New York Estate Planning Lawyer Blog

Last week an article in the Mansfield Patch listed "Five Vital Estate Planning Mistakes" made by local community members. The list touched on a few issues that each New York estate planning lawyer in our firm has seen time and again. Like history, these errors tend to repeat themselves. Being aware of the common problems is the best way to ensure you don't make them yourself.

Of course common mistake number one is putting off estate planning efforts entirely. Passing on is usually not a topic that most enjoy thinking about. Estate plans inherently involve some considerations and preparations in the event that one is no longer alive, and so many simply avoid the idea altogether. This delay ultimately serves no purpose. As the article author remarks tough-in-cheek, "If you don't die before retirement, chances are pretty good you'll die sometimes afterwards." Considering that death is inevitable, there is simply no logical reason to do no planning and risk paying more in taxes, the uncertainty of the probate process, or the potential squabbling of family members.

Second on the list was failure to consider naming guardians for one's children. While most local residents conducting New York estate planning have adult children, planning is important for younger community members as well, particularly those who have young children. When crafting an elder law estate plan for clients, we always take into account the family dynamics involved. When young children are present it is important to make plans for those children in the event something happens to you, the parent. This is another task that is often put off, because it is not pleasant to think about orphaned youngsters. However, at the end of the day failing to name a guardian only means that the buck will be passed to some other decision maker if anything happens--usually the court. No one is better positioned than a parent to name a potential replacement in case of tragedy, and so it is always prudent for parents to do so.

Another common mistake includes failing to update policy beneficiaries. Single parents or those who are divorced are more susceptible to this error. For example, when their children are young a single parent may name a grandparent as a beneficiary on things like an IRA, 401(k), or life insurance policy. They then fail to change that designation down the road, after their children have grown. Similarly, divorced spouses often forget to change each other as named beneficiaries after the divorce.

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Estate Planning May Be A Family Decision

Our New York estate planning lawyers ran across a Forbes article last week that began with the provocative claim that "70% of intergenerational wealth transfers fail." The story was discussing a new Williams Group study which examined the long-term effects of wealth transfers in 3,250 families. "Failure" in the study was characterized as situations where wealth was dissipated by heirs, often with the family assets becoming a source of disagreement and friction.

The researchers were quick to note that poor professional assistance was not to be blamed; estate planning attorneys, financial advisers, and tax experts were not found to play a role in the wealth transfer problems. In fact the researchers noted that "these professionals usually did well for their clients." Instead, the transfers that ended with problems were usually caused by poor family transition planning. In other words, the authors explained that "no one in the unsuccessful transferring families was preparing their heirs for the multiple kinds of responsibilities they would face when having to take over the reins."

To combat the problems that arise when large sums of wealth are given to unprepared children and grandchildren, it is important to identify long-term lessons and values that must pass on along with the assets. Some suggest identifying a "family mission" and a strategy to ensure that the family mission is carried out. The heirs should understand that mission and be aware of ways to honor it. For example, it is likely that the mission would include a range of philanthropic goals, family business development plans, and other targets. It is helpful for the heirs to have experience practicing those family duties well ahead of time, perhaps by assisting with a few family business matters or charity efforts.

The report suggests that at the center of all successful wealth transfers--beyond proper estate planning--is open and honest communication between families. Many wealthy seniors worry that there will be undesirable consequences if they talk openly with their children about their business, assets, and attitudes about wealth. There is a fear that if children know what is coming to them they will become lazy, take advantage of the situation, or begin feeling entitled to more. However, many experts have found that secrecy breeds problems down the road. This is true for all families regardless of their overall financial situation. It is almost always beneficial to have conversations about family assets and long-term legacies. The holiday season is perhaps a perfect time to do so.

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Estate Planning May Be A Family Decision

Many local families create their New York estate plan with potential family feuds in minds. History is replete with examples of siblings, parents, children, in-laws, and others being torn apart following disagreement regarding the passing of assets at the death of a loved one. Legal challenges following a death are very common. The legal fights are even more likely to occur when a significant amount of assets are involved, there is surprise about how they will be distributed, or inadequate estate planning has been conducted forcing the matter to be decided in the courtroom. Many parents have made the mistake of assuming that "the kids will figure it out" when it comes time to pass on assets. Unfortunately, that exact mindset has led to entire families descended into dispute. The fighting can last for years or, in some cases, even decades.

