Lawyer Developing Online Estate Planning Game

June 11, 2014,

An attorney is developing an online game aimed at teaching its players about estate planning. Stephanie Kimbro has created a demo for the game, "Estate Quest," where the player is a detective who is given various cases about people who did not plan their estates correctly. The player is taken back in time and given clues about what the person should have done in his estate or written in his will. Examples include naming a guardian, specifying bequests to certain people, or naming an executor.

Using Crowdsourcing for Legal Products
Ms. Kimbro has been utilizing online crowdsourcing such as Rockethub as a means to develop her game. Crowdsourcing websites allow developers to explain their idea to everyone on the internet, and if people want to invest in the idea they donate money to the venture. Crowdsourcing is also a good tool for gauging interest in potential products. Ms. Kimbro is interested to learn about how crowdsourcing can be used to advance legal services projects, and she is using Estate Quest as a test product.

Teaching Estate Planning through Gaming
The goal of law-related online games such as Estate Quest is to teach people of all ages about certain topics in the law. Ms. Kimbro is also working with Illinois Legal Aid Online to develop a game that teaches its players about landlord/tenant law. She stated that the goals of these legal games are to:

· Empower players to prevent legal problems before they happen
· Award players with points that can be used as discounts for access to legal assistance online
· Increase access to justice through engagement and power of gaming to teach basic legal rights
· Build a fun game that may be played online in a social capacity with friends and family

A game like Estate Quest appeals to a younger, more tech-savvy generation, and it can teach players about important legal topics at a younger age. It also encourages younger players to play the game with older members of their family who may have a more pressing need for legal information about estate planning.

The animated game play also serves as a way to discuss sensitive subjects in a more approachable manner. One of the main reasons why so many people do not have an estate plan in place is because the subject matter is uncomfortable to talk about. Others attempt estate planning on their own without an experienced attorney because they do not wish to discuss final wishes or financial matters with others. Games such as Estate Quest can help to facilitate the conversation about estate planning as well as highlight the potential issues that can come with attempting estate planning on your own.

Samsung Heirs Facing $6 Billion in Estate Taxes

June 9, 2014,

When a family member faces a serious medical emergency or is nearing the end of his life his loved ones will often review the estate plan in order to make the necessary preparations for the present and the future. Reviewing a plan can give clarity to last wishes and a better understanding of what will happen in certain circumstances. However sometimes big surprises can emerge, which is the case with the Samsung fortune.

Recent Case Example
Lee Kun-hee is the current patriarch and leader of the Samsung conglomerate, known mostly for its production of cell phones and other electronic equipment, and his personal assets are valued at around $12.7 billion dollars. Samsung's revenues for 2012 accounted for over one-quarter of South Korea's overall gross domestic product. Earlier this month Mr. Lee, 72, suffered a serious heart attack and was hospitalized. According to the inheritance laws of South Korea, when Mr. Lee passes his heirs will be forced to pay up to $6 billion in estate taxes.

In the United States, gift and estate taxes are exempt up to $5.34 million and the top possible rate of taxation for the remainder is 40%. However, in South Korea the rules of estate tax are different. South Korea's top tax rate for its most wealthy estates is 50%, and the same types of exemptions do not apply. To put this potential $6 billion tax on Mr. Lee's estate into perspective, the United States only collected $16 billion in gift and estate taxes overall last year, and this single estate's tax bill would triple what the entire country of South Korea collected in estate taxes last year.

A major issue faced by the Lee heirs is public scrutiny if they attempt to restructure the estate. The Lee family has already been the subject of public outcry when the elder Mr. Lee went to trial and was found guilty of breach of trust and tax evasion. He had sold shares of Samsung SDS stock to his children far below market value, but he was later given a Presidential pardon. Any attempt at restructuring the estate now, when all of the information is public knowledge, would most likely lead to a huge backlash from citizens of South Korea and other stakeholders within Samsung.

However, there are options for reducing the estate tax bill or paying it off without relinquishing control of the conglomerate. The company that the children were sold stock, Samsung SDS, recently announced plans for an IPO that will most likely net the Lee heirs billions of dollars, and this money could be used to pay off the estate taxes of the elder Mr. Lee. Another option is to create charities or transfer large amounts of his estate into various foundations in order to reduce the amount of taxes owed. But because the options for avoiding the estate tax could potentially weaken the position of the Lee heirs within the Samsung conglomerate or cause public backlash it looks like for now as though the Samsung heirs will be forced to pay the $6 billion bill when it comes due.

Reminder: The Importance of Updating Estate Planning Documents

June 6, 2014,

The importance of having a thorough and complete estate plan cannot be overstated. Not only does it protect your wishes, it also ensures that your loved ones are provided for after you are gone. However, the estate planning process is not a one-and-done deal. It is also important to update your estate planning documents to reflect any personal, familial, or financial changes that have occurred in your life. The estates of some famous actors illustrate why it is important to have an updated plan.

