Long Island Estate Planning Attorneys & Elder Law Attorneys

We have, from time to time, addressed the importance of creating a power of attorney in our quarterly newsletter “A Step Ahead.” Through a power of attorney the “principal” authorizes an “agent” to manage property and make financial and business decisions on behalf of the principal. When an agent accepts his or her appointment, a special legal relationship, a “fiduciary” relationship, is created. This article addresses the agent’s responsibilities:

• To act according to the instructions of the principal or, where there are no instructions, in the principal’s best interest;
• To avoid conflicts that would impair the agent’s ability to act in the principal’s best interest;
• To keep the principal’s property separate and distinct from the agent’s assets;
• To keep a record of receipts, payments, and transactions conducted for the principal; and
• To disclose one’s identity as an agent whenever acting for the principal.

What is the Role of an Agent?

Although the power of attorney generally grants broad powers to the agent, these duties prevent the agent from doing whatever he or she wants with the principal’s money. The agent must follow the principal’s lawful instructions as enumerated in the power of attorney, must act with the highest degree of good faith in accordance with the principal’s best interests, must act prudently when handling the affairs of the principal, and must make decisions based upon the preferences of the principal. If the agent overrides the wishes of the principal or takes actions that are not authorized by the power of attorney, the agent can be held liable in court for breach of fiduciary duty. Additionally, the agent has a duty to keep bank statements and all other documents demonstrating the actions that have been taken on behalf of the principal. Maintaining such records will allow the agent to address any questions that may arise with respect to the management of the principal’s funds.

When Does the Power of Attorney Take Effect?

Most powers of attorney become effective once they are executed by both the principal and agent. Often, however, principals do not intend for the agent to begin utilizing the power of attorney until the principal becomes incapacitated or is otherwise unable to handle his or her own affairs. For this reason it is important for the principal and agent to discuss the principal’s intentions.

Conclusion

The role of agent under a power of attorney is a responsibility that should not be taken lightly. If you have been appointed as an agent under a power of attorney and are unsure about your responsibilities, you should consult an experienced New York estate-planning attorney. Berwitz & DiTata LLP will be happy to assist you in determining your responsibilities as agent and ensuring that you are in a position to account for your activities as agent should the need ever arise.

Having a well drafted last will and testament and/or trust is only the first step to comprehensive estate planning. A proper estate plan is not the result of a singular event. It is an ongoing process, affected by life events, relationships, births and deaths and changes in assets. To be truly effective, an estate plan requires periodic review. In particular, one should review beneficiary designations to ensure that they are correct, that the intended beneficiaries and contingent beneficiaries are properly named and that their respective shares or portions are properly delineated.

Assets that pass to beneficiaries directly, and not by the terms of a will or trust, such as life insurance proceeds, retirement plans, and IRAs, are distributed pursuant to a contractual form, or beneficiary designation, provided by the financial institution holding the asset. Although many people are under the mistaken impression that beneficiary designations provide a simplified means of distributing assets, the truth is that they are replete with potential pitfalls for the unwary.

Often, after a financial institution receives a beneficiary designation form from its account holder, the in- formation is entered into a computer. The form itself is discarded and the permanent record is only as accurate as the data that was entered. If the data was incorrectly entered, problems occur. It is always a good practice to request a copy of your beneficiary information after a beneficiary designation has been submitted to ensure that the information is correctly recorded.

What happens if the beneficiary dies before the account holder?

The answer to this question depends on whether the account holder has named contingent beneficiaries and what the financial institution’s contract provides. It is possible that the assets will be distributed to the estate of the account holder, and be subject to probate, if the named beneficiary predeceases and there is no contingent beneficiary. Do not think that, if you name your children as beneficiaries and grandchildren as contingent beneficiaries and one child predeceases you, that child’s children will receive the predeceased child’s share. The entire account will likely be distributed to your other children.

If the beneficiary designation fails and the asset passes through the estate of the account holder, there are several disadvantages. First, is delay. Assets, like life insurance proceeds, which are paid promptly after the insured’s death, are frequently needed to pay funeral and other expenses. If the beneficiary designation fails, the proceeds will not be available until an executor or administrator for the estate is appointed by the court. This can be frustrating if the assets were intended to provide immediate liquidity. The second disadvantage is the loss of asset protection. If assets pass through the estate they are available to creditors. They are subject to estate recovery if the account holder was receiving Medicaid benefits. The failure of a beneficiary designation relating to a life insurance policy may subject that policy to the claim of a surviving spouse when it may have been exempt from the pool of assets available to satisfy the spouse’s elective share. The consequences of the failure of a beneficiary designation relating to a retirement plan can also be devastating. If a retirement plan passes through an estate, it must be paid out and taxed within five years of the account holder’s death. With a named beneficiary, by contrast, the distributions can be stretched out, along with the tax liability, for decades.

This important estate planning tool should be reviewed to ensure that the maximum benefit is obtained for your loved ones. Let us help you. Contact us to schedule a consultation at (516) 747-3200.

Naming someone as the beneficiary of your IRA or other retirement account can be a wonderful way to provide for a loved one after you have passed away. Often, the people we name as beneficiaries of our IRA accounts are our children and/or grandchildren. This is a powerful planning tool for the named beneficiary as the account can grow tax free and the beneficiary can take distributions over his/her entire lifetime. This might lead one to assume that the younger the beneficiary the better. Take heed! There are several things you should consider when designating a minor as the beneficiary of your IRA account.

A minor cannot inherit an IRA in their own name outright. An adult, a parent or guardian or the trustee of a trust established for that minor’s benefit, must be designated since the minor lacks the legal capacity to own the account or make the necessary withdrawals. If the minor beneficiary fails to take the required minimum distribution each year, major penalties can be assessed. When you die, the parent/guardian/trustee for the minor beneficiary must seek Court appointment to control and manage the account and to make the annual distributions on the minor’s behalf. This is a process which can be both costly and time consuming. Another potential issue is that, when the minor beneficiary reaches the age of 18, he/she attains complete control over the account. An 18-year-old may not yet be fiscally responsible or understand the benefits of the tax deferred investment. It is usually preferable to delay control over the account for some time.

The best way to avoid those potential issues is to create a trust as the repository for IRA accounts that you intend to leave to minor beneficiaries. This makes it possible to designate an appropriate person or entity to manage the minor beneficiary’s interest until they mature. We would be more than happy to help you explore your options relative to this important part of your estate plan.

Each spring, we at Berwitz & DiTata LLP encourage our clients, friends and “would be” friends to focus on estate planning, refresh those resolutions and stop procrastinating. We call it our annual “Review and Renew” program.

If you have never created an estate plan, now is the time.