For example, last week Forbes touched on the case of the famed civil rights legend Martin Luther King Jr. MLK had not created an estate plan before he died; he did not even have a will. As a result, the distribution of his affairs was left entirely to the courts with the predictable family fighting that ensued--and still continues. Some time ago the King family children engaged in a series of back-and-forth legal battles following the creation of a corporation to manage King's estate. The lawsuits lasted for years before a settlement was finally reached between the children.

However, the possession of certain assets continues to be fought by the corporation (The Estate of Martin Luther King Jr., Inc.). Recently the estate sued the son of one of the Reverend's former secretaries (an old family friend) claiming that the secretary possessed historical documents related to MLK. The documents apparently include handwritten letters, speech transcripts, newsletters, and similar materials. According to the secretary, Dr. King gave her the documents over the years, and she always assumed them to be her personal property. He apparently never asked for them back over the decade and a half that the secretary worked for the Reverend.

The King Estate Corporation recently sued the family when it learned of the existence of the documents. The family friends are hoping to end the legal fight early, because they presumably do not have the funds to support a prolonged (and expensive) legal battle over ownership of the documents. The Estate is arguing that the documents were given by an employer to an employee, but the family friends insist that they were gifts. Resolution of this issue will come down to what Dr. King actually intended when he handed the materials over. Proving one's mental state is difficult at all times, let alone when it relates to events that happened half a century in the past. All of the fighting can be avoided by making ones intentions known explicitly through use of legal documents like wills and trusts.

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High-Profile Examples Highlights Need for Clarity in the Estate Planning Process

Forbes Shares Information on Celebrity Estate Planning Stories

Yesterday there was a new twist in the high-profile New York estate planning story involving Huguette Clark, the woman who died this year leaving behind a $400 million Gilded Age fortune. As we discussed earlier this week, the woman's family was not provided for in her will. Instead her fortune was given mostly to a newly created art charity with some benefits going to her long-time nurse, attorney, and accountant. Instead of using various trusts to ensure the woman's estate was transferred seamless per her wishes, her New York estate planning attorney surprisingly utilized only a will. Expectedly, the will has been challenged by the woman's family.

However, new information was just released revealing that Ms. Clark actually signed two wills, one only a few weeks before the other. According to a report by MSNBC, both wills were genuine, meaning that they were properly executed. The first will, seemingly revoked by the signing of the second will, would have left her fortune to her family. The family filed the first will with the court yesterday--the first step in what will assuredly be a prolonged battled over the Clark family millions. The attorney representing the disinherited family members claimed that the case involved "undue influence and exploitation of a very elderly and extraordinarily wealthy woman at the hands of two professionals who, with the help of certain others...ultimately stripped her of her free will, as well as millions of dollars."

As this situation demonstrates, it is incredibly ill-advised for any family to rely solely on a will to conduct inheritance planning, especially for families with large amounts of wealth. Like clockwork they almost always cause more problems than they solve. Will contests are common and virtually guaranteed to occur when two wills are signed in short succession with family members being cut out between them. In this case, while twenty one relatives would have split the fortune in the first will, the second gave a large amount to a nurse, small sums to an accountant and lawyer, and then put the rest in an art foundation that was to be managed by the same lawyer and accountant. That chain of events raises many red flags about the influence that the small group of individuals who benefitted from the second will had on the woman. It is made even more suspect by the fact that the estate planning attorney who was to benefit from the will was the same one that drew it up.

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Questions Remain About Huguette Clark's $400 Million New York Estate

Forbes Shares Information on Celebrity Estate Planning Stories

New York estate planning is a necessity for virtually all local residents, no matter where on the income scale one falls. Easing the emotional, social, and financial burden on one's family and ensuring wishes are carried out upon one's death is important if one has $400,000 or $400 million to pass on. Unfortunately, New York estate planning mistakes are made at all income levels, often with serious results for the individuals involved. The most common mistake includes not taking advantage of all of the legal tools available. For example, while wills are still commonly thought of as a basic estate planning necessity, in truth they are becoming obsolete for many families. Trusts are much more useful in that they can avoid probate and provide for substitute decision-making if disability strikes. Yet, many local residents, including those with vast fortunes, still fail to take advantage of the benefits that trusts bring.