The actor Paul Walker, known mostly for his role in the high speed franchise, "The Fast and the Furious," died tragically at the age of 40 in an automobile accident. At the time of his death, he was survived by his parents, his 15 year old daughter, and a girlfriend of seven years. Mr. Walker did have an estate plan in place with a pour-over will and trust set up for his daughter. Unfortunately, Mr. Walker set up his estate plan twelve years prior - the same year that his first hit franchise movie came out. Since then, his wealth had increased dramatically and he entered into a long-term relationship. Because his plans were never updated his daughter will be inheriting millions more than anticipated, his long-term girlfriend will get nothing, and the family does not have the direction to know what his true last wishes would have been.

Philip Seymour Hoffman provides another good example of why it is important to update your estate planning documents. Mr. Hoffman died at age 46 from a drug overdose earlier this year. At the time of his death he was survived by his companion of fourteen years and mother of his children as well as his three kids ages 10, 7, and 5. At the time of his death, Mr. Hoffman had an estate plan that was created in 2004. It provided for the eldest child who was the only one born at the time, and did not have any language that provided for the case of future children. His two pretermitted children, those born after the creation of the will, are now left in a precarious legal situation. In addition, since the creation of his estate plan Mr. Hoffman had gained significant wealth and acclaim from winning an Oscar and his successful movie career. He never updated his will to manage this new wealth, and as a result of the language of his will all of the assets that go to his longtime companion will be taxed once under his estate and again under her estate when she dies before it goes to their children.

By periodically updating an estate plan issues like the ones faced by the families of Mr. Walker and Mr. Hoffman can be avoided. When family events or financial circumstances change consider speaking with your estate planning attorney about updating your plan in order to accommodate these changes. It will ensure that your loved ones will receive all of the benefits intended and face no surprising legal problems with your estate.

Back to the Basics: Estate Planning for Adults & Children with Special Needs

June 6, 2014,

According to 2010 U.S. Census data, 56.7 million Americans, or almost 20 percent of U.S. residents, have a disability. Within this demographic, over 5 million adults need assistance with self-care and independent living activities, including difficulty getting around inside the home, getting into/out of bed, bathing, dressing, eating, toileting, managing money, preparing meals, doing housework, taking prescription medications, and using the phone.

More than half of those with severe disabilities who are age 15 to 64 receive some form of public assistance. Approximately 33 percent receive Social Security benefits and approximately 20 percent receive Supplemental Security Income (SSI) benefits. Some also receive other forms of cash assistance such as Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP) (formerly called food stamps), and public or subsidized housing.

Given the above statistics, many people who are making estate plans will be leaving money or property to someone with a disability who has a special needs situation. However, if the inheritance is not structured properly, the receipt of money or property can negatively impact a person with disabilities' eligibility for some public assistance programs.

Trusts
A trust is a legal document that directs the management and distribution of assets. The person or entity creating or funding the trust is called the grantor. The person who receives the benefit of the trust is called the beneficiary. The grantor appoints a trustee to manage the trust and distribute the trust's assets or funds for the benefit of the beneficiary. (The trustee can be a person or an entity such as a bank.)

Trusts are particularly useful in the situation where a beneficiary has special needs because a trust can provide financial resources without compromising eligibility for public benefits. On particular type of trust is called a supplemental needs trust (or sometimes a special needs trust). The special needs trust protects and perseveres financial assets that the individual with special needs inherits. It also separates the assets so that they are not counted for purposes of determining eligibility for public benefits such as SSI, Medicaid, and subsidized housing.

In addition to protecting public benefits, a supplemental needs trust can allow for vastly superior care options and opportunities for the person with special needs. These supplemental items can greatly enhance the person's dignity, productivity, and comfort. For example, trust funds can be used to purchase the following--

-clothing
-transportation
-personal care items
-education
-rehabilitation and therapy
-case management
-health insurance premium
-dental care
-phone and phone service
-television
-entertainment

Establishing A Supplemental Needs Trust
Supplemental needs trusts must comply with complex federal and state laws in order to be effective. They also require information regarding the specific situation and needs of the person with special needs.

However, in New York, the following general requirements apply to the formation of a supplemental needs trust:

1. The supplemental needs trust must be for the benefit of an individual under the age of 65 who qualifies as begin "disabled."
2. The trust is established by a parent, grandparent, legal guardian, or the court
3. The beneficiary with special needs with have no direct control over or access to trust funds
4. The trust must provide that, upon the death of the beneficiary of the supplemental needs trust, the state will receive the remainder of any trust funds up to the amount spent by the state for medical assistance to the beneficiary.

Proper estate can help you plan for the future security of a loved one with special needs. It is important to contact an experienced NY estate planing attorney.

