When a married person applies for Medicaid, the government looks at the collected, or, pooled, resources of the two to determine if one of the two spouses is eligible for Medicaid. If the combined income of the two spouses is above the income threshold set by law, the balance must be paid to the nursing home of the dependent spouse.  But what income provisions are allowed for the spouse who remains in the community?  What do the get to keep?  Is the community spouse allowed to tap into the income of the dependent spouse if his/her income is not enough?


The legal, financial benefits that allow for the community spouse to keep a certain amount of income has the terrible name of spousal impoverishment standards. This contains an amount of money, known as the minimum monthly maintenance needs allowance (commonly known as or referred to as the MMMNA). The figure from July 1, 2015 to June 30, 2016 is $1,991.25 per month. Starting on January 1, 2016 the maximum monthly maintenance needs allowance is set at $2,980.50 per month. This is the maximum the community spouse may keep before being required to contribute to the medical needs of the dependent spouse (NOT minimum, so not to be confused with the MMMNA).




If the community spouse makes less than the minimum amount, he/she may keep all of that income, plus tap into the dependent spouse’s income to insure that their income rises to that minimum monthly maintenance threshold. If the community spouse can establish that their housing costs are more than 30% of their monthly needs, then the community spouse can add that additional amount for excess shelter allowance. The formula or means by which the community spouse determines their income is called the Community Spouse Monthly Income Allowance (also known as the CSMIA). To determine the CSMIA involves four steps:

  • First step – Determine minimum monthly community spousal need. As noted, from July 1, 2015 to June 30, 2016 that figure is $1,991.25.
  • Second step – Add any additional shelter costs that exceed 30% of their monthly need. Say for example the community spouse can establish that their housing or shelter costs $1,000. 30% of $1,991.25 is (rounded) $598. So the excess of that is $402 per month.
  • Third step – Add the first two steps above together. In the example provided the sum is (rounded) $2,393. Since this amount does not exceed the maximum monthly maintenance need, the community spouse keeps this amount.
  • Fourth step (if needed) – If the community spouse made less than the MMMNA, you subtract this amount from the figure from step three above. In the simple example above, say the community spouse earns $1,000 per month. Subtract $1,000 from $2,393, which equals $1,393. This is the amount that the community spouse may utilize of the dependent spouse.


If for any reason this amount exceeded the maximum monthly maintenance need,the community spouse would only be entitled to keep the maximum monthly maintenance amount and provide anything in excess of the maximum monthly maintenance amount for the care of the dependent spouse.
Medicaid planning is intricate and extraordinarily fact sensitive. Only a consultation with an experienced elder law attorney will do to provide the level of assurance and peace of mind needed.  

As the new year opens it is a good time to review all of your legal estate planning decisions and tweak any previous documents that you think need to be modified. This requires us to get back to the basics of estate planning . For those scenarios that deal with what happens to you in an emergency situation, you have an advanced medical directive, with some level of specificity but not too much. The term advanced medical directive is an umbrella term that encompasses several types of legally significant documents. One of them is a living will. Your living will tells the medical professionals who are treating you, what your wishes are in advance for any number of medical situations.




Underneath the umbrella term of advanced medical directive, there is also the health care proxy. The health care proxy allows for you to appoint a trusted person to act as a decision maker for those scenarios that are not contemplated in your living will and if you are unable to make any medical decisions by yourself. Medical conditions change, different doctors have varying opinions as to the best course of treatment or even over the correct diagnosis. Having a health care proxy will have someone stand in for you to make the best decision under the circumstances. You can limit the authority that you give to the person or only permit the health care proxy go into effect after certain conditions or triggers occur.




Underneath the umbrella term of advanced medical directive is another document of legal significance, the do not resuscitate order. For some a do not resuscitate order may be fitting for religious or other reasons. There is nothing legally inappropriate for a person to include their do not resuscitate order in their living will or in a separate document. Whether it is separate, from the living will or both is of no legal consequence.