One high-profile local example is that of Huguette Clark. The reclusive heir to her father's copper and mining fortune died earlier this year at the age of 105. She was rumored to have more than $400 million at the time of her passing--an estate she inherited upon her father's death over eighty five years ago in 1925. Ms. Clark had been a mysterious figure, having lived in a hospital room since the late 1980s. She left her Fifth Avenue apartment empty for over twenty two years even though she was in relatively good health until just before her passing. Ms. Clark was long estranged from her family, and only a very small and intimate group of advisors had any contact with her for the last quarter century.

Surprisingly, even though she had such a large estate, Ms. Clark's advisors never had her create a trust to protect her long-term financial affairs. An article about her story published today by Forbes explains how most estate planning attorneys would have at least advised the client to utilize a revocable living trust, instead of a will. The need for a trust was made even more necessary considering the size of Ms. Clark's wealth. In addition, there are questions about the terms of the will--drafted and signed when Ms. Clark was ninety eight years old. The will left most of the woman's fortune to a newly created art fund and gave a significant amount to Ms. Clark's long-time nurse. However, the will also named a partner in the very law firm that drafted the will as a beneficiary. Even if this was the exact intent of Ms. Clark, the potential conflict of interest issues would usually counsel the firm in question not to prepare the will. Many other questions remain surrounding her advisors spending over $100 million of her estate in the last two decades of her life.

As it quite common when a will is used, Ms. Clark's family members have contested the will. They are claiming that she was mentally incompetent at the time she signed the document and will likely allege that the small group of advisors around her exercised undue influence. If successful, the distant family members may ultimately obtain the fortune. All of this fighting likely could have been averted had trusts been used to provide for her charity and pass along assets as intended.

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Our New York estate planning lawyers continue to advise local community members that wills are virtually obsolete for many residents. A will often creates more problems than it solves, because probate is still involved, the information is made public, and legal challenges to the will provisions are common. Estate planning is meant to simplify the transfer of assets, and wills often fail at that goal. Instead, the creation of trusts is usually a far superior method of saving taxes and streamlining the process to distribute assets quickly and seamlessly.

However, there may be limited situations where a will might be appropriate, depending on the age of the individual and their assets. As Forbes explained in an article last week, even when a will is used instead of a trust, it is vital to have professional help writing it. While do-it-yourself projects are worthwhile for home improvements and car maintenance, it is not the same vital financial planning tasks. When professional help is not sought and problems are created, it is only at the exact moment when the document is needed to work that its flaws come to light. At that point, there is no going back.

As the article explains, when done without experienced aid, wills are often filled with errors. For example, failing to sign the will, not updating it, or adding amendments improperly are common mistakes that can nullify the document. Without the guidance of professionals, imprecise wording is often used. It is much harder than many suspect to craft legal documents with language that is void of any ambiguity. Vague language is easy to misinterpret, and the one who knows for sure what was intended will not be around to explain the mistake. Estate planning lawyers are well versed in crafting legally precise terms in standard language that doesn't equivocate.

Besides making sure one's specific intentions are explained without ambiguity in the will, a legal professional can also ensure that important issues are considered and incorporated into the document if necessary. For example, when drafting a will on their own, many community members fail to consider important issues. What happens if an heir dies first? What happens when an asset distributed in a will is no longer owned when the will is executed? Who is responsible for paying the expenses on certain assets, like a house? A professional experienced in these matters can bring up these and many concerns that may need to be considered when going through the drafting process. This is particularly important in more complex situations, such as with blended families.

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There is often a default assumption that local parents wish to provide all of their children with equal shares of an inheritance as part of their New York estate plan. However, no two families are identical, and there are a variety of reasons why some parents feel it necessary to provide different assets to each of their children upon their death. The ability to tailor an inheritance using rules different than the default to suit a family's specific desires is one of the main reasons why local families seek the assistance of New York estate planning lawyers. As one lawyer put it, "there's nothing so unequal as the equal treatment of unequals."

Most families take a variety of factors into account when deciding how to distribute their property. For example, one child may already be more financially successful, another may have a larger family of their own, and yet another may be estranged from the family. In other cases a parent may have already helped one child while alive--such as by providing down payment money on a house--and want that prior help to be reflected in the inheritance.

