3:3 Reasons to Discuss Estate Planning With Your Ex
March 28, 2010
Creating an estate plan to protect your minor children is one of the most difficult—and most important—things you will ever do; this is especially true if you and your child’s other parent are separated or divorced. Relationships don’t always end amicably, but if you do have children it is definitely worthwhile to put aside your differences with your ex long enough to discuss estate planning for the sake of your kids.
There are three major things to consider when estate planning during or after a divorce:
- Financial inheritance
Guardianship: According to the law, if you pass away guardianship passes to your child’s other biological parent; this is the case even if you had full custody (unless it is determined that the surviving parent is unfit). This is something to keep in mind when you are nominating guardians. If you and your ex can sit down and discuss guardians together and agree on a few alternates it will make everyone (including your child) feel more secure about the future.
Financial Inheritance: Although many divorced couples may feel comfortable with their ex as guardian, most are dead set against their ex having any control over their finances. How then can you leave your estate for the benefit of your child without leaving it in the hands of your ex? The solution is to put your child’s inheritance in trust until they come of age, with a person you know and trust acting as trustee. Your trustee will have the responsibility to keep and maintain the trust, giving distributions to the guardian for the benefit of your child. Keep in mind that your trustee and guardian will have to work together quite often, if you and your ex can agree on someone with whom you both are comfortable it will make the process much easier on your trustee, your ex, and your child.
Remarriage: When you marry there is an inevitable mingling of finances, and this is no different for a second or third marriage. However, if you don’t make provisions for your children in your estate plan your assets will end up going entirely to your new spouse when you die, leaving your child(ren) out in the cold. This can be easily addressed in your estate plan (or your ex’s estate plan, if he or she is the one getting remarried) as long as you talk to your attorney and take action now, before it’s too late.
If you are going through or have gone through a divorce please call our office and let us help.
What Does the New Healthcare Legislation Mean for YOU?
March 25, 2010
Everybody knows the latest big news: President Obama’s healthcare reform bill was finally approved by the senate—for better or worse—and although politicians may still be arguing the benefits and evils of the bill across party lines, most Americans are asking one simple question: What does this legislation mean for me?
Many people whom I have asked have an opinion but it is based upon what a “talking head” said on one of the network or radio shows. I have been searching for a plain explanation without the political spin. I will keep looking. In the meantime, CNN Health attempts to answer that question and more in a recent article entitled (appropriately) “Answers to your questions on healthcare law.” At a time when everyone either loves or hates the bill, it’s not always easy to get a straight and non-partisan answer to a question that really has nothing to do with politics; but this CNN article does a good job of providing straightforward answers to many of the frequently asked questions, and explaining exactly how this bill is likely to affect you and your family now and in the years to come.
We know that many of our clients will have questions about this bill that go beyond those answered in this article, and we invite you to contact our office with any concerns you may have; especially about how this may affect your decision-making rights, legal healthcare documents, or Medicaid qualification. Whether you are a parent of young children worried about your health insurance, or a retiree facing the need to tighten your purse strings in your “golden years,” this legislation may have an impact on you; contact our office to find out how.
How to Choose the Right Nursing Home
March 23, 2010
A recent article in the New York Times calls choosing a nursing home for your loved one “one of the hardest [decisions] you will ever make;” and yet it is a decision that almost all of us will have to think about eventually (whether for a grandparent, parent, spouse, or for ourselves.) It is a decision that is made infinitely more difficult if you are forced to make it under pressure.
But choosing a nursing home doesn’t have to be the difficult and unpleasant decision we think it will be, not if you know what to look for, and have the time to really review all your options. Walecia Konrad, author of the article mentioned above, breaks the process down into four steps, and gives valuable advice on how to approach each individual step:
- Doing the research
- Visiting the homes
- Asking the right questions
- Consulting the experts
The home you eventually choose will be a very personal decision based on a number of factors; location, the preferences of your loved one and your family, health, and of course finances; but having all the right information—and confidence in your ability to evaluate that information—is a key part of making this very personal and very emotional decision.