The general power of attorney may or may not be a good fit for you depending on any number of factors. It does act as a safety net for any and all situations, such as to empower your health care proxy agent to negotiate with the health insurance company in the event they denied some service, such as medical transport or a physical rehabilitation. It may allow for the person to redirect certain public benefits into different accounts, depending on your needs. It may also allow for someone to care of the young children on an emergency basis if you are incapacitated and they have medical or other needs themselves that need to be taken care of. The general power of attorney helps to fill all cracks in the documents that you created, to allow for truly wrap around services for you in any emergency situation.


It is good practice to forward and review all of your documents that encompass your advanced medical directive (living will, health care proxy and if any do not resuscitate) with your primary care physician. Of course all doctors are busy professionals so make sure that you inform your doctor’s office receptionist that you are making an appointment to review your advance medical directive. It is always best to listen to the advice of any professional that you engage with, obviously including your primary care physician. That does not mean that you have to do everything that they suggest as it may not be fitting for you personally. But it should always be food for thought. Hospitals often ask about a do not resuscitate order when a person is admitted as well any advanced medical directives. The same holds true for your attorney. It is best to review all of your documents with your attorney and make any recommended changes that you are comfortable with.

In today’s society it is common, to say the least, to have a single parent household. Most of the time the parents are divorced or simply not together and one of the parents is less hands on than the other. Perhaps this is a because of distance, as the other parent may live quite some distance away or perhaps due to work obligations and can only physically parent a month or two out of the year. Then there are truly single parents insofar as the other parent has passed away or perhaps the other parent is just not in the picture for any number of reasons or there is a history of domestic violence and the other parent’s custodial rights are extremely curtailed.  


For this population, their will serves not only to memorialize how they want their possessions and property to be disposed of, it also allows for them to indicate who they want to take custody of their children.  To be sure, if the other parent is named as the father/mother to the child and the primary custodian passes away, the other parent has the legal authority to take custody, absent good cause. There are, however, other ways of addressing these concerns outside of the four corners of the primary custodians will. Enter the standby guardianship which was specifically designed in response to such situations.




New York has a standby guardianship law, which creates a safety net for the children to insure that their basic everyday needs and well being is met in the event the primary custodian cannot care for them. New York was the first state in the nation to create such a law, which was originally designed to address the needs of those suffering through the AIDS epidemic in the 1980s and 1990s. It’s utility is obvious. For single parents who may have a terminal illness and are concerned more for the future of their children than anything else, the standby guardianship may indeed be the perfect legal device.


While there is a need for a standby guardian to obtain court approval via a Court Order, they have some breathing room to insure that their actions are legally proper and the immediate needs of the children are met. If the parent has a progressive terminal illness or condition, they may not be able to care for the child even before they pass away. The standby guardian can be there to do what needs to be done. In many ways, the vehicle of the standby guardian is superior to a typical custody Order, as a custody Order may entitle the non-parent custodian a right to custody in the future, even after the parent is able to reobtain custody, on grounds that the non-parent custodian stood in loco parentis. Absent a standby guardian, after a single parent passes away, it is likely that the children may go into foster care, which will only magnify any emotional distress the children are already experiencing. The standby guardianship can go into effect at any time that the parent and standby guardian define in the guardianship documents; perhaps on a date certain or if the single parent’s medical condition deteriorates past a certain point.

As with any decision regarding such important issues it is best to consult with an experienced estate planning attorney to insure that your intentions and decisions are given full legal effect.

An intentionally defective grantor trust is an extremely effective tool that accomplishes multiple objectives. First, it helps to minimize gift or transfer tax liability that a person may have to pay if the asset passed through normal probate process or it were gifted to the intended recipient. Second, it helps to step up the cost basis, which can be extremely valuable if the asset grew in value and then stabilized. It is often an effective tool for a small business owner who seeks to pass his/her business on to children or grandchildren. It is even more fitting if the same small business grew in size but then stabilized in value.


But, the question has to be asked. What’s with the reference “defective” in its name? It certainly is not a name conducive to marketing its rather impressive abilities. The term does not refer to something being broken (or busted).  The term defective has a simple explanation, it is defective as to income tax liability. To state it in the inverse may help to explain it better; the trust is effective for estate tax purposes. In other words, the trust does not eliminate all taxes in that the grantor still pays the income taxes generated by the asset that is the corpus of the trust, but it does eliminate estate tax liability. Furthermore, it is a “grantor trust”, as defined at 26 U.S.C. § 675, meaning that it satisfies the legal definition of a grantor trust.




