Suffolk County, NY Estate Planning and Elder Law Blog
Thursday, July 28, 2016
Nancy Burner, Esq. Announced as 2016 Brava Award Winner
SmartCEO selected Nancy Burner, Esq. as a 2016 Brava Award winner. The Brava Awards celebrate the distinguished achievements of 40 of Long Island’s top women business leaders. The 2016 Brava Award winners collectively generate more than $10.39 billion in annual revenue and employs 8,149 individuals.
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Monday, July 25, 2016
Updating Your Estate Planning Documents
Consider this scenario: An individual executes a will in 1995. The Will leaves all of his personal property (household furnishings and other personal effects), to his friend who is also the named Executor. The rest of his estate he leaves to his two sisters. When he died in 2012, his two sisters had predeceased him. There were no other individuals named as beneficiaries of the Will. The Executor brought a petition requesting that the Court construe the decedent’s will so that she would inherit the entire estate as the only living beneficiary in the will. The Executor stated that the decedent intended to change his will to name her as the sole beneficiary, but he died before he signed the new Will. There was also an unwitnessed handwritten writing which left his entire estate to the Executor.
The Court held that the testator's intent to give his residuary estate to his two sisters was unambiguous. Having failed to anticipate, at the time that the will was executed, that his two sisters would predecease him, the Court was not allowed to find that that the decedent intended a gift of the residuary estate to his friend, the Executor. The Court held that there were limitations on its ability to rewrite the decedent’s will to accomplish the outcome sought by the Executor. Since the Executor was only named as the beneficiary of personal effects, she could not inherit the rest of his estate. This is because the sisters predeceased him and they had no children, the Will failed to name a contingent beneficiary. The result was that the individuals who would have inherited had he died without a Will, would inherit. In the case at had he had a distant cousin, (that he never intended to leave anything), that was entitled to inherit all of his residuary estate. If the decedent had no other known relatives, his residuary estate would have escheated to New York State at the conclusion of the administration of the estate.Read more . . .
Friday, July 22, 2016
Joint Accounts Are Not Protected
Question: Someone told me to avoid probate, so I have added my two children as joint owners on my accounts or put them “in trust for” my children. Does this protect my assets from Medicaid too?
Answer: No, it does not. Adding a joint owner on bank accounts does not protect them for Medicaid purposes and neither does designating them as a beneficiary. “In trust for” accounts are a misnomer. When an account states that it is “in trust for” someone it does not mean that there is a trust created for the benefit of that person. Rather, it simply refers to a designation of who will inherit the asset when the account owner is deceased.
You are correct that adding co-owners or beneficiary designations does avoid probate. Probate is the court process whereby a Will is filed and validated by the Surrogate’s Court. As part of this process, all those individuals who would inherit had you never written a Will are entitled to notice of the probate proceeding and must consent to the admittance of your Will before assets can be distributed. If they do not consent to the probate of the Will, and/or if they file objections, it will cause unnecessary delay and cost to the estate. Accordingly, if you are disinheriting a natural heir, avoiding probate is a priority. However, if you are not disinheriting heirs, probate is not a problem. Moreover, while you can name children as beneficiaries on bank accounts, you are not able to do so for real property. If you own real property, you would still have to go through probate in order for your beneficiaries to inherit same. Read more . . .
Friday, July 15, 2016
Contesting a Will
Q: If I specifically disinherit my child in my Will, does he or she still have the right to contest my Will?
A: There are certain individuals who have the right to contest your Will even if they are specifically disinherited, whether or not they are named as a beneficiary under your Will or if they were left with a disproportionate share of your estate. A disinherited child has the right to challenge or contest your Will because, if you died without a Will, your child would receive a share of your estate through the laws of intestacy.
A disinherited child is required to receive notice that your Will is being offered for probate in the Surrogate’s Court by the Executor named in your Will. One form of such notice is called a “Waiver of Process; Consent to Probate”. The Executor is required to obtain a signed Waiver from your disinherited child.
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Friday, July 8, 2016
Trusts and Chronic Medicaid
Question: My father is about to enter a nursing facility. He may have to spenddown some of his money in order to qualify for Medicaid. I was told that he could pre-pay his own funeral and he may be able to pay for his children’s funeral as well. Is this true?
Answer: Yes, a pre-need funeral trust allows an applicant for Medicaid to set aside money to fully fund the funeral services of their choice before their funds are exhausted down to necessary eligibility levels. Chronic Medicaid is a program that will pay for all or part of a Nursing Home. In order to be financially eligible for Chronic Medicaid, the applicant can have no more than $14,850.00 in liquid non-qualified assets, an unlimited amount of retirement assets so long as the applicant is taking a monthly required distribution and an irrevocable pre-paid funeral trust.