A Wall Street Journal story this weekend discussed how many families have questions about the best way to go about giving one child a larger share than another. Trusts are usually a more effective estate planning tool than a will. However, if a will is used, it is important that certain steps be taken to ensure that the uneven child distribution is capable of withstanding legal challenge. Part of that process involves being open and honest with family members about the inheritance so that children know about the terms while you are alive. This minimizes the surprise factor and may quell later suspicions. Having these conversations is often difficult, so as an alternative a video or instruction letter can be included with the estate planning documents to explain why a certain decision was made.

To minimize the risk of legal challenge to these documents, it is also helpful to take steps to prove that you are of sound mind and have the proper capacity at the time the plan is signed. In addition, local residents may be well served by considering alternatives to a will to distribute assets to their heirs. For example, property can be split unequally between children, with a set percentage of assets left in a trust to be used for all of the children's emergency needs. A variety of unique legal tools exist which may help a family tailor their plan to effectuate their specific wishes. Local residents can learn what options may be best in their situation by visiting a professional, like a New York estate planning attorney.

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Some local residents believe that they do not need to worry about creating a New York estate plan if they only want to divide all of their assets between their children equally. These community members are under the incorrect assumption that the default legal rules will ensure that everything works out as they wish. Unfortunately, this is rarely the case.

This weekend My SA News discussed this all-too-common mistake of voicing intent to be even-handed with asset distribution but not taking the proper legal steps to carry out that intent. For example, the story used the real example of a family with two parents and five daughters. Both parents had been married to one another their entire lives with no divorces. They did not conduct any estate planning because they always explained that they wanted everything to be divided equally among their children at their death. They did not even have wills drafted.

However, their actions did not reflect that voiced intention, and there was no plan in place to protect the family. For example, after the father died, the mother deeded the family home to the first sister. Later, a second sister deeded another house to the mother, but upon the mother's death that sister wanted the home back. A third sister visited an attorney and asked for help. She wanted the family home and the second home to be divided equally among the children as the parents always wished.

Unfortunately, without any estate plan there is often little that can be done to enforce the verbal assurances of parents. Actions such as signing deeds over to others have important legal ramifications that cannot be undone. Failure to visit with an estate planning attorney to understand the consequences of these decisions often leaves those involved without legal recourse. In this case, the family home will likely remain with the first sister. The second home may be divided among all the children according to the intestacy rules of the state, because the second sister will likely be unable to force return of the house if she gave it to her mother free and clear.

An important take away from this convoluted story is that clear legal planning must be done to ensure that all vocal intentions are respected. Beyond that, it is important to remember that proper preparation in these matters does more than simply pass on property at death. By visiting a New York estate planning attorney those in our area can also keep certain assets in the bloodline, save on estate taxes, and provide for disability.

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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.

Interestingly, the same general advice also applies to those who specifically want no religious components in their plan. It is often a mistake to assume that the default rules will lead to no religious involvement in end of life affairs. It may be important to use estate planning documents to expressly indicate a preference for no observances to override incorrect assumptions by friends and family members. Without such clear guidance there is a chance that a third party could impose religious traditions on some end of life issues like funeral and burial decisions.

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An important benefit of visiting with a New York estate planning lawyer to help with your asset planning is that on top of carrying out your wishes, the professional can share avenues available to you of which you may not be aware. For example, many area residents are under the impression that their will is nothing more than a document that specifically divvies up assets. In reality wills can be crafted in virtually unlimited ways depending on specific family dynamics and the ethical values of the testator.

Perhaps no high-profile case better illustrates the complexity with which a will can be drafted than the story of Wellington R. Burt. At one point one of the richest men in America, Mr. Burt made his wealth in the robber baron age and was primarily involved in the lumber industry. Mr. Burt lived to age 87, passing away in his Michigan mansion in 1919 with an estimated net worth around $60 million.

The lumber giant gained notoriety following his death as the details of his will were revealed. Mr. Burt was particularly careful to ensure that his living relatives received only a small part of his fortune. To avenge an apparent family feud, Mr. Burt left his children relatively small annual payments from $1,000 to $5,000--except for one favored son who received $30,000 yearly. The rest of the man's estate was held in trust until 21 years after the death of his last direct descendant alive at the time of his death.

