Archive for the ‘Asset Protection’ Category

How to Discuss Estate Planning Without Unnecessary Drama

Tuesday, August 11th, 2020

Littman Krooks Retirement PlanningFamilies can usually agree on the importance of creating a New York estate plan. However, as crucial as having a comprehensive estate plan is, recent studies show that only a small percentage of couples – most of them older – have current estate planning documents in place. When those who do not have an estate plan are asked why that is the case, the most common response is that they are avoiding having a difficult conversation with their loved ones. For parents, this concern is primarily centered around not wanting to cause problems between siblings.

The first step toward drama-free estate planning is understanding what causes drama between siblings in the first place. Of course, parents cannot necessarily resolve existing sibling rivalries or long-standing disagreements between siblings, which can make the process more challenging. In addition, the estate planning process itself can cause other types of issues to arise. For example, siblings who may not communicate that often may be skeptical of the others’ motives; they may disagree on who should pay for final arrangements, or how assets should be divided. Parents can take specific steps to make the estate planning process easier and reduce the chance of starting arguments between their children.

Create a Financial Overview

littman krooks elder lawWhile a comprehensive estate plan provides a detailed explanation of where a couple wants their assets to end up after they pass on, it does little to explain to children what those assets are and where they are located. A financial overview solves this problem by providing a list of all family assets and their location. For example, parents may have bank or investment accounts that at least one child is unaware of. If a child believes assets are only made known to certain siblings, it can start to build resentment, which may grow over time. By sharing a financial overview with all children, parents can reduce the perception of favoritism.

A proper financial overview should include the following information:

  • A list of all assets, liabilities and insurance policies, as well as how they are titled and any named beneficiaries.
  • Contact information for all financial, legal and insurance professionals.
  • Usernames and passwords for all financial and insurance websites.
  • A legacy letter outlining the non-financial assets, such as family heirlooms, that parents want to pass on to their children.

By creating a financial overview, parents can not only make the estate administration process easier for the executor but can also reduce the chances of starting family conflict. However, ongoing and open communication will also be essential.

Schedule a Family Meeting

After parents create an estate plan and a financial overview, the next step is to schedule a family meeting. Both parents, as well as all children who will be inheriting assets, should attend the meeting. While ideally, family members would meet in person, if children live across the country or a family is concerned about maintaining social distance, a family meeting could be held virtually.

Topics to cover at the family meeting include:

  • Discussing the basics of the estate plan;
  • Ensuring at least one person knows the location of the estate planning documents;
  • Explaining who will be the executor of the estate, as well as any other necessary parties, such as trustees;
  • Discussing the importance of transparency and openness during the estate administration process;
  • Outlining the parents’ plan for important non-financial items, such as family heirlooms; and
  • Discussing the importance of keeping things fair and using the process to bring the family together.

For many parents, the process of discussing their estate plans with their children is a topic to be avoided. However, these are crucial conversations that must take place to increase the likelihood of a smooth and drama-free estate administration process.

Speak With a New York Estate Planning Lawyer for Immediate Assistance

Creating an estate plan to address your family’s unique needs is crucial to securing your legacy and ensuring that future generations are cared for. At the New York estate planning law firm, Littman Krooks, LLP, we have over 30 years of experience helping families effectively plan for their financial future. We pride ourselves in providing an exceptional level of service to individuals of varying net worth, helping our clients ensure that future generations are well taken care of and reducing the tax burdens on their estates. To learn more about how our dedicated team of attorneys can assist your family with its unique needs, call 914-684-1200 to schedule a no-obligation consultation today.