Although estate planning is rarely a topic people look forward to addressing, we are dedicated to helping clients identify and implement their estate planning objectives with ease and efficiency. We believe that our success is founded on this fundamental commitment to communicate with our clients in a caring and responsive manner. Those who have met with us in a one-on-one consultation know that we believe that everyone can benefit from estate planning regardless of personal income or net worth. Everyone has concerns regarding the future. For instance: How can I avoid probate or the dissipation of my assets to estate taxes? How can I avoid losing control of my assets if I become disabled? How do I protect myself and my family from devastating nursing home costs? Can assets still be protected if a loved one is already in a nursing home? How can I protect my minor children? How can I protect my disabled child or the assets that he or she may one day inherit? In designing strategies to effectuate our clients’ goals, we offer detailed advice and a high level of technical expertise. Now is the time to achieve estate planning peace of mind! Ask those questions, explore the options, get it done.

If you created your estate plan, or reviewed it last, more than 3 years ago – now is the time.

Are your documents up to date? Have there been changes in the law or in your life that should now be considered? The documents that address the needs of a single person are frequently insufficient when he or she marries. If a couple has children, the appointment of a guardian should be a key factor in estate planning. Those documents that were created when the kids were small may no longer reflect their parents’ wishes now that the kids have grown and flown. Indeed, once your child reaches the age of 18, he or she should have a valid and enforceable Health Care Proxy empowering you or another to make health care decisions. The “sandwich generation” is discovering that the joy and responsibility of raising children is all too frequently overshadowed by the illness of parents. The need for estate planning takes on new meaning as one approaches retirement and, if illness threatens, timing becomes more critical. Lifetime changes affect estate planning. Even if you can’t conceive that the changes in your life may have an impact on your estate planning documents, an estate planning review is a vital element to ensuring that your wishes will be accomplished.

Because Berwitz & DiTata LLP understands the importance of keeping the plan current, we offer our clients a unique value-added component: a complimentary three-year review. For those who have not yet retained our services, there is a nominal fee to review your plan. Let us help you realize your estate planning objectives. Call (516) 747-3200 for more information.

The price of higher education, college and graduate school, is astronomical. Many families try to start saving when the child is young. 529 College Savings Plans provide an effective strategy to save for future costs during the child’s formative years while affording tax and other benefits.

Here’s How It Works: A 529 plan can be set up by anyone, a parent, grandparent, aunt, uncle, even a friend, to benefit any beneficiary. You can even establish one for yourself. Once established, the account can be used to pay for education expenses at eligible 2 or 4 year colleges, vocational and technical schools, or graduate schools. Any qualified higher education expense: tuition, mandatory fees, books, supplies, and equipment required for enrollment or attendance, can be paid from a beneficiary’s account. Certain expenses for room-and-board if the beneficiary is enrolled for at least half of the academic period and certain expenses for special needs students can be paid from a 529 plan. The Contributor of the plan maintains control over the account, makes decisions regarding withdrawal of funds, and can even change the designated beneficiary. Under most plans, the Contributor can revoke the account at any time, however, all non-qualified withdrawals would be subject to income tax and a penalty. Management fees for the accounts are very low.

The Advantages: There are many federal and state tax benefits of implementing a 529 plan. Earnings grow federally tax deferred and, as long as distributions are made for qualified education expenses, there is no federal tax on the distributions. Contributions to a 529 plan qualify for the federal annual gift tax exclusion, currently $14,000.00 for a single individual and $28,000.00 for a married couple filing jointly. Contributors have the option of depositing five years worth of gifts for a single beneficiary at once, meaning single individuals can contribute up to $70,000.00 per beneficiary and married couples filing jointly can contribute $140,000.00 per beneficiary without incurring any federal gift tax, as long as the contributor does not make any additional gifts to that beneficiary for the next five years. In New York, when filing a state income tax return, a single individual can deduct up to $5,000.00 from taxable income, and married couples filing jointly can deduct up to $10,000.00, for contributions to a 529 plan account!

Estate Planning Considerations: On the positive side, since contributions
to a 529 plan are considered completed gifts, assets put into a 529 plan are not considered part of the Contributor’s estate for estate tax purposes. On the other hand, since a Contributor maintains control of the account at all times and can revoke it at any time, a 529 account is considered an available resource for purposes of determining the Contributor’s Medicaid eligibility. Furthermore, because a 529 Plan is an available resource, in the event that a Contributor changes ownership of a 529 account, the state would consider this a transfer resulting in an ineligibility period for Medicaid purposes. For this reason, a grandparent might choose to implement an irrevocable trust for the beneficiary and make the contribution to the trust. The Trustee would then establish and fund the 529 account and designate the Trust beneficiary as the beneficiary of the 529 account.

A 529 plan is a great way to save for a loved one’s educational expenses. The implementation of such a plan may have an unintended impact on one’s estate and tax planning. Thus, for example, if a Contributor has made a five-year contribution but does not survive the period, a percentage of the gift will be included in his taxable estate. We would be more than happy to talk with you about whether the implementation of a 529 Plan would be an appropriate fit for your estate and tax planning needs.

The Medicaid Redesign Team was established by Governor Cuomo to work cooperatively and reform the Medicaid system in New York to improve health outcomes and control costs. The recommendations of the Redesign Team that were approved by the Legislature, as part of the enacted budget, are now being implemented. One of the most important initiatives is the transition of Medicaid home care consumers to care management or “Managed Long Term Care (MLTC) Medicaid.” Managed Long Term Care Plans (MLTCPs) must ensure that consumers transitioning from traditional Medicaid fee-for-service to MLTC have continuity of the care services they are currently receiving.

Mandatory enrollment began in the five boroughs of New York City late in 2012. We anticipate that Nassau and Suffolk Counties will start to implement the program this spring. Initially, persons who are age 65 or older, who need personal care services and are already receiving Medicaid benefits, can expect to receive correspondence from the Department of Social Services or the Human Resources Administration advising them of the need to enroll in a MLTC program. The notice suggests that the consumer select a MLTCP but indicates that, if the consumer fails to do so within a 60 day time period, one will be selected for them. The MLTCP selected will make an initial assessment of the consumer’s needs and will then establish a care plan. The plan should identify the amount, duration and scope of the services and should not arbitrarily reduce those services.

While we will continue to monitor and report on the new program, we strongly recommend that you contact our Medicaid attorneys if you receive notice and would like assistance in the selection of a MLTC provider. Additionally, if you or a loved one has been assessed and the plan that is proposed does not meet your needs, or places inappropriate limits on service, it is important to note that new internal
grievance procedures will apply and you must strictly adhere to the time
constraints for seeking redress. Berwitz & DiTata LLP can assist you
in this process.

For estate planning practitioners and their clients, the past decade has been a period of unpredictability and uncertainty. Over this period we experienced drastic increases in the federal estate tax exemption, “sunset” provisions, the lure of the portability of the exemption as between spouses, concern over the “fiscal cliff” and the threat of the federal exemption returning to $1 million from $5 million. On New Years’s Day 2013, with the American Taxpayer Relief Act of 2012 (ATRA), Congress approved the first permanent estate, gift and generation-skipping transfer (GST) tax provisions in 12 years.

