Grimaldi & Yeung

Requests for Estate Plans Reflect Fears about Coronavirus

 

 

 

 

 

 

 

 

“Lawyers are being bombarded with requests to write Wills, update estate plans and prepare Living Wills and health care directives, as people are confronted by the realization that they could be diagnosed with COVID-19 and dead within days.”

Estate planning lawyers have always known that estate planning is not about “if,” but about “when.” The current health pandemic has given many people a wake-up call. They realize there’s no time to procrastinate, reports the article “Surge on wills: Fearing death by coronavirus, people ask lawyers to write their last wishes” from InsuranceNews.net. Legal professionals urge everyone, not just the elderly or the wealthy, to put their end-of-life plans in writing.

The last time estate planning attorneys saw this type of surge was in 2012, when wealthy people were worried that Congress was about to lower the threshold of the estate tax. Today, everyone is worried.

Top priorities are creating health care directives such a Health Care proxy, which appoints a person to be your health spokesperson when you are unable, and a living will stating your wishes for end of life choices such as “Do Not Resuscitate” orders. In addition, individual are recognizing the importance of granting power of attorney to someone who can make legal and financial decisions. Once these safety net planning documents are fully executed and the agents are in place for life crises and emergencies, then one can plan of their afterlife inheritances and wishes.

 An estate plan, including a Last Will and Testament or Living Trusts, details what you want to happen to assets, or who will be guardian to minor children upon your death. A Last Will and Testament can provide guidance when you are no longer alive to do so and spares your family court involvement in family affairs, opens the door to family disagreements that can result extensive legal fees. These can occur when there is no estate plan. You can meet with one of our firm’s estate planning attorneys, to help assist in your estate plan for peace of mind.

The coronavirus has created a new problem for families. In the past, a health care surrogate would be in the hospital with you, talking to healthcare providers and making decisions on your behalf. However, now there are no visitors allowed in hospitals and patients during the Pandemic, the patient can be completely isolated. Estate planning attorneys are recommending that specific language be added to any end of life documents that authorize a surrogate to give instructions by phone, email or during an online conference.

Any prior documents that may have prohibited intubation and or the use of ventilators may need to be revised, since intubation has been a vital treatment for COVID-19 and not necessarily just an end-of-life stage.

Our attorneys will ensure that documents are properly witnessed and signed.  New York State has permitted remote signings, but it is currently by Executor Order of the Governor and is not permanent law.

There are many stories of people who have put off having their wills prepared, figuring out succession plans that usually take years to plan and people coming to terms with what they want to happen to their assets.

Equally concerning are seniors in nursing homes who have not reviewed their wills in many years and are not able to make changes now. Older adults and relatives are struggling with awkward and urgent circumstances, when nursing homes or senior communities do not permit visitors.  We are hopeful this will end soon. We have be able to do remote signing by video or “window” of special outdoor signing to accommodate the new health rules.

Please call our office anytime for assistance in your Estate Planning, Long Term Care Planning, Medicaid or Special Needs Planning: (718) 238-6960 or info@gylawny.com. We will be happy to schedule an appointment with one of our attorneys.        

Steps to Take When a Loved One Dies

 

 

 

 

 

 

 

“When a member of your family dies, you could be left to pick up the financial pieces. Finding all the information you need can be challenging.”

This year, more families than usual are finding themselves grappling with the challenge of managing the affairs of a loved one who has died. Handling these tasks while mourning is hard, and often families do not have time to prepare, says the article “How to manage a loved one’s finances after they die” from Business Insider. The following are some tips to help get through this difficult time.

Someone has to be in charge. If there is a Will, the person named in the Will is responsible for administering the estate of the deceased. That person is usually called the executor or personal representative. If there is no Will, the closest next of kin is eligible to serve as the administrator. It should be someone who has the necessary skills to take the lead. This individual is honest and trustworthy, capable of handling many details, and can handle sometimes mountains of paper work.  This includes arranging for the funeral, paying debts and claims, gathering assets, collecting accounts, paying the final taxes and distributing the inheritances as per the will or state law.