 

A Message to Our Clients and Our Littman Krooks Family

Friday, March 13th, 2020
Dear Client and Friends, 
At Littman Krooks, the health and safety of our clients and staff is our highest priority. We pride ourselves on exemplary and individualized services to our clients. We are writing to provide you with the steps that we are taking to protect you and our staff against the spread of the Coronavirus (COVID19). We understand the paramount importance of these tasks, as we serve many elderly clients and families with children with health concerns.
Steps We are Taking To Protect You and Our Staff:
  • We are maintaining social distancing, which means that we will not be shaking hands, hugging or touching anyone.
  • Hand sanitizer is available in our reception area and we are asking you to apply a generous amount to both of your hands upon entry to our office.
  • Staff know to wash their hands each time they enter our building before touching anything and frequently throughout the day.
  • We have remote access for employees who are ill or need to work from home.
  • If you or someone you have been in contact with is experiencing symptoms of coughing, high fever and/or shortness of breath, we ask that you not come to our office.
  • If you do not feel comfortable visiting our office in person, because you may be sick or for any other reason, please consider meeting with us virtually either via conference call or through FaceTime or similar service. Call our office at (914) 684-2100 to let us know that you would like to change your meeting to a virtual one. Our staff will be happy to assist.
Protect Yourself and Those Around You: We encourage all to follow basic hygiene measures that protect us from respiratory viruses. As the Center For Disease Control recommends, these actions include:
  • Washing your hands often and thoroughly with soap and water for at least 20 seconds. If soap and water are not available, use an alcohol-based sanitizer.
  • Avoiding touching your eyes, nose and mouth with unwashed hands.
  • Avoiding close contact with people who are sick.
  • Staying at home if you are feeling sick, especially if you have a fever, are coughing and/or have shortness of breath. If you have those symptoms, please seek medical care early.
  • Covering your mouth and nose with the inside of your elbow when you cough or sneeze and, if using a tissue, dispose of it immediately into a closed bin and clean your hands with alcohol-based sanitizer or soap and water.
  • Cleaning and disinfecting frequently touched objects and surfaces by using disinfectant spray or wipes.
Extra Protections for Those at Higher Risk: If you are at higher risk of getting very sick from COVID-19, meaning if you are older or have a health condition, you should:
  • Stock up on supplies.
  • Take everyday precautions to keep space between yourself and others.
  • When you go out in public, keep away from others who are sick, limit close contact and wash your hands often.
  • Avoid crowds as much as possible.
  • Avoid cruise travel and non-essential air travel.
  • During a COVID-19 outbreak in your community, stay home as much as possible to further reduce your risk of being exposed.
We thank you for your understanding and cooperation as we navigate this challenging time. We understand that the situation is evolving and we will continue to actively monitor it and take the necessary precautions. Our firm remains dedicated to providing our clients with the highest level of client service in every way possible
For additional information regarding the Coronavirus, here are resources from the CDC and the New York State Department of Health:

National Financial Literacy Month: Six Steps Toward Successful Estate Planning

Tuesday, October 10th, 2017

In support of National Financial Literacy Month (April) and National Estate Planning Awareness Week (3rd week in October), the following estate planning article contains a very important message:

Estate planning is a financial process that can protect you and your family and is a very important component of your overall financial planning. Now is the perfect time to put your estate planning house in order. If you don’t have an up-to-date estate plan and you happen to get hurt or sick and cannot manage your financial affairs, the courts will have to appoint someone to manage them for you. The person they appoint might not be the one you would want to perform those tasks.

Without an estate plan, when you pass away, your affairs will be settled by default through a complex legal system called “probate.” The handling of your financial affairs can turn into a costly and frustrating ordeal for your family and heirs.

The crafting of a good estate plan starts with planning, followed by the proper drafting and signing of appropriate legal documents such as wills, trusts, buy-sell agreements, durable powers of attorney for asset management, and an advanced health-care directive or health-care power of attorney. Having these documents in place saves you and your family a lot of money and time at a very difficult and emotional time.

Your estate planning should also address the coordination of the way you hold title to your various assets, your beneficiary selections, and the possible transfer of certain assets while you are alive.

