Posted tagged ‘estate planning’

IS A “SIMPLE” WILL RIGHT FOR YOU?

August 9, 2013

A “simple” Will can be defined as one by which the person making the Will (the testator) leaves all assets first to his spouse. If the spouse predeceases the testator, then all assets go to the children in equal shares. For some people this may be fine.
For other people, a simple Will may not be best because it does not consider these and other issues:
1. Children may get money or assets outright at eighteen, the age of majority, and might not use the money for college or some other use the testator supports.
2. It’s a second marriage, the children are not of this marriage and the testator never adopted them, even though he considers them to be his children.
3. One child receives governmental benefits and anything left to that child will make them ineligible for those benefits.
4. Uncertainty as to what assets transfer under the Will instead of by other means.
5. The testator made unequal financial gifts during his lifetime (maybe paid for college) and wants to equalize monies given to children in the Will.
6. The testator wants to leave something to some grandchildren and to a couple of charities.
The lawyers at Bansbach Zoghlin P.C. can draft a simple Will or a Will tailored to your life. If you would like to talk with or send an e-mail to one of us, please let us know.
BANSBACH ZOGHLIN P.C.
Tel: (585) 227-2610
John M. Bansbach, Esq. jbansbach@banszog.com
Mindy L. Zoghlin, Esq. mzoghlin@banszog.com
Gerald F. Wahl, Esq. gwahl@banszog.com
The information contained in this article is not legal advice. Bansbach Zoghlin provides legal advice to clients who retain it to provide services.

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WAYS TO AVOID PROBATE COURT

July 19, 2013

It’s possible to keep assets that transfer because of death out of probate court.   If you do this, a probate court judge (New York State calls them a “Surrogate’s Court Judge”) will not be involved in your estate.  This is true whether you die with or without a Will. There can be many advantages to avoiding Surrogate’s Court:  less expense for court filing fees and attorney fees; less exposure of your assets to claims of creditors; faster distribution of assets; and greater privacy.

There are simple ways to keep your post-death financial transactions out of a probate court.   These include: (a) owning assets as a joint tenant so that the survivor becomes the owner by operation of law (often done with real estate and bank accounts); (b) naming beneficiaries and contingent beneficiaries (for example, life insurance and IRAs); and (c) using TOD (Transfer on Death) accounts.

Less simple ways to keep assets out of probate court include transferring them  during your life to a revocable or an irrevocable trust and transferring your home to children with the reservation of your right to live in your home as long as you choose (a so-called “life estate”).  In addition to keeping assets out of probate court, these types of transfers can increase the certainty that what you want will to happen does happen and avoid the need to pay for nursing home care privately in order to spend down assets to achieve Medicaid eligibility.

 If you’re interested in avoiding estate probate, the lawyers at Bansbach Zoghlin P.C. can help you.

THINK OF THE LIVING: ESTATE PLANNING

June 3, 2013

Estate planning benefits you and people you care about during and after your life. It is far more than making a Will that distributes your assets after you die.

You benefit during your life by appointing an agent under a Power of Attorney to make financial decisions. This lets you choose a trusted relative or friend to make decisions for you if you are disabled and avoids the need for a court to appoint a guardian for you.

You benefit during your life by appointing a proxy under a Health Care Proxy to make medical decisions. This lets you select a trusted relative or friend to make medical decisions if you are unable and avoids the need for a court to appoint a guardian for you.

Minor children or disabled persons you care about benefit from your estate planning. You can appoint a caring guardian to raise minor children and a financially responsible trustee to make their money decisions. This avoids a court appointing the guardian and trustee. You can make disabled children and adults beneficiaries of a special type of trust (a supplemental needs trust). A special needs trust will provide money for experiences and creature comforts the disabled person might not otherwise have and will not disqualify them from receiving governmental benefits.

People who will pay the expenses of your estate benefit when you plan for what will be owed and where estate tax, probate expenses, lawyer’s’ fees, accountant’s’ fees, funeral and burial expenses will come from.

People who handle your end-of-life affairs benefit when you make funeral and burial arrangements and state who will get what items of property with sentimental value. Items with sentimental value may be worth more to your heirs than their dollar value would suggest. Planning removes uncertainty about what you want and can make it easier to accomplish what you want.

Finally, planning will make it more likely your money and assets will go to the persons you choose. Planning can reduce the amount of your assets that go to pay nursing home expense, make it easier to earlier qualify for Medicaid, reduce estate taxes, and increase the likelihood that what you leave will not be squandered but will achieve good.

Pet Trust Musing

September 14, 2012

While driving to work yesterday, I began to think about what would happen if I died today?  I have relatively few real assets: a car, a few bank accounts and some jewelry.  All of that would go to my husband, Ryan.  I have no children, but I do have a 1 year old Lab-mix named Ollie. Ollie sure acts like a big baby sometimes despite the fact that he can put his paws on my shoulders and weighs in at about 65 lbs.  While I may attribute human characteristics to Ollie and treat him as an important member of my family, in the eyes of the law he is just another piece of property.

We often plan for the fate of our homes, cars, jewelry and heirlooms, but what about our pets?  Sadly, our pets are often overlooked in traditional estate planning.  According to the American Pet Products Association (“APPA”), 62% of U.S. households own at least one pet[1]. Our pets range from cats and dogs to horses and pythons.  Over 500,000 pets end up in shelters each year due to the pet owner’s death or incapacity.[2]  Of those, up to half may be subject to euthanization.[3]

While it may be difficult to put Ollie in the same category as a couch or grandma’s china, it is important to plan for our pets so that they can be cared for even after we are gone.  Unlike grandma’s china, Ollie would be costly to maintain, and that may be too much to ask of surviving loved ones.