ABC News reported recently that that final requirement was met in 2010--92 years after Mr. Burt's passing. Mr. Burt's last grandchild died in 1989, triggering the 21 year wait which finally expired in 2010. Last month the twelve descendants of the lumber tycoon reached an agreement to split up the estate now valued over $100 million. Based on seniority, the individuals received values ranging from $16 million to $2.5 million.

While a "spite clause" is perhaps not advisable for many area families, the case of Wellington Burt stands as an evidence of the immense flexibility that exists to all those considering what to do with their assets following death.

Continue reading "$100 Million Estate Finally Reaches Relatives After 92 Years" »

New York estate planning is often given little thought by some local residents until a specific event brings attention to the issue. A retirement, death of a close friend or relative, and similar occurrences often act as a catalyst leading residents to consider plans for their own affairs. Unfortunately, for many residents that triggering event never occurs, and they end up waiting too long to properly prepare matters related to their estate. It is in those cases that controversy and disagreement often leads to fighting among surviving relatives.

That appears to be what happened with the estate of NFL football great and union leader Gene Upshaw. Earlier this month The Washington Post reported on the saga surrounding Mr. Upshaw's death, lack of will, and controversy among his friends and family in the aftermath of his death. The 63-year old Upshaw was vacationing with his wife in 2008 when he unexpectedly fell ill. He was taken to a local hospital and died three days later.

Mr. Upshaw did not have a will or any other estate planning matters settled before his sudden illness. As a result, there was a chaotic, questionable attempt to have a will drafted and signed in the three days between his illness and ultimate death. According to reports the last-minute document appeared to leave all of the man's assets to his wife, naming her as trustee and executor. However, many questions remained about Mr. Upshaw's mental state at the time the will was drafted and whether or not he actually signed the document.

A few months after his death, Mr. Upshaw's eldest son filed suit disputing the will. He claimed that his father was essentially unconscious in his final days and unable to execute the paperwork. His mother-in-law, however, asserted that he was conscious and capable of speaking. It was later revealed that Mr. Upshaw had not in fact signed the document but that his friend had done it on his behalf. Both sides entered into a prolonged dispute. The matter was set to go to trial earlier this month but was finally settled privately a few days before the start.

Continue reading "Lack of a Will Leads to Controversy in Estate of NFL Legend Gene Upshaw" »

by Michael Ettinger, Esq.

We were thinking the other day about what typically happens when a client signs a will. After the will signing, the client often fails to ever look at the will again and the lawyer may never contact the client again either.

Now, let's say this particular client dies thirty years later. The old will is trotted out and, lo and behold, the executor is some very elderly or deceased sibling and the beneficiaries are quite different from what the deceased would have wanted thirty years later. Not to mention that by only having a will, not being a plan for disability or nursing home protection, this client may have died penniless, having spent down all of their assets to pay for long term care.

On the other hand, had the client secured an Ettinger Elder Law Estate Plan, they would have attended a client breakfast every two years, or fifteen client breakfasts, had ten of their complimentary three year reviews and would have received a whopping fifteen hundred and sixty of our weekly Ettinger Elder Elerts. That's 1585 points of contact between the client and the firm, all designed to make sure that your plan works when you and your family need it, including for disability and long term care.

We received a call last Friday from a woman who said that her father had died but her stepmother was claiming that he did not have a will. The daughter was certain that he did, in fact, have a will.

What happens in such a case? Regardless what the daughter believes, unless a will can be produced there is no will. A check of the county probate court would be in order as some clients traditionally filed their wills in court for safekeeping, but this is rarely done today. There is also the possibility that the father destroyed the will he had, for whatever reason.

Another possibility is that all of the assets may have been made joint with the father's second wife and that she was also named beneficiary of any other assets, such as IRA's, annuities and insurance policies. In this case, all of the assets pass to the surviving spouse without any court proceeding and there is no need for a will or, if there is a will, there is no need to file it.

The remedies for the daughter would be two-fold. First, she could file a legal proceeding against the stepmother to compel an accounting of her father's assets. This may be costly and her claim against the stepmother, if all the assets were made joint or beneficiary designated, would depend on her ability to prove fraud or duress - a highly unlikely scenario.

