Articles Tagged with fishkill estate planning lawyer

There are a number of reasons that people create joint bank accounts. Perhaps you and your spouse want to share a bank account to help simplify your marital finances. You may use joint bank accounts to help teach your children the importance of budgeting and financial planning. You may even need to have access to someone else’s bank account if they are incapacitated or cannot make purchases on their own. Whatever the reason for having a joint bank account, they are not without potential issues when it comes to your estate plan.

Vulnerability

Adding a person as an owner of a bank account inherently makes the account itself more vulnerable. In addition to the potential issues raised below, the more people you add as owners of a joint account the more likely you are to fall victim to theft – including identity theft. By adding individuals to the account, you will increase the risk of lost or stolen cards and/or checkbooks. Additionally, if the person you add to the account is not financially responsible, you risk losing the assets in that account because of poor financial planning.

Recently we published a blog about the difference between probate and non-probate assets . Probate is the legal process that occurs after a person’s death in which a court determines if a valid will exists and takes care of various legal aspects related to things like debts and distribution of probate assets. Usually, probate assets include assets that are owned individually and not governed by a contract. When a person dies without a valid will in place, a court will determine how your assets should be distributed according to your state’s law. However, this may not always be in line with your personal wishes.

What is intestate succession?

Intestate succession is the legal term used to describe the process by which a court will distribute your assets upon your death once other obligations, like debts, have been addressed if a person dies “intestate.” Dying intestate means that an individual is deceased but has not left a valid will. It is important to remember that not all wills are automatically valid, and there are certain statutes in each state that define what qualifies as a valid will. Each state has their own statutes governing the “line of succession,” a term used to refer to the path courts follow in distributing your assets if you die intestate.

In a previous post about healthcare and end of life decision making, we discussed the importance of the election of a healthcare proxy or agent. However, not everyone is able to make these advanced plans prior to an unexpected incapacitation. In June 2010, New York enacted the Family Health Care Decisions Act in order to address the issue of healthcare decision making for those individuals who do not have a predetermined healthcare agent or have not left instructions with a living will or Do Not Resuscitate Order.

The Family Health Care Decisions Act allows for the appointment of the patient’s family member or close friend to act as a ‘surrogate’ and step in to make medical decisions for the patient if they have become incapacitated and do not have prior designations made. Similar to a health care proxy’s ability to make decisions, this only applies when the patient is incapacitated. The Act lays out the order of priority that surrogates would be named, starting with a court appointed guardian if one exists, then the spouse or domestic partner of the incapacitated person, followed by adult children, a parent if still alive, a sibling, and then a close friend. Once elected, the surrogate is able to make all decisions regarding healthcare for the person, subject to some limitations. If the patient objects to the election, their objection prevails, absent a court finding that there is reason to override the patient’s decision. Additionally, if the patient made determinations prior to incapacitation while hospitalized, and in the presence of two witnesses, the surrogate’s consent is not needed for any life sustaining treatment, the patient’s wishes will prevail.

Adult Patients

PROPOSAL TO MOVE BACK TO PREVIOUS TRUST LAWS

As this blog discussed in the recent past, dynasty trusts are trusts that allow for a benefactor to pass wealth on to future generations via various legal mechanisms that allow a trust to carry on for literally hundreds of years, overcoming the traditional rule against perpetuities that limited trusts to a life in being plus 20 years, thereby ending the legal life of a trust essentially at about 90 to 100 years.  In March, 2016 President Obama submitted a proposed budget that includes a provision that would effectively eliminate these state trusts at about 90 years.

Every year, the Department of Treasury prints what is called a green book which outlines proposals, which, among other things, contains suggestions that the presidential administration believes are needed and appropriate changes to the law, policy or other regulatory and legal matters.  It also contains information regarding exceptions and issues that are unique to dealing with the federal government.  Under President Obama’s proposal, as found in after page 190 in the green book, this would be done by eliminating the generations skipping tax exemption at 90 years from the date of its creation.  

As the new year opens it is a good time to review all of your legal estate planning decisions and tweak any previous documents that you think need to be modified. This requires us to get back to the basics of estate planning . For those scenarios that deal with what happens to you in an emergency situation, you have an advanced medical directive, with some level of specificity but not too much. The term advanced medical directive is an umbrella term that encompasses several types of legally significant documents. One of them is a living will. Your living will tells the medical professionals who are treating you, what your wishes are in advance for any number of medical situations.

HEALTH CARE PROXY

Underneath the umbrella term of advanced medical directive, there is also the health care proxy. The health care proxy allows for you to appoint a trusted person to act as a decision maker for those scenarios that are not contemplated in your living will and if you are unable to make any medical decisions by yourself. Medical conditions change, different doctors have varying opinions as to the best course of treatment or even over the correct diagnosis. Having a health care proxy will have someone stand in for you to make the best decision under the circumstances. You can limit the authority that you give to the person or only permit the health care proxy go into effect after certain conditions or triggers occur.

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