Estate Planning & Technology - Including a Digital Estate Plan

June 4, 2014,

In the Information Age our digital presence and assets are just as important as our physical estate. Digital assets consist of all of our property that exists online. This can include brokerage accounts, bank accounts, PayPal, and online currency such as bitcoin. However, our digital presence extends far beyond that into other areas such as social media accounts, email addresses, online subscriptions, documents, photographs, and digital music libraries. Over 75% of all Americans have some kind of social media account or have an account on a social networking website. When creating an estate plan you need to consider what your wishes are for your digital assets as well as how you would like them to be handled.

The first step in creating a comprehensive digital estate plan is to identify and organize all of your digital assets. A simple way to track these assets is to create an Excel spreadsheet. You can break your digital property into categories in addition to having all pertinent user names, passwords, and other information necessary for access. Excel sheets can be password protected, so for those who are worried about other people gaining access to their online accounts a level of security can be added. Other people keep track of accounts and information in a small notebook or other non-digital means.

The next step is deciding who should be the "trustee" of these accounts. This is the person who would manage all of your wishes for your digital property. This person would distribute assets, delete or erase accounts, or continue to manage any digital accounts that you have. Typically, a family member or friend is named as trustee, but the digital assets could be broken into separate groups with a different trustee for each. The best person, or people, to choose are those who will handle the assets according to your wishes.

Providing access to the list of digital assets is also a consideration that must be made. If you choose to organize your assets on a password-protected Excel sheet or lock away a hard copy your trustee needs to know how to access the information or where it is located. For estate planners that are a little more tech savvy, a variety of online companies provide services for storing passwords and other online information. Some of these password manager companies include:

· Lastpass
· Dashlane
· PasswordBox
· Keeper
· Password Genie
· Passpack
· Deathswitch, and others.

The final aspect of creating a digital estate plan is providing instructions in the overall estate planning process. Using language in an estate plan that gives permission to the trustee or explains how to gain access to the digital list is a reliable way of ensuring that they will gain access to your accounts. You can also include as a part of your overall estate plan instructions for inheritance or bequeathing of specific digital assets. An experienced estate planning attorney will be able to seamlessly integrate your digital estate plan with your plan for the rest of your physical estate.

The New Generation of Estate Planning - Young, Wealth, and Childless

June 2, 2014,

For those who are single or childless, estate planning options are vast and often complicated. It is estimated that over 17 million people who are retirement age are unmarried or childless facing this very dilemma. However, a new wave of estate planners are now facing the same issues of those retirees - the young, wealthy, and childless.

Since the tech boom in the 1990s, a considerable number of young entrepreneurs are becoming millionaires and billionaires. Due to their financial circumstances, these people are considering financial and estate planning at a much younger age. The vast majority of this younger generation is childless, some are unmarried, and all are considering what will happen to their wealth when they are gone. Because of this shift in wealth, estate planning attorneys are now stressing income, instead of age, as a more reliable metric for when you should be drafting a plan for your estate.

The most important thing to this new generation of estate planners is flexibility. When planning for the future at this age, there is a higher chance of changing circumstances both personally and financially. The probability of starting a family or having swings in finances is much greater in a person's 20s and 30s than at the typical retirement age. Estate planning attorneys are now coming up with new and flexible options for this generation of young, wealthy, and childless clients.

Besides providing for extended family and loved ones, the most popular option is charitable donation. Many want to participate and donate to charitable options like the Giving Pledge without locking into a long-term commitment. One way to do this is through a donor-advised financial fund which allows the donor to make periodic contributions at their discretion without a mandated dollar amount or period of time. Another benefit of such funds is that the donor receives tax breaks immediately and does not have to go through the messy paperwork typical of such major gifts. Another option is to plan the estate with language that provides for a potential family legacy while leaving a portion or the remainder of the estate to another organization.

With the trend of young, rich, and unattached people planning their estates at a new age combined with the fairly recent addition to estate planning of digital assets, attorneys are reevaluating the typical methods of estate planning and are coming up with innovative ways for people to plan for the future. However, these new options are not just for the young, wealthy, and childless wishing to plan their estate. Everyone can benefit from these new possibilities in estate planning, and by speaking to an experienced estate planning attorney you can incorporate these ideas into your plan.

Common Goals of Estate Planning for Married Couples

May 30, 2014,

Estate planning is meant to provide direction and security for loved ones when we pass away, but complications can arise in the estate planning process when structuring a plan as a married couple. Each person in the marriage has individual estate planning goals, tax-related objectives, and ideas for the future. However, upon probing deeper through the individual wants and needs of the spouses common goals run through the estate planning process of almost all married couples:

· Providing for family and loved ones
This is typically the top priority for all married couples. They want to know that their surviving spouse, children, grandchildren, extended family and friends are all provided for after they are gone. Even pets can be provided for if an estate plan is structured correctly.

