Posts Tagged ‘estate planning’

It’s Time to Protect Your Family and Your Future: April is National Financial Literacy Month

Monday, April 1st, 2019

Estate planning is a financial process that can protect you and your family, and is a very important component of your overall financial planning. April is National Financial Literacy Month 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.


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.

2. 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
  • Advanced Health-Care Directive or Health-Care Power of Attorney


Check with your financial advisors for updated information.

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.

These materials are provided as a public service by The NAEPC Education Foundation for “free-use” on websites, newspapers, newsletters, magazines, and other media broadcasts during the months of April and October as it relates to National Financial Literacy Month and National Estate Planning Awareness Week. For additional information or materials contact us at The NAEPC Education Foundation.

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Comparing Different Options in Life Insurance

Wednesday, March 18th, 2015

Certain forms of life insurance can be used as an investment and estate planning tool as well. Understanding the different options, term life insurance and permanent life insurance, can help to protect your family’s economic security in the event of an unexpected death.

Term life insurance
Term life insurance is pure risk protection, and it is what many families consider to be essential. The premium is paid for a certain term, or number of years, and the death benefit is paid out only if the insured person dies before the term ends. Term life insurance is much less costly than permanent life insurance, for the simple reason that the insurance company expects to only have to pay out the death benefit for about five percent of policies.

Within term life insurance, a common type is guaranteed level premium term life insurance, in which the annual premium remains the same for the entire term of 10, 15, 20 or 30 years. Insurance companies may also offer return premium term life insurance. With this type, some of the premiums paid are returned if the policyholder outlives the term, minus fees that the insurance company retains. This type of term life insurance is more expensive.

Permanent life insurance
With permanent life insurance, there is no fixed term, and the policy is in place for the insured person’s entire life. As long as the premiums are paid, then a death benefit will be paid when the person dies. Because the insurance company knows it must pay out a benefit, the premiums it charges are much higher than for term life insurance.

Permanent life insurance is typically comprised of an insurance portion and a savings or investment portion. The insurance company invests part of the premiums paid, and the policy builds up a cash value on a tax-deferred basis. The policyholder can usually borrow against the cash value.

The basic form of permanent life insurance is known as whole life insurance. A more flexible form is known as universal or adjustable life insurance. With a universal life insurance policy, one may choose to pay premiums at different times and increase the death benefit. One may also select a fixed death benefit, or an increasing amount equal to the face value of the policy plus the cash value amount.


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Elder Law Attorney Bernard A. Krooks to Speak at Heckerling Institute

Monday, January 7th, 2013

White Plains, New York (January 10, 2013) – Bernard A. Krooks, Esq., a founding partner of Littman Krooks LLP, will be a guest speaker at the 47th Heckerling Institute on Estate Planning on January 14, 2013, at the Orlando World Center Marriott Resort and Convention Center, in Orlando, Florida.

Mr. Krooks will be speaking about the “graying” of Baby Boomers and their need for elder law services. Mr. Krooks will also discuss “Later Life Law” and how elder care attorneys can assist their clients with Medicaid options as well as other areas of elder care planning including retirement accounts, long-term care insurance and tax considerations and the use of trusts in elder law and special needs planning.

The Heckerling Institute on Estate Planning is known as the premiere U.S. conference for estate planning professionals, including attorneys, accountants, trust officers, insurance advisors and wealth management professionals. The program offers lectures and special sessions with comprehensive coverage of estate planning techniques and strategies, designed to allow attendees to customize their educational experience.

Mr. Krooks has been included among The Best Lawyers in America® for each of the last six years. He has been selected as a “New York Super Lawyer” since 2006. Krooks has received his AEP accreditation from the National Association of Estate Planners & Councils. He is a member of the Real Property, Probate & Trust Law Section and Tax Section of the American Bar Association. He is a sought-after expert on estate planning and elder law matters and has been quoted in leading publications such as The Wall Street Journal, The New York Times and Forbes, among others.