By making permanent the $5 million exemption and the concept of “portability,” which allows one spouse to utilize the unused exemption of the other even after death, ATRA has been touted as having made estate tax planning irrelevant. Do not be fooled. Anyone with assets exceeding $1 million will still have a tax liability to New York State that must be addressed, and federal estate tax planning that was undertaken in 2012, in contemplation of the expiration of the existing rules, should now be reviewed in light of ATRA’s enactment and because there may be additional filing requirements.

For those who made gifts at the end of 2012 in an attempt to take “last
minute” advantage of the $5 million federal exemption before it expired, a federal
gift tax return (form 709) must be filed by April 15, 2013. This date can be
extended, until October 15, by utilizing form 4868. It is important to realize that
even if no gift tax will be due, because the gift was less than the $5 million exemption amount, a return must still be filed if the gift was more than $13,000. If a gift was made to one of several children, the donor may now want to revise the estate plan to account for this “advance” inheritance and equalize the provisions for the other children. Moreover, those who engaged in expedited, last minute planning might not have had ample opportunity to consider the provisions of their instruments.

Certain strategies called for the naming of a “placeholder” trustee, others may have granted or withheld powers to a trustee that should now be reconsidered. Under New York’s liberal decanting statute, even assets in irrevocable trusts can be transferred to a new trust with more favorable provisions under the right circumstances. We recommend that anyone who engaged in this type of planning review their trust documents and wills to ensure that they comply with their wishes and that the gifts made at the end of 2012 do not affect the overall plan of distribution. Our estate attorneys are happy to review these issues with prospective clients who would like to ensure that their plans will accomplish their goals.

Additionally, there is no better time than the present to become educated about the effect of New York State estate taxes on your estate plan. New York’s independent estate tax regime will continue to play a significant role in estate planning. New York continues to impose its own transfer tax on estates in excess of $1 million. Additionally, the concept of “portability” made permanent by ATRA does not apply to the New York estate tax. Therefore, proper planning is still necessary to reduce or eliminate New York estate taxes.

Berwitz & DiTata LLP welcomes associate attorney Rosemary Harnisher to the firm. After earning a bachelor’s degree magna cum laude in History from Drew University, Rosemary obtained her law degree from St. John’s University School of Law. During law school, Rosemary participated in the St. John’s Elder Law Clinic where she assisted senior citizens with various legal issues.

An article based on Rosemary’s research has been published in the New York Law Journal and has been selected for republication in the New York State Bar Association Trusts and Estates Newsletter. Rosemary is a member of the Bar Associations of New York State, Nassau, Queens and Westchester Counties and is admitted to practice law in New York and New Jersey. In her spare time, Rosemary enjoys reading history books and painting, as well as spending time with her family. Rosemary looks forward to meeting and speaking with you.

Having properly executed estate planning documents, such as a Will, Trust, Power of Attorney, Health Care Proxy or Living Will, is an essential step in the process of estate planning. Many people think that their work is done once the documents are signed. However, an estate plan can only be effective if it is properly implemented. What good is your Last Will & Testament if, after you die, no one knows it exists or it cannot be found? There are a few simple steps to ensure that your wishes will be carried out upon your disability or death.

Create a document or inventory that recites your pertinent financial information. Identify your financial assets. Be sure to include all bank and investment accounts, individually owned investments (stocks, bonds and mutual funds that are not held in an account), retirement accounts, real estate, insurance policies and employee benefits. Also, list any outstanding liabilities you may have such as mortgages, loans, and credit card debt. Include your full name, other or previous names, date of birth, and Social Security number. You may also wish to specify the name and contact information for your lawyer, accountant, insurance agent, and other financial representatives. It is important to update your inventory regularly, as changes occur. Those of you who have done your planning with us can use the forms in your binder.

Determine where to store your important documents: the estate planning documents (Will, Trust, Power of Attorney, Health Care Proxy, Living Will), life insurance policies, deeds for real property, financial records, tax returns, and
your inventory of financial information. When determining where to keep your legal and financial documents, it is important to select a location that your family can locate and that they will have access to after your death. While it is not necessary to disclose the specifics of your estate plan, you want to be sure that a trusted family member or friend knows what documents comprise your plan and where they
are located. In general, your original Will should not be stored in a safe deposit box because it will be unavailable, after your death, as the bank will seal the box. This will require your nominated executor to bring a proceeding to open the box before your Will can be probated. Instead, you may want to consider leaving the original Will with your attorney for safekeeping. Berwitz & DiTata LLP offers this benefit to all of our clients free of charge. If you decide to retain your original Will, it is advisable to store it in a waterproof and fireproof container.

Notify your health care agent. Under New York law, you can appoint only one agent at a time to make health and medical decisions for you if you become incapable of communicating your wishes. Once you have selected your agent, and even before you execute the Health Care Proxy, it is advisable to tell your agent and to discuss your end-of-life choices. Once the document has been executed, make a copy for your primary care physician and bring a copy with you if you undergo any medical procedures, particularly those requiring anesthesia. It is inadvisable to create a new Health Care Proxy at the hospital or clinic unless there are changes you wish to implement and, if this is the case, it is better to revise your Health Care Proxy before scheduling the procedure.

Advise your loved ones that you have implemented your plan. Let your family know that you have completed your estate plan. This may give them peace of mind. Inform a family member, such as the nominated executor or trustee as to the whereabouts of your documents. We also recommend that you provide them with your attorney’s contact information or even introduce them! Following these simple steps will not only alleviate some of the stress the family faces when a loved one becomes ill or passes away but will also help to ensure that your wishes are faithfully accomplished.

A large segment of our population is disabled, either physically, intellectually, cognitively, emotionally or psychologically. In a study reported in 2007 by the National Organization on Disability it was estimated that more than 54 million Americans, nearly one in five of us, are disabled. Generally, “special needs planning” is estate planning for the benefit of persons with disabilities. It is designed to accommodate the unique needs of the individual and to protect and preserve assets to enhance their quality of life. This planning can be done by or on behalf of the disabled individual. It can involve assets that already belong to the disabled person, assets that the disabled individual is or will be entitled to receive, and assets that others may wish to give or leave to the disabled individual. Today, it is totally unnecessary to disinherit a disabled beneficiary to prevent his or her loss of benefits. Planning for a loved one with special needs can be accomplished as part of general estate planning or it can be separately handled. What’s important to remember, however, is that the time and attention that is devoted to this type of planning will make all the difference to your loved one in the future.