· Minimizing taxes
Couples also want the taxes on their assets to be as minimal as possible so that their beneficiaries can fully inherit after they are gone. This includes federal estate and income taxes as well as state estate and income taxes.

· Protecting property/assets going to family and loved ones
Similar to providing for loved ones, married couples also want to know that specific property and assets will be protected from creditors or from future family issues such as a future spouse.

· Cost effective planning
The cost of estate planning is one of the main reasons why couples put off the process for so long. They want to have a plan in place that meets the individual and couple's goals, but at the same time want a plan that isn't too costly to create. In most cases a compromise must be made. In order to achieve all of the estate planning goals a basic level of complexity must go into the planning process. At the same time, structuring an incredibly intricate plan can be costly. Therefore, finding an attorney that can cover all of the basic goals while also keeping the plan under a certain budget is vital.

· Privacy in estate planning matters
Keeping the decisions of estate planning private from others is also a common goal of most married couples. Not only does it keep their business out of public knowledge, it can help protect the surviving spouse or other beneficiaries from being the victims of fraudulent schemes after the estate plan goes into effect.

· Control over assets
One of the biggest concerns that married couples have when estate planning is ensuring that the surviving spouse has control of the assets of their marriage after one passes away. The same is true in most cases when it comes to ensuring that the children will also have control over the assets of the marriage when both spouses pass.

· Planning for incapacity
Although it is tough to think about, most couples also want provisions in an estate plan that provide for the incapacitation of themselves or their spouse. An estate plan can provide for more than just death, and in the case of incapacitation a plan can dictate power of attorney as well as medical wishes.

· Asset management
Typically, one spouse in a marriage is more adept at asset management, and an estate plan can structure a new management system for the surviving spouse if the other is incapacitated or passes away. This ensures that someone capable is always managing the family's assets.

Discussing these common goals before meeting with an estate planning attorney can help a married couple facilitate the process of creating an estate plan. Not only does the process become much easier, it also provides peace of mind that both individual and common goals are being met when planning for the future.

Dealing With the Logistics of Estate Planning

May 28, 2014,

As discussed in a prior post, the estate planning process is not a do-it-yourself project. An experienced estate planning attorney is necessary to ensure that all of your wishes are met and that your loved ones are provided for after you pass away. However, after the estate plan has been created, what do you do with it? And what about all of the other, smaller details that come with incapacitation or passing?

New companies are springing up that deal with these specific issues. Instead of sticking the will in a manila envelope in a security deposit box or in the back of a filing cabinet, these companies store all of your estate planning documents online. Some companies allow you to do more than store your estate planning documents online. It helps you make all of the smaller decisions or even send out invitations to your memorial after you pass. These websites also provide for an executor or deputy to also have access to your plans so that they can be carried out once you have passed. These companies are also planning for their own demise - for example, Everplans has already enacted a plan that will allow users to access their estate planning materials up to fifty years after the company has been sold or dissolved.

For those who have already made all of the decisions about memorials, funerals, and smaller details there are still options for storing your estate documents securely online. Dropbox and SecureSafe are cloud storage options where you can upload your documents, and your executor or beneficiaries can access it from anywhere if they know the password. These options give you the benefits of online storage without needing to decide all of the extraneous options.

The most important thing to consider if you decide to store your estate planning documents with an online source is security. Some companies claim that they have "bank-level security" and others will tell you about the high level of encryption that will protect your documents online. For those not so tech-savvy the best option is to simply research the companies, read reviews, or ask your estate planning attorney for advice. Some estate planning attorneys are now setting up their own private online storage sites for estate planning documents that also allow their clients to detail arrangements for their passing, and other attorneys are working specifically in conjunction with already established companies

Whatever method you choose to store your estate plan, make sure that someone you trust knows where it is and how to access it. With the advent of end-of-life online companies it is now becoming easier to plan every detail of your estate plan from the largest legal aspects of inheritance and bequeathing to the smallest detail such as recommending a restaurant after the services. While it is still vital to have an estate planning attorney draft all of the legal documents of your plan, it is nice knowing that you can provide even more ease and direction to your loved ones after your passing.

Having a Bon Voyage - Specifying End of Life Decisions that Lay Out Your Last Wishes

May 23, 2014,

It has been said that life is a journey, not a destination. So it makes sense that in our last days, on our final journey, we should strive to have a good one--a bon voyage.

While talking about end of life issues--particularly our own--can sometimes be uncomfortable, the best way to make sure that your end of life wishes are honored is to lay them out in writing and make sure that your loved ones are aware of them. Don't miss the opportunity to have a bon voyage--take the opportunity to set out your end of life wishes and take control of your journey.