Second, she may go to the probate court and request to be appointed "administrator" of her father's estate. An administrator, similar to the "executor" under a will, is appointed by the court as the legal representative of the deceased person. It is said they "step in the shoes" of the decedent and have full rights to act in their name. This way, daughter can approach any banks or investment houses where her father had assets and they must respond to her. She can obtain his mail and check for statements there as well. She can compel the stepmother to turn over all documents concerning her father's financial affairs. In the event that her father did have assets in his own name or assets that were left to his estate, these would be shared, by law, as follows. The first fifty thousand dollars would go to his wife and the rest would be split with fifty percent going to his wife and fifty percent going to his children, in equal shares.

Here is where the race to the courthouse comes in. Nothing stops the stepmother from going to court herself to be appointed administrator and gaining control of the estate. In such a case, the first to the courthouse, with a properly prepared petition, wins. We advised the daughter to come in to our office the following Monday and have the petition prepared on the spot and filed the same day. As this was written over the weekend in between, it remains to be seen what she will do.

by Michael Ettinger, Esq.

"Elder Law Estate Planning" is a niche area of the law which combines the features of elder law and estate planning that pertain most to the needs of the middle class.

Estate planning was originally for the wealthy few. Middle class families did not consider themselves as having "estates" to plan. During the Reagan years (1980-1988), a great economic expansion occurred, raising the asset level of the middle class into the realm of estate planning. With middle class people suddenly exposed to "estate taxes", the need arose for estate planning, to reduce or eliminate those taxes. A few years later, in 1991, the American Association of Retired Persons (AARP) published "A Consumer Report on Probate" which concluded that probate was a process to be avoided, in all but the most exceptional cases. This marked the beginning of the end of traditional will planning and started the "living trust revolution". AARP recommended that families start using trusts rather than wills, to avoid probate and save their beneficiaries tens of thousands of dollars in the estate settlement process.

Since then, millions of people have set up trusts to:

• Save time and money in settling the estate

• Avoid legal guardianship if they become disabled

• Avoid having their personal and financial matters made public

• Reduce the chance of a "will contest"

• Keep control in their family and out of the court system

At about the same time as living trust planning became popular, the field of elder law emerged to help people navigate the increased complexity of state Medicaid rules and regulations, the soaring costs of nursing home stays, and the fact that people were living considerably longer.

Historically, estate planning was handled primarily by "white shoe" law firms in the deep canyons of downtown Manhattan, while elder law planning emerged out of the Department of Social Services. State employees began to take their expertise in Medicaid rules and regulations into the private sector.

To this day, these two fields continue to grow independently of each other, sometimes to the detriment of the clients lawyers are meant to serve. Estate planning lawyers mostly see estates averaging from the low hundreds of thousands to about two million dollars. Families with estates under one million dollars often cannot afford long-term care insurance. They may now or later need a Medicaid Asset Protection Trust (MAPT) to protect their estates from being depleted in the event a nursing home is required. Since the estate planning attorney is often unfamiliar with elder law, the client never gets the MAPT they need, and the estate plan to avoid probate proves useless when a nursing home stay ends up consuming all of the assets.

For the couple with over one million dollars in assets, estate planning is essential to reduce or eliminate estate taxes. In this case, they should split their assets into two trusts, thereby creating two estates, and doubling the exemption from one million to two million dollars. Still, this couple, while they may be able to afford long-term care insurance, may find one or both of them uninsurable due to health reasons. Perhaps what they really need are two MAPT's, not just to save estate taxes but to also protect the assets from nursing home costs, but they never get them because the estate planning lawyer is not experienced or trained in drafting these documents.

What happens when the estate planning client actually becomes disabled and needs long-term care? They, or the family, often consult with the estate planning lawyer who prepared their plan, but who may be unable to help them, due to his or her unfamiliarity with state Medicaid rules. Many families lose assets that might have been saved. Unknown to the estate planning attorney, elder law attorneys have developed numerous techniques to protect hard won assets, even when the nursing home is imminent, such as "spousal refusal" and the "gift and loan" strategy.

On the other side of the coin, what happens when the older single or couple meets with an elder law attorney instead of an estate planning attorney? These clients are usually sixty-five or over, and are looking for asset protection. The elder law attorney knows how to create a MAPT and often recommends them. However, on the estate planning side of matters, the elder law attorney may miss the need to set up two trusts for the couple to avoid the estate tax. He or she may have little knowledge about estate planning for second marriages, a growing segment of the population, or using Inheritance Trusts to keep the assets in the blood and protect the inheritance from children's divorces, lawsuits, and creditors.

