Articles Posted in Trusts

Perhaps no New York estate planning effort has received more attention over the past few years than that of well-known New York hotelier Leona Helmsley. Upon her death in 2007 a scramble ensued to determine what would happen with her estate, estimated to be worth billions. As a post yesterday at Financial Planning explains, the subsequent way in which her assets were divided imparts lessons for all local residents, regardless of the size of their estate.

Mrs. Helmsley’s wishes captured the public attention when it was revealed that the she left $12 million to care for her dog, Trouble, and created a charitable trust worth billions to be spent primarily for the care and welfare of dogs. Mrs. Helmsley’s wishes were placed in a “mission statement” where she explained that she desired the trustees to use their discretion to disperse funds first for the care of dogs and only secondly for “other charitable activities as the Trustees shall determine.”

But there were concerns about the legal effect of the intentions placed in the statement. For one thing, the statement gave the trustees discretion to spend the resources. On top of that, the statement was never incorporated into her will or other trust documents.

As a result, the trustees have been given the power by local judges to essentially disperse the charitable trust funds in any way they wish. So far the trustees have donated $450 million to charity; of that amount only $100,000 has been given to dog-related efforts. That constitutes less than one fiftieth of one percent–hardly an amount which would indicate dog welfare as the main priority suggested in Mrs. Helmsley’s mission statement. Several animal charities sued to force a larger share of the trust given to animal efforts, but their legal efforts have been unsuccessful.

The overarching goal of all New York estate plans is to ensure that an individual’s specific wishes are carried out when they won’t be around. However, without a clear, consistent plan a judge usually decides what happens to an estate, regardless of one’s actual wishes. Even when some planning is done, as in this case, confusion may remain unless those planning documents are updated and integrated so that there remains no ambiguity about how to handle affairs.
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Virtually all local families have much to gain from taking the time to conduct proper New York estate planning. However, for some the need to ensure that future finances are in order and loved ones are secure indefinitely is a particularly strong necessity. Families who have children with special needs, like autism, must give careful thought to how their vulnerable children will have the resources that they need no matter what the future holds.

Yesterday the Sacramento Bee profiled one young family that is taking steps to ensure that their four children–including three with signs of autism–will be financially secure in the future. Considering many forms of autism make communication and basic social interaction a challenge for these children, their dependence on loved ones will often last a lifetime. There remain millions of families in this situation as an average of one child out of every 110 suffers from autism.

Paying for medical expenses alone is often a challenge for these families. While the average American usually spends about $317,000 in direct medical costs in a lifetime, individuals with autism often pay roughly twice that amount, nearly $630,000. Of course that does not even account for non-medical expenses, including basic needs like clothing, food, education, transportation, entertainment, and countless other costs. Thinking about these details is overwhelming for some, but it is important to remember that it is manageable. One of the first steps is to contact a New York estate planning lawyer to learn what options are available to you.

One possible choice that can be explained to you is the creation of a special needs trust. Depending on your family’s financial situation, this option may allow you to pass on more of your assets to your child without risking the loss of government benefits like Supplemental Security Income (SSI), Medicaid, or state residential programs. However, even if the trust is created there are risks of government benefit reductions depending on how the trustees make payments.
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Many seniors know that they need to get in touch with a New York elder law attorney to help update and handle matters related to their estate. Yet much of the actual work that those lawyers do is shrouded in mystery to the average community member. Some believe that it all has to do with filling in the blanks of certain legal forms. That often leads to the assumption that all elder law attorneys are capable of doing essentially the same quality of work. Nothing could be further from the truth.

It is imperative that all planners ensure that they work with experienced New York estate planning lawyers to avoid common pitfalls in the process. Only the best practitioners in this area are aware of all options available to a client to best protect their assets and ensure that their wishes are carried out. The law changes often at both the federal and state level–it is your attorney’s job to know those changes and advise you on its potential impact on your situation.

Besides keeping abreast of updates in the law, your attorney must also have the practical skills to explain to you how certain future events may affect the estate. Careful planning and strategizing is important in these matters. For example, there may be no easy answers when it comes to how many assets to place in a wife’s name or trust to offset a husband’s IRA assets. There is a tendency among some attorneys to place too many assets with a wife, while ignoring the practical reality that the husband’s life expectancy is lower. This mistake may then results in no estate tax savings. Only the most experienced attorneys would be capable of understanding these possibilities and ensuring that you have all the options on the table when making your plan.
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