The most common tool to accomplish this type of estate planning is the Supplemental Needs Trust or “SNT.” SNTs are used to protect the assets of the disabled individual who is receiving, or may eventually qualify to receive, needs-based governmental benefits such as Medicaid and Supplemental Security Income. The goal is to ensure that the assets will be used to supplement rather than replace governmental benefits, to provide quality-of-life enhancements such as special furnishings or equipment, a specially equipped van, a computer, an entertainment center, vocational training, a vacation or other recreation.

There are two types of SNTs, “First Party” and “Third Party” Trusts. A First Party SNT is funded with the beneficiary’s own money. Often, the source of this money will be an inheritance, a recovery from a malpractice or personal injury lawsuit, or a divorce settlement. These SNTs require a post-death Medicaid payback, which means that at the end of the disabled beneficiary’s life, Medicaid is reimbursed from the trust for funds it expended on the disabled beneficiary’s behalf. A Third Party SNT is funded with the property of someone other than the disabled beneficiary and is typically established through a Will or Trust. Depending upon the circumstances, the assets are utilized for the disabled beneficiary and then “remainderpersons,” typically other family members, can be designated to receive the remaining assets after the disabled beneficiary has passed away. Medicaid receives no reimbursement from a Third Party SNT.

While estate planning is important for everyone, it is even more important for those who wish to benefit a loved one with special needs.

As our loved ones age, their ability to manage their medication may be compromised - by age, illness, poor memory, failing eyesight or otherwise. The greater the number of medications, the higher the likelihood that they may become overwhelmed or
make mistakes. These mistakes can be life-threatening. According to the U.S. Surgeon General, medication non-adherence is a problem that causes more than one-third of medicine-related hospitalizations and nearly 125,000 U.S. deaths each year. Here are some tips to ensure that your loved one is safe when it comes to medication:

• Maintain a list of all of the medications that your loved one is taking. This list should include prescription and non-prescription medications, the time of day that each
is taken and the dosage. It may be helpful to include a physical description of each medication.
• Put a copy of the list in your loved one’s wallet and in your own. In case of an emergency it is always better if the list can be readily accessed.
• Check labels for accuracy in patient name, medication, dosage and expiration dates.
• Establish a system to organize medication and dosage, such as a weekly pill box set or electronic dispenser.
• Inquire of the physician or pharmacist about restrictions, interactions or customary side effects.
• Make sure your loved one visits his or her primary care physician at least annually. Bring the list of medications and review it with the doctor

Long-term care is assistance provided to people with chronic illness or disability, whose physical or mental conditions limit their ability to independently carry out everyday tasks.  These tasks may include toileting, eating, bathing, dressing and transferring.  Long-term care, unlike standard medical care, helps an individual maintain a level of functional independence.  While most people do not want to think of themselves as needing this kind of care, nearly 50% of all Americans will require long-term health care at some point during their lives - not only after a serious illness or accident, but often as a result of the natural aging process.

The financial and emotional stress that full-time care giving may place on families is overwhelming.  Many families struggle to provide care for parents or siblings only to eventually realize that the care required is more than can adequately be provided.  Sometimes the best way for a family to care for a loved one needing long-term care is to secure access to professional care.

The cost of long-term care services is rising.  In the New York metropolitan area, nursing home costs already average well over $100,000.00 annually.  Assisted living and home care services are generally less expensive, but, like everything else, the price for long-term care will inflate over time.  Our clients often ask how they can pay for this type of care without jeopardizing their financial well-being or exhausting their savings.

Health insurance policies cover acute rather than chronic care services.  They do not cover long term care.  Long-term care is not a medical service.  While Medicare provides health care for seniors, it is severely limited in the coverage it provides for long-term care.  Medicaid will pay for most long-term care services.  However, to qualify, you must meet strict asset and eligibility requirements.

Long-term care insurance offers a variety of options beyond nursing home coverage.  Given the choice, most people would prefer to stay at home rather than entering a facility.  With the advances in home care services, many people needing long-term care are able to stay at home, with or near their families.

Most long-term care insurance policies offer a wide range of care services, including home care, adult day care, assisted living facility care and hospice care.  Planning ahead for long-term care can be confusing.  We advise our clients to always consult with a professional insurance agent who is knowledgeable about this topic and to select a company which is financially secure.  If you are considering the purchase of a policy, read it carefully.  Be sure to obtain an outline of the coverages and description of the policy features.  Long-term care insurance can be an important investment in your future that will provide financial and emotional benefits - be sure to make an informed choice.  If you have questions about this topic please do not hesitate to call our offices and inquire.
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Often encouraging an elderly parent or loved one to undertake estate planning is a sensitive topic.  Many of our clients have described feeling awkward or believing that their motives were in question.  Yet learning about our loved ones’ legal and financial affairs can help to prevent serious problems later. 

Think about the issues you want to talk over in advance.  Express your concern in ways that demonstrate your respect.  The important topics to include are: whether there is a valid last will and testament that expresses their present wishes, whether the individual has legally appointed another to manage financial affairs and to make health care and medical decisions if he or she becomes incapacitated, whether they have a current listing of assets and valuables - and where these documents might be found.

There are many ways to start the discussion.  Sometimes it helps to use a story to make a point.  Some clients have asked for advice, like this: “I’m putting my will together, how did you do this?”  Some people respond more favorably to a direct and factual discussion.  The important message to convey is that none of us knows what the future will hold.  While the individual is capable of participating in the planning, solutions are available that will permit them to exercise choice and preserve their control, dignity and independence.  Perhaps this article can be used to open the discussion.

Your first attempt may not be successful.  Step back and approach the subject at a later date in another way.  Major issues are seldom resolved with a single suggestion.

Planning is an integral part of life.  We plan to buy a house or car, to send our kids to college, or even a vacation!  Have you planned for your care in the event you are in an accident, become ill or are unable to care for yourself?  It is hard to imagine that, one day, we may be unable to handle our personal or financial affairs.  Many people incorrectly assume that a spouse or “next of kin” will have legal authority to manage in the event of an emergency.  Without proper planning, if you become ill or incapacitated, a Guardianship will be necessary to manage your affairs.

What is Guardianship?
Guardianship is the process by which a Court appoints a representative, called a Guardian, to make personal and property management decisions for an individual who is ill or incapacitated (the “IP”) and has not done advance planning.  It requires a Court proceeding.  It is costly, time-consuming and intrusive on affairs that most of us would prefer to keep private.  It restricts the legal rights of the IP. The Court declares that the IP is unable to handle personal and/or financial affairs and needs special protection.  The process starts with the filing of a Petition, with notice to family members and others.  The Court appoints a Court Evaluator to conduct an investigation.  A hearing is held to determine whether a Guardian is required and, if so, who should serve in that capacity - not necessarily the person whom the IP would have selected.  The process ordinarily takes several months.  An attorney customarily represents the Petitioner and an attorney may be appointed to represent the IP.  Court fees, attorneys fees and the Court Evaluator’s fee must be paid.  A Guardian typically is required to post a bond or other security and to pay annual premiums to keep the bond current.  A Guardian must file an accounting of monies collected and spent on behalf of the IP.  The administration of the Guardianship is supervised by the Court.  Frequently, a Guardian must obtain Court approval before acting on behalf of the IP.