Unfinished Life Matters
Sometimes so much focus is placed on the medical and legal aspect of dying that the personal aspects get brushed aside. However, the reality is that it is much easier to have a bon voyage if you are happy or at least satisfied when you depart. This involves taking care of loose ends and putting things right where necessary. Personal matters to consider include--

**Saying things you need to say to loved ones, friends, and others, such as "I'm sorry." "I forgive you." "Thank you." "I love you." "Goodbye."

**Determining whether you may need psychological, emotional, spiritual care, counseling, or other support.

**Writing a personal legacy or story, telling any life lessons or outlining your hopes and dream, as well as leaving any helpful advice, for loved ones.

**Creating a "bucket list," outlining any things you would still like to accomplish or setting out any goals of for your remaining medical care.

Funeral Wishes
Funeral arrangements are very personal and options vary widely--from in-ground burial, mausoleum burial, cremation, as well as other possibilities. Some planning and logistical questions include--

**Do I want to donate my organs for transplant or donate my body to science?

**Which funeral home/mortuary do I want used?

**What are my feelings regarding embalming, burial, cremation, casket, burial location?

**Who should be notified of my passing?

**Who will write my obituary and what should it say if you are not writing it yourself?

**What do you envision for a funeral--a church service, a party or dinner, a memorial service?

**Will you pre-pay your funeral expenses or where will funds be held?

**Do you want to specify a charity or other cause "in lieu of flowers"?

Medical And Legal End Of Life Paperwork
A complete estate plan typically involves the documents identified above as well as a pour-over will, a revocable living trust (RLT) or an irrevocable Medicaid asset protection trust (MAPT), power of attorney for finance, and deeds and memoranda regarding personal property. In particular, questions related to medical and/or legal arrangements include--

**Do you have a will and possibly a trust? When is the last time you looked at these documents and thought about their provisions? Do the provisions reflect your current wishes and desires for distribution of your personal and real property, as well as your other assets?

**Do you have a Living Will? Does it state your wishes regarding the type and extent of medical treatment you want in the event that you can no longer speak for yourself?

**Have you made your feelings known about matters such as "Do Not Resuscitate (DNR)" orders or your feelings on CPR? What are your feelings on palliative care and natural death? What are your feelings regarding breathing tubes (intubation) and feeding tubes? A Living Will allows you to record your wishes regarding organ donation, pain relief, funeral, and other advance planning matters. It is an important source of guidance for your health care agent.

**Have you executed a Durable Power of Attorney For Healthcare? Have you also selected a Health Care Proxy? Have you specified an alternative proxy in case your first choice is unable or later unwilling to act as proxy? A health care proxy is a designated decision-maker who will make medical decisions for you if you become incapacitated and cannot make decisions for yourself. Your health care proxy should be someone with a strong personality; someone who will fight for you and your wishes.

Thinking of end of life matters can be uncomfortable and challenging, but most things are easier when we have some control over them. Expressing your wishes and making affirmative decisions regarding end of life matters will hopefully allow you to have a peaceful departure and a bon voyage.

With Age Comes Wisdom - Limiting Child's Access to Family Money

May 20, 2014,

The current generation of older Americans make up the wealthiest generation this country has ever seen. As the number Baby Boomers (people born between 1946 and 1964) retire or pass on, the United States is expected to see an "inheritance boom" unlike any other in history. At the same time, the generation that stands to inherit this money generally lacks the money management skills to handle these inheritances. But there are some things that the older generation can do to help the younger generation "grow into" its money.

Provide Children And Grandchildren With A Financial Education

Young adults often are launched into adulthood with little or no financial education. In the United States, only four states require students to take a personal finance class in high school. Worse yet, a 2009 study by the University of Arizona and the National Endowment for Financial Education gave students an "F" grade for money management skills. When the study was repeated two and a half years later, students' money management had declined by an additional 7 percent.

Five money management skills that members of the older generation can help to teach their children and grandchildren include--

1. You sometimes have to wait to buy something you want. Although this is a hard concept to learn, the ability to delay gratification can determine how successful one will be as an adult.
2. You need to make choices about how to spend the money you have. Financial decision-making is a key factor in successful money management as an adult. It is important that children and grandchildren be taught that money is finite and that when money is spent on one thing, it is not available for other another thing.
3. The sooner you start saving, the faster your money can grow. The concept of compounding interest is critical for children and grandchildren who will be inheriting or otherwise receiving family money because they need to learn that saving accrue on the initially received money plus on past interest received from the initial savings.
4. You should pay with credit card (or cards) only if you can pay off the balance in full each month. The average American household has over $15,000 in credit card debt. This, along with average student loan debt which is almost $34,000, threatens to choke most young people. To counter this debt trend, it is important that the older generation help children and grandchildren understand that it is important to budget and use credit cards wisely.
5. You need to know how to budget. Learning to create a budget is a main key to learning to live within one's means and budgeting techniques are critical for a successful adulthood.