When one member of a married couple dies, the surviving spouse is the usual choice. Otherwise, a family member who lives closest to the deceased could be the next best choice especially if they have the administrative capabilities as well. That person will need to petition the local probate court to be appointed in order to take care of assets remaining in the decedent’s names and often the residence. It the residence is to be sold, that is an additional duty of the administrator to make those arrangements until it is sold. Being physically nearby can make many tasks easier.

It is always better if these decisions are made before the person dies. Wills should be kept up to date, as should power of attorney documents, trusts and advance directives. When naming an executor or trustee, let them know what you are asking of them. For instance, if your Executor will need to arrange for your pets and/or be your children’s guardian it would be best if they knew and consented to this special responsibility.

Do not delay and leave the burden to your heirs. Grief is a powerful emotion. Your family will be dealing with these strong emotions especially if the death was unexpected. It may be hard for them to get through the regular tasks of the day while grieving.  The additional work of managing an estate is a difficult burden at a difficult time. You are providing a clear and well thought out estate plan as described in your Will to ease the burden.

Get more death certificates than seems necessary. Your Executor should be prepared to order sufficient copies of the death certificate. If you have a detailed asset list it will help them know the number of death certificates they will need.  At least a dozen certified copies are recommended. Banks, brokerage houses, phone companies, utilities, credit card companies, etc., will all request the death certificate. While there are instances where a copy will be accepted, in many cases you will need an original, with a raised seal.

Who should the Administrator to notify? If the decedent is receiving Social Security, they need to be notified. Usually the funeral director will do this as a courtesy. Social Security Administration can be notified by an email.  If there are any other recurring income or retirement payments, like VA benefits or a pension, IRA distributions, etc. those institutions need to be notified. The same is true of insurance companies, banks and credit card companies. Fraud on the credit cards of the deceased is quite common. When a notice of death is published, criminals look for the person’s credit card and Social Security numbers on the dark web. Act fast to prevent fraud.

Protect the physical property. Secure the home of a decedent right away. Are there plants to be watered or pets that need care? Take pictures, create an inventory and consider changing locks. Take any valuables out of the house and place in a secure location. If the house is going to be empty, make sure to take care of the property to avoid any deterioration or signs of abandonment, which will make the property a target.

Paying the bills. Depending on the person’s level of organization, you will have to identify where the active Bank or other accounts are so money is available for necessary expenses. You also need to determine if anything is being paid automatically, and be wary of the checking account being overdrawn. Old tax returns can be helpful to identify income sources. Determine what accounts need payment in the short term, like utilities, mortgages, credit cards.

Some accounts are distributed directly to beneficiaries, like in-trust-for accounts, transfer-on-death accounts, 401(k) s, IRAs and life insurance policies. Joint bank accounts and real property held in joint tenancy will pass directly to the joint owner. The executor’s role is to inform the institutions of the death, but the financial institutions will disperse these accounts with beneficiaries directly. These accounts are not the responsibility of the executor as they are not governed by the Last Will and pass outside the Will.

File tax returns. The executor is responsible for filing the final taxes, due on April 15 of the year after death. If taxes were not filed for any prior years, the executor has to resolve the filing of back taxes as well.

Consider getting help. Our firm’s attorneys can assist with the administration of an estate. We will prepare the necessary court papers to have an Executor or administrator appointed and will work collaboratively to settle the estate, pay the bills and competently distribute the funds to the named heirs. Expect the tasks to take anywhere from six months to two years, depending on the complexity of the estate and the New York county in which the estate is probated.  Our firm aims to share the burden and work of estate administration and to be sensitive to the emotions that come along with this difficult work.

 

Please call our office anytime for assistance with your Estate Planning, Estate Administration, Long Term Care Planning, Medicaid or Special Needs Planning: (718) 238-6960 or info@gylawny.com. We will be happy to schedule an appointment with one of our attorneys. 

Our Office is Now Open - Time to Review Your Estate Plan!

