Estate Planning

August 16, 2011

New York Estate Planning Can Address Religious Goals

Proper estate planning involves respecting client wishes about distribution of assets while creating legal documents to avoid probate, save estate taxes, and plan for disability. Many plans include similar components, but there is flexibility so that each client’s unique goals and preferences are accommodated. For example, many area community members work hard to adhere to their religious principles in all areas of their lives–including their New York estate plan.

A new article posted at Wealth Journal recently explained how few areas of the law are as entangled with religious issues as estate planning. Many components of an estate plan may be influenced by one’s religious or spiritual beliefs, from traditional rules about asset distribution to statements about medical decisions and funeral arrangements. For example, traditions like Judaism, Islam and Orthodox Christianity have detailed rules of inheritance that some may wish to follow as closely as possible. Similarly, it may be important to leave detailed instructions for trustees on how funds should be dispersed in accordance with those religious traditions and values.

Most residents usually apply a hybrid approach to blending their religious belief with their estate plan. One many wish to avoid following any religious custom except for burial and funeral arrangements. Others may seek strict adherence except restrictions on cessation of heroic medical measures. There is seemingly an endless combination of approaches that one might seek to balance in their estate plan. Of course, whatever one’s desires it is crucial to have open and honest discussions with loved ones about these issues so that they can be communicated effectively during the planning process. In our area it is also important to contact an experienced New York estate planning attorney who can effectively integrate religious wishes into a plan that simultaneously respects legal, tax, and ethical issues.

August 12, 2011

Women Can Take Control of Family Estate Planning

by Ettinger Law Firm

An experienced New York estate planning attorney has likely come to appreciate how asset preparation issues are particularly important for women. Demographics play a role in this reality. Women tend to outlive men, and a wife is more likely than a husband to be left alone after a disability or death. In addition, men frequently take charge of handling family financial affairs while alive and risk leaving their wives in an unfamiliar position if preparation is not conducted ahead of time.

Yet polls continue to reveal that it is only a minority of women who admit prioritizing estate planning or familiarizing themselves with family financial issues. A Forbes article yesterday discussed this disconnect between the importance of financial preparation for wives and their prioritization of it. The story mentioned that women are much more likely to experience a decline in their standard of living following the death of a spouse because of their longer life expectancy, tendency to marry older spouses, and lower lifetime earning average. Interestingly, this also means that wives frequently have the last word about where a couple’s assets ultimately end up–either to the family, charity, or tax coffers–particularly when the family had conducted no prior planning.

This makes it essential for women to become equal participants in the estate planning process or to take charge of the process if no preparation has yet been completed. While talking about mortality is rarely easy or light hearted, it is a topic that cannot be avoided in the end. The story’s author suggests that it is often helpful to have a series of conversations about the topic instead of trying to cover everything at once. Of course every couple will have their own ways of communicating. However, it may be useful to mention the need to consider the children, refer to someone who recently passed away, or bring up a news article that discussed estate plans.

August 10, 2011

New Website Services Offers Online Method of Distributing Personal Property

by Ettinger Law Firm

Most New York estate plans have various components and include several legal documents. Most will have a Revocable Living Trust, Medicaid Asset Protection Trust, or both. A pour-over will is also frequently added as a failsafe to cancel an old will and ensure that any assets left outside the trust are brought into it after death. The plan will have various other facets, including a Power of Attorney, Health Care Proxy, burial instructions, and other final instructions for a family.

In addition, a common practice is to leave a list which indicates which valuables will go to each heir. This list is usually handwritten and specifically requests that a trustee honor its terms. In this way, if a client changes their mind about the distribution of their personal property they can simply handwrite a new list without needing to visit their attorney to cement the change. This step is important because many local families experience in-fighting when trying to distribute sentimental personal property without the guidance offered by a New York estate plan. When more than one family member wants the same item, the stage may be set for strong disagreements that often profoundly and permanently affect relationships. Most family members are under immense stress at the time of a passing which makes the situation even worse.

A few online web services have recently sprung up which claim to help families distribute this property in a fair manner. For example, one of the more popular services is eDivvyup. The website essentially sets up a family auction using non-monetary “credits.” A family first selects an “executor” to set up the auction by cataloging personal items, inviting family members to participate, and assigning credits. Each family member then visits the site and places bids on items of interest to them using the non-monetary credits they are provided. The auctions usually work like eBay, spanning anywhere from a day to several weeks. The goal is that by the end of the auction each family member will have gotten the fair chance to indicate which items mean the most to them.

August 8, 2011

Season Tickets, Frequent Flier Miles, and Other Unique Assets in Estate Plan

by Ettinger Law Firm

Local residents visit our New York estate planning attorneys for professional assistance to protect and pass on their assets. Many also expect guidance identifying the items that should be considered an asset and included in the planning. Most area families need to consider things beyond homes, cars, investment portfolios, and similar items when creating their New York estate plan.