If the applicant exceeds $14,850.00 in liquid assets, there are certain planning mechanisms that can be used in order to qualify the applicant for Chronic Medicaid benefits. One of those mechanisms is establishing an irrevocable pre-need funeral. New York State Law mandates that pre-need burial trusts for applicants or recipients of Medicaid be irrevocable. This means that the prearrangement may not be canceled prior to death nor can funds be refunded if the actual funeral costs are less than then funded agreement. Thereby, an individual with a revocable agreement would have to convert it to an irrevocable agreement if they were to require Medicaid in the future. The Medicaid applicant is also permitted to set up pre-needs for a spouse, minor and adult children, stepchildren, brothers, sisters, parents and the spouses of these persons. Read more . . .
Wednesday, July 6, 2016
Can I Resign or Decline Being an Executor?
Question: My sister recently passed away and I just found out that I was named executor of her Will. I am really busy with my job and family and really do not want to serve. Can I decline or resign from being executor?
Answer: Just because you are nominated as executor of a Will does not mean that you must serve. You can renounce your rights as executor and decline to act by simply signing and having notarized a Renunciation of Nominated Executor form and filing it with the Surrogate’s Court in the county in which your sister resided. If the Will nominates a successor executor, that individual would then have the right to seek to probate your sister’s Will. If the first named executor predeceased your sister and you were named as the successor, then one of the beneficiaries of your sister’s will may petition the Court for the probate of the Will. The proceeding where someone not named in the Will petitions the Court for the probate of a Will is called an Administration c.t.a., this is Latin for with Administration with the will annexed.
If an executor who has already been appointed by the Court wishes to resign, he/she must file a petition with the Court seeking permission to resign. In the petition for permission to resign as executor, the petitioner must demonstrate “good cause”, and the decision of whether the executor will be permitted to resign rests with the Court. The Court will evaluate whether the executor’s request to resign is in the best interests of the estate. If the executor is unable to establish that the resignation is in the best interests of the estate, the Court may deny the request. In addition, in certain circumstances, the court may also charge the resigning executor with the fees associated with the resignation proceeding if they find that the resignation is not for “good cause”. An example of this would be if an executor is resigning because he/she cannot get along with a co-fiduciary.Read more . . .
Wednesday, June 29, 2016
To Probate or Not to Probate
While discussing an estate plan with a client, she stopped me and said “What is probate.” Sometimes we forget to explain the simplest concepts. Probate is the process by which a Last Will and Testament is given effect. Under New York State Law, a Will is admitted to probate after the Executor files a Petition for Probate with the decedent’s Will attached and gives proper notice to the individual’s that would have inherited from the decedent had the decedent died without a Will. The proceeding for the probate of a Will takes place in the Surrogate’s Court in the County where the decedent resided at the time of his or her death. The probate proceeding gives the interested parties (distributees) the right and opportunity to object to the probate of the Will.
Typically, we advise that a client that creates a Will consider if there are any circumstances that will make the probate proceeding an expensive one. For instance, is any distributee being disinherited? If so, that disgruntled distribute may come to Surrogates Court and object to the Will. The litigation objecting to a Will can be long and drawn out- and expensive as well. Are there missing heirs that must be found before the Will can be probated? If so, it could be very expensive and time-consuming to find all the individuals that are required to be given notice and an opportunity to object. Is there real property owned by the decedent in different states? If so, then the Will would have to be probated in each state. If any of these circumstances exist, you may want to avoid probate altogether. We also suggest avoiding probate if you are the surviving spouse and your spouse is or has received Medicaid benefits. Medicaid has a lien against the spouse’s estate for any Medicaid benefits paid for the other spouse within ten years of the death of the surviving spouse. Another reason to avoid probate is if you have a disabled beneficiary as the Surrogate’s Court may appoint a Guardian ad litem to protect that person’s interest. That could be another delay and cost to the estate. Read more . . .
Monday, June 27, 2016
Q: A few years ago my mom was diagnosed with dementia and recently she is having trouble paying bills on time. What is the best way for me to make sure the bills are paid?