Regardless of the extent of your net worth, estate planning is important for everyone. Complex strategies may be used by wealthy people to reduce death taxes and costs. Others may only require a simple will and/or trust to pass on property to their heirs and provide for minor children.

Even if a simple will is all you require, an estate plan is an essential part of your financial planning. Everybody will need it someday. The time to address or update your estate plan is now. See the checklist provided below to help update your estate plan:

CHECKLIST — SIX STEPS TOWARD SUCCESSFUL ESTATE PLANNING

1. DEFINE YOUR GOALS: What do you want to happen to your assets in the event of your death or disability? If your beneficiaries predecease you, who are your alternate selections? How will your assets be distributed, and when will these distributions take place?

  • Decisions on distribution of your estate assets should take into account the size of the estate, the ages and abilities of your children, and your personal desires. For example, a distribution to children over time might consist of 10 percent of the estate at age 18, 25 percent at age 21, 50 percent at age 24 or upon completion of college, and the balance at age 30.
  • Choose your appointees for important roles: Who will be your executor and, if applicable, trustee and/or guardians? It is advisable to list at least a first and second alternate for each appointment in case your first choice is unwilling or unable to serve.
  • If you have children who are minors, the appointment of a guardian is probably the most important decision you’ll make. With the court’s approval, this person, or persons, will raise your children. Consider appointing a family member and spouse, or another close couple who’ll care for your children the way you would want.
  • You may want to consider listing multiple executors, trustees and guardians to serve together in handling the details of your estate. This can provide a check-and-balance system for the appointees and help them avoid oversights or misappropriations. Consider appointing family members, friends, professionals, advisers and/or trust companies for this position.
  • There is some risk here: If these people disagree and have problems, they can each be represented in court by counsel paid for by your estate, so be very careful in making your selections.
  • Living trusts have become popular because less administration is required in comparison with a will. Be aware that having a living trust does not eliminate the need for a will and administration at either the first or second spouse’s death.
  • To get the benefits of the trust, certain details must be attended to, and this is the job of your appointees. For example, leaving a trust for the surviving spouse requires that the trust be funded properly and in a timely manner at the first death, or major tax benefits can be lost.
  • Is estate privacy an issue for you? Do you want your estate to be public record upon your death? Do you have any special gifts you want made to charity? Do you want an elderly parent or friend to be financially cared for? All of these circumstances should be noted in your plan.
  • GATHER & ORGANIZE YOUR DATA: There are three basic tasks to be accomplished:
  • Review and update your financial position.
  • Review how you hold title to your assets. Is it consistent with your estate plan?
  • Review your beneficiary selections. Are they aligned with your estate plans?
  • Did you know that how you hold title to assets has a higher legal priority than your will? For example, if you and your best friend held title to an investment club account as joint tenants and you died, the property would revert to your friend even though you had willed your interest to your spouse.

3. ANALYZE YOUR SITUATION: Start by determining your current net worth, assuming your death occurred today. This can be done by totaling your current assets and liabilities, and adding the value of any life insurance.

  • Try sketching a picture or flow chart of your existing estate plan. Review your appointees:
  • Executor
  • Guardian of the Person/of the Property
  • Trustee
  • Power of Attorney – Property Management
  • Advance Health-Care Directive or Health-Care Power of Attorney

4. DEVELOP YOUR STRATEGIES: With the assistance of your estate planning advisor(s), identify the legal documents that need drafting or make any necessary adjustments to existing documents. Determine any other actions that must be taken for your wishes to be carried out.

5. IMPLEMENT YOUR PLAN: Do what needs to be done — i.e., create new wills, trusts and powers of attorney, adjust title to your properties, change alternate beneficiaries of retirement plans and life insurance policies to trusts.

6. TRACK & MONITOR YOUR PROGRESS: Check your estate plan annually or any time there are changes in your family situation or net worth. Use your financial planning calendar to schedule your next review.