 

 

 

 

 

 

 

 

 

As of Monday, July 13th, our office will be open during regular business hours, Monday through Friday from 9:00 AM to 5:00 PM for in-person services (by appointment only) in all areas of our practice: 

• Estate planning
• Probate
• Estate and trust administration
• Medicaid and long term planning and special needs services
• Care advocacy
• Gift and estate tax advice
• Guardianship issues

For health and safety, as well as speed and convenience, we will continue to offer our services virtually with remote signings continuing as permitted by law. (Please see our home page for more details)

Take this time to review and update your estate plan: 

Please make sure you have reviewed your plan to consider updating it, if life events like the following have changed your circumstances:

• The birth or adoption of a new child or grandchild
• When a child or grandchild becomes an adult
• When a child or grandchild needs educational funding
• Death or change in circumstances of the guardian named in your will for minor children
• Changes in your number of dependents, such as the addition of caring for an adult
• Change in your or your spouse's financial or other goals
• Marriage or divorce
• Illness or disability of your spouse
• Change in your life or long-term care insurance coverage
• Purchasing a home or other large asset
• Borrowing a large amount of money or taking on liability for any other reason
• Large increases or decreases in the value of assets, such as investments
• If you or your spouse receives a large inheritance or gift
• Changes in federal or state laws covering taxes and investments
• If any family member passes away, becomes ill, or becomes disabled
• Death or change in circumstance of your executor or trustee
• Career changes, such as a new job, promotion, or if you start or close a business

Reviewing your plan at regular intervals will help ensure that your legacy, both financial and otherwise, is passed on in accordance with your wishes and that your beneficiaries receive their benefits as smoothly as possible (communicate often and early to avoid litigation later).

Please feel free to contact our firm with assistance in your Estate Planning, Medicaid and Special Needs Planning and we will be happy to assist you: (718) 238-6960 or info@gylawny.com.

Update on Death Certificates

You do not have to wait to start death certificate process – death certificates are still being ordered and processed during this current pandemic

From the New York City Department of Health:

Due to COVID-19, funeral homes are experiencing higher than normal requests for burial arrangements. While families might be waiting longer to bury their loved ones during this pandemic, Funeral Directors and families do not have to wait to begin the death certificate process. 

The City is making clearer to Funeral Directors and the public that death certificates can still be processed and delivered to funeral homes or families even if final arrangements have not been made. Death Certificates are available once the death has been reported and the case has been registered. This means if a decedent is being held in a morgue for longer than usual without a set burial or cremation date, a death certificate can still be ordered. 

Today the City posted clear guidelines for the public, medical professionals, and Funeral Directors. This guidance is available on the Health Department's website. The City is also be providing DOHMH contact points for members of the public, medical community, or Funeral Director community who have questions about the death certificate process or concerns about delays. The public can call the Health Department at 347-396-7962, and funeral directors can contact the Burial Desk at 212-788-4545. Questions can also be answered via DOHMH chat or via email at nycdohvr@health.nyc.gov. Certificates can be ordered online

 

Estate Planning Essentials

An estate plan starts with a will, but that’s just the beginning. A true estate plan includes addressing issues that occur while we are living, as well as when we have passed. Everyone needs to have these plans in place, regardless of how much or little one owns.

Having an estate plan means that you and your family are prepared not just for death, but also for illness and incapacity. Distribution of your property according to your wishes, is just one part of an estate plan. Minimizing state and federal estate taxes is another. A complete estate plan addresses many legal, financial and health issues.

Investopedia’s recent article, “6 Estate Planning Must-Haves,” provides us with a list of items every estate plan should include:

• A will and/or a trust;
• Powers of attorney;
• Beneficiary designations;
• A letter of intent;
• Guardianship designations;
• Health Directives.

In addition to these documents and designations, a thorough estate plan also should consider the purchase of insurance, like long-term care insurance, income producing investments, and life insurance to pass money to beneficiaries without probate.

Let's look at each item on this checklist to make sure you haven't left any decisions to chance.

Wills and Trusts. A will or trust should be one of the primary parts of your estate plan, even if you don't have a lot of assets. Wills make certain that your assets are distributed according to your instructions.  Your family will appreciate your clear direction on how your personal effects should be shared. Trusts can also help limit estate taxes or legal challenges and costly and slow court procedures.

Power Of Attorney and Health Directives. A durable power of attorney (POA) allows an agent or a person you assign to act on your behalf, if you’re unable to do so yourself during your life when it is most important. A Health Care Proxy (HCP) designates another person to make critical healthcare decisions on your behalf in the event of incapacity.