A: The best way for you to help mom would be for her obtain a power of attorney. Being diagnosed with dementia doesn't necessarily mean she does not have the capacity to sign the document. However, if her dementia is so severe that she is not able to understand what she is signing, you may need to commence a Guardianship proceeding. The appointment of Guardian the Person and Property is appropriate when there is no power of attorney and health care proxy in place. Sometimes, a Guardianship is needed even if the documents are in place, because the power of attorney or healthcare proxy is deficient. Not all documents are the same. Therefore, it is important to review the documents with an attorney that practices in this area. Do not rely upon documents taken off the internet.
Assuming, a Guardianship is necessary, the Court will appoint a Court Evaluator to investigate the circumstances. The Court Evaluator is an objective third party appointed to rport to the Court and he or she is often referred to as the “eyes and ears” of the court. The evaluator will interview you, mom, and any other family members or interested parties. That person will then give an opinion to the Court on whether your mom is incapacitated, if she needs a guardian, what powers are needed and who would be an appropriate person to be named as guardian. Depending upon the circumstances, the Court may appoint a guardian of the person to make medical decisions on her behalf and a guardian of the property to handle her financial affairs, or the Court can appoint a Guardian of both the Person and the Property. One or more persons can be appointed.Read more . . .
Tuesday, June 21, 2016
Britt Burner, Esq. named as one of Star Network's Stars Under 40!
The Star Network has honored 40 young professionals in Brooklyn under 40 years old who exemplify outstanding leadership skills, not only in their chosen fields, but also in their community. The awardees were honored on Thursday, June 16, 2016 at the Grand Prospect Hall.
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Monday, June 20, 2016
Chronic v. Community Medicaid
Question: My dad will need care soon, I am not sure if he can be safely cared for at home or if he will need a nursing home. I am also concerned about the cost, can you tell me the eligibility requirements should we decide to apply for Medicaid to help cover the cost of his care?
Answer: In New York, Medicaid can be a pay source whether you require care in your home or care in a Nursing Facility. The program which can help cover the cost of care in the home is referred to as Community Medicaid and the program which can pay for all or part of the cost of a Nursing Home is called Chronic Medicaid. Because Medicaid is a needs based program, certain income and asset requirements apply.
In order to be financially eligible for Community Medicaid the applicant can have no more than $14,850.00 in liquid, non-qualified (non-retirement) assets in his name. He may have retirement assets in an unlimited amount so long as he is taking a monthly required distribution as determined by the local department of social services. The primary residence is an exempt asset; however, it is important to consider asset planning if the applicant own a home. Although the home is exempt for eligibility purposes, there is a potential for estate recovery after the applicant passes away if proper planning is not undertaken. Finally, the applicant may pre-arrange and pay for his funeral expenses so long as the pre-payment is irrevocable. Personal property is exempt as is one car. With respect to income, a single applicant may have no more than $845.00 in monthly income; however, any income earned in excess of the $845.00 can be preserved for the applicant’s use by creating and funding a Pooled Income Trust. One important thing to take note of is that the Community Medicaid program in New York has no look back. What this means for an individual living in the community is that he can undertake planning in one month and is immediately eligible for services the following month. This allows many of our clients to remain in the community, receive the care that they need while still managing to preserve their assets. Read more . . .
Wednesday, June 15, 2016
With tax planning becoming less of an issue for the average client, the focus in estate planning has shifted to asset protection for intended beneficiaries. As attorneys, we often hear our clients tell us that they plan to leave everything equally to their children, but that they are concerned that one (or more than one!) has creditor issues or are going through a divorce. How can they ensure that whatever they leave to this child will not have to be spent on his or her debts or given to his or her soon-to-be ex-spouse? The answer is with the use of Descendants Trusts.
Whether an estate plan includes a traditional last will and testament or a trust, planners should direct that any asset left to a child with potential creditors or divorces be left in a Descendants Trust, also commonly referred to as an Inheritor’s Trust. This is a trust written into the last will and testament or trust document that does not come into effect until after the death of the creator, which will protect the child’s inheritance from outside invaders, including creditors or divorcing spouses. To the extent that assets are left in the trust, creditors do not have access and the assets are considered separate and apart from the marital estate.
Typically, the Descendants Trust provides that any income generated from an asset in the trust shall be paid to the beneficiary at least annually and principal distributions can be made for health, education, maintenance and support if the child is his or her own Trustee, or for any reason if there is an independent trustee. An independent trustee is a person not related by blood or marriage to the beneficiary and is not subordinate to the beneficiary, i.e. does not work for the beneficiary. However, your lawyer can customize the language to provide for you and your beneficiaries’ specific circumstances.Read more . . .
Nancy Burner & Associates, P.C. has offices in Setauket, Westhampton Beach, and Manhattan New York.