On our website we have a link to “Snap for Seniors” (http://www.dutcher-zatkowsky.com/) which is an aid in searching facilities which meet certain criteria. Once you narrow your search, go to the NYS Department of Health website (http://www.health.state.ny.us/facilities/) to research violations and qualifications. Feeling comfortable that your loved one is in a good place is crucial to your peace of mind.
Estate Tax to Again Become an Issue in the House
March 19, 2010
Could it be that some movement finally happening in the House of Representatives with regards to the estate tax?
It looks like it may be, if we are to believe this recent article in Bloomberg Business Week. According to the article, the House Ways and Means Committee has plans to begin discussions in April (after the spring break) about former President George W. Bush’s tax cuts benefiting the middle class.
Of special interest to our clients is the section about the estate tax, found at the bottom of the article:
“…The committee would begin work to retroactively reinstate a federal tax on multimillion-dollar estates that expired Dec. 31. The legislation would likely seek an extension of a 2009 law, which applied a 45 percent tax rate on the value of estates that exceeded $3.5 million per individual… One possibility being considered… would let heirs choose to pay the capital gains tax that replaced the estate levy if that is more beneficial.”
Just one more reason to be sure you see your estate planner as soon as possible in 2010.
Protecting Your Parents, Protecting Yourself
March 18, 2010
Do you need long-term care insurance? You may think you’re too young to think about that quite yet, but what about your parents? If you’re reading this blog it’s likely that your parents are at an age where they soon may need some sort of care, whether that will be in-home care, nursing care, or even need to stay in a nursing facility; if your parents haven’t planned ahead for this eventuality, the burden for their care—either financial or physical or both—may fall on you.
It is for this very reason that a new trend in long-term care insurance seems to be emerging. According to this article by Stacy Schultz, there is an upswing in the purchase of long-term care insurance by the Boomer Generation—except the insurance isn’t for the Boomers themselves, it’s for their parents. “Many of them have just had a relative go through being in a nursing home, and they see the devastation and the stress it causes,” quotes the article. “They’re concerned about mom and dad, and if their parents don’t have a lot of means they want to buy insurance for them.”
If you are considering buying long-term care insurance, either for yourself or your parents, you have a number of options, especially compared to even just a few years ago. Forbes.com recently published an article outlining the improvements in long-term insurance, and what your options are if you’re buying it today.
Take an hour or two this month to talk to your parents (or your kids) and advisors about what the coming years have in store. You may not need long-term care insurance, but you will certainly need a plan, and it’s never a bad idea to know your options, especially when it comes to protecting your future. In the lives of many Boomers, protecting their own future also means protecting their parents’ futures.
NY Passes Family Health Care Decisions Act
March 17, 2010
New York law grants competent adults the right to decide about treatment, including the right to refuse treatment necessary to save or extend life. Adults have the right to appoint a person they trust (a health care agent) to decide about treatment if they lose the ability to decide for themselves. Adults can also leave advance instructions about treatment, such as a living will.
When patients cannot decide for themselves, and have not left advance instructions, health care professionals routinely turn to family members to consent to needed treatment. In most states, family members can also refuse life-sustaining treatment for incapacitated patients. Under New York’s do-not-resuscitate (DNR) law, family members and others close to the patient can decide about cardiopulmonary resuscitation. However, they have no authority to refuse other life-sustaining treatments unless the patient has signed a health care proxy.
On March 16, 2010, Governor David Paterson signed into law the long awaited Family Health Care Decisions Act (“FHCDA”). The law will now give family members and those close to a patient the right to make important medical decisions without a health care proxy. The act was first introduced 17 years ago.
The legislation establishes a protocol for health care practitioners to determine whether a patient in a hospital or nursing home has decision-making capacity. When it is determined that a patient does not have decision-making capacity, the legislation requires the selection of a surrogate from a list of individuals ranked in order of priority, including family members, domestic partners and close friends. Various safeguards are required under the FHCDA to prevent inappropriate decisions, including procedures for a patient, family member or physician to assert objections to the selection of a particular person as a surrogate or to a decision made by a surrogate.