Well, there’s costly, and then there’s extravagant.  “Queen of Mean” Leona Helmsley left $12 Million in Trust for the care of her beloved Maltese, Trouble, when she died in 2007[4].  While the Court eventually reduced the trust to $2 Million, Trouble’s annual expenses until his death in 2011 are estimated to have been approximately $190,000 per year[5].  However neither Ollie nor your everyday household pet will require a $12 Million trust for care during its life.  According to the APPA, the average dog will incur approximately $1,500 in expenses each year, while the typical cat may only incur approximately $1,200[6].  Not every dog requires a personal security team like Trouble did[7].  The annual expense for your pet may vary depending on his or her lifestyle, favorite foods, grooming expectations, toys and medical condition.

When choosing someone to care for your pet it’s important to choose someone who is willing and able .  Leona Helmsley appointed her son as Trouble’s caretaker, but he refused.  Ultimately, the manager of one of Helmsley’s hotels agreed to take care of Trouble.

While Trouble was lucky that someone was willing to take her in, other pets aren’t as fortunate.  I would choose at least one alternate caretaker and, as a last resort, a no-kill animal shelter or rescue organization that can find a loving home for Ollie in the event that the appointed caretakers are unable to care for him.

In all likelihood, the trust you create for your pet will outlive your pet.  In that case, it is important that you appoint a beneficiary to receive the remainder of the trust upon your pet’s death.  The beneficiary can be an individual or a charity.  Humane Societies and rescue organizations are popular choices.  Ryan and I adopted Ollie from a rescue organization called Buffalo Paws and Claws; it is likely that when we set up a trust for Ollie’s care we will leave the remainder to that organization so that they can continue to place rescued animals in forever homes.

The moral of the story is this: the law may treat our pets like personal property, but many us of consider them a part of our families.  When we die we should consider who will care for them, and what funds may be needed to do so.


[1] American Pet Products Association, Industry Statistics & Trends, Available at: http://americanpetproducts.org/press_industrytrends.asp

[2] Shidoon Aflatooni, The Statutory Pet Trust, 18 Animal L. 1 2011 at 3

[3] Shidoon Aflatooni, The Statutory Pet Trust, 18 Animal L. 1 2011at 3

[4] Sewell Chan, Leona Helmsley’s Unusual Last Will, Aug 27, 2007, available at:http://cityroom.blogs.nytimes.com/2007/08/29/leona-helmsleys-unusual-last-will/

[5] Dan Slater, Trouble for Trouble!  Judge Knocks $10 Mil form Helmsley Dog’s Take, June 16, 2008, available at:http://blogs.wsj.com/law/2008/06/16/trouble-for-trouble-judge-knocks-10-mil-from-helmsley-dogs-take/

[6] American Pet Products Association, Industry Statistics & Trends, Available at: http://americanpetproducts.org/press_industrytrends.asp

[7]

LIFE ESTATE IN HOME NOW SUBJECT TO MEDICAID COLLECTION RISK

February 17, 2012

To protect the value of their home from being used to pay nursing home bills or subject to a claim by Medicaid, many people, often parents, have transferred title to their home to another person, often one or more children.  The transfer often includes the grantors retaining a “life estate,” the right to stay in their home for the rest of their lives.   Common benefits of retaining a life estate include: the homeowners remain eligible for basic STAR and other enhanced STAR school tax exemptions; the life estate is unaffected by a judgment against or bankruptcy filing by the child; and as owners of the life estate, the grantors cannot be evicted from the home.

The law in New York is that five (5) years after a parent’s transfer of home ownership to a child – even where a parent retained a “life estate” – Medicaid cannot recover any part of the home’s value in reimbursement for paid benefit.

This appears likely to change.  New York State has proposed regulations to enable it to recover the value of a retained life interest from a Medicaid benefit recipient.  This is true even if the life use was created more than five (5) years ago.

The value assigned to the retained life estate is expected to based on tables that state a percentage of the home’s fair market value (“FMV”).  For example, New York State has used the example of a person aged 76 dying in October 2011 with a retained life estate in a home with a $270,000 FMV.   The life estate is determined to be worth  $57,323.70 (life estate factor for a 76 year old is .21231 multiplied by the $270,000 FMV).   Medicaid would have a claim against the estate of the 76 year old decedent for $57,323.70.

Homeowners who have already transferred ownership and retained a life estate may wish to consider extinguishing the life estate, selling the life estate to whom they transferred the interest, or transferring the life interest to an irrevocable trust.  Each of these changes has possible negative consequences such as loss of the basic and enhanced STAR Exemptions, tax consequences (gift and possible loss of step-up in tax basis), and starting a new five-year Medicaid look-back period.  The age and physical and financial health of the client are considerations, as is the availability and attractiveness of long  term care insurance through the New York State Public/Private Partnership for Long Term Care.

The lawyers at Bansbach Zoghlin P.C. can help you decide what to do if you have a retained life interest and about other estate planning topics. If we can help, please let us know.

BANSBACH ZOGHLIN P.C.

http://www.BansZog.com

Tel:  (585) 227-2610

John M. Bansbach, Esq. jbansbach@banszog.com

Mindy L. Zoghlin, Esq.   mzoghlin@banszog.com

Gerald F. Wahl, Esq.     gwahl@banszog.com

The information contained in this article is not legal advice.  Bansbach Zoghlin P.C. provides legal advice to clients who retain it to provide services.