The transaction has to be structured properly to allow for the avoidance of gift tax liability. A good example is small business owner – let’s call her Deb – wants to ensure that her kids inherit her very lucrative company that specializes in providing services to disadvantaged, inner-city children. Deb sells her company to the trust, in return the trust gives Deb a promissory note. 26 U.S.C. § 675 establishes that a trust is a grantor trust for income tax purposes if the owner maintains control over the asset in a non fiduciary capacity. As such, even after the sale, Deb maintains control over the business to insure that the promissory note is paid in full.


However, when the income tax liability is due for Deb’s business over the next several years, it is paid for by the money that is due to Deb from the promissory note. Ideally Deb wants the promissory note to pay the same amount as is due to for the income taxes. Precision is possible but getting a figure that is approximately the same as is due for the income tax of the business is more likely. Deb’s children will also realize an added benefit for this transaction. Since Deb sold the company to the trust for its true market value, it has a stepped up or heightened cost basis. That means that if and when Deb’s kids takes over sole control of the company and the trust transfers the company out of its portfolio, they will have minimal, hopefully zero transfer tax liability.

As with any estate planning decision, it is best to consult with an experienced estate planning attorney.

It happens often enough that a parent for many reasons decides to disinherit one, several or all of his/her children.  At the same time, this is often not a controversial decision and is just as common both understandable and predicable.  Perhaps a person promised their estate to a specific child, stepchild or niece or nephew for taking care of them instead of being required to be sent to a long term continuing care facility.  Perhaps the parent provided financial largesse to his/her via college education, graduate school and even helped them purchase a house but had one child who had special needs who always lived at home and insured that child’s future by funding a trust during his/her lifetime and then disinherited all of his/her other children by putting the whole of the estate into the trust.  


Mickey Rooney was a very well known and well paid actor that had a long career, with many children and many marriages and disinherited his children.  He instead left his estate to his stepson and explained that his kids were better off than he was.  By the time Mr. Rooney passed, his estate dwindled to just about $18,000, so there was little incentive for any of his kids to contest the will, although the same did not hold true for Mr. Rooney’s then current spouse.  Unfortunately for some families, this can be a shock and there are sufficient incentives for the family to contest the will.  




Louisiana is the only state that allows for a disinherited child to elect to take a statutory share against the stated wishes of a parent’s will.  If the parent did not dispose of everything in the will, due to perhaps an heir predeceasing him/her, the children may inherit that property via intestacy statutes.  If a parent, however, leaves all of his/her property to someone else via his/her will, the only thing the child/children can do is to invalidate the will.  In New York, if a person dies intestate – meaning without a will – the spouse inherits the first $50,000 and half of the remainder.  The children then split the other half between themselves.  The child/children must also consider if there was a previous will, and, if so, what treatment is afforded to them in that will.  But the matter gets more complicated from there.  Property held in joint tenancy (with a business partner for example), by the entireties (held as a marital asset with the spouse) takes those assets out of the estate.  




There are many many factual scenarios that enable a party to contest a will.  The first consideration is who may contest the will, or, more properly stated, who has standing to contest the will?  In New York, only people who have a material interest that may be prejudiced if the will as written is fully probated.  Perhaps the heir stands to inherit more if the intestacy law controlled or perhaps the heir stood to gain more under an older will.  There are several grounds to contest the validity of a specific will:


  • Undue influence, coercion or duress;
  • Revocation;
  • Incapacity or lack of capacity;
  • Fraud;
  • Forgery; and
  • Improper execution.

Think about this, you were born to your mother and father. At a wee young age your mother and father separated and your mother raised you. Nothing unusual there. Say then your mother later married another man and he started to raise you as his own; while your stepfather may have always been known as a stepfather, he still loved you and treated you as his own without distinction as to his own biological children. Then at a certain point your stepfather moves to adopt you. Adoption can be a lengthy process, with a mandatory minimum three month waiting period. During that process your stepfather passes away intestate. You are not legally his child so there are no inheritance rights; so what do you do?