Without a statute such as the FHCDA, the common law of New York State provides that life-sustaining treatment cannot be withdrawn or withheld from an individual who has lost the capacity to make such decisions, unless clear and convincing evidence can be produced to show that the individual would have declined treatment if competent. An advance directive, such as a living will or a health care proxy, can serve as clear and convincing evidence of a patient’s wishes, but many people do not prepare such directives while they are competent to do so. It is estimated that, although most people think it is a good idea, only 20% of New Yorkers have a health care proxy.
New York had been one of the few states that prohibited family members from making health care decisions for incapacitated loved ones.
Each year, about 75,000 people die in New York without a health care proxy and lack the capacity to make their own health care decisions. It is preferable to discuss your wishes with loved ones and those you trust, and to sign a health care proxy appointing an agent to make decisions on your behalf. Without this law, some incapacitated patients were denied appropriate palliative treatment which could have improved quality of life and reduced suffering, while others were subjected to burdensome, highly invasive treatment that potentially violated their wishes and prolonged their suffering.
Please keep in mind, the new law is not a replacement for need for each person to have open and honest conversations with loved ones about one’s wishes for future medical care. Further, advanced directives are as important as ever as medical advances change the landscape of available medical treatments. Work with your doctor, your attorney and your trusted family members to insure that not only you have the proper advanced directives but that the patient’s treating physicians have a copy in the patient’s medical record.
Ensure Your Wishes for Medical Treatment are Followed: Share Them With Your Doctor
March 16, 2010
This time of year often involves spring cleaning for many families: reorganizing the closets, clearing the weeds and brush from the yard, and getting rid of all those boxes in the garage or basement. Spring seems to be a time to take stock and start fresh… at least in the home. But what about with your health?
We’re not talking about the diet you vowed to follow in your New Year’s Resolution, or trying to look good in that new bathing suit for summer; what we’re talking about is your annual checkup—taking stock of your health with your primary care physician and making sure you’re both on the same page with your instructions for health care and your advanced healthcare directive or living will.
When clients come into our office for an estate plan, we ensure that their healthcare instructions are completed as well; but the job doesn’t end when the document is signed. Your health care providers need to be aware of your wishes as well. The best way to ensure that they know and understand your wishes is to take a copy of your advanced healthcare directive or living will with you to your next check up and talk to your physician about it, then ask them to keep the copy on file.
A rule of thumb with healthcare wishes is to give a copy of your living will or healthcare directive to each of your primary care physicians, give a copy to each of the healthcare agents you’ve nominated, AND keep a copy or two on file to take with you if you ever need to go to the hospital. And of course keep the signed original in a safe place with the rest of your estate planning documents.
This timing of this post not only coincides with the sunny and warm weather we enjoyed today, but Governor David Patterson signed the Family Health Care decisions Act into law today! I will write more on this later this week. We strongly encourage everyone to sign a health care proxy, appointing someone to make health care decisions when they are lacking the capacity to do so. But if they do not, this new law enables a patient’s family member, including his or her domestic partner, to make health care decisions when the patient is not able to do so.
Sensible… Sentimental… Prenuptial Agreements?
March 14, 2010
Somewhere between Family Law and Estate Planning lie Prenuptial Agreements. These documents—once avoided at all costs by all but the super-rich as pessimistic or unromantic—are now considered by just about every financial advisor or specialist to be good financial planning, good estate planning, and just good sense.
Prenups are no longer just for the rich and famous, and they’re not for people “who will probably get divorced anyway.” A prenup is a good idea for the small-business owner, the older bride or groom with children from a previous marriage, the newly-graduated student with a huge amount of credit card debt, and the expectant heir or heiress. In fact, according to this article in USA Today even “Personal-finance expert Suze Orman encourages every engaged couple to get one to protect their current and future assets as well as to shield themselves in case a mate secretly runs up massive credit card debt (which could damage both partners’ credit scores).”
