Suffolk County, NY Estate Planning and Elder Law Blog

Monday, October 16, 2017

NY ABLE Program Helps New Yorkers

Q:        I am a disabled person that receives Social Security Disability Insurance as a disabled adult child and Medicaid and will be inheriting $20,000.00 from my aunt. I am able to manage my own finances. Are there any options that would allow me to manage my inheritance while maintaining my eligibility for Medicaid?

A:        You are in luck, New York state has a new savings plan, called the New York Achieving a Better Life Experience (NY ABLE) program, designed to help individuals with disabilities maintain their health, independence and quality of life. The program was modeled after the 529 College Savings Program. NY ABLE accounts are also known as 529A accounts. New York is one of 28 states in the country that offer this type of program.

The NY ABLE program allows New Yorkers with disabilities to save money in their own names without risking their means-based benefits. NY ABLE accounts can be opened with a minimum contribution of $25.00. Contributions can be made by eligible individuals, family members or friends, but are not tax-deductible. The annual contribution is capped at $14,000.00 and the maximum account balance is $100,000.00. New York residency is required and only one account per eligible individual is permitted.

A NY ABLE Account can be opened by: The eligible individual; a parent or legal guardian of the eligible individual or a person granted power of attorney on behalf of the eligible individual.


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Friday, October 13, 2017

Trustee Responsibilities

If you have been named as a trustee of someone’s trust, you may be wondering what you are supposed to do. It is important that the trustee understand their duties and responsibilities.  The most important thing to remember as trustee is that the trust assets are not your assets. You are safeguarding them for the settlor and/or beneficiaries, who will receive them after the settlor dies.

 As a trustee, you stand in a "fiduciary" role with respect to the beneficiaries of the trust.  As a fiduciary, you will be held to a very high standard.  The trustee must read the trust document carefully, upon acting initially and when any questions arise. The trust is the road map the and trustee must follow its directions in administering the trust.  A trustee should be aware that failing to abide by the terms of the trust document and mismanaging the assets can have serious financial repercussions for the trustee personally such as forfeiture of commissions and surcharge.

 This very issue came up in the recent Suffolk County Surrogate’s Court case of Accounting Proceeding the Schweiger Family 2013 Irrevocable Trust decided on September 7, 2017. 

The subject trust stated that during the lifetime of the settlor, the trustees in their sole discretion may pay the net income to or for the benefit of the settlor's beneficiaries or accumulate such income. With respect to principal, the trustees were given the discretion to pay so much of the principal to or for the benefit of the settlor's beneficiaries. 



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Wednesday, October 4, 2017

Estate Planning for Young Couples

Question: I recently completed my estate planning which included doing an irrevocable trust to protect my assets in case I need Medicaid in the future. I have nominated my 35 year old daughter to be my Trustee. What kind of estate planning should my daughter be doing? She is married and has two small children.

Answer: People often put off estate planning far too long. But it is just as important for young families to do their planning as it is for older family members to do asset protection. I always recommend the following basic documents to my young clients.

Any one over the age of 18 should have advance directives. These are documents that you execute in advance of needing them which designate someone to make medical and financial decisions on your behalf if you were disabled. These documents include a healthcare proxy, living will, HIPAA release form and durable power of attorney.

The healthcare proxy designates a person to make medical decisions if you were unable. The living will is a statement of your wishes with regard to ending life-sustaining treatment if you were in a vegetative state. Finally, the HIPAA release permits your healthcare agents to obtain protected medical information from your medical practitioners.


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Monday, October 2, 2017

Probate a Will

Question: My mother recently passed away and I cannot locate her original Will; I can only find a copy.  Can I submit the copy to the Surrogate’s Court for probate?

 

Answer: To begin, it is important to understand what it means to probate a Will.  Probate is the court process whereby a Will is "proved" and accepted by the Surrogate’s Court as a valid document that is the true last testament of the decedent.  The probate of a Will also serves to appoint the executor of the estate.  

The Surrogate’s Court generally requires that the original Will of the decedent be presented for probate.  However, if the original Will has been lost, the law allows for a lost Will to be admitted to probate if certain conditions can be met. 

First, the Will must not have been revoked.  In New York, there is a presumption that if the decedent had the Will in his/her possession at the time of death and the Will cannot be located, that the Will was revoked.  This presumption must be overcome by the person petitioning the Court to have the copy admitted to probate, generally the nominated executor.  It is important to note that, if the Will was not in the possession of the decedent at the time of death, this presumption is easier to overcome.


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Wednesday, September 27, 2017

Super Lawyer Honors Attorneys from Burner Law Group, P.C.

Please join us in congratulating Nancy Burner, Esq. on her 10th Super Lawyer achievement. For ten years, Super Lawyers has recognized Nancy for her outstanding legal achievements. 

Congratulations are also in order for Robin Burner Daleo, Esq.Britt Burner, Esq.Kimberly Trueman, Esq.Kera Reed, Esq. and Brittni Sullivan, Esq. for their Rising Star honors. 

The Super Lawyers list will be available in the October 1st issue of New York Times Magazine

 


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Monday, September 25, 2017

Estate Recovery

Question:  My mother, who is widowed, is receiving Community Based Medicaid services.  She currently owns a home in her own name; she has been hesitant to transfer it out of her name.  I am concerned about Medicaid having a claim against the house after her death, am I right to be concerned?

Answer:  Yes.  Individuals who have received benefits under the New York State Medicaid program are subject to estate recovery for all assets passing through their probate estate.  This is a minimum requirement under Federal Law.  States have the option to expand the definition of estate recovery to include those assets that are non-probate. New York has adopted a narrow definition, only recovering against the assets that pass through a Medicaid recipient’s probate estate.  Practically speaking, what this means, is that where a Medicaid recipient passes away with assets in their sole name, you would need to commence a probate proceeding in Surrogate’s Court.  Once this occurs, the Department of Social Services will seek to recover any monies that they paid for services on behalf of the Medicaid recipient against that Estate. 

            For example, assume at the time that Mom dies she had been on Community Based Medicaid for four years, receiving live in care services. Over the course of those four years, Mom has received a care paid for by the Department of Social Services as well as assistance with Medical visits and supplies.  At the time of your Mother’s passing Medicaid will calculate the cost for the services provided to your Mother during her lifetime and seek recovery against your Mother’s probate estate equal to the amount of care paid on her behalf. 


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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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12 Research Way, East Setauket, NY 11733 | Phone:631-941-3434
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45 W 34th St Suite #1203, New York, NY 10010 | Phone: 212-867-3520

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