources would have been left to suffer alone. He had enough assets to not only live comfortably the rest of his days but to have others attend to his every need- without him ever having to leave his home, or ever becoming impoverished as a result.

The solution to this inevitable tragedy? Properly executed “Advance Directives,” individually known as a Health Proxy (for medical decisions) and a Power of Attorney (for everything non-medical). These documents are in effect during a period of incapacity. If these documents were never executed,  then the option would be an Article 81 Proceeding a.k.a. Adult Guardianship

I have been involved in Article 81 proceedings for a number of years and have worn every hat imaginable: 1. Petitioner’s Counsel, 2) Court Evaluator (the Judges’ “eyes and ears,”), 3) Counsel for the Alleged Incapacitated Person (AIP) and 4) Permanent Guardian.  Briefly, this proceeding is filed in Supreme Court (a trial court)  to request from the “Court” (the Judge) that a Guardian be appointed to care for the personal needs and property management of an “Alleged Incapacitated Person.” Yes, there is a hearing. Sometimes they are uncontested, other times they are quite contested. The AIP can consent, but sometimes they do not and then there are those who cannot.

In the end, the Judge determines if the person is incapacitated and how this incapacity could further harm them without the appointment of a Guardian.

Based on the brewing estate “battle” and the allegations by one of Mr. Knoll’s adult sons that others took advantage of his father’s “frail physical and mental state,” it seems it was known, at least by some, that Mr. Knoll was not well.

So why did nothing happen? I have absolutely no idea.  And if I were to put forth theories, this blog post would become even longer and I would become even more incensed.

My biggest takeaways from his story:

  1. Even all the money in the world cannot protect you, when people choose to remain silent.
  2. Watch over older people you know, in your family and community.  It really is our responsibility.
  3.  In Spanish there is a saying, “Hoy por ti, mañana por mi” which means “Today for you, tomorrow for me.” Treat others how you would want to be treated. Getting to old age is a privilege and it should happen with dignity.

 

Your government will not take care of you…so you have to: a post on paying for long-term care

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A few months ago, I gave a brief presentation on long term care for the elderly and disabled. As I contemplate my own mortality, that of my parents and the people I come into contact daily– I thought I’d write a post about it. It’s a little long, but I promise you’ll learn something valuable.

Americans tend to think, “I have medical insurance so I’m covered.” And while this may be true for routine medical care, doctor’s visits, prescriptions and in-patient hospitalization and some types of rehabilitation, it does not extend to long-term care.

What is long-term care? I could define it, but the National Institutes of Health does a better job explaining it.

When we hear “long-term care” we often visualize an older person, but that is not always the case. Anyone can become ill at any time and require long term care in a facility.  As Americans we are living longer due to better medical care, advances in science, environmental factors and, if you’re lucky, good genes. Inevitably, no matter your genes, you will become ill. We just do not know from what-or when.

Most of us are not prepared to finance our long term stays in a nursing home. And it’s expensive, more expensive than paying for one year of university (private or public), a wedding and in some states, a year’s worth of mortgage payments. During my presentation I referenced this infographic and the dollars and cents really do make it real. It is worth a look.

Thankfully, there are ways to plan the financing of long term care. The earlier you do it, the more options you have. While none of the options are cheap, the later options are much more costly – and I am not just referring to money.

a) Private pay. This is exactly what it means. You or a loved one pays out of pocket for your long-term in care in a facility. Most of us will far outlive our savings, especially in light of the very high financial cost associated with aging.

But, if you are one of the relatively few who find themselves in the exclusive tax bracket of “exceedingly wealthy”- congratulations. Now, for the rest of us.

b) Long-term care insurance (LTC). I could tell you what it is, but the National Institutes of Health (NIH) does a better job of defining it here. It is insurance that you pay for so that it can take care of you should you need it.  Since I am a huge infographic fan here is another one, from 2013, that illustrates rates of  LTC insurance acceptance and rejection based on age, as well as the cost to maintain it

Again, the earlier you plan the better off you are. Because once you become ill, this type of insurance is no longer available to you.

One caveat: LTC insurance will likely not cover your entire long term care needs for the time you will require it. The latter is assuming you live past the period for which it will cover your needs i.e. the money runs out before you die. LTC insurance is meant to be a cushion of sorts, to delay or prevent spending out of pocket, parting with your assets, or applying for Medicaid. Applying for Medicaid is the next step for many, but it is not without challenges.

c) Medicaid. It is a needs based insurance program. In simplest terms, you must meet certain income and resource limits in order to qualify. And those limits are low- and in some people’s opinions- almost near indigency.