About Littman Krooks

Littman Krooks LLP provides sophisticated legal advice and the high level of expertise ordinarily associated with large law firms along with the personal attention and responsiveness of smaller firms. These ingredients, which are the cornerstone of effective representation and are necessary to a successful lawyer/client relationship, have become the foundation of the firm’s success.

Littman Krooks LLP offers legal services in several areas of law, including elder law, estate planning, special needs planning, special education advocacy, and corporate and securities. Their offices are located at 399 Knollwood Road, White Plains, New York; 655 Third Avenue, New York, New York; and 300 Westage Business Center Drive, Fishkill, New York. Visit the firm’s website at

Impending Changes Would Make Estate and Gift Taxes Apply to Many More Americans

Wednesday, December 26th, 2012

The rules governing taxes on gifts and estates are set for major changes at the end of the year unless Congress steps in.

The taxes, which currently concern mainly the very wealthy, will soon ensnare far more people if scheduled reductions in exemptions are allowed to go through. The exemption level for each tax is currently $5.12 million and is set to plunge to $1 million.

The lifetime exemption on gift taxes is also scheduled to make an identical drop.

The impending changes have prompted a frenzy of activity among wealthy Americans eager to make gifts and create trusts under current law, filling the calendars of estate planning attorneys and financial planners nationwide.

The estate tax rate is also scheduled to increase from a current top rate of 35 percent to a new top rate of 55 percent.

According to Congress’ Joint Committee on Taxation, the change in estate tax exemptions would make approximately 55,000 estates subject to the tax next year, compared to fewer than 4,000 estates under current law.

President Obama’s budget proposal of February 2012 called for an estate tax exemption level of $3.5 million and a top rate of 45 percent. It did not contain a recommendation for gifting exclusions.

Estate and gift taxes are not the only ones scheduled to change. The tax exemption for generation-skipping transfers and trusts would likewise drop from its current $5 million to $1 million under current law. In addition, trusts of this type currently can shelter assets from taxation for an unlimited number of generations, but President Obama has proposed limiting the effect to 90 years.

Most experts predict that Congress will not resolve the matter before the end of the calendar year, but any compromise reached in 2013 could be retroactively applied to January 1.

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Spend Time in Two States? Get Informed on the Laws

Wednesday, December 5th, 2012

Research can help avoid unwelcome surprises for you or your family

(as seen  in the Poughkeepsie Journal by guest columnist Bernard A. Krooks, Esq., Littman Krooks LLP)

We live in a mobile society, where it’s common to spend significant time away from home visiting the grand kids or escaping winter weather. New Yorkers comprise the single largest segment of Florida’s temporary residents, with many ultimately relocating on a permanent basis. But those address changes could complicate your estate planning, long-term-care arrangements and tax bill.

In general, if you spend183 days per year in a state, its residency laws kick in, so it’s important to keep track of calendar days. And if you decide to move permanently, you should check that the legal documents framed in one state will be recognized elsewhere.

Estate planning

The regulations governing trusts and advance directives vary throughout the country. Even a difference in the number of witnesses required to acknowledge a document can render it void. Doctors and hospitals have been
known to disregard the instructions contained in living wills and healthcare proxies that were drafted in another state. Banks could ignore directives from your designated financial agent. And it could be devastating to
the financial security of loved ones to discover that a relocation has rendered your prior planning invalid. If you have important ties to more than one state, be sure your estate planning documents explicitly describe
the situation. It’s also useful to consult legal counsel from the relevant jurisdictions. That ensures that advantageous differences in state law are considered, and it’s less likely that recent legislation will be overlooked.

Long-term care
Since Medicaid is often a major source of funding for long-term care, differing state guidelines could complicate a sudden, debilitating medical condition. Eligibility requirements, as well as covered services, often vary. In a
previous column, I discussed “filial responsibility” laws, which could potentially hold adult children responsible for their parents’ expenses. These are state-specific and evolving, so lapses in Medicaid coverage have the potential to result in big bills for the younger generation. Work through the scenarios with certified elder-law attorneys who can navigate the Medicaid systems of whichever states you or your parents are likely to call home in later years.