Beneficiary Designations. Some of your assets will pass to your heirs without being mentioned in your will, such as 401(k) plan assets, annuities, IRAs, etc. Therefore, maintain a beneficiary and a contingent beneficiary on these types of accounts. Likewise, insurance plans should have a beneficiary and a contingent beneficiary, because they also pass outside of a will. Your beneficiaries should be over 21 and mentally competent.  These need to be updated regularly as your life changes.

Letter of Intent. This is simply a document for your executor or a beneficiary to define what you want done with a particular asset after your death or incapacitation. Some letters of intent also contain funeral details and other special requests. A letter of intent isn’t legally binding. It helps inform a probate judge of your intentions and may help in the distribution of your assets, if the will is declared invalid for some reason.  These can be extremely helpful for blended families or when close friends or non-family members are selected as your executor or trustee.

Guardians/Special Needs Provisions. If you have minor children or are considering having kids, naming a guardian is very important. Be sure the person(s) shares your views, is financially sound and willing to raise your children. You should also name a backup or contingent guardian.  Most people don’t understand that if you don’t name a guardian in your will, the decision is made by the court. It is possible that the court choses someone you would never have wanted to raise your children.

There may also be a need to provide for other dependent or disabled loved ones in your Estate Planning documents, such as a disabled adult child.  Your Estate Planning documents can includes special provisions to set up a Special Needs Trust or Discretionary Trust for the benefit of the person who may need help in managing their inheritance.  This can also include individuals who have other financial or spendthrift issues.  Your documents can be customized to include those protective trusts to be created after you pass, as part of their inheritance.  

Meet with one of our estate planning attorneys and prepare a complete estate plan to protect your loved ones.

Reference: Investopedia (July 16, 2019) “6 Estate Planning Must-Haves”

Do You Have a Crystal Ball…Will the New Estate Tax Levels Really End in 2026?

The IRS has said that even if taxpayers don’t die until after the tax overhaul expires in 2026, they may still benefit from the higher thresholds for U.S. estate and gift taxes. How will that work?

The estate and gift tax exemptions skyrocketed in 2017, as the result of changes to the tax law. The increases mean that in 2019, individuals may pass on $11.4 million from their combined estate at death and the gifts they gave before they passed. These estate tax exemptions will expire, unless laws change. However, the IRS announced regulations that said individuals who make large gifts while the exemption is higher and die after it goes back down, won’t see the estate tax benefit eroded.

“As a result, individuals planning to make large gifts between 2018 and 2025 can do so, without concern that they will lose the tax benefit of the higher exclusion level once it decreases after 2025,” the agency said in a press release.

Yahoo Finance’s recent article, “IRS Says Millionaires Can Keep Estate Tax Benefits After 2025,” says that the exemption increase was a big priority for Republicans in the 2017 tax overhaul.

This exemption decreased the number of individuals who’d be subject to the 40% estate tax by about two-thirds.

The exemption was $5.5 million prior to the law change.

If the law is reversed with a new administration and a more balanced tax plan, changes could sweep the House, Senate and White House after the 2020 national elections.

Many current presidential candidates propose to decrease the estate tax exemption so a greater number of wealthy families will be liable for a greater estate tax

The current rules and the potential for tax savings make estate and tax planning important and advantageous.  Our frim invites you to come in and start now!

Reference: Yahoo Finance (November 22, 2019) “IRS Says Millionaires Can Keep Estate Tax Benefits After 2025”

Using Estate Planning to Prepare for Your Future

Planning a vacation is a lot more fun than planning for death, disability or needing long-term care. However, putting off estate planning means missing an opportunity to gather our thoughts on what kind of a legacy we want to leave behind, how we want to be cared for if we can’t speak for ourselves and what kind of end-of-life care we’d want.

It doesn’t matter how much or how little you own, if you have a family, you need an estate plan. It’s a way to document your wishes for what you want to happen, when you die. Some of the big questions that estate planning addresses are outlined in an article from Montrose Press titled “Estate plans can help you answer questions about the future.”

What will happen to my children? As part of your estate planning, you should name a guardian to take care of your children, if you pass away. You can also name a conservator–sometimes called a “guardian of the estate”–to manage the assets that your minor children inherit.