About 2/3 of nursing home residents rely on Medicaid for their medical coverage and a majority of those people worked with an attorney in order to qualify because they had “too much” in assets. And you’d be surprised to learn what “too much” is.

Unlike long term care insurance, Medicaid does not “run out” and will continue to cover your medical care —as long as you meet income and resource eligibility. It can quite possibly cover your long term care needs until your death. Very important, Medicaid is the only health insurance that covers long term care; Medicare has never and will never do so.

This link provides a succinct overview of the income and resource limits required in my home state, New York.

d) Reverse Mortgage. This is an option for individuals who are at least 62 years old and have either paid off their mortgage completely or have way more equity in their home than a mortgage balance. The amount of the reverse mortgage should be sufficient to pay off their mortgage (if necessary), live in the home and maintain it, pay off bills or debts of any kind, fund home renovations or to have a “nest egg” for the unexpected.

You can obtain a reverse mortgage and never touch a penny of it.  I have little experience with reverse mortgages, so I will let US. Department of Housing and Urban Development (HUD) provide further information here.

Lastly, and as a bonus for reading this post to the end, is one last infographic painting a literal picture of financing aging in the U.S.  Pictures definitely tell a story.

Do yourself a big favor, plan and plan early…and share this post with others!

My forthcoming post will be about how legal protection, in the form of a trust document (and other legal mechanisms), can safeguard your assets as you anticipate long term care needs in your future. To properly plan, you will need a lawyer in your corner.

To learn more about me, visit my law practice website here and connect with me on Twitter, Facebook and Google + 

It can never be too early, but it can always be too late

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As a solo practitioner, I now find myself doing a lot of networking. In recent months the phrase, “It can never be too early, but it can always be too late” has become a part of my lawyer lexicon. I think it is a phrase that is applicable to certain parts of our lives, but it definitely applies when speaking about what I do– mainly the practice of elder law and trusts and estates.

I generally deal with an older population- people who have lived life,  gained insight and experience (or maybe not) and, at the very least,  have a life to reflect on. But I also meet with younger people: single, married, with or without children, whose own  experiences have influenced their life outlook.  There is never a right age to plan for the future- it really depends on the person and their circumstances.  Some people need to feel “ready” to do so. News flash–you’ll never be 100% ready for anything.

People procrastinate when it comes to estate planning. My own parents did it, so it does not surprise me. I think estate planning, in general, really forces us to confront  our own mortality and to literally take stock of our lives– and our life’s work.

We will all die one day. You do not know when or how, but you know it will happen. This a scary thought for many of us. Who wants to think about drafting a will where you decide who gets what when you die…before you actually do? Morbid? No. I just call it smart.

I  hope to be a very old lady who dies peacefully in her sleep. I want to age and die with dignity, like everyone should. But I do not call the shots when it comes to my aging and dying– that is genetics and the luck of the draw.  Who wants to think about what happens if you can no longer take care of yourself or live independently? Who wants to think about who will make medical decisions for you if you can  no longer make those decisions competently? Scary stuff. Scarier still? Leaving those decisions to someone you would not have chosen to make them for you- just because you did not make that election when you had the opportunity.

I was taught from a young age that we have to confront the things that scare us in order to move forward.  I have learned that when I have confronted frightening situations: 1) I am stronger than I thought, 2) What I thought was scary really was not, and 3) That everything in life comes and passes. As quickly as it came, it can also go away.  In sum, we overcome.  Survival is what human beings do best.

Do not be afraid. Confront your mortality head on. Plan ahead.  Believe me, you will fee a lot of better if you do. Who does not like being in the driver’s seat?

Children and the Elderly- getting the short end of the stick?

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I usually write about the law and its relevancy to my practice areas. However, I just started to think about how so much of my work (and my clients) are impacted by external forces that are beyond our control. These forces affect how effectively I can  do my job and how my clients will live. We are living in very difficult economic times, that some people refer to as the worst economic depression the United States- and the world– has seen in years (second only to the Great Depression).

All of us,  to different extents, have had to practice “austerity”- i.e. the tightening of the purse strings,  doing more with less, putting ourselves on a spending “diet,” and using less plastic and more green –or in many instances, counting our pennies and putting them away.

We have also felt the repercussions of our fragile economic state in the programs that support the most vulnerable in our population- children and the elderly. In my 30 something years on this Earth, I have learned that when times get tough, programs benefiting children and the elderly are always the first to get a good trimming or axed altogether. I admit that these programs are very expensive to administer, however I refuse to look at everything as dollars and cents all the time. I think it is important to look at the dividends these programs yield- that have absolutely no monetary value.