 

Learn more about National Financial Literacy Month by clicking here. For more information on estate and financial planning content contact v.sabuco@TheFinancialAwarenessFoundation.org.

 

 

 

Medicaid Asset Transfers: What Are The Rules?

Tuesday, June 21st, 2016

For many families, paying for a loved one’s extended stay in a nursing home would be difficult without the help of Medicaid. However, in order to qualify for the program, a person’s income and assets must fall within certain limits.

Federal rules state that to qualify for Medicaid nursing home coverage, a person must have no more than $2,000 in “countable” assets. However, New York State has more generous rules, so for New York residents in 2016 the limit is $14,850 for a single person. If a married person needs nursing home care, there are protections for a spouse who remains outside. In this situation, the community spouse has a maximum threshold of &74,820 to $119,220 ($14,850 for the institutionalized person and $119,220 for that person’s spouse). Certain types of resources are exempt, such as up to $828,000 of equity in a home and one motor vehicle.

Littman Krooks Elder LawIf you have countable resources above the limits, you may be told that you need to “spend down” your assets, paying for nursing home care yourself, until you reach the resource limits, at which point Medicaid begins covering the cost. This is what happens in many cases. In other cases, a family may anticipate the need for long-term care and wish to transfer assets to the next generation ahead of time, in order to preserve the family’s resources while still qualifying for Medicaid. This is an excellent strategy, as long as the Medicaid rules are followed.

Medicaid has a five-year “look-back” period for transfers of assets. A person applying for Medicaid must disclose all financial transactions for the previous five years. During this time, any transfers of assets for less than fair market value may prevent the person from being eligible for Medicaid. (However, in New York State, the asset transfer rules do not apply for recipients of Medicaid for home care services.) In addition, invalid transfers may result in a costly penalty period during which ineligibility may continue even after assets are spent down.

To avoid ineligibility and penalties, it is important to plan ahead. Transfers made more than five years in advance are not affected by the rules. There are also important exceptions to the asset transfer rules as well as legal strategies including certain trusts that can help preserve assets while ensuring eligibility. As you can see, Medicaid planning is very complex and it is essential to have help from a qualified elder law attorney.

 

Learn more about our services by visiting www.littmankrooks.com or www.elderlawnewyork.com.


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The Importance of Asset Protection Strategies

Monday, July 6th, 2015

Protecting your assets from creditors is an important part of estate planning. There are several different strategies that may be effective. Because individual situations vary and the laws regarding these strategies can be complex, you should only use them with the advice of an experienced estate planning attorney. With that in mind, here is an overview of some techniques for asset protection:

lawyer-or-notary-with-cl Give certain assets away before any claims arise. When done properly, such a gift may succeed in transferring property while keeping it out of an estate that may face claims from creditors. However, creditors may try to claim the transfer is fraudulent if it is made after claims arise, if the gift makes you insolvent, or if you place limits on the gift such that you still maintain control over the assets.

In the business context, a basic strategy for protecting your personal assets is to operate businesses as limited liability entities, such as corporations or limited liability companies (LLCs), rather than as partnerships or sole proprietorships. However, be aware that if you blur the line between your personal finances and those of your company, you may open your personal assets up to creditors of your business.

At the family level, an important asset protection strategy is for a married couple to hold title to property as tenants by the entirety, rather than as tenants in common. This can prevent one spouse’s creditors from asking the court to partition the property. The laws on this vary by state, but in New York, third parties cannot partition a tenancy by the entirety. However, when a married couple may be subject to estate tax, there are reasons why owning property as tenants in common may be more advantageous.

 

Learn more about our services by visiting www.elderlawnewyork.com.


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How Divorce and Remarriage Affect Social Security Retirement Benefits

Tuesday, March 11th, 2014

People considering divorce as their 10-year wedding anniversary approaches should know that delaying the split until after the decade mark can result in higher Social Security retirement benefits for a spouse with a lower earning record.

