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Archive for July, 2010

Estate Plans Should Represent Your Family’s Specific Needs

Friday, 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 http://www.elderlawnewyork.com.

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Reverse Mortgages as a Source of Equity

Thursday, 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

Tuesday, 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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