What are the alternatives?
In order to authorize another to make medical, health or financial decisions on your behalf, you must do so, in advance, and in writing.  The legal documents that establish how and by whom your financial affairs will be managed and health care decisions made in the event your incapacity are the Power of Attorney, Health Care Proxy and Living Will.

A Power of Attorney (POA) permits you, the “principal,” to name another, the “agent,” to make financial and property management decisions for you.  The POA can be designed so that it remains in effect if you become incapacitated due to advanced age, illness or injury.  It can authorize the agent to handle a wide range of matters or be limited to a single transaction.  You may name more than one agent.  You should always appoint a successor or back-up agent if your first choice cannot perform the required duties.

A Health Care Proxy (HCP) appoints an agent to make health and medical decisions for you if you are unable to communicate your wishes.  The agent may be given authority to authorize or refuse surgery, antibiotics, cardiac and pulmonary resuscitation, respiratory support, and artificially administered feeding and fluids.  In New York, you may only appoint one agent at a time, but may appoint successor agents.  A Living Will (LW) contains information for your agent as to your end-of-life wishes.  A LW and HCP help to avoid conflict among your family members.  Armed with appropriate instructions, your agent can ensure that you receive only the treatment which you desire.

Proper planning in advance,  and implementing a POA, HCP and LW, the “Advance Directives,” can eliminate the need for a Guardianship proceeding.  You can select your agent(s), direct their decision-making and, on most matters, avoid Court involvement.  Your health and financial matters remain private.  Advance Directives enable us to plan for the possibility that we may become ill or incapacitated.  By utilizing these effective tools, we can maintain control for as long as possible and then ensure that our wishes will be carried out by those we trust.

Advance Directives are sophisticated estate planning devices.  While pre-printed forms are available in bookstores and on line, they are often outdated and sometimes inappropriate for the jurisdiction in which you reside or the goals you wish to accomplish.  You should seek the assistance of a qualified estate planning attorney in preparing these documents.  We will be happy to help you and afford counsel as to your choice of agent(s), the powers that are appropriate for your situation and the manner in which the various documents must be executed in order that they will be valid and enforceable. 

Sometimes Property Management Guardians, appointed in an Article 81 proceeding, do not realize until after they have been appointed that it is their obligation to manage all of the assets and income of their ward and prepare an annual report, for the Court, detailing their activities during the year, including the income and receipts collected on behalf of their ward and expenses and disbursements incurred during the year.

The following is a checklist that will help a Guardian prepare for the task of managing the finances for their ward and compile the information needed for the yearly accounting:

• Identify all of the assets that your ward owns, including bank and brokerage accounts, retirement accounts, insurance policies and annuities

• The IRS can help you find bank accounts that belong to your ward, use IRS form 4506T (Request for Transcript of a Tax Return)

• If you are married to your ward, divide joint accounts

• If your ward has joint account(s) with others, ascertain that portion of each account that belongs to your ward and segregate it

• Retitle all accounts in accordance with the Court’s direction and request that all correspondence concerning the accounts be delivered to you

• Make sure to open and fund a Guardianship checking account

• Ask that copies of all checks be included with the monthly statements for the Guardianship checking account and close all other accounts

• Identify all sources of your ward’s monthly income

• Make arrangements to have your ward’s income deposited directly into the Guardianship checking account

• Determine your ward’s monthly expenses

• Arrange to have invoices forwarded to you, as Guardian

• Pay expenses by check only, with funds from the Guardianship account

• If there are debts, arrange for their payment

• If there are insufficient assets to pay creditors, notify the Court

• Search for other unclaimed property, like unclaimed tax returns and insurance reimbursements

• Locate safe deposit boxes owned by your ward and if jointly held, separate your ward’s belongings and rent a separate box

• You will also have to identify valuable personal property, documents and real property

Once you begin receiving statements, review them monthly.  Keep them in a binder for easy reference.  Keep receipts for purchases and services.  Separate them into categories such as food, clothing, utilities, household expenses, medical expenses. 

In your annual report, you must account for all income received, monies earned, expenses paid and previous and current balances of the estate.  Under your stewardship, you will be able to provide a safe harbor for your ward and safeguard his or her resources.

A Guardianship proceeding seeks a Court determination whether an individual is incapable of caring for his or her financial and/or personal needs and, if so, to appoint a guardian to act on behalf of the individual.  Not only is it costly, the time delay can result in 10s of thousands of dollars being lost.

You can expect a Guardianship proceeding to cost $7,500.00 or more.  The costs include filing and attorney fees, the doctor’s fee for evaluating the alleged incapacitated person and the Court Evaluator, who is appointed by the Court to investigate and report back to the Court whether a guardian is required and who should serve in that capacity.

It is not unusual for the entire proceeding to take months to complete.  During this time, without an appropriate power of attorney and health care proxy, any financial and healthcare decision making on behalf of the alleged incapacitated person are often delayed.  In addition, Medicaid planning during this time becomes more complicated.   We have seen uncontested Guardianships take as long as ten months to resolve because of Court delays, costing the family thousands of dollars.

These are just some of the reasons Berwitz & DiTata LLP strongly encourages all of our clients and friends to have a power of attorney, health care proxy and living will.  This not only allows the retention of control over these important decisions, but also allows for the expression of intentions that reduce family stress and dissension.

Housing costs and nursing home costs continue to rise. Many adult children and their parents are exploring the possibility of living together. This arrangement should not be undertaken lightly. Preparation is the key to success and can incorporate everything from physical modification of the house to finances. The following are some things to think about.

Work out the financial details first. These can be very sensitive. Can the parent contribute to the cost of renovations? If the parent has other children, will they object to the parent’s capital contribution to their sibling’s home? Will this cause ill feelings in the family? Even if no renovations are anticipated, an extra mouth to feed can be expensive. How much can or should the parent contribute to the household? What if the parent requires home health care? If the parent doesn’t have sufficient assets to pay for room, board and care, will the other children contribute?

There are tax and other considerations. If the parent contributes to remodeling the house, should the parent receive an ownership interest? Should the parent gift their portion of the house to the children, retain an interest, or put it in a trust? These and other decisions will affect the parent’s future eligibility for Medicaid nursing home care. Should a contract be established by which the parent pays the children for providing care? Should promissory notes be utilized to reflect sums paid by the child or children on behalf of the parent?

Make the home senior friendly. Whether adding an addition or just fixing up a spare bedroom, adjustments should be made to accommodate the parent. Doorknobs can be replaced with levers, stair railings must be sturdy, grab bars should be installed in the bathroom, and rugs with non-slip backings should replace those that will present a falling hazard. Some homes require more significant adaptations. These may include the installation of a ramp for wheelchair accessibility, the conversion of a room on the first floor into a bedroom, the installation of a stair lift, or widening doors to accommodate a wheelchair or walker.