For example, what happens to frequent flier miles and rewards upon an individual’s death? Many residents spend years and thousands of dollars in airfare racking up mileages and benefits in airline sponsored loyalty programs. A recent article in Payments News explained how many fliers spend time accumulating these “miles” and rewards only to leave them unused at their death. Some reports indicate that as many as 3.5 trillion miles currently remain unused in these programs. Interestingly, each airline has a different policy in place regarding transferability of loyalty benefits at death. American Airlines specifically allows accumulated mileage credit to be transferred to a person named in a court-approved will or estate plan. Other carriers, such as United Airlines, require that a beneficiary be named with the program, a fee be paid, and require an executor to contact the airline before miles can be transferred.

Another asset which one may wish to leave behind is the option to purchase valuable season tickets. Area residents often spend years waiting for the opportunity to become a season-ticket holder for their favorite teams. A post this weekend at The Faculty Lounge recently discussed this topic. Most teams have policies in place that allow an individual’s decedents to gain the right to purchase. However, it is important to closely examine the team policy related to ticket transferability to understand what issues might arise. For example, there may be conflict over who gains the right if several children share in ones’ assets. Many team policies indicate that there will be no transferability if several individuals share in the right and do not agree on a single transferee. Some teams also expressly prohibit a non-relative from receiving the right to purchase the tickets.

August 4, 2011

New York Estate Planning and the National Debt Crisis

by Ettinger Law Firm

Over the past few weeks political debate around the national debt has dominated headlines. National leaders had disagreed for months on whether the debt ceiling needed to be raised. In addition, lawmakers had argued over whether spending cuts and revenue enhancements should be addressed as part of the debt crisis.

This week finally saw the apparent end of negotiations as the White House and Congressional leaders reached an agreement on many of these issues. The accord will raise the debt ceiling by $2.4 trillion, up to a total of $16.7 trillion. This will come with a $900 billion reduction in spending–a special Congressional committee will identify up to $1.5 trillion more in spending cuts in the coming months. Interestingly, no specific decision was made on revenue enhancements that either raises taxes or removes “tax loopholes” for corporations and individuals.

Our New York estate planning attorneys closely monitor all legislative developments that may influence how local residents decide to pass on their assets or plan for their long-term care. For example, finding additional sources of revenue enhancements generally means raising taxes. During this latest debate, increasing the estate tax was frequently mentioned as a possible way to increase federal revenue. The estate tax level was significantly reduced by President George W. Bush several years ago. Current leaders have often suggested that the Bush tax cut was misguided and that the level needed to be returned to its former amount.

August 2, 2011

Estate Planning is Not Just for Senior Couples

by Ettinger Law Firm

Some area residents may think that New York estate planning is only for married seniors who have big families and substantial wealth. Fortunately, more and more people are coming to understand that this planning is a necessity for all community members, no matter what their situation in life. The Calgary Herald recently discussed the universal applicability of estate planning by sharing the example of a thirty-six year old mother of two who was recently divorced. The woman had never before seriously considered financial matters, but everything changed following separation from her husband.

It was not long before the mother began to realize that taking care of her family was now squarely on her shoulders–necessitating prudent preparation for long-term contingencies. For example, if she were to suddenly become ill, who would take care of her children? If she became disabled, how would the family survive? The woman began considering these and similar questions before realizing that she wanted the peace of mind of knowing that she had prepared for these possibilities ahead of time. The woman visited an estate planning attorney and learned what options were available to her. She eventually purchased life insurance, disability insurance, and had legal documents drafted to ensure others could make critical decisions on behalf of her family if the need arose.

The mother’s situation is a good example of why estate planning is often particularly important for singles. Those without a partner frequently need to clearly spell out their wishes ahead of time, because fewer people may be around to speak on their behalf. For example, a thirty year old single man may get in an accident shortly before closing on his first piece of real estate. If he has taken the time to create a durable Power of Attorney, the named individual may be able to close on that new home on his behalf. There are countless similar situations that may arise where prior estate preparation can significantly affect an individual’s life.

July 29, 2011

Iron Clad Will Likely Avoids Inheritance Fight After Death of Amy Winehouse

by Ettinger Law Firm

Inheritance feuds are quite common when a family member dies without an estate plan. Those who die young are the most likely to have failed to leave any legal documents that express their wishes. Unfortunately, the perception still exists that estate planning is something with which only seniors need be concerned.

