Retirement Savings and Estate Plans

September 8th, 2010

With careful planning and review, your retirement savings can provide for your loved ones after your death. By taking a few simple actions, you can ensure that your benefits are awarded to the right person and will protect your family.

Making arrangements for the distribution of your retirement assets after your death is relatively simple. When you start a new job or open a retirement account, you’ll be required to fill out beneficiary forms that designate whom you want to collect on your savings. Unfortunately, it’s fairly easy to forget about these forms as the years pass by, and many people inadvertently leave their retirement assets to an unintended individual, such as a divorced spouse, rather than the current spouse or their children.

You can make sure that your retirement benefits go to the appropriate person by doing the following:

1) Make sure that you review your beneficiary designation forms every 2-5 years or whenever you experience a major life event, such as the death of a spouse, a second marriage, or the birth or adoption of a child.

2) Name contingent beneficiaries so that your family will be provided for if the primary beneficiary pre-deceases you. While you may think that naming your spouse as your primary beneficiary is enough, you can never be too careful with the assets that will help support your family.

3) Do not rely on your will to take care of your retirement assets. A will does not control the disposition of any asset that has a named beneficiary (including life insurance, pensions, trusts, and retirement accounts). Any named beneficiaries on your retirement account, therefore, will override any beneficiaries named in your will. If you wish to leave your retirement assets to a trust, you should seek the advice of an estate planning attorney.

4) If you’ve made the choice to name minor children as beneficiaries, you need to make sure you name a guardian for them and a trustee for their assets. Your retirement funds may be used to provide for the kids if anything happens to you, but minors are not legally allowed to control assets. They will need someone to manage their inheritance for them until they come of age.

Following these simple steps will ensure that your retirement assets work together with your overall estate plan. An estate planning attorney can help guide you through the process of making the proper designations and incorporating your retirement benefits into your estate plan.

To learn more about New York elder law, New York estate planning, visit https://www.elderlawnewyork.com

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Law Requires Doctors to Offer Information on Palliative Care and End-of-Life Options

September 1st, 2010

We interviewed David Leven, executive director of Compassion  & Choices of New York, about the state’s recently passed Palliative Care Information Act.  That legislation requires physicians to offer terminally ill patients information on their prognosis and their full array of end-of-life care options, including hospice and other palliative care, in addition to life-extending interventions.  Compassion  & Choices of New York works to improve end-of-life care and to expand available options in order to ensure a humane and peaceful death with dignity.


Q: Why was it necessary to enact this law? It seems like common sense for doctors to share this information with their patients.

A: Even though patients are entitled to receive details concerning diagnosis, prognosis, treatment options, and accompanying benefits and risks, many doctors are not having these discussions with the terminally ill.  Many physicians haven’t been adequately trained to have these difficult conversations, and they’re uncomfortable having them.

Q: Why did the Medical Society of the State of New York (MSSNY) oppose this legislation?

A: Although many physicians supported the bill, it’s true that the MSSNY did not support it.  I believe that was an unfortunate knee jerk reaction to having the legislative process mandate their professional behavior. The fact is that they were already under both an ethical and legal obligation to provide this information.  This legislation simply clarifies previously existing law to include the specific right to receive this critically important information, including options available for those who are terminally ill.

Q: Studies have shown that candid end-of-life discussions benefit patients.  Please explain.

A: First of all, most patients—83 percent, according to one study—want to hear the truth about their health, even if they’re terminally ill. After these discussions, they are more likely to accept their diagnosis.  As a result, most of them–85 percent–opt for palliative treatment rather than life-extending regimens.  Sixty-three percent put in place “do not resuscitate” orders, twice as many as those who have them when end-of-life discussions do not occur. End-of-life discussion patients are less likely to choose to use mechanical ventilators or to spend time in the intensive care unit. They are also more likely to be enrolled in hospice and for a longer time.

It’s been found that patients with aggressive interventions had a worse quality of life during their last week than those focused on palliative care. There are also significant cost savings, but the real issue is that a person has the right to be informed of the options and to have their wishes concerning this most personal of decisions respected.

