Suffolk County, NY Estate Planning and Elder Law Blog

Monday, September 18, 2017

IRA Beneficiaries

Many of our clients have retirement assets held in a Traditional IRA, 401K, 403(b), or other similar plan.  It is important to periodically review the beneficiary designations on these types of plans.  A review should confirm that the institution still has the proper designations on file, the clients’ wishes are being followed, the designations fit into the larger estate plan of the client, and that the best interests of the beneficiaries are taken into account.  This is of special concern if the beneficiaries are grandchildren or other minors. 

There are certain benefits to leaving retirement assets to a minor who is a much younger beneficiary than the original account holder.  When you leave retirement assets to a non-spouse, the beneficiary has the right to take it in an “inherited IRA”.  The beneficiary of an inherited IRA must start taking distributions the year after the death of the original account holder.  These distributions are taken as a “stretch”, meaning they are determined by the life expectancy of the new IRA beneficiary.  In that case, the account can grow tax deferred over a much longer life expectancy.  The rule of thumb is that the account will be worth approximately thirty (30) times its value if distributions are taken over the life expectancy of a grandchild.  For example, suppose you name your grandchild as beneficiary of an IRA account with $100,000 balance.  If your grandchild takes distributions based upon her life expectancy each year, then the account could be worth $3,000,000 over her lifetime.  This is one of the great benefits of naming a minor as beneficiary of a tax deferred retirement account. 


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Monday, September 18, 2017

Gifting and Medicaid

Question: My mother is widowed and is beginning to decline in health.  I have four siblings.  We know that in order to qualify for Medicaid, Mom cannot have more than a certain amount of assets in her name.  She rents a house, but has approximately $150,000.00 in various CD accounts.  A friend of hers told her that she can give up to $14,000.00 to each of us annually without penalty and still qualify for Medicaid if she needs it in the future, she would like to give these gifts before the year end so that she can gift again in 2018, is this advisable?

Answer: NO!  We often see clients who believed this to be true, and thinking that they were doing the prudent thing did exactly this sort of gifting, resulting in long periods of ineligibility when the time came to apply for Medicaid. To begin with, what your friend is likely referring to is the $14,000.00 gift exemption under the Internal Revenue Code.  Under the Code, all gifts made in any given year are subject to a gift tax.  However, the first $14,000.00 gifted to each individual in any given year is exempted from the gift tax, and for that reason, for many individuals, gifting during lifetime is a way to distribute wealth and reduce their taxable estate at death.

Oftentimes, seniors and their children believe that this same exemption holds true for Medicaid eligibility, and that gifting this amount of money away annually will not affect them should they need to apply for Medicaid benefits in the future.


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Monday, September 11, 2017

Ancillary Probate

Q:  My mother is a resident of Florida and owns a condominium and several financial accounts in her sole name. She also owns a summer home in New York that is titled in her sole name.  If she were to pass away, what is the procedure to transfer the New York home after her death?

A: Real estate is governed by the laws of the state where it is located. The old saying is that where you own dirt you have to probate a will. Therefore, if a person dies owning real estate in two different states, the Executor would have to probate the Last Will & Testament in the decedent’s home state and commence an “ancillary” probate proceeding in the State where the other real property is located.  In your mother’s case, her estate would first be probated in the Florida courts.  The ancillary proceeding would be commenced in the county in New York where her summer home is located.

The term “ancillary proceeding” refers to a probate or administration proceeding that is required in addition to the primary probate or administration proceeding that will take place in the decedent’s home state. Typically an ancillary proceeding is necessary because a decedent owns real estate located outside of their home state. An ancillary proceeding could also be necessary if the decedent owned personal property, such as a car, boat, or airplane that is registered and titled outside of their home state. The laws of the state where the real estate property is located will govern what will happen to the property that is located in its borders. 


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Friday, September 1, 2017

Estate Planning for Single Seniors

Question: I have been living with my partner for the last 25 years. While I want to provide for him in my estate plan, I want to be sure when we are both deceased, my assets pass to my children from my first marriage. Can this be accomplished?

Answer: For the single individual who is living with another person but is unmarried, planning can be done to specifically provide for that partner, if so desired. It is important to recognize that partners are not given rights to property the way spouses are. Even if a person has resided with another for decades, without proper estate planning, that partner will not be entitled to assets of the decedent.