While some of the family's needs may be met, such as asset protection, other needs are left unserved, often because the clients are unaware that these two fields of law complement and overlap one another. In other words, they may get what they want but
not necessarily what they need. These oversights are often visited on the heirs.

Your writer made the conscious decision twenty years ago to develop expertise in these two fields of law simultaneously. This has proven to be invaluable to thousands of families. Clients who originally came in for estate planning services later became elder law clients, converting their revocable living trust estate plans into MAPT's as they got older, or through the use of Medicaid planning services to protect assets when the need for nursing home care actually arose.

Looking back on our experiences in over ten thousand cases at Ettinger Law Firm, we conclude that we have assisted in the creation of a new niche, "Elder Law Estate Planning".

We define this area of law as:

• Getting your assets to your heirs, with the least amount of taxes and legal fees possible

• Keeping those assets in the blood for your grandchildren and, in the meantime, protecting those assets from your children's divorces, lawsuits, and creditors

• Protecting your assets from the costs of long-term care and qualifying for government benefits available to pay for care

While estate planning involves tools for well-to-do families, with acronyms like GRITS, GRATS, and GRUTS, and where elder law serves the diverse needs of our growing senior population, including the less fortunate, through Medicaid, Medicare and Social Security, "Elder Law Estate Planning" addresses the concerns of the vast majority in the middle.

By Michael Ettinger, Esq.

So many clients are advised that they need a will. In fact, will planning is becoming obsolete for persons over sixty for many reasons.

Instead of actually solving problems, wills often create them. First, they must be proven to be valid in a court proceeding, the infamous probate, for estates in New York over $30,000.00. Court proceedings can be expensive, time-consuming and things often go wrong. Also, when the client dies, that will is usually out-of-date, having been created decades before. The executors may be the wrong persons, the beneficiaries or their percentages may be wrong or other changes in the family have not been taken into account.

Notice of the court proceeding must be given to certain relatives who may be difficult or impossible to locate. Complications arise with relatives in foreign countries who may need to go to the American Consulate for notarization or "consularization" of legal documents. If there is a disabled child, the court will appoint a lawyer to represent their interests, including preparing a report to the court, and your estate must pay that attorney's fees.

Proof problems with the will lead to delays that often prevent needed funds getting to surviving spouses or children. It is fairly common for real estate to be tied up, while the probate process drags on, causing potential buyers to be lost. In some cases, stock cannot be sold even though it may be falling in value rapidly. Law firms routinely commence probate proceedings as a courtesy for families who cannot even afford the legal fees to get the matter started. Needless to say, the cost of court proceedings today may be expected to be in the five figure range.

Two other pitfalls of will planning bear mentioning. First, since the will is filed in court, it becomes a public record. Anyone may then go into the courthouse and order a copy of your will to see what you had and who you left it to. Your privacy is out the window. Secondly, since notice must be given to the heirs you may have left out, or left less than they may feel they are entitled to, you run the risk of a will contest if your estate is distributed in anything but equal shares.

When you are in probate court, who is in charge? The judge, not you or your lawyer. Don't suppose that the Judge will always act in your best interests, as the court may have other interests to consider.

Always better to stay out of court, in our opinion. By using a living trust, instead of a will, you avoid probate court and keep control, or at least control rests with those you have chosen, if you die or become disabled. The expenses are so much less without court proceedings that you may easily save tens of thousands of dollars.

The other problem with a will? It only takes effect when you die. Today, about half of all people eventually become disabled. Since the will does not provide for disability, you risk guardianship proceedings. These proceedings occur later in life when someone becomes unable to handle their affairs and does not have an adequate plan set up. In a guardianship, the court will appoint someone to handle your affairs. Not only may it not be the person you would have chosen, it may not even be someone you know. Trusts, which take effect while you are living, are considered a highly effective tool to avoid guardianship proceedings and guarantee that the person or persons you choose will be in charge. This way, you may be certain that your best interests will be looked after.

In short, when someone tells you that you need a will, think again. It may be a living trust that you need instead.