Some of these programs give children a “head start” in life –literally, or provide their parents the opportunity to work and better their lives while the children are being cared for in government subsidized day cares, or allow them to feed their family when they can’t afford groceries.  Others, allow otherwise home bound seniors to receive a nice hot meal, once– or sometimes twice– per day.  Or they run the risk of eating poorly,  not eating at all or burning down the house. I could go on– and on- about the  issues, but I realize this is a blog post not a chapter in a book . And I COULD write a book about my thoughts (just ask any of my close friends, if you know them)

My point is this, if you offer children better opportunities as they begin life you are leveling the playing field and giving them a better chance at having a brighter future.  If you cut off their opportunities early in life, you are basically telling them they aren’t worth the effort– not as much as more affluent children.   If you offer the elderly basic human services as they enter the twilight of their years, you are bestowing upon them the dignity and respect they deserve after contributing to our society during their most productive years.  They are old; not disposable.

Whenever I see someone going through rough times, I say to myself, “There but for the grace of God, go I.”  And it’s true. Anything that is given can also be taken away. Never think it  can’t be you– or someone you know and love. I just wish our legislature saw it that way too…my next post will be about the proposed cuts to existing programs- like Medicaid and home care– for the elderly…which has me scared for my elderly clients. Coming soon.

Having “The Talk” with your Parents

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Yeah, I know it can be uncomfortable to talk about these kinds of things with your parents. They come from a different time (and sometimes a different country)where these topics are  taboo,  but it has to be done.  I’ve done it repeatedly and it wasn’t as bad as I thought.  Come to think of it, it was cathartic and I know my parents felt good about it too.

No, I am not talking about the “birds and the bees.” What I am talking about is health, death and money.

We’d all like to think that our parents will live to a ripe old age, without infirmities and  pass away snug in their beds.   I know I want that for myself- and for my parents- but the reality is that all of us will die of something. Health and Death are not topics to shy away from.  On the contrary, you need to have these discussions with your parents while they are still alive and have the capacity to meaningfully talk about these issues with you. You also need to have this discussion with yourself about your own health and wishes.

The below is a succinct and general post that provides an overview of  the legal documents that serve to protect your parents’ wishes regarding their health, money and death.

Health: Does your parent (or parents) want to be kept alive by artificial means if they were to suffer from a catastrophic injury or illness that would severely impact their quality of life?  Whether the answer is yes or no, your parent needs a Living Will. While the latter is not legally enforceable in New York State, it is a document that is recognized and respected by medical personnel.  Click here to download a copy to read.  It expressly states a person’s wishes regarding medical treatment, artificial respiration and the appointment of a health care agent to carry out those wishes.  In addition, a Health Care Proxy, which is legally recognized,  is also strongly recommended. Like a Living Will, it memorializes a person’s wishes regarding end of life issues but it is a general power regarding medical care and treatment should the principal become disabled. Click here to download a copy to read.

They have religiously conscious health care proxies too, like a Halachic Health Care Proxy that aligns with Jewish law.  Click here to download a copy to read.  In addition, there are reading materials on the internet for Catholic and Orthodox Christians, as well as other denominations, regarding the use of health care proxies.

Money: Does your parent (or parents) have a Last Will and Testament? They should, no matter how big or small their “estate” is. If your parent dies without a will it means they died ” intestate,” which means a headache to obtain and/or dispose of their assets-plus Uncle Sam will take a nice chunk out of it before it ever gets to the beneficiaries.  For some assets, a  Trust is an even better testamentary document for the disposition of assets.  There are different types of trusts and each has a specific function and objective.  And last but not least, the never to be forgotten Power of Attorney.  Necessary.  End of story.

Death: The “Last Will and Testament” can express the testator’s wishes regarding burial or disposition of remains, as well as who or what will pay for it.  In my opinion, there is an even more important document that everyone should have in their legal arsenal,  the  “Appointment of Agent to Control Disposition of Remains. Click here to download your own copy. It can designate how  remains are to be disposed (i.e. burial, cremation, spreading of ashes, being buried in your favorite dress, etc.) as well as whether  there will be a wake for the deceased, an open or closed casket,  a religious ceremony (a service or Mass), a graveside prayer, or no prayer at all.

These topics may not be easy to talk about, but once you do and they put their wishes in writing, you will feel as if a big weight has been lifted. I would even venture to say, it’s a good feeling.

So go and have “the talk” with mom and dad, or anyone else you care about.