Thank you, David; I know that Compassion & Choices New York worked diligently to have this legislation passed.  We appreciate your sharing this information concerning the rights of terminally ill individuals and the benefits that accrue when they are empowered to direct their end-of-life care.

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How the Economy Is Affecting Seniors

August 25th, 2010

We recently spoke to Andrew H. Hook, an elder law and estate planning attorney with Oast & Hook (www.oasthook.com), about trends he’s observed during the economic downturn.  Andy is past president of the Special Needs Alliance and a nationally known elder law, special needs, and estate planning expert.  Here’s what he had to say…

Q: How is this economy affecting the seniors who turn to you for advice?

A: The issues for seniors are the same ones we’ve dealt with for years—except that the situation is more extreme.  Many of the elderly are ill prepared for retirement, which has always been true.  They come to us with mortgages on their homes and high credit card debt.  They have no long-term care insurance and insufficient assets to cover insurance deductibles and co-payments in the event of acute illness.  They haven’t done the financial planning that’s necessary to ensure quality of life during their golden years.

Q:What’s the answer?

A: Saving and planning.  People have assumed too much debt over the course of their lives and, consequently, have been faced with enormous interest payments—way too much.  They have mortgaged their futures.

Q: How is this affecting other family members?

A: That’s where I’ve observed a big difference in this economy.  The adult children, who are usually between the ages of 45 and 60, are themselves thinking about retirement.  The recession has caused many of them to lose their jobs, and the value of their 401(k) investments has plummeted. They’re counting on an inheritance to make up the difference, but given the issues being faced by their parents, the size of the estate may be negligible.

Adult children may always have had expectations concerning the family estate, but now their need is more urgent.  I’m seeing a greater fear among members of that generation, and it’s certainly causing more conflict  between siblings.  There aren’t a lot of Ozzie and Harriet families out there.

Andy, thanks for taking the time to share your views with us.  We appreciate it, and we hope that your comments inspire others to put their legal and financial affairs in order.

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Dealing with the Probate Process

August 8th, 2010

Probate is the process by which a court determines the authenticity of a decedent’s last will and testament. The executor’s job is to carry out the decedent’s wishes as set forth in the will. While probate sounds like a simple process, it almost never is. Even in the best of circumstances, there are procedures that must be followed strictly, and the probate process can take anywhere from months to years. Creating a good will can help shorten the probate process; however, even with a will, there are elements outside your control.

The executor must complete the following steps as part of the probate process:

  • making an inventory of all the decedent’s assets (this can be a difficult task if good records were not kept);
  • holding the assets while the estate is administered;
  • selling and/or liquidating assets for distribution or payment of taxes;
  • paying all valid debts of the estate;
  • notifying all beneficiaries of their inheritance;
  • preparing tax returns and paying taxes; and
  • distributing the estate assets as directed in the will.

The probate process can be further complicated if beneficiaries cannot be located or if a beneficiary contests the will. Going through all of these steps on your own can be difficult. An experienced estate law attorney can guide you through the probate process by helping you file the appropriate court documents and protecting the inheritance of beneficiaries.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit Littmankrooks.com.

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Estate Plans Should Represent Your Family’s Specific Needs

July 23rd, 2010

Each family is unique and should have an estate plan which reflects its specific requirements. Your estate plan should represent your family’s hopes for the future while meeting its current financial needs. For example, a couple married for many years will surely need a different estate plan than a second marriage couple with children from the previous marriages. In addition, high net worth families may need to employ special strategies to minimize estate, gift, income, and generation skipping taxes.

Estate plans can take a number of different forms and may include an education trust and the nomination of a guardian for minor children; a special needs trust for a child or spouse with disabilties; or even safe trusts for heirs who may not be able to manage their inheritance or who may be facing divorce. Alternatively, some families may find that their needs are simpler and do not require any trusts; for them, a simple will may serve their purposes well.

Whatever your family’s needs may be, you’ll want them to be met by a knowledgeable and compassionate estate planning attorney. You’ll want to choose someone who will listen to your family’s specific concerns and needs with an open mind. An estate plan should not be a standard set of documents based on numbers and averages. There is no one-size-fits-all solution when it comes to estate planning. Families will want to sit down together and seriously consider their specific situation before meeting with an estate planning attorney.