Another possibility is that more than one state will hold you liable for income or inheritance taxes. Residency audits are increasingly common, and New York is especially aggressive, with taxpayers expected to provide documentation that establishes where they’re spending their time. Nor is that the sole determinant. You must take active steps to relinquish New York residency— possibly including the sale of real estate —in order to establish another domicile. For many couples, second homes and frequent travel represent a lifetime’s hard work and investment. With some forethought, you can ensure that your chosen lifestyle doesn’t have costly, unintended consequences.

Bernard A. Krooks, Esq.,  is managing partner of the law firm Littman Krooks LLP (; 845-896-1106), with offices in Fishkill, White Plains and Manhattan. His firm collaborates with Solkoff Legal, P.A., Delray Beach, Fla., on dual residency issues.

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LGBT Retirees Have Additional Estate Planning Concerns

Tuesday, October 16th, 2012

Members of the LGBT community tend to save more money for retirement than the population as a whole.  But LGBT seniors planning for retirement also face unique concerns.

According to experts, people in the LGBT community tend to be higher earners, and have smaller families, some with no children.  While lower family expenses may make it easier to plan for retirement, LGBT couples without children may also have to plan for additional caregiver costs as they approach retirement age.

Although same-sex couples may now marry in New York, the federal government does not yet recognize those marriages, and this creates complications for LGBT couples in terms of tax and estate planning.

As one example, estate taxes in 2013 will revert to a $1 million exclusion.  When a heterosexual spouse passes away, his or her assets over $1 million can usually pass to the surviving spouse without being subject to the tax, but this federal right does not apply to LGBT couples, married or not.

Social Security is another concern for LGBT couples, as spousal benefits are not provided to same-sex partners.  In addition, federal pension plans do not provide for spousal benefits.  LGBT couples must also be careful when moving property into joint ownership, as this can result in a large gift tax.

With careful estate planning, there are solutions to many of these issues.  LGBT couples planning for retirement would be advised to seek the counsel of a qualified estate planning attorney familiar with the unique needs of the LGBT community.

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What Jim Morrison Can Teach Us About Estate Planning

Monday, June 18th, 2012

Perhaps surprisingly, looking at the life and death of a 1960s rock star can teach us a few things about estate planning.  Actually, it’s a lesson in what not to do.

When Jim Morrison died in 1971, he left a simple will bequeathing his entire estate to his girlfriend, Pamela Courson, provided she survived him by more than three months.  If she did not, then his estate would pass to his brother and sister.  Courson was Morrison’s primary beneficiary and his siblings his secondary beneficiaries.  Courson did survive Morrison by more than three months, but she died in 1974, and her estate then passed to her own parents.  Morrison’s parents unsuccessfully challenged the will, and Morrison’s brother and sister were left with nothing.  This may have been Morrison’s intention, but probably not.

At the heart of this problem is the question of what happens to a bequest when the beneficiary dies, and that depends on whether one has left a simple will, or engaged in more careful estate planning to create a trust or trusts.

In the case of a simple will, when the person who made the will, the “testator,” dies, the estate passes to the primary beneficiary, provided the primary beneficiary has survived the testator by the specified amount of time, and met any conditions specified in the will.  Once the primary beneficiary or beneficiaries receive the money, it is theirs to do with as they please.  They need not take the original testator’s wishes into account in drafting their own wills, or they may fail to draft a will at all.  Generally speaking, a secondary or contingent beneficiary will not receive anything from a simple will unless the primary beneficiary is ineligible to inherit.

Creating a trust provides a way to control the distribution of one’s estate much more carefully.  For instance, rather than transferring a significant sum directly to certain beneficiaries, the principal can be held in trust for the benefit of those persons until their death, at which time the principal can be diverted to other uses, such as the benefit of another beneficiary.  Many more potential future events can be taken into account by a well-designed trust, such as the marriage or parenthood of the beneficiaries.  Careful estate planning entails confronting these potential future situations, to be sure that your estate is put to the good use you intend.  Contact an attorney to learn more.

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