Personalize the home for the parent. Consider the parent’s likes and dislikes. The goal should be to make the parent feel at home. Even if he or she will occupy only a bedroom, it should be made to feel like it is their space. Prepare the grandchildren and discuss the advantages of having a grandparent in the home.

Look into a tax deduction. When considering the financial details of this new arrangement, ascertain whether the child is able to claim the parent as a dependent. A tax deduction may be applicable if the child provides more than half of the parent’s support during the year.

To avoid fostering resentment and guilt among other family members, all of these issues should be addressed before the decision to move is finalized. It may be helpful to prepare and have all of the family members enter into a family agreement. Reducing the arrangements to writing, and asking everyone to participate in the agreement and to acknowledge their acceptance of its terms can significantly eliminate arguments. A New York elder law attorney can help your family create a plan that takes into account the contingencies so that everyone is on the same page and knows what to expect.

Sometimes we are asked to give our clients information and advice on topics that we don’t select. Recently we were asked about assisted suicide. Certainly this is a controversial topic. But what is the law? Although there is much debate about the morality of helping a terminally ill person end their life, the fact remains that it is illegal in most states.

In 1997, the United States Supreme Court ruled that there is no Constitutional right to assisted suicide, leaving states free to pass laws specifically prohibiting it. Under the laws of most states, helping someone to commit suicide is a felony.

Only two states have passed laws legalizing assisted suicide, and only in limited circumstances. Oregon’s Death with Dignity Act permits physicians to prescribe lethal medication that will allow terminally ill individuals to end their lives. There are very specific steps—including waiting periods and release forms—that must be followed before the medication can be prescribed. Washington has a similar law.

The Supreme Court of the state of Montana paved the way, in 2009, for a statute similar to Oregon’s, ruling that physicians could be permitted to prescribe medication to help terminally ill individuals end their lives, but lawmakers have, to date, not enacted a law that would allow this.

In New York State the law is clear. The Penal Law states that one who “intentionally causes or aids another person to attempt suicide” is guilty of promoting a suicide attempt, a class E felony and that one who “intentionally causes or aids another person to commit suicide” is guilty of manslaughter in the second degree, a class C felony.

On June 24th, 2011, New York became the sixth state, behind Massachusetts,
Connecticut, Vermont, New Hampshire and Iowa, as well as Washington, D.C., to permit same-sex couples to marry. The law has been in existence for one year. It has garnered headlines, created controversy, and withstood challenge in our Courts. Many jurisdictions will not recognize a New York same-sex marriage, or will recognize the marriage only for certain purposes. This article will address some of these issues and will review the legal rights and obligations, tax ramifications and unanswered questions that result from the enactment of the law and its application.

Under the new law, in New York, same-sex spouses will enjoy the same rights and obligations as spouses in a traditional marriage. For instance: the surviving spouse of a same-sex marriage will share in the estate of the deceased spouse who dies without leaving a Last Will and Testament, and he or she is entitled to inherit such things as household items, electronic and photographic devices, musical instruments, the family bible, pictures, books, and one car. The same-sex surviving spouse is also afforded equal protection against being disinherited by a spouse. Once legally married, each spouse has the right to recover damages in a personal injury or wrongful death action, and the spousal privilege against being compelled to testify against one’s spouse. Same-sex spouses will automatically hold real estate as they would in a traditional marriage. The survivor owns the entire parcel should the other pass away, unless otherwise designated in the deed.

Marital obligations include a general duty to support the other spouse, and the duty, upon divorce, to pay maintenance (formerly called alimony) to the other spouse. Property obtained during the marriage, regardless of whose name it is in, will be divided equitably by a Court. Similarly, upon a divorce, the debt accrued
during the marriage, regardless of whose name the debt is in, will be allocated equitably. During the marriage, a spouse is generally not responsible for debts of the other spouse that were incurred prior to the marriage, nor is a spouse responsible for debts incurred solely by the other spouse. However, creditors of the debtor spouse may try to collect the debt by levying upon jointly owned accounts or property.

Marital status greatly affects rights regarding children. It is unclear whether New York will recognize the biological child of one spouse born during the marriage as the legal child of both spouses. Even if New York does recognize both spouses as the legal parents of the child, other states may not. A child born prior to the marriage will not be considered the child of the non-biological spouse without further legal steps being taken. A child born via artificial insemination to a married woman, with the written consent of her husband, is deemed the legitimate birth child of the couple for all purposes. The child born via artificial insemination to consenting same-sex couples should also be deemed the legitimate birth child of both parents but, because of the uncertainties surrounding this issue, it is recommended that the non-biological parent obtain a second-parent adoption. In a divorce, both partners can seek custody and visitation. Upon death, however, the remaining parent has always been regarded as the minor child’s guardian, absent evidence that this is contrary to the child’s best interests. There are also significant questions concerning inheritance rights relative to a child born of a same-sex marriage.

However, the most significant difference between same-sex marriage and traditional marriage is that only traditional marriage offers federal benefits and protections, such as Social Security benefits, veterans’ benefits, health insurance, Medicare, estate tax exemptions and credits, retirement savings and pension benefits, and unpaid leave from your job to care for family members. This will cause unintended and unanticipated problems. For example, a woman whose health insurance covers her female partner must pay federal income tax on the total employer cost for that insurance.

When a person dies, the federal government imposes an estate tax on the value of the estate exceeding $5 million. Property left to a surviving spouse, however, is exempt from this tax if the spouse is a U.S. citizen (the “marital deduction”). Same-sex spouses are not eligible for the marital deduction. For federal income tax purposes, a married couple may choose to file taxes jointly or separately, i.e. “married filing jointly” or “married filing separately.” On a joint return, the couple’s combined income is reported and the combined expenses are deducted, resulting in potentially significant tax savings. A same-sex married couple cannot file joint income tax returns. The Internal Revenue Service website states: “For federal tax purposes, a marriage means only a legal union between a man and a woman as husband and wife.”

All income-earning individuals may contribute to an Individual Retirement Account (IRA), the contributions to which are generally tax deductible. In addition, married couples can contribute up to $5,000.00 annually to an IRA for a non-working spouse. Same sex couples may not make these contributions for a stay-at-home partner. Because they are not able to benefit from decades of compounding returns, this can result in significantly smaller retirement accounts.

The same-sex spouse of a member of the military is not entitled to military benefits, such as education scholarships and loans, home loans, life insurance, healthcare, and housing allowances, among other such benefits. The same-sex surviving spouse of a military veteran, who has died either during or after service, is not entitled to survivor benefits, including death pension, dependency and indemnity compensation, home loans, medical coverage and life insurance proceeds, all of which are potentially available to a heterosexual spouse.