Perhaps you seek various government benefits that you would be entitled to if you were adopted, such as Social Security benefits if you are still a minor, benefits through the Veterans Administration, et cetera. This scenario is entirely plausible and actually happened in the case of Matter of Mazzeo, 466 N.Y.759 (A.D. 3rd Dept 1983). Mazzeo shows some of the problems that goes beyond what was outlined above, in that in Mazzeo after the necessary parties filed the adoption petition for an adult adoption, the stepmother (Rose Mazzeo, hereafter Mrs. Mazzeo) passed away intestate and her niece filed for letters of administration, claiming that under New York’s intestacy statute, Mrs. Mazzeo’s only surviving heirs were her five nieces. The stepson (Joseph Mazzeo, hereafter Mr. Mazzeo) opposed this move and claimed that he was equitably entitled to be considered the child of the deceased. The New York Appellate Court agreed with Mr. Mazzeo and found that under principles of equity, or, fundamental fairness, an adoption should be construed for purposes of considering Mr. Mazzeo as the heir to Mrs. Mazzeo.




Many states and territories have statutes or case law that enable Courts to find an equitable adoption. Even federal Courts recognize and enforce this legal principle, as found in Kuchenig v California Co., 410 F.2d 222 (5th Cir. 1969). Moreover, it is a doctrine with a long history. In fact one of the best quotes describing equitable adoption in New York case law comes from New Jersey case law from 1933, which states, in essential parts, equitable adoption will be found where there has been “full and faithful performance” but was never memorialized with a formal Judgment of adoption.


With the death of the parent, however, “equity and justice” require that there be a finding and the law and Courts treat the child as if there was an adoption and the child be entitled to the same rights of inheritance that is not disposed of by will and be treated as a natural born child. Burdick v Grimshaw, 113 NJ Eq. 591, 595 (Ch. 1933), as quoted in Matter of Riggs, 109 Misc. 2d 644 (Surrogate’s Court, 1981). No doubt it is a fact sensitive determination that a Surrogate’s Court must carefully weigh after hearing all of the evidence.

If you believe that you are entitled to an inheritance but for formal adoption proceedings memorializing this arrangement, you must speak with an experienced estate planning attorney today.  Any delay could be to your prejudice.


Contrary to the European model, American parents are legally free to disinherit their children, but at the same time, they cannot simply forget or omit their children in their will by mistake. If the child is specifically addressed in the will and, at the same time, the will either fails to pass any property or assets on the child or specifically disinherits the child, there is nothing that the child can do to inherit something from the estate, aside from invalidating the will and potentially inheriting under the intestacy statutes. Children born after a will is created and not properly addressed in the will, via language that is expansive and inclusive that undoubtedly includes even children born or adopted after the specific will is created are referred to in the law by the ungainly term pretermitted children.


Not surprisingly it comes from a latin verb meaning to overlook or forget. New York’s law that addresses pretermitted children and found at NY EPTL §5-3.2, only addresses children born after the creation of a last will and not otherwise provided for by other means, such as life insurance proceeds, a trust or other assets. The children that fall under the pretermitted law protections are entitled to whatever the other children who are addressed in last will. Oddly enough, if the children born before the creation of the will are mentioned but unprovided for, the pretermitted child will not inherit anything. Indeed, the law specifically addresses this possibility, insofar as it indicates that “(1) If the testator has one or more children living when he executes his last will, and: (A) No provision is made therein for any such child, an after-born child is not entitled to share in the testator’s estate.” NY EPTL §5-3.2. Certainly there are many problems with this, insofar as some parents specifically disinherit their children. Anna Nicole Smith disinherited her son in her last will and then had a baby daughter only a short time prior to her passing away, without any change in her will.




It is a rather common scenario for a person to create a will, forget about it and move on with life by having kids, buying a house, investing in a retirement account and growing their assets. A number of celebrities left these problems in their wake by their failure to properly plan.


