Articles Posted in Trusts

Supplemental Needs Trusts (also called Special Needs Trusts) have become fairly popular in recent years. These trusts are designed to protect a disabled person’s assets in order to ensure the greatest amount of funds available for care and support. In 1993, Congress passed legislation in 42 U.S.C. § 1396 et seq. that specifically allows a disabled person to exempt assets from public aid determinations. You can click here to read more about how the government treats these unique trusts. One look at the complex federal regulations that control these trusts should be reason enough to consult an experienced elder law attorney to find out if it is right for your situation.

How much money can a disabled person keep and still be eligible for public aid?

In general, for a person to qualify for Medicaid, he or she must be impoverished. This means having less than $2000 in personal assets. Previously, there were fairly strict provisions that made it difficult for a disabled person to keep assets and still qualify for Medicaid funding of long-term care. Nursing home and rehabilitation costs can be exceedingly expensive, and people are often concerned that a disabled family member could quickly spend all of their assets on care and support before qualifying for government assistance.

Retirees are acutely aware of the future, and they have usually spent between thirty and forty years saving up for it. While many dream of beach living and travel, current numbers show that most retirees opt instead to continue living in their home. Historically, the biggest move that a retired person makes is from their home to a nursing facility when they are unable to care for themselves anymore, but new trends are coming up in moving after retirement that people should be made aware of.

Trends in Retirement Moving

More seniors today are moving after retirement than in the past. In fact, the likelihood of moving has tripled between the age groups of 1968-1984 and 1996-2011. Interestingly, another trend being noticed by experts is that the average age at the time of the move is considerably lower than it was before. More young, wealthy retirees are choosing to sell their home and move into a retirement community. This is drastically different than past generations, where wealth meant that a person could remain living in their own home significantly longer.

While parents make the vast majority of decisions for their children, it comes as a surprise to many that they cannot automatically make decisions regarding a trust or estate in their child’s name. Estate law protects the interests of the beneficiary above all others, even from the parents of a minor beneficiary. If a parent is not able to sign for their child’s trust or estate, a court appointed guardian is assigned that is also known as virtual representation.

Virtual Representation

The concept of virtual representation occurs when an adult is appointed to speak on behalf of a minor trust beneficiary. Many of the provisions regarding virtual representation are found in the Uniform Trust Code (UTC), Uniform Probate Code (UPC), and state laws. Essentially, virtual representation gives a minor beneficiary the power to speak through an adult that actually has legal capacity to make decisions. A virtual representative can be appointed for minors, incapacitated adults, unborn children, unascertained beneficiaries, and adult beneficiaries that cannot be found.

Bobbi Kristina Brown is the only heir to the estate of her mother, renowned singer and actress Whitney Houston, but since being placed in a medically induced coma questions have arisen about who is next in line to inherit her fortune. Whitney Houston’s estate was estimated to be around $20 million at the time of her death three years ago. Bobbi Kristina was found on January 31 unresponsive in her bathtub and has remained unresponsive in a coma.

Whitney Houston’s Estate

Since being discovered on January 31, Bobbi Kristina has yet to regain consciousness, and there are rumors that her organs have started to fail. With reports that Bobbi Kristina’s family is considering taking her off of life support, people are now looking to the terms of Whitney Houston’s will and estate planning documents. According to the terms in her will, if Bobbi Kristina dies, Whitney Houston’s mother, Cissy, and her two sons are next in line to inherit Ms. Houston’s estate. The estate includes full royalties from the singer’s music, likeness, and image that will continue to distribute revenue over time.

When a trust is created, most often the creator turns to a trusted friend, relative, or confidant to oversee it. This makes a lot of sense to most people because the purpose of a trust is often personal in nature, and the creator wants someone to run the trust that has been a part of their life for many years. However, things like friendship, family drama, and emotions can all complicate the decisions that a trustee makes for a family trust in regards to carrying out the terms of the trust.

Use of Non-professional Trustees

The use of non-professional trustee has been growing as more people set up trusts to operate during their own lifetimes. A lot of these creators do not believe that they need to hire a professional because they can keep an eye on the trust while they are still alive. People are creating lifetime trusts for a variety of reasons. Many are looking ahead at minimizing estate taxes if their assets are above the $5.43 million exemption limit ($10.86 million for a couple). Others are attempting to minimize the level of current state taxes on their assets or gain financial control of their legacy.

Estate planning is not many couples’ idea of fun, but it is necessary to ensure that your loved ones are cared for after you are gone. An experienced estate planning attorney can handle drafting the proper documents and explaining the law behind estate planning; however, there are three important questions that you should address with your spouse or significant other regarding an estate plan.

How well does my spouse know my estate planning attorney?

If you are the one in charge of the estate planning process and the finances of the family, it is possible that your spouse has never met, or only met once, your estate planning attorney. Perhaps they met to briefly sign some papers, but the client/advisor relationship is not very strong.

“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.

While many New York residents familiar with and have an existing will in place in the event of their death, most people do not realize that estate planning documents extend far beyond a last will and testament. The world of estate planning documents includes not only living wills and advanced medical directives, but also trusts. Trusts offer several benefits associated with them, and come in two forms: revocable and irrevocable.

Benefits of Having a Trust

Trusts can not only provide for loved ones upon death, but they can provide for the person who created the trust during their lifetime. This is important in cases where the creator has a health issue, a mental disability or incapacitation, and other scenarios. Trusts can be administered without the need to involve a probate court, and can therefore protect privacy as to the contents of the trust. Trusts also serve as protection of assets for trust beneficiaries, and offer a wide variety of options in creating them to suit different needs.

Charity is an important part of an estate plan for New York families. Many residents have important causes that symbolize their own values and morals, including social, political, economic and religious non-profit groups. Donating funds via a will or trust is common for estates of all sizes–this is not just for the wealthy. Even relatively small donations can have a significant impact. In addition, giving funds to valued causes is a key way to pass on a final lesson to future generations.

There are many different ways to give assets to a charity at death. In the simplest form, funds can be given for the charity to use in any way it chooses. However, many donors have more specific wishes, often wanting to direct funds for very specific uses.

Understanding Donor Intent

We often discuss the importance for local families to account for the New York estate tax. Far more media coverage is given to the federal tax, and some local residents are under the mistaken assumption that the state law mirrors the federal. It currently does not. Even families who do not have asset to trigger the federal tax may still need to plan appropriately for the New York tax on estates.

However, if current plans are carried out, in a few years .there may be much more congruence between the state and federal rules. That is because earlier this month New York changed exemption levels for the estate tax. Previously, assets over $1 million were exposed to the tax at a 16% top rate. Now, however, the exemption level is raised to slightly more than $2 million ($2,062,500). Not only that, but that level is set to steadily increase or five years until, in 2019, the exemption level matches the federal exemption amount at that time (projected to be $5.9 million).

Important Provisions in the Estate Tax Law

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