Will there be a battle over my assets? If you fail to put a solid estate plan in place, your assets could be subject to the time-consuming, expensive and public probate process. During probate, your relatives and creditors can get access to your records. They may even challenge your will. However, with proper planning, you can maintain your privacy.

Who will control my finances and my living situation, if I’m incapacitated? You can sign a durable power of attorney. This permits you to name someone to manage your financial affairs, if you’re incapacitated. A medical power of attorney lets the person you choose handle health care decisions for you, if you’re not able to do so yourself.

Will my family feel cheated if I leave significant assets to charities? As part of your estate plan, you have options. You could establish a charitable lead trust. This will provide financial support to your chosen charities for a set period. The remaining assets will then go to your family members. On the other hand, a charitable remainder trust will provide a stream of income for family members for the term of the trust. The remaining assets will then be transferred to one or more charitable organizations.

An experienced estate planning attorney will be able to guide you through these and other questions and create an estate plan that will allow your wishes to be realized. Once that plan is in place, you’ll be able to focus on the future, knowing that you’ve taken care of the ones you love.

Reference: Montrose Press (July 7, 2019) “Estate plans can help you answer questions about the future”

How Does a Spendthrift Trust Work?

There are many different kinds of trusts, including ones designed to safeguard an inheritance. The spendthrift trust is a good tool in the estate planning toolbox for individuals who, for whatever reason, can’t manage money.

In planning for your family upon your passing, you may recognize that despite all of your efforts, some family members simply need help in managing family money, says Newsday’s recent article, “What to consider when creating a 'spendthrift' trust.”

This can happen if a family member has an addiction or gambling problem, a spouse who may not be looking out for their best interests, a difficult divorce, or they are just cannot handle their money wisely, this type of trust may be a solution.

A spendthrift trust—also called an “asset protection trust”—gives an independent trustee the power to make decisions as on how to spend the funds in the trust for the benefit of the distributes.

The beneficiary of this type of trust can get trust benefits as regular payments, like an annuity, or may be set up to allow the trust beneficiaries to ask for permission from the trustee to access funds at certain times.

A spendthrift trust is a kind of property control trust that restricts the beneficiary’s access to trust principal (the money) and income by giving the trustee the rules for distribution and discretion about extra expenditures.

This restriction protects trust property from a beneficiary who might waste the money, or allow these funds to be subject to beneficiary’s creditors.

In planning, consider these other issues about asset protection trusts:

• Understand the tax ramifications of a spendthrift trust who will be liable for the income tax.
• If the trust is the beneficiary of retirement accounts, the trust must be designed to have the RMDs (required minimum distributions), at a minimum, flow through the trust to the beneficiary.
• If the trust accumulates the income, it could be taxable. In that case, the trust would have to pay the tax at a trust tax rate. That is substantially higher than an individual rate.

Consult with your attorney and tax accountants in these issues.

It's critical that you choose your trustee carefully. They must be able to work well with the beneficiary and carefully manage their expectations and encourage their cooperation. You may think about using a professional corporate trustee to achieve independence especially when the beneficiary has legitimate needs and the family trustee might refuse to give them the money, based on a history of bad decisions. This eliminates the risk of judgments.

Your estate planning attorney can help you work through the trustee selection process, as well as creating the trust.

Reference: Newsday (June 23, 2019) “What to consider when creating a 'spendthrift' trust”

Why Your Will Needs to Change Again

Some people change their wills every time there’s a small family skirmish. However, most sign their wills and shove them in a drawer and try not to think about death. This is a mistake, for them and their families.

Even if your own life never changes, there are changes in the law and changes in the lives of the people around you that merit a review of your will and your estate plan every three or four years. If there are major changes in your family, like death, divorce, birth or marriage, you definitely need a review. However, if you don’t remember who you named as executor or who you want to make health care decisions on your behalf in a while, you need an estate plan review.

Forbes’ recent article, “Why You Should Change Your Will Now,” warns us that if you’ve taken the “one and done” approach to your estate plan, think again. In addition to the reasons already mentioned, your assets may have changed dramatically since you signed your will. The plan you put in place years ago, may not have considered new federal and state estate taxes. Now that you’ve accumulated significant wealth that will be passed on to your children, you might need to review your plans for that wealth for your children.