This blog reported on the problems with Philip Seymour Hoffman and Paul Walker in the past. Heath Ledger was another famous celebrity with similar issues. Fortunately for Mr. Ledger’s daughter, Matilda, she had a very altruistic family. Mr. Ledger’s family clearly live the adage that just because you can do something does not mean you should do it. There are many people, however, who would handle things differently, even if they were still altruistic, in that they would perhaps create a trust wherein they are the trustee or somehow or another exert control over the money. The remedy to all of these issues is simple and obvious, have an experienced estate planning attorney review all of your estate documents to insure that there is a coherent plan and the legal documents properly effectuate these plans. Furthermore, it is best to review these documents on a periodic basis in light of major, life changing events, such as marriage, divorce, the birth of children or grandchildren, et cetera.  


It is known by many different names, depending on the state and the era. Most recently it made its appearance in news headlines with the name – intentional interference with expected inheritance, sometimes even shortened it IIEI. The United States Supreme Court referred to it as “a widely recognized” cause of action and as the “tort of interference with a gift or inheritance” in the Anna Nicole Smith case. Marshall v. Marshall, 547 U.S. 293, 296 (2006). The matter has surfaced in the news over at least the last century, most famously (perhaps infamously) in the Father Divine case in New York, in 1949. Latham v. Father Divine, 299 N.Y. 22 (1949).


The American Law Institute published the The Restatement of Torts (Second) of Torts in 1979.  That was the first time that the tort, known by many names, was formally recognized as such. Prior to this, the principal and concept was recognized but only in the most egregious of circumstances. There are several seminal cases that speak to the larger concept, one of which was the New York case dealing with Father Divine case noted above.


The vast majority of Trial Court cases barely survived dismissal for failure to state a claim, as the right to such a cause of action was in question, despite the seminal cases. The law is a living thing that evolves and even comes around waves. As one of the twentieth century cases that broke the mold of nineteenth century reasoning noted that under Roman Law, interference with inheritance was a criminal act.




New York Law does not recognize this cause of action per se. The New York Appellate Division of the Supreme Court summed it up perfectly when they held that no such cause of action exists in the state for tortious interference with an inheritance. It will, however, create a constructive trust for the intended heir under certain equitable circumstances. Schneider v. David, 602 N.Y. 2D 130 (1993). Is this the same thing? For example, Iowa permits such a cause of action, which is litigated in its Trial Courts, not its Probate Court, allowed for attorney’s fees and punitive damages for intentional and malicious conduct. Huffey v. Lea 491 N.W. 2D 518 (Iowa 1992).


The difference between whether a case is litigated in front of a probate judge versus a trial court matters, insofar as you are entitled to a jury in a trial court. In addition, attorney’s fees and punitive damages also matter, but, probate court judges could award attorneys fees if the case warrants it. But the measure of economic damages, which is indeed the merits of a case, is still the same. To further elaborate on New York law, the 1988 case of Dawson v. Vasques quoted the 1919 case of Beatty v. Guggenheim Exploration Co. which stated that equity requires that a constructive trust be created, but it is nothing more than the means by which fairness acts and that it will not “restrict itself” to any specific form of harm for which it will provide justice. Instead, equity will fix whatever chicanery that people can implement.


For more information all all issues related to inheritances, wills, and trusts, be sure to reach out to a NY estate planning attorney today.



It is not an uncommon scenario for a middle class family of even modest means to own a vacation home in another state. For those of us who love to ski, hike and explore, mother nature’s wonders on horseback, Vermont and Wyoming may be your choice. For those of us who can never tire of beaches, the ocean and sun, California, Florida or maybe even the Carolinas are for you. Even more of us own timeshares and similar properties throughout the country.


Most of us never stop to think about what it takes to insure that these properties pass via a will without complication. Whenever a person lives, or, to couch it in lawyer lingo “domicile” in a state (and own the vast majority of their property in that state) their estate should go through probate in that location. The vacation property in the other state, however, will likely not pass as desired and outlined in the decedent’s will without opening an independent probate proceeding in that state. This secondary proceeding to insure the proper passing of the property in that state is commonly called “ancillary probate“.