Because Medicaid is locally administered, it appears that same-sex married couples will be afforded equal rights. Same-sex spouses are considered legally responsible relatives and the income and resources of both are considered when determining eligibility. Same-sex spouses are permitted to sign Spousal Refusal forms. Other budgeting rules, which protect the community spouse when the other spouse needs long-term nursing home care, and allow the institutionalized spouse to make transfers to the community spouse to qualify for Medicaid, will apply to same-sex couples.

Ultimately, this is an area of the law that is evolving and the questions and problems that are surfacing create a virtual minefield for same-sex couples and their families. If you, a relative or friend have questions or concerns, do not hesitate to give Berwitz & DiTata LLP a call.

For adult children, the recognition that a parent has dementia can either be a slow process or it can be a body blow. This coupled with the parent’s denial of a problem, or their desire to remain independent, or their wish to remain in their own home, can create a dilemma.

Because many of the early symptoms of dementia are consistent with the aging process, because the illness does not follow a prescribed pattern and change can happen gradually, and because it is not uncommon for those affected to devise strategies for keeping it confidential, our loved ones are often at risk.

As the disease progresses, simple tasks may become overwhelming. Try these tips:

• Purchase a telephone with large numbers and speed dial buttons
• Label the speed dial buttons with names {not numbers] of people commonly called
• For police, label the button as POLICE, not 911
• Make a sign to hang on the bathroom mirror outlining the morning routine: brush teeth, wash face, shave, brush hair
• Hang clothing as an outfit
• Store clothes and pajamas in different places
• Remove medications from the home that are no longer taken
• Sort medications into pill boxes marked with the day of week and time of day
• Hang a large calendar and encourage “crossing out” each day at the same time
• On appliances, such as the washer, dryer, microwave and stove, use nail polish to mark the dials with arrows indicating the normal settings
• Mark the thermostat with an arrow for the normal temperature
• Disable the stove by unplugging it or tripping the breaker
• Remove hazards from stairs and check banisters for security
• Package food in single-portion sizes or as a whole meal

When giving instructions, the key is to “keep it simple.” The person may be able to process only one thought at a time. Offer only one alternative. When preparing a meal, “Would you like a hamburger or soup?” When making an appointment, “Should we go at one or two?" For sequencing activities, “Would you like to do this now or after we eat'?” Always speak directly, face to face. Use short sentences with simple words. A task requiring multiple steps, such as doing laundry, should be described in very small steps: Put the clothes into the washer, add the detergent, close the lid, turn the dial to wash.

Wandering is a common symptom and has frightening consequences both for the dementia sufferer and for the family. Try these suggestions:

• Sew ID tags into clothing - include the address and telephone number
• Install door alarms that will sound if the door is opened
• Place a large stop sign on all exit doors
• Bring a clear, color photo of your loved one to the local police and mark his or her name, address and telephone number - and yours - on the back

Personal hygiene may deteriorate. Telling your loved one to bathe, or that their breath is offensive, or that their toe and finger nails are unsightly can be very difficult. You may want to consider hiring a professional to assist with bathing and grooming twice a week. This removes the stigma of the constant reminder, spares dignity and saves embarrassment. The professional will be able to handle oral hygiene, nail care and will remove dirty clothes and offer fresh ones.

It is difficult to assess when a person affected with dementia is no longer safe at home. It depends not only on the individual but also on the household, the neighborhood, the proximity of family and a host of other factors. Unfortunately, all too often family members fail to recognize the signals or are unable to breach the topic and the implementation of precautionary measures is delayed.

It is not uncommon for a parent to add a name to his or her checking or savings account, or to any other asset, thereby making the child a joint owner. While this is often done for convenience purposes, it can have serious, unexpected and undesirable consequence

Since the child legally owns the asset, creditors of the child can levy against it and, if the child becomes involved in a divorce action, the child’s spouse may attack the interest in the asset as marital property. At a minimum, the existence of the account will have to be disclosed in a matrimonial action.

When you name a child as a joint owner on your account, you empower the child, during your lifetime, to withdraw money - as much as 100% of it! At your death, the child will automatically become the sole owner of the account, thus effectively “disinheriting” other children. While the full value of the joint asset will be part of your taxable estate, it will not pass under the terms of your Will. Therefore, if you want your assets to be equally divided among your children after your death, and for any tax burden to be equally shared, naming a child as a joint owner is a mistake. Naming all of your children as joint owners is a bigger mistake! That increases the chance that your assets will be at risk in the event that a child divorces or suffers bankruptcy or creditor issues. Moreover, if a child dies, that child’s children don’t inherit.

The majority of married couples own their assets jointly, with right of survivorship. This means that, when the first dies, the second owns everything. Owning assets in this manner may be convenient while both parties are alive because it gives both of them easy access to accounts. Unfortunately, however, if the combined value of the couple’s estate, including real property, life insurance, investments, stocks, bonds, mutual funds, annuities and retirement accounts, exceeds $1 million, owning assets jointly can result in adverse tax consequences. Instead, where the couple’s combined assets exceed $1 million, it is advisable to take advantage of each spouse’s credit against estate tax.

Simply put, owning assets jointly may conflict with estate planning. The goal of giving access to another “just in case” can be accomplished without exposing those assets to the risks discussed above. Now is the time to review your estate plan, including the manner in which your accounts are titled, to ensure that your wishes are accomplished.

For more information, contact our experienced Nassau County estate planning attorneys.

All of us can benefit from a better understanding of our investment accounts. The first way in which we, as investors, can educate ourselves is by reading our investment account statements. Sad to say, many of us just toss them away every month. Your account statements are an important part of controlling your investments. Some of the important details on your statement will be the “account summary,” which outlines the net or total market value of priced securities; the “cash balance,” which is the opening and closing cash amount for the account; the “income summary,” which shows the dividend and interest income earned during the period following the last statement and over the course of the year; and “asset class summary,” which summarizes all the investments in the account and categorizes them by the type of asset they represent.

After you familiarize yourself with your statement, its format, and the terms and codes used by your financial professional, look at how much you have invested in
each asset class. Try to determine how much each investment is currently worth as compared with the sum you have invested in it over time. As an investor, you need to know whether your investments have grown, decreased in value or held steady. Look at the section of your statement that shows the charges or fees debited from the account. If there is any information or irregularity that you do not understand on your account statement, contact your investment professional immediately. Each investor should be aware of the recommended asset allocation for their profile. A proper asset allocation will take into effect your risk tolerance and investment objective. Your financial professional should help in determining what your asset allocation should be. Your portfolio should be adjusted periodically to stay within your recommended asset allocation.