To learn more about New York
elder law, New York
estate planning, visit https://www.elderlawnewyork.com.

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Reverse Mortgages as a Source of Equity

July 8th, 2010

Because their home is their largest asset and their greatest source of equity, many choose to take out a home-equity loan. However, a home-equity loan may not be a sound option, since the money must be paid back, with interest. Luckily, there is another option available to seniors. A reverse mortgage allows them to gain equity without adding financial pressure to their lives.

A reverse mortgage is an easy way of accessing your home equity without creating monthly payments. The money received from a reverse mortgage does not have to be paid back during a person’s lifetime. Instead of making payments, as with a normal home-equity loan, the cash flow is reversed and the senior will receive payments from the bank.

Not everyone will qualify for a reverse mortgage. One of the major eligibility requirements is that the person applying for the mortgage be at least 62 years old and occupy the home as the principal residence for the majority of the year. The loan only becomes due when the last borrower permanently leaves the home.

What makes these types of mortgages so attractive is the fact that they are not credit-based. Therefore, income and credit history are not necessary for the person to obtain the mortgage. Another major benefit of a reverse mortgage is that the proceeds are tax-free and can be received in a number of ways. You can choose to receive the proceeds as a lump sum, in fixed monthly payments for as long as you live in the mortgaged property, as a line of credit, or through a combination of these options. These proceeds can be used for any of the following purposes:

  • daily living expenses
  • paying-off existing debts
  • home repairs and improvements
  • medical bills and prescription drugs
  • education
  • travel
  • long-term care and/or long-term care insurance
  • financial and estate tax plans
  • gifts and trusts
  • purchasing life insurance

While there are many benefits to this process, there are certain drawbacks that seniors should consider carefully before choosing this option. If, for example, the senior who takes out the reverse mortgage is not entirely competent, his power of attorney or guardian may be able to access the funds received from the reverse mortgage. Seniors considering a reverse mortgage should contact an elder law attorney who can guide them through the process.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit Littmankrooks.com.

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Second Marriages and Estate Planning

July 6th, 2010

With the number of divorces continuing to rise in the United States, there has been an increase in second marriages. Second marriages and the blended families that often result from them can pose a number of estate planning issues. This is because spouses must provide for their partners, their partner’s children, and children from the previous marriage. If you are marrying later in life and already have substantial assets, this can make the situation even more complex. One of the most difficult challenges will be using those assets to ensure that a surviving spouse is financially secure in his or her lifetime, while preserving a sizable sum for the children from your first marriage.

With a second marriage, spouses should consider how long the second marriage has lasted and the financial situation of each partner. In addition, a great deal of thought should go into what the children from the first marriage will receive if their parent is the first spouse from the new couple to pass away. If there is no prenuptial agreement in the second marriage, it is likely that the surviving spouse will get half of the deceased spouse’s assets, and this may not be what the deceased spouse would have wanted for his or her children from a previous marriage.

While second marriages can present challenges for estate planning, these issues can be resolved if clients are thoughtful and seek the advice of an experienced estate planning attorney.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit Littmankrooks.com.

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A Closer Look at Spousal Refusal

June 24th, 2010

New York is one of only three states in the U.S. that allows spousal refusal. Spousal refusal is a planning option that protects a couple’s assets and allows an incapacitated spouse to qualify for Medicaid. To be eligible for Medicaid in New York, an individual cannot have more than $13,800 in non-exempt property, which is often a problem for married couples.  However, there is an alternative way to qualify for Medicaid benefits – spousal refusal. Under New York law, the spouse who does not reside in the nursing home (known as the “community spouse”) is allowed to keep his or her assets if spousal refusal is exercised.

The community spouse can invoke spousal refusal by signing a statement refusing to contribute income or resources to the spouse who is residing in an institution and receiving medical care. If the community spouse chooses to do this, the Medicaid agency is then required to disregard the community spouse’s income or resources when determining the eligibility of the spouse in an institution. Doing so will allow the community spouse to continue supporting himself or herself without fear of impoverishment.