There are many ways to avoid all of the potential problems that may come with the transfer of your property to your heirs. Real estate transfer taxes change, attorneys fees are rarely something that can be planned for in advance, valuations fluctuate from year to year and may be wildly erratic depending on the nature of the property and the location of the property. None of these expenses and precious few others are fixed costs. It is, therefore, difficult to predict the final cost to your heirs. In the meantime, it may not be possible for the heirs to use the timeshare or the vacation property and yet taxes and maintenance fees are still incurred.


As such if you own simple property such as time shares or a simple beach condo, some may advise you to add an adult heir as joint tenant with the right of survivorship to the property title. Certainly there are expenses related to such a transfer, but the costs are greatly reduced, can be accomplished at a time of your own choosing and with a known cost structure. However, one of the downsides to this is to open that property up to potential claims by the new joint tenant’s judgment creditors.


Another method to insure transfer of title to the property with reduced costs and complication is to place the property in a revocable trust, with you as the trustee. You have complete dominion and control over the property during your lifetime in the event you decide you want to sell it, rent it or let a friend or family member live there. You can insure that the property will pass to heirs who are minors at the time of your passing in the event you want to pass it on to grandchildren, young children or nieces or nephews. As with adding a joint tenant, the cost to transfer title from you to the trust is drastically discounted compared to probate, with the added cost of ancillary probate proceedings, again, you can control the timing for the transfer of the property to when it is most opportune to do so and the costs for these endeavors come with a known cost structure.  


Trusts are valuable estate planning devices that allow for the transmission of wealth with lower tax liability. When proper estate management is picked, they also allow for the creation of future income, potentially allowing for the life of the trust in perpetuity. Trusts also allow for the beneficiaries to benefit from the income of the corpus of the trust, yet insure that their creditors cannot obtain the income producing assets itself. The same also applies for a financially irresponsible beneficiary, in that it provides income but prevents the financially irresponsible beneficiary from squandering the income producing asset. One of the most popular types of trusts is the irrevocable trust. As with anything in life, there are upsides and downsides; one of the downsides to an irrevocable trust is that in most circumstances, and, more particularly, most states, an irrevocable trust is usually irrevocable. Unwinding an irrevocable trust when it no longer functions as it should, due to, for example, a major change in the estate and gift tax law is possible but must be done correctly, whereby the assets from the trust may be transferred or gifted to the beneficiaries or the settlor if still alive.


There are times when a trust no longer accomplishes the stated intention of the settlor. For example, in December 2010 Congress raised the estate tax exemption to five million dollars, but for only two years. So, at the end of 2012 many people thought that the estate and gift tax exemption was going to go back down to the previous one million dollars and thus created irrevocable trust.

With hindsight we now know that Congress made the then hitherto heightened estate and gift tax exemptions permanent. In addition, in 2011, Congress allowed for a surviving spouse to inherit any unused estate tax exemption. Prior to this, individuals believed that the much lower estate and gift tax exemptions would remain and created trusts optimized to the then lower tax amount. Finally, let us not forget that personality conflict occurs. Sometimes there may be very valid professional reasons why a beneficiary may want to do things according to a certain school of thought, while the trustee favors the opposing school of thought.


New York law allows a settlor to amend or revoke an irrevocable trust if he/she obtains the informed, express consent permission of the beneficiaries. If the beneficiaries include a minor, the law forgoes the need for informed, express consent of the minor if the amendment or revocation is beneficial to the minor. If it is the trustee that wants to amend the terms of trust by “decanting” or transferring the assets from the trust in issue to a different trust, he/she may do so, although the means by which he/she goes about doing so depends on the specific authority granted to the trustee. Assets can be transferred to a different trust. If the terms of the trust grants the trustee discretion to invade the corpus of the trust for the benefit of the beneficiaries, provided that three things occur:

  1. that the beneficiaries current right income is not negatively effected; and
  2. the choice is in the interest of the beneficiaries (“objects of the trust”); and
  3. the amendment does not reduce the trustee’s responsibility to exercise reasonable care or otherwise increase the trustee’s commission.

The document that memorializes this change must also mention whether some or all of the corpus of the trust is effected. If only some then the percentage of value of the trust effected must be noted.

As with any trust creation or modification, it is best to consult with an experienced estate planning attorney.

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