Having a Will which designates a partner as the beneficiary of the estate can ensure that property passes to the partner; however in order for the Will to be carried out, it must go through Probate. In New York, the Probate process includes notifying and obtaining the consent of the decedent’s heirs. For instance, if a single individual with children dies, the children are the parties entitled to notice of the proceeding. If the children do not consent, they have the opportunity to present objections to the Will which leaves assets to the partner. If their objections are successful, the Will is invalidated and the law of intestacy prevails which assumes the deceased person would have wanted their estate to be distributed to their children, and not their partner.  Moreover, if your Will gives assets to your partner outright, those assets become part of your partner’s estate and will not necessarily be distributed to your children unless he includes your children in his estate plan.



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Monday, August 28, 2017

Health Care Proxy Expiration

Question: Does my health care proxy expire? What if I would like an individual to act temporarily as my health care proxy?

Answer: As the individual executing the health care proxy, also called “the principal,” you have the option to set an expiration date for your named agent’s ability to act. Therefore, the answer to whether your health proxy expires is a decision you must make at the time you sign it.

First, it is important to understand the purpose of a health care proxy. A health care proxy is a document that states who will make your medical decisions if a doctor deems you unable to make them for yourself. The agent is authorized to make healthcare decisions on your behalf including any treatment, service or procedure to diagnose or treat your physical or mental condition.  It is important that you name an individual that you trust to follow through with your wishes as you have discussed with them.

When executing the health care proxy document many individuals intend that their named agent act indefinitely. This is primarily because the agent will have the authority to act when you do not have the capacity to act. Therefore, unless you regain your capacity this person will maintain the authority to make health care decisions on your behalf.  However, the New York State health care proxy form specifically states that unless you include a date or conditions upon which it expires, the health care proxy form will be for an indefinite duration. 


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Monday, August 21, 2017

Health Care Proxy for College Aged Students

Question:  My daughter started college classes last week and I contacted the health office to try to help her with some forms and I was told that they cannot speak with me. 

Answer: Great question, because most college aged students have turned 18 or will soon be turning 18, they are considered adults and as such, we, as parents, no longer have a right to access their confidential medical information.  For that reason, two items that you should add to your seemingly never ending to do/packing list are a health care proxy with a HIPPA waiver and a Power of Attorney.  Even if your child is still covered by your health insurance, and assuming you are paying your child's tuition, you are not entitled to information from the school regarding either.  The good news is that this is simple to rectify. 

Once your child turns 18 consider having them execute a health care proxy naming you as the agent.  Be sure to check that the document you choose is HIPAA compliant.  This will allow you not only to make medical decisions in an emergency, it will also allow you to access basic medical information and inquire with the health service department at her school. 

With respect to financial decisions and information gathering, you would need to be named as agent under your daughter's Power of Attorney.  A properly executed Power of Attorney document will make it possible for you to correspond with the Financial Aid office at your daughter's school.  


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Monday, August 21, 2017

Estate Planning for Single Seniors

Much of the estate planning discourse revolves around planning techniques for the married couple, whether it be for tax planning or asset protection planning. However, for seniors who have never married or for those whose spouse is deceased, what, if any, special considerations need to be made? This article will focus on some of the unique challenges that the unmarried senior may face.

For the single individual who is living with another person but is unmarried, planning should be done to specifically provide for that partner, if so desired. It is important to recognize that partners are not given rights to property the way spouses are. Even if a person has resided with another for decades, without proper estate planning, that partner will not be entitled to assets of the decedent. If the plan is to give property to a partner after death, one should make sure that they designate that partner as a joint owner or as a beneficiary.

Having a Will which designates a partner as the beneficiary of the estate can also ensure that property passes to the partner; however in order for the Will to be carried out, it must go through Probate. In New York, the Probate process includes notifying and obtaining the consent of the decedent’s heirs. For instance, if a single individual with no children dies, but the parents or siblings of that individual survive, consent must be obtained from those parents, or if deceased, the siblings. If the family members do not consent, they have the opportunity to present objections to the Will which leaves assets to the partner. 


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Friday, August 11, 2017

Powerless Power of Attorney

Question: My father executed a Power of Attorney and named me as the Agent.  I was recently told by his bank that they would not accept my Power of Attorney, what are my options?

Answer:  A Durable Power of Attorney is an integral part of any estate plan.  A validly executed Power of Attorney will allow you, the Principal, to designate an Agent to act on your behalf and virtually step into your shoes with respect to all of your business and financial matters.  The purpose of a Durable Power of Attorney is to have one comprehensive document that will allow an agent to transact business on all accounts regardless of the financial institution. Where an individual becomes incapacitated without having these documents in place, the family may find themselves petitioning the Guardianship Court in order to have the authority to do the very same thing that a valid and comprehensive Power of Attorney can provide.      