Taking the example of a divorced couple where the ex-husband had a higher earnings record, if the couple was married for 10 years or more, then the ex-wife can receive higher benefits based on his record, provided she is age 62 or older and has not remarried.

Even if the ex-husband has not applied for retirement benefits, the ex-wife may receive benefits based on his record, provided they have been divorced for more than two years. If the woman remarries, then she would no longer be able to collect the benefits unless the later marriage ends.lawyer-or-notary-with-cl

Recent years have seen a rise in both marriages and divorces later in life, and statistics suggest that divorcing couples may take retirement benefits into account, as there is a measurable increase in divorce after the 10-year mark. As might be expected, the effect is most pronounced for couples nearing retirement age. A recent study found that for people 55 and older, there is an 11.7 percent increase in the likelihood of divorce at about the decade mark. For couples age 35 to 55, that drops to a 6 percent increase in likelihood of divorce at 10 years, and for people under age 35, there is almost no effect.

Other researchers are skeptical that many people take retirement benefits into account in their divorce decisions, pointing to studies that show that only 13 percent of people are very knowledgeable about how Social Security benefits are calculated.

Whether divorcing couples currently consider retirement benefits in timing their divorce, many advisers agree that they should. Divorcing just short of the 10-year mark could result in thousands of dollars in lost benefits, so it may be worthwhile for some to delay the process.

Financial considerations are often part of making decisions about divorce, so it is important to be aware of how Social Security benefits can be affected.

 

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Leaving Unequal Inheritances to Children Can Cause Problems

Wednesday, January 22nd, 2014

Many people creating or updating an estate plan are blessed with children and grandchildren, and enough assets to leave them a significant inheritance. However, deciding how to provide for future generations can lead to conflict, and much of that conflict stems from unequal treatment of children, whether it is intended or not. Here are a few pitfalls to avoid.

In some families, especially in previous generations, it was common to treat sons and daughters differently in regards to inheritances. A family business might be left to sons, while another asset such as a trust may have been created to provide for daughters. Needless to say, this can cause resentment and disputes. In modern times, such gender distinctions are less common. However, parents creating an estate plan often still choose to treat some children differently.

Parents sometimes consider providing for their adult children differently based on each child’s family income and assets. While this may seem like fairness, it is likely to cause resentment. It is, of course, one’s right to distribute one’s assets according to one’s wishes. However, parents may want to consider simply dividing their assets equally among their children. This simple solution can head off arguments and hurt feelings.

Distribution of assets to one’s children and grandchildren during one’s lifetime may be unequal for valid reasons. Paying for college may entail a greater cost for one child than for another. Helping to provide for grandchildren may mean that one’s adult children with more children of their own receive more help. These matters are best approached with openness and an attempt at fairness, keeping in mind individual circumstances.

When it comes to planning one’s estate, there may be a temptation to either mirror those inequalities by leaving more to adult children with more children of their own, or to make up for them by leaving something additional to one’s other children. However, the best approach may be the simplest: dividing one’s estate equally among one’s adult children, and providing that in the case of an adult child who has passed away, that any grandchildren receive that child’s share of the estate.

Passing on a family business may seem like a special case, but it need not be. If one or more adult child has had a special role in a family business, then that role will likely continue. Ownership of a family business may still be passed on to all adult children equally, with a child who has worked in the business continuing to be compensated for his or her work. Alternatively, a child who works in the business can receive ownership shares during the parents’ lifetime, so that the remaining family shares are distributed equally upon the parents’ death.

Passing on an inheritance to one’s children should be a cause for celebration rather than disputes. Making distributions as equal as possible is one way to keep it that way.

 

 

Understanding Asset Rules for Medicaid

Friday, August 17th, 2012

Many seniors take advantage of Medicaid for health insurance coverage, nursing home care, or, in the state of New York, home health care.  Because Medicaid is a joint program between the federal government and the states, it is important to understand the rules that apply where you live.  Here we will review the resource or asset rules that apply to the program for nursing home or home health care recipients, both generally and in the state of New York.