Inheritance fights often make headlines when they involve the fortune of a high-profile public figure who died without leaving behind any indication of how they wanted their wealth to be distributed. Many well-known celebrities have died young, without a will, setting the stage for drawn out fights over the distribution of their estate. For example, Jimi Hendrix died tragically in 1970 at the age of twenty seven without conducting any estate planning. As a result, the legal battle over his assets raged on for more than thirty years.

Examples like that are often mentioned as a reminder of the importance of visiting an estate planning attorney to ensure that one’s affairs are in order. However, it is also helpful to highlight well-known instances where proper preparation was completed and fighting was avoided. That appears to be the case following the passing last week of singer-songwriter Amy Winehouse. The young entertainer lived a tumultuous life, but she was serious about making her wishes known regarding distribution of her assets. According to reports in Daily Finance, even though she was only twenty seven years old at her death, Winehouse had an “iron clad” will that passes her wealth to her parents and brother. She understood the importance of updating estate planning documents following changes in life circumstances. Winehouse executed a new will following her divorce from her husband, preventing possible challenges resulting from out-dated legal documents.

July 25, 2011

The Inheritance Rights of Children Conceived After Death By In Vitro Fertilization

by Ettinger Law Firm

The Wall Street Journal wrote this weekend on a unique estate planning issue that is becoming relevant to a growing number of families: the inheritance rights of children conceived after one’s death through in vitro fertilization. More people than ever before are cryopreserving their gametes which can then be unfrozen later and used in fertilization. This practice is growing in popularity among cancer patients before undergoing chemotherapy, those in the military, and others in high-risk occupations.

The total number of infants born through use of this technology has doubled in the past decade and the clinics offering this service have increased. For area residents, use of this science may have an impact on their New York estate plan. Many are beginning to question what inheritance rights these children have if their parent passes away before they were conceived? In an effort to provide clarity, more and more states are passing laws defining their rights with regard to insurance, Social Security, trust participation, and similar topics. However, the legal landscape is far from clear.

Families who are considering their options or who have already frozen gametes should take a close look at the forms associated with the procedure. The clinics should clearly explain what happens to the material in the case of the donor’s death. Some families may be surprised that the language in those agreements does not match their intent.

July 21, 2011

Planning For Your Digital Life After Death

by Ettinger Law Firm

One of the more novel aspects of modern New York estate planning includes determining what to do with one’s digital life after death. Social networks like Facebook, Twitter, email archives, and other online resources continue to expand. Individuals of every age are using the services to store past communications, share personal information, stockpile photographs, publish essays, and much more.

Everyone may have different wishes for these unique assets after death, and so making those plans known is an important part of a New York estate plan. Just as with traditional assets, it is a mistake to allow default rules to dictate what happens to online property. In the digital context, rules of privacy often mean that loved ones are permanently locked out of online accounts. As a result, important memories, blog articles, photos, online journals, and other items may be forever lost.

Digital asset planning gained national attention a few years ago following a high-profile legal case. The parents of an American soldier killed in Iraq sought to have access to his old email account. Privacy policies at the email service did not allow such access, regardless of the death of the account holder. The family was forced to bring a lawsuit before eventually winning the right to access their son’s email archives.

July 19, 2011

Tips to “Lawsuit-Proof” An Estate

by Ettinger Law Firm

Our New York elder law estate planning lawyers know that proper estate planning can help clients save money on taxes and probate costs, ultimately allowing them to pass on more of their assets at death. Besides leaving a larger estate, preparation also ensures that the distribution is likely to occur exactly as desired. Unfortunately, family infighting can erupt after a death that leads to a lawsuit challenging an estate. These legal struggles tear families apart and can distort the intent of the one who has passed.

Estate battles should be avoided at all costs. Last week Forbes published a helpful “tip list” of common sense and practical ways to “lawsuit proof” an estate. For one thing, it is very helpful to divide up specific possessions among friends and family members before death. Distributing family heirlooms–like a wedding ring, antique furniture, and similar items–can be contentious if not done ahead of time. There is no “right” way to divide these possessions, but communication is crucial. Talking about the issue gives families a chance to understand what items actually matter to each of them and avoid lawsuit-provoking surprises at death.

If you give large loans, advances, or gifts to children while alive it is helpful to provide close records of the transfer. Sometimes a parent will give a child a large amount of money–perhaps for a down payment on a house. Afterwards there may be disagreement about whether that money was “in advance” of an inheritance. By unequivocally clarifying your intent beforehand, a donor may prevent others from litigation the issue in the future.

One of the most common allegations in estate litigation is that someone did not have sound mind when their plan was created. Understanding this risk and accounting for it can go a long way in preventing a lawsuit ever being brought. Some seniors who seem vulnerable may be particularly apt to having their wishes attacked on this ground. In those cases evaluation by a treating physician and geriatric psychiatrist immediately before signing documents can help dissuade potential litigants from attacking the estate plan.
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