Recently we have noticed a trend at some financial institutions where they have refused to honor a validly executed Durable Power of Attorney.  They insist that an institution specific form be signed by the account owner in front of a notary.  In some cases, this may be impossible as the account owner has become incapacitated.  This could force an individual, who had the appropriate documents in place, to now be the subject of a Guardianship proceeding.  In fact, on May 6, 2016 the New York Times published an article, “Finding Out Your Power of Attorney Is Powerless”, by Paula Span.


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Monday, August 7, 2017

Probate Estate vs. Gross Estate

Question:  What is the difference between my gross taxable estate and my probate estate?

Answer:  Your “gross taxable estate” consists of the assets which you have an interest in at death, even if the assets do not pass by virtue of your last will & testament.  Your gross estate will also include gifts you made during life which exceeded the amount you could gift on an annual basis.  (currently $14,000 per person per year). Your gross taxable estate may also include certain property which transferred during your life in which you retained an interest.  For example, if you transferred property to your children but retained a life estate, that property would still be part of your gross taxable estate.  Or, if you have property or financial interests that would become payable upon your death, such as life insurance, that may also be included in your gross estate.

Typically, the property that constitutes a person’s gross taxable estate is property held in the deceased person’s name ether jointly or solely. However, it may also include ownership interests in trusts, partnerships, and jointly owned property. For example, your gross estate may include:


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Monday, July 31, 2017

Health Care Proxy

Q: Do I need a lawyer to sign a health care proxy?

A: No, you do not need a lawyer to sign a health care proxy.  The legal requirements of a health care proxy are that you have two adult witnesses, neither which needs to be a medical or legal professional. However, it is important to note that your named agent cannot be a witness.  A health care proxy is a document that states who will make your medical decisions if a doctor deems you unable to make them for yourself.  We also recommend our clients name alternate agents in case your first agent is unavailable or unwilling to serve.

Once you understand the purpose of a health care proxy, you should take the time to consider who you want to name as agent and successor agent.  The choice of agent is an important one because they will be required to make medical decisions for you when you are at your most vulnerable point.  Remember, the agent is only acting if you have been deemed incapacitated by a doctor.  The agent is authorized to make healthcare decisions on your behalf this includes any treatment, service or procedure to diagnose or treat your physical or mental condition.  Your agent can also make the decision to remove or provide life-sustaining treatment, as long as your health care proxy form states that they know your wishes regarding these matters.

Since your agent will have this broad authority, it is important that you choose someone you trust will make your healthcare decisions according to what you would want if you had the capacity to do so yourself.


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Monday, July 24, 2017

Non-Hospital DNR vs. Traditional DNR

Question:  My mother is in a nursing home and she has a “non-hospital DNR.”  What is that and how does it differ from a traditional DNR?

Answer: The “Do Not Resuscitate” order, or “DNR” came about from a task force commenced by Governor Mario Cuomo in 1985 wherein experts were tasked with reconciling outstanding issues with legally withholding life sustaining treatment. The result was the traditional DNR order which applied to patients in an institution such as hospitals, nursing homes and mental health facilities. Unlike a Living Will which is a general statement of wishes that a person would not want life sustaining treatment administered if there were no hope they would make a meaningful recovery, DNRs are directives which only apply to incidents of cardiac respiratory arrest and prevent the use of cardiopulmonary resuscitation.

The DNR order must be signed by a physician on the Department of Health form and recorded in the patient’s medical record. It can be signed by the patient herself, or if she lacks mental capacity, the DNR can be signed by a family member or health care agent. The DNR order must be reviewed periodically by a physician. This means they should be re-visited every seven days for hospital patients and at each visit for outpatients, but at least every 60 days for nursing home residents.

Due to the fact that the traditional DNR can only be used in an institutional setting, in 1991 the legislature expanded the Public Health Law to include a non-hospital DNR order. This would cover the prevention of cardiopulmonary resuscitation in emergency situations outside of a facility.  The non-hospital DNR would be utilized for emergency services personnel, including first responders and emergency medical technicians, when the patient is at home or in another community setting. 


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Burner Law Group, P.C. has offices in Setauket, Westhampton Beach, and Manhattan New York.
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© 2017 Burner Law Group, P.C. | Copyright
12 Research Way, East Setauket, NY 11733 | Phone:631-941-3434
82 Main St., Westhampton Beach, NY 11978 | Phone: 631-288-5612
45 W 34th St Suite #1203, New York, NY 10010 | Phone: 212-867-3520

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