Spousal refusal can work for couples as a last minute planning option, and the spouse in need (the incapacitated spouse residing in the institution) can start receiving benefits almost immediately. However, this planning option is not without cost. The Medicaid agency can choose to commence proceedings and attempt to force the community spouse to support the spouse in the institution. The agency can also file a claim to receive reimbursement from the community spouse’s estate once he or she has passed away. These planning options should be discussed with your elder law attorney.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit Littmankrooks.com.

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Bernard A. Krooks to Speak on Financial Abuse of Seniors

June 15th, 2010

Bernard A. Krooks, Esq., managing partner of Littman Krooks LLP, will teach a seminar on “Fraud and Exploitation of the Elderly” at Pace Law School in New York City on June 16. The course is being conducted in recognition of World Elder Abuse Awareness Day on June 15. World Elder Abuse Awareness Day was established in 2006 to increase understanding of the problem of elder exploitation and neglect and to protect the dignity, rights and financial security of seniors.

The seminar will focus on the financial exploitation of seniors, in many cases committed by a close relative or other trusted person. Lessons from the Brooke Astor case will be used as illustration. In addition, recent changes to New York’s power of attorney law will be examined, some of which were designed to prevent elder financial abuse and to protect seniors from the mismanagement of their affairs by caregivers.

“This is a timely and socially significant topic,” explains Krooks. “The current economic climate is increasing the number of multi-generation households, as families seek to control living expenses. The temptation is there, and seniors, as well as concerned family members, need to be aware of steps to protect against abusive behavior that can result in both economic disaster and emotional scars.”

Bernard Krooks has been recognized as one of the “Best Lawyers in America” and as a “New York Super Lawyer.” He is the newly elected president of the Estate Planning Council of Westchester County, a former president of NAELA (National Academy of Elder Law Attorneys), and a past chair of the Elder Law Section of the New York State Bar Association.
Littman Krooks LLP offers legal services in several areas of law, including elder law, estate planning, veterans’ benefits, special needs planning, special education advocacy,  and corporate and securities.  The firm’s offices are located at 655 Third Avenue, New York, New York; 399 Knollwood Road, White Plains, New York; and 300 Westage Business Center Drive, Fishkill, New York.  For more information about Littman Krooks LLP, visit www.littmankrooks.com.

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A Closer Look at Charitable Trusts

June 4th, 2010

A charitable trust is a financial account that allows you to donate money to a charity while receiving a tax benefit for you and your heirs. There are two major types of charitable trusts: charitable remainder trusts (CRTs) and charitable lead trusts (CLTs). Of these two types of trusts, CRTs are the most common. These types of trusts are usually funded with a minimum of $100,000. CRTs are attractive, because in addition to the income tax and estate tax deductions that are available, the donor of the trust also receives income from the trust for a specified period.

A CRT is a trust which allows for a specified distribution, which must occur at least annually, to one or more beneficiaries. At the very least, one of these beneficiaries must not be a charity. The trust is set up for life or for a term of years, with an irrevocable remainder interest to be held for the benefit of, or paid over to, charity.

CRTs are further broken down into two types: charitable remainder unitrusts (CRUTs) and charitable remainder annuity trusts (CRATs). Both are irrevocable trusts that pay out a portion of the value of the trust assets each year to a beneficiary chosen by the trust donor. The beneficiary can be the donor or his or her spouse. The difference in these trusts lies in the fact that the CRUT pays a fixed percentage of the value of its holdings, and the CRAT pays a fixed dollar amount.

Charitable lead trusts (CLTs) are different from CRTs in that they pay income to a qualified charity for a set number of years or for the lifetime of the individuals who establish the trust. At the end of the trust, the assets are returned to the donor, the spouse, children, or other specified individuals. A great benefit of a CLT is that if the trust earns more than it pays to the designated charitable beneficiary, those extra earnings will then pass on to the non-charitable beneficiaries without racking up additional estate or gift taxes.

If you or your spouse wishes to establish a charitable trust, you should contact an estate planning attorney, who can offer you guidance about which type of trust will be right for you and your family.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit Littmankrooks.com.

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