And we’re not talking about your parent’s prenups anymore. As with most things, prenuptial agreements have evolved over the years: “Some prenups touch upon more sentimental topics, such as who keeps the heirloom silverware received as a wedding present…” and “Some prenups address issues such as adultery, frequency of intimacy, limitations of weight gain, the scheduling of housekeeping and provisions for pets.”
If there is a wedding somewhere in your near future consider calling our office to talk about whether a prenuptial agreement might benefit you and your fiancé. Prenups may have a reputation as being unromantic, but what could be more romantic or loving than planning your future… together.
Do You Need A Will Or A Trust?
March 11, 2010
When it comes to estate planning there are two major vehicles for the distribution of property: A will and a trust. Both are very useful tools and can accomplish specific goals—but how do you know which one is best for your family? Which document you will need depends on a number of factors, some of which may seem completely irrelevant at first: the size of your estate, your goals for that estate, the age of your children, your marital status, your retirement account, and many, many more. But the first step to understanding which tool may be right for you is to understand what each document does.
A Will: A will is a formal declaration of your wishes. It is a document you create to declare the extent of your privately held property (it does not cover jointly owned property) and what your wishes are for the distribution of that property. You name an executor to carry out your wishes, and you can even include a nomination of guardian for young children in your will. A will does not go into effect until after you die; before then it is simply a piece of paper containing your private wishes. However, once you have passed away your will no longer remains private, it now becomes a matter of public record, available to anybody who would like to view it, and overseen by the court in a sometimes lengthy and expensive process called probate.
A Trust: A trust is a far more extensive tool than a will. In fact, there are many different kinds of trusts, each of which may be used for specific situations. Most trusts created for estate planning purposes are revocable living trusts (or RLTs.) An RLT is a document created not simply to distribute your property, but to own your property on your behalf, to be invested and spent for your benefit or the benefit of your named beneficiaries. As such, a trust takes effect as soon as you sign it and your property is protected by and subjected to the trust parameters as soon as you place them in the name of your trust. There is a lot of flexibility available with a trust, and yours can be created to fit your unique situation. Most RLTs name the trust creators as the initial trustees, nominating individuals or banks to take over as trustee when the creator becomes incapacitated or passes away. The benefit of a trust is that when the creator passes away, property is not merely distributed and that’s the end of it; the creator can instruct the trustee to distribute the money slowly and in any number of ways, even to the extent of creating new trusts for each beneficiary. Trusts can last for generations, as evidenced by the enduring Kennedy trusts.
Wills and trusts are necessary tools in estate planning, each one working in unique situations. Your attorney will be able to tell you which one is best for your family.
5 Ways to Enjoy Planning Your Estate
Creating a will or trust, healthcare documents, powers of attorney, etc., can sometimes seem overwhelmingly sad and serious. Well, the act of protecting your loved ones is very serious, but it doesn’t have to be sad. In fact, planning your estate can sometimes be downright enjoyable! Here are 5 ways you can enjoy planning your estate:
- Let the process of choosing and informing your fiduciaries (the people you will trust to be your executor, your guardians, your agents) forge stronger bonds with the people you love and trust the most. It can be the perfect excuse to spend more time with the friends and family you will be naming in your documents.
- Make it a time to go crazy with your dreams for the future: Your own retirement, goals for your children, and plans for your grandchildren. Have fun imagining the wonderful old-age you want—and then make it happen.
- Take the opportunity to learn more about your past—and record that past for your children and grandchildren. Talk to your parents and grandparents about their history and experience; then write it down—along with your own memoirs—and include it with your EP docs for your children to find.
- As long as you’re gathering important financial information and documents, keep the momentum going and use the time to organize your important files and information. Not only will this help you with your planning, it will make life easier for you every time tax season rolls around, and it will save your family and executor a lot of headache and heartache as well.
- The biggest reason to enjoy planning your estate is the simplest—it has to be done and it’s the right thing to do. When your estate plan is signed and complete it will be a weight off your shoulders because you will know you have done what is necessary to protect yourself, your family, and the people you love.