You may want to include grandchildren to help pay for their college education.

It is also not uncommon for parents to want to protect their children from themselves. This can be because of addiction issues or a lack of financial literacy. If that’s an issue, some parents elect to hold monies in trust for adult children, as a way to ensure that the funds will be there throughout the child’s lifetime.

A person’s estate plan should grow with them over time. An estate plan for a twenty-something may be very basic, but a newly-married couple will want to include provisions for their spouse. Parents need to think about providing for and protecting their children. Adult children have another set of concerns and you need prepare for the possibility of divorcing spouses, poor life choices, addiction issues and just poor money management. There are many stages in life when you may need to readjust the provisions for your children in your estate planning documents.

The first task is locating the will, while the second is making an appointment to meet with your estate planning attorney. There may be opportunities for tax savings that didn’t exist when the will was first created, or strategies that are no longer necessary.  The recent tax law changes have radically impacted estate plans.  The elaborate trust planning in older wills may no longer be needed and can unnecessary.  With the estate tax exemption rising to over $5 million in New York State, many people no longer need to design their planning to avoid taxes and can concentrate on other important family or legacy issues.

Contact our firm today to update your estate plan and redraft your will and trust.

Reference: Forbes (August 27, 2019) “Why You Should Change Your Will Now”

Why Should I Continue to Have Life Insurance After My Divorce?

If you have children and you purchased a life insurance policy to protect them, then you still need a life insurance policy. But you may want to make a few changes.

Life insurance needs to be addressed during the process of a divorce. If there are children, the beneficiary may continue to be the ex-spouse, if they are going to be the person raising the children if the key breadwinner dies. But there are alternatives.

Investopedia’s article, “How Life Insurance Works in a Divorce,” explains that addressing life insurance is a critical issue in the divorce process, especially for divorcing couples with children. Maintaining life insurance protects the financial interests of both parties and their dependent children. This involves making the necessary beneficiary changes, accounting for the cash value in whole or universal life policies, protecting child support and alimony income, and—most importantly—making certain that any children involved are financially protected.

Most married couples with life insurance list their spouse as the primary beneficiary. Life insurance protects a family from financial devastation, if you die and your income is lost. For a married person, naming your spouse as your beneficiary makes certain that he or she can continue to pay the mortgage, put food on the table and possibly bring up the children without your income. Life insurance is especially critical, if you provide the majority of the income.

In a divorce, especially an acrimonious one, odds are good that you’ll no longer want your ex-spouse profiting from your death. If there are no children are involved, most life insurance policies let you change the beneficiary at any time.

Some life insurance policies, such as many whole life and universal life policies, accumulate cash value over time. Each month when you make your premium payment, some of the money is deposited into a fund that grows with interest. This is the policy's cash value, and it’s your money. Any time while the policy is active, you can forgo the death benefit and take the cash value. This is called “cashing out” your life insurance policy.

Since the cash value from a life insurance policy is part of your net worth, you should list the policy, including its cash value, as a marital asset to be divided. Frequently, when marital assets are divided evenly, half the cash value from the policy goes to each spouse.

Protecting child support or alimony income is really important for the spouse who takes primary custody of the children after the divorce. These child support funds are for feeding and clothing the children and saving for college. If the noncustodial parent isn’t around anymore, this income goes away and it could put the custodial parent in a bind. If you have custody of the children, the best way to protect yourself from this situation, is to keep a life insurance policy on your ex-spouse with a benefit amount high enough to replace your child support or alimony income at least until the last child is 18. Being the custodial parent, if your ex is irresponsible or untrustworthy, you may just purchase the policy and pay the premium yourself, since coverage stops if payments lapse.

A life insurance policy becomes more important, if an ex-spouse is no longer involved with the children and if the custodial parent is the only source of income for the family. There should be a guardian named in your estate plan and another person named to handle finances on your children’s behalf. Estate planning and life insurance are both important to protect children, when there is a divorce.

Reference: Investopedia (June 25, 2019) “How Life Insurance Works in a Divorce”