Establish A Trust

One option to slowly ease children or grandchildren into the adult world of personal financial management is through a trust. One form of trust which is sometimes used in the case of inheritance is a "spendthrift trust." A spendthrift trust can be created for a child or grandchild to limit access to the trust funds. An independent trustee is given full authority to make decisions about how trust funds can be spent for the benefit of the child or grandchild and funds are not under the child's or grandchild's control. An additional benefit of the spendthrift trust is that the child or grandchild cannot assign any of his or her present or future income to creditors, or sell his or her rights to the trust principal.

A spendthrift trust can be tailored to the maker's specific wishes and particular family circumstances. For example, a spendthrift trust can be established for the child's or grandchild's lifetime or until he or she reaches an age designated by the maker of the trust. To ensure that family wealth is responsibility passed on to the next generation, it is important to discuss trust specifics with an experienced NY estate planning law firm.

Estate Planning is Not a Do-It-Yourself Project

May 16, 2014,

Recent economic times caused many people to take on a lot of home projects that they otherwise would have hired out to a handyman. While some do-it-yourself (DIY) projects turned out alright, people often found that seemingly easy projects were significantly more complicated than they had anticipated. Worse yet, sometimes these DIY projects even end with disastrous consequences, requiring calling in professionals to fix the job at greater hassle and cost than would have originally been incurred if the professional had been called in the first place.
The same can be said for estate planning.

DIY Estate Planning "Kits" And Pre-Packaged Computer Software Are Not The Answer

Regardless of how smart or talented someone is in other areas of his or her life, proper estate planning is not something that can be done out of a DIY "kit" or on some software package.

DIY Kits

Do-it-yourself kits are notoriously inadequate and incomplete. At best, they can be a waste of money. At worst, they can be an outright scam to bilk you out of your entire estate. According to AARP, older adults are frequent targets of fraudulent and deceptive business practices and a healthy dose of skepticism is warranted when considering estate planning services.

In particular, AARP warns against living trust kits and seminars, as well as "free lunch" financial seminars. The organization advises, "If you want to know if a trust is right for you, seek advice from a licensed and experienced estate-planning attorney."

Pre-Packaged Software

In similar fashion, Consumer Reports advises against using pre-packaged estate planning software in all but the most simple of estate planning circumstances. Consumer Reports tested several brands of software using profiles of individuals from three different New York families.

Using the various estate planning software (which operates like tax software), Consumer Reports found problems with all software packages that were tested. These problems included:

-Outdated information- some of the software products referred to federal estate-tax limits that were outdated;
-Insufficient customization- the products did not give sufficient detail on state laws and offered no guidance on certain situations;
-Too little flexibility in some cases- the products created arbitrary limits and would not allow certain distributions to be made as desired, despite the legality of such distributions;
-Too much flexibility in other cases- the editing and open ended narrative features of some programs allowed information to be added that could outright contradict other parts of the will document;
-Incompleteness- important matters related to estate dispositions were omitted from each of the software programs considered, including certain critical tax matters.

As the AARP and Consumer Reports reviews show, no DIY kit or prepackaged computer software can adequately substitute for the skills and individual attention of an estate planning expert.

Estate Planning Is Important Enough To Use A Professional

End of life planning involves considering an individual's very unique and personal circumstances. It involves important decisions on how your life and property will be handled if you become incapacitated, as well as how your property and assets will be distributed when you pass on. And there is no one-size-fits all answer for these questions.

Further, while drafting up a will, trust, or power of attorney may seem like a relatively simple task, any mistake in preparing these estate planning documents can create catastrophically bad results down the line.

An experienced estate planning attorney has knowledge of several areas of the law, including estate planning, tax law, real estate law, elder law, and business law, as well as succession planning. He or she can make sure your end of life intentions are properly expressed and honored.

Putting Conditions on a Trust in New York

May 13, 2014,

For many New Yorkers, the term 'trust' continues to invoke visions of the super wealthy. Similarly, terms like "trust fund baby" are used to refer to spoiled, rich individuals who do no work on their own and simply live off their parents savings. The connotation is always negative.

As our estate planning attorneys often explain, however, trusts are critical tools for families of all income levels. And there is no reason why children who benefit from the trust suddenly become slovenly or without their own motivations. For one thing, many trusts are not large enough to offer income that can last a lifetime. Even when the trust is large, conditions can be placed on child-beneficiaries which can help prevent them from relying solely on an unlimited stream of income.