Individuals who have a disability, are blind or are age 65 or over, or who require nursing home care, must pass a resource test to be eligible for Medicaid.  In New York, in order to be eligible for Medicaid, a person’s assets must be $14,250 or less.  Income is restricted to $792 per month if the person continues to reside in the community.  Nursing home residents are permitted a small monthly income for personal needs.

Asset rules also apply to a nursing home resident’s spouse, known as the “community spouse.”  In New York, the Community Spouse Resource Allowance (CSRA) is $74,820, or half of the joint assets of the couple, up to $113,640 in countable assets.

The community spouse is also entitled to a small amount of income, what is known as a minimum monthly maintenance needs allowance (MMMNA).  For income in excess of the MMMNA, 25 percent may go to the cost of the nursing home resident’s care.

Assets that do not count against the resource limits are those defined as “noncountable,” including personal possessions like furniture and clothing.  A primary residence and an automobile can be considered noncountable, with certain restrictions.  Prepaid funeral arrangements, some life insurance, and assets that are “inaccessible” can also be considered noncountable.

For more information about New York Medicaid rules, visit http://www.health.ny.gov/health_care/medicaid/. For more information about our elder law services, visit www.elderlawnewyork.com.

Planning to Retire Soon? Create a Retirement Checklist

Monday, July 16th, 2012

If you are considering retiring within the next five years, now is the time to create a retirement plan.  Many seniors say they wish they had planned more carefully for retirement.  There are several things you can do now to make sure your legal and financial affairs are in order when you retire.

Define Your Financial Goals

Naturally, one of the most important considerations in planning for retirement is safeguarding your financial security.  That means defining what you expect your lifestyle to be during retirement, and how your financial goals will be met.  You will want to consider factors such as how you will allocate money from your savings to supplement your retirement income, the possibility of rising health care expenses, and the effect that inflation may have on your purchasing power.

Your retirement plan will need to include a budget and an asset allocation strategy, and you will need to consider how to balance different sources of income and benefits, including Social Security, Medicare, and your own assets.  If you are employed, one thing you can do to maximize your savings is to invest as much as you can in your 401(k) before you retire.  Your employer can be a valuable source of information on how best to make use of your 401(k), and what benefits you will receive in retirement.  If you are married, then you and your spouse should create a joint retirement plan.

Create an Estate Plan

If you do not already have an estate plan, now is the time to create one.  Before retirement, you will want to be sure that you have taken the necessary steps to ensure that your assets will be distributed according to your wishes, through the execution of a will, and the establishment of any trusts that would benefit you and your family.  It is also important to establish a durable power of attorney, designating a person to make decisions for you in the event you become incapacitated.  Through a living will, you can issue specific instructions for what is to be done in certain medical situations.  An estate planning attorney can help you create a holistic plan for the management of your assets.

Retirement is something to look forward to, and something to plan for carefully.

To learn more about our elder law services, visit www.elderlawnewyork.com.

Pros and Cons of Joint Accounts

Monday, February 8th, 2010

If you’re thinking that joint accounts are a foolproof way to escape probate and funnel dollars to loved ones as a sort of “poor man’s estate plan,” think again. Sometimes a joint account is an excellent option. But the instrument has its pitfalls as well, and if misused or entered into without caution, joint accounts can pose serious risks. Adding a loved one to a bank account may seem like a prudent action, but such actions can impact Medicaid planning or even make your account “fair game” for your loved one’s creditors.

There are viable alternatives to joint accounts. A consultation with your attorney practicing Elder Law may suggest a durable power of attorney or a well-considered trust instrument.

To learn more about New York Elder Law, NY Elder Law, New York Elder Care, NY Elder Care, or New York Estate Planning visit http://www.elderlawnewyork.com.