Incentivizing a Trust in New York
A helpful Tribune article last week discussed some of the ways that trusts can be created to offer incentives to beneficiaries. The basic idea is simple--add "strings" so that the beneficiaries of the trust only receive money if they meet various conditions. A range of conditions can be added, but the most common relate to promoting responsible achievement in the next generations--requiring graduation from college or holding a steady job. By limiting the child from any proceeds unless they meet these requirements, one can flip the script, not only avoiding the trap of the trust acting as a de-motivator, but making the trust actually act as motivation to succeed.

These trust condition can be very helpful in tailoring an estate plan to one's exact specifications. However, they come with many pitfalls. When not crafted carefully, the conditions may unintentionally become far too restrictive or too expansive, failing to meet the intended goal. For example, requiring completion of college before receiving trust benefits may seem straightforward. But, what exactly counts as receiving a college degree? A bachelor's degree? What about an associate's degree? Does completion of a trade school count? The conditions need to be specific and clear.

In addition, there are some limits to trust conditions--both legal and practical. In general, conditions that violate the general public good can be invalidated. For example, requiring a child to divorce his wife before receiving anything may not hold up because the public supports the general goal of preserving marriages.

Get Legal Help
As always, do not attempt to craft these arrangements on your own. Contact an experienced New York estate planning lawyer who can explain the many options available to you and ensure the plan is drafted appropriately.

Prenuptial Agreements in NY - Part 2: Challenging The Validity Of A Prenuptial Agreement

May 9, 2014,

To challenge the validity of a prenuptial agreement, one looks to see if any of the above elements were abused or not satisfied. This can include--

1. Duress- A prenuptial agreement can be voided if one party was pressured or coerced into signing it. Duress also can be shown if the agreement was presented too closely to the wedding date and is not given enough time to think about the terms of the agreement before signing it. Some sources suggest that agreements signed within 60 days of the wedding may be challengeable based on duress. For example, duress has been shown where the wedding is only days away, the invitations have been sent, large sums have been expended, and cancelling the wedding would be costly and embarrassing. Another example is a case where the groom presented a prenuptial agreement just before the bride's visa was to expire and told her to sign or the wedding would not take place prior to the visa's expiration date.

2. Lack of mental capacity- Lack of mental capacity can be shown if the agreement was signed when one party was drunk or under the influence of drugs.

3. Lack of full disclosure- Failing to provide complete and truthful financial statements or the outright hiding of assets can constitute a lack of full disclosure.

4. Lack of independent counsel- An attorney or counsel can be shown to be partial if he or she was provided or paid for by the party demanding the prenuptial agreement.

5. Unconscionable Terms/ Lack of fairness- Disproportionate asset division alone does not make a prenuptial agreement unenforceable, but the agreement cannot be so disproportionately unfair that it is unconscionable or unscrupulous.

6. Child support and child custody provisions- Agreements that specify an amount of child support or dictate who will receive custody of any marital children are unenforceable as against public policy.

7. Unenforceable provisions- Provisions that make unreasonable demands of one party may be deemed unenforceable by the court. Examples of unenforceable provisions include requirements that one party must maintain a certain weight or keep a certain hair color, or must do certain chores (i.e., walk the dog or do the dishes).

8. Ambiguous terms or provisions- A prenuptial agreement is a contract. If a contract is not clear or has ambiguous terms or provisions, it is interpreted against the party who drafted it and in favor of the non-drafting party.

9. Fraudulent inducement/promises made but not kept- Fraudulent inducement is the use of deceit or trickery by one party to cause the other party to act to his or her disadvantage. For example, in a recent New York case, the wife claimed that her husband-to-be promised to tear up their prenuptial agreement as soon as their first child was born. After the couple had children, the husband refused to tear up the agreement and sought to enforce it when the couple divorced. The court ruled that the agreement was void because the wife had been fraudulently induced to sign it, believing the promise that the agreement would be destroyed upon the birth of their first child.
10. Verbal/unwritten agreement- Because of the serious nature of a prenuptial agreement, oral agreements generally are not valid.

The validity of a prenuptial agreement may be challenged in whole or in part. A court may decide to strike only certain provisions from the agreement, leaving the remainder enforceable. Alternatively, the agreement may be so weakened by certain provisions or circumstances that the entire document may be unenforceable.

If you have questions about how these agreements are crafted or how an agreement may fit into your long-term planning, be sure to contact a New York estate planning attorney today for tailored guidance.

Prenuptial Agreements in NY - Part 1: Enforceability

May 8, 2014,

Every year, over 2 million people get married in the United States. In the same year, almost 900,000 people get divorced. Broken down even further, approximately 50% of all first marriages, 67% of all second marriages, and 74% of all third marriages end in divorce. With these statistics, it should be of little surprise that the use of prenuptial agreements is on the rise. However, one surprise may be that more agreements are being requested by women.

In New York, the state statutes have little to say about prenuptial agreements. Section 3-303 merely says, "A contract made between persons in contemplation of marriage, remains in full force after the marriage takes place." This is because prenuptial agreements, by their nature, are highly customized and tailored to the couple who is entering into it.

In general, a valid prenuptial agreement requires the following--

Free Will

In order to be valid, each person entering into the prenuptial must do so of his or her own free will and must not be coerced into signing the agreement. The circumstances surrounding the negotiation and signing of the agreement need to be free from duress, overreaching, or coercion.

Disclosure

Valid prenuptial agreements require full disclosure of each person's financial assets and liabilities. This includes disclosure of financial statements for bank accounts, investment accounts, real estate holdings, business interests, vehicles, and other assets, as well as disclosure of liabilities, including outstanding loans, mortgages, and other debts.

Independent Counsel

Independent counsel means that each person to the agreement should have his or her own attorney, rather than sharing an attorney or being required to use one that is being supplied by the other person.

Fairness

The fairness provision is subjective. In general, a prenuptial agreement does not have to be equal, but it must not be so disproportionate, or call for one party to give up so much in the event of a divorce, that the agreement is considered unconscionable.

Proper Acknowledgement

In New York, a prenuptial agreement must be properly acknowledged or witnessed. Proper acknowledgement serves to prove the identity of the people signing the agreement and it adds formality to the situation to encourage careful reflection and prevent hasty decision-making regarding execution.

If you have questions about how these agreements are crafted or how an agreement may fit into your long-term planning, be sure to contact a New York estate planning attorney today for tailored guidance.

Not For Ourselves Alone - Estate Planning Beyond Immediate Family

May 6, 2014,

"Not for ourselves alone are we born; our country, our friends, have a share in us" is a famous phrase by the Roman philosopher Cicero. While the phrase is several thousand years old, it still has great applicability to estate planning today, because many people are still seeking to leave a legacy of good for their community and friends after they pass on.

Leaving A Legacy Of Good

Americans are generous people. In the United States, charitable contributions by individuals make up a vast majority (72%) of all charitable donations to nonprofit organizations. In fact, the State of New York ranks fifth in overall charitable contributions, with individual donors making an average charitable contribution of $5,150 annually. In addition, these same charitable donors also make will bequests that are, on average, almost triple the amount of their lifetime donations.

Legacy considerations and estate planning are relevant for everyone, regardless of their economic status, marital status, or age. Estate planning is not just for the wealthy, and it is not just for married people with children. In fact, many people come to realize they feel strongly about the idea of leaving a legacy after they experience a life changing event such as a divorce, spousal death, retirement, new job, change in economic circumstances, or health crisis.

Philosophical Questions

While many people are interested or intrigued by the idea of creating a legacy, they often do not know where to begin the process.

If you are considering using your wealth for good after you pass on, sometimes the best place to begin the estate planning process by considering your core values and asking yourself what general type or types of charities or causes you wish to support. Possible charitable classifications and causes include:

-Animals- including animal rights, animal welfare and services, wildlife conservation, zoos and aquariums
-Arts, Culture and Humanities- including libraries, historical societies, landmark preservation, museums, performing arts, public broadcasting and media
-Education- including universities, graduate schools, technology institutes, private elementary and secondary schools, other educational programs and services
-Environmental- including environmental protection and conservation, botanical gardens, parks, and nature centers
-Health- including diseases, treatment and prevention services, and medical research
-Human Services- including children's and family services, youth development, shelters, crisis prevention services, and food pantries
-International- including relief services, humanitarian relief, and international peace and security
-Public Benefit- including advocacy and civil rights, fundraising organizations, community foundations, and community and housing development
-Religion- including religious activities, religious media and broadcasting

Ways Of Leaving A Legacy

There are several gifting strategies and wealth transfer tools that can help an individual to leave a legacy for his or her family, friends and community, including the following:

1. Including specific bequests in a will- a will provides a simple plan for distributing personal and real property. A bequest can specify a particular piece of real or personal property, or it can be general in nature, such as cash.
2. Establishing a trust- there are several types of trusts which can be used depending on a donor's intentions and goals. Three of the most common are life insurance trusts, revocable living trusts, and irrevocable gift trusts. Trusts are often useful for avoiding probate, as well as reducing estate taxes.
3. Designating a beneficiary designations on life insurance policies, IRAs, retirement plans, and annuities- these assets are automatically distributed upon your death, which generally allows them to avoid probate.
4. Setting up a donor-advised fund with a community foundation- community foundations provide grants and scholarships to nonprofit organizations in a designated area. A donor-advised fund gives some control over distribution of funds while sharing administrative costs with other funds held by the foundation.

Creating a legacy plan is an important reason to embrace the idea of estate planning. Your donations can give lasting meaning to your life and make a significant difference in the lives of others. Please contact Ettinger Law Firm at (800) 500-2525 ext. 100 if we can help you with your estate planning needs.