In order for you and your financial professional to design a portfolio which takes into consideration your individual risk tolerance and investment objectives, you need to be honest. The professional should have a clear understanding of your financial picture, including assets and liabilities, the level of risk that you are willing to accept, the timing of anticipated expenditures, your retirement goals and other factors that might have an affect on your need to liquidate the investments. When you fill out your new account form, it should be accurate. It is a good practice not to sign they may not include assets that pass outside of the probate estate as part of the decedent’s estate for recovery purposes. It has promised that a “revised regulation” will be promulgated. Sounds like we are back to Square 1? Not really, Medicaid has also advised its districts that the “new” method for evaluating life estate interests that was set forth in the emergency regulation, and addressed in our anything until is it completed, accurate and understood! The new account form will provide a guide to your financial professional in recommending investments which may be suitable or appropriate for you. It is a good idea to keep a copy. Keep accurate and complete records, including your new account form, all correspondence and statements, and any other pertinent materials. Also keep a diary of all conversations with your investment professional.

Note the date, place and subject matter of every meeting and conversation. This way, if there is ever a dispute with your professional, you will have records documenting your version of events. Our next article about investments will go in to more depth about types of accounts, rules brokers must follow and discretionary accounts.

Information on estate planning attorneys, Long Island, NY.

In both of the two most recent issues of A Step Ahead (our quarterly newsletter), we addressed the proposed changes in Medicaid estate recovery procedures and their significant impact upon seniors, the disabled and their families. On December 6, 2011, Medicaid allowed the emergency regulation, which would have enabled expanded estate recovery, to expire.

Medicaid has advised its districts that, effective immediately, they may not include assets that pass outside of the probate estate as part of the decedent’s estate for recovery purposes. It has promised that a “revised regulation” will be promulgated. Sounds like we are back to Square 1? Not really, Medicaid has also advised its districts that the “new” method for evaluating life estate interests that was set forth in the emergency regulation, and addressed in our earlier articles, will continue to apply despite its expiration!

The draft of the proposed revised regulation differs from the earlier emergency regulation in several significant ways. Presently in the “comments period,” it is unclear whether this proposal will sustain further modifications. There are some positive aspects to the proposed regulation, particularly that it will apply only to estates of decedents’ dying after July 1, 2012. This may provide some clarity lacking in the former regulation. However, there remain troubling concerns, such as its impact upon life estate and remainder interests that have already vested. The proposed regulation also has a detrimental impact upon spousal claims, retirement plans and annuities.

We anticipate that, in the months to come, there will be more news on the proposed regulations. It does not appear that this is a matter that will reach finality in the near future. We will continue to keep you apprised. If you have any questions, we invite you to contact our Long Island Medicaid Attorneys at 516-747-3200.

If you already receive, or will receive, Social Security benefits upon turning 65 years of age, you are automatically enrolled in Medicare. If you will not be receiving Social Security, you must separately apply for Medicare during the seven (7) month period
that starts three (3) months before the month you turn 65, includes the month you turn 65, and ends three (3) months after the month you turn 65. A delay in signing up for Medicare can delay your benefits!

More info on Medicaid Planning in New York.

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Guardians Have A Duty To Account

Sometimes Property Management Guardians, appointed in an Article 81 proceeding, do not realize until after they have been appointed that it is their obligation to manage all of the assets and income of their ward and prepare an annual report, for the Court, detailing their activities during the year, including the income and receipts collected on behalf of their ward and expenses and disbursements incurred during the year.

We like to remind Property Management Guardians to organize the financial records and begin compiling the information that must be included in their annual report. The following is a checklist that will help a Guardian prepare for the task of managing the finances for their ward and compile the information needed for the yearly accounting:

•    Identify all of the assets that your ward owns, including bank and brokerage accounts, retirement accounts, insurance policies and annuities
•    The IRS can help you find bank accounts that belong to your ward, use IRS form 4506T (Request for Transcript of a Tax Return)
•    If you are married to your ward, divide joint accounts
•    If your ward has joint account(s) with others, ascertain that portion of each account that belongs to your ward and segregate it
•    Retitle all accounts in accordance with the Court’s direction and request that all correspondence concerning the accounts be delivered to you
•    Make sure to open and fund a Guardianship checking account
•    Ask that copies of all checks be included with the monthly statements for the Guardianship checking account and close all other accounts
•    Identify all sources of your ward’s monthly income
•    Make arrangements to have your ward’s income deposited directly into the Guardianship checking account
•    Determine your ward’s monthly expenses
•    Arrange to have invoices forwarded to you, as Guardian
•    Pay expenses by check only, with funds from the Guardianship account
•    If there are debts, arrange for their payment
•    If there are insufficient assets to pay creditors, notify the Court
•    Search for other unclaimed property, like unclaimed tax returns and insurance reimbursements
•    Locate safe deposit boxes owned by your ward and, if jointly held, separate your ward’s belongings and rent a separate box
•    You will also have to identify valuable personal property, documents and real property

Once you begin receiving statements, review them monthly. Keep them in a binder for easy reference. Keep receipts for purchases and services. separate them into categories such as food, clothing, utilities, household expenses, medical expenses.

In your annual report, you must account for all income received, monies earned, expenses paid and previous and current balances of the estate. Under your stewardship, you will be able to provide a safe harbor for your ward and safeguard his or her resources.

Many people have incorporated Medicaid planning as part of their overall estate plans. Because the planning strategies are frequently tailored to the individual or couple, they vary greatly, making a general description of how the recent changes in Medicaid’s estate recovery rules will affect the anticipated outcome impossible. That said, we would like to provide an example of how your plan may be affected.

A frequently used planning technique includes the transfer of a home to another person or to an irrevocable trust. As part of this plan, or sometimes as a separate planning strategy, an owner might transfer their home but retain a life estate. Under the new Medicaid recovery rules, Medicaid may be able to recover the benefits paid on behalf of a Medicaid recipient from assets that were previously insulated from such recovery, such as the value of the life estate or assets owned in trust.

We encourage our friends, family, clients and former clients to review their estate plans periodically. We hope that, in light of the new rules, they will take advantage of this opportunity. It is imperative that anyone who has done asset-protection planning, to protect against the possibility that they may one day need long-term care, meet with an attorney who is familiar with the most recent regulations. Moreover, if a loved one is currently receiving Medicaid benefits after having transferred assets or engaged in Medicaid planning, or has received Medicaid benefits and is now deceased, or if you are interested in this type of planning, we encourage you to make an appointment. Meet with our Long Island estate planning attorneys and discuss how these changes will impact you, your loved one, the plan or the results you hope to achieve. While there will be a nominal fee charged for this service, it is important to review, reflect, evaluate and consider the impact of these changes and what, if any, techniques are available to you.

In our last issue of A Step Ahead, we reported that the New York State Health Budget had cut funding for programs that assist the elderly and disabled and, in particular, the Medicaid program. Regulations to implement the changes had been proposed but not adopted. On September 8, 2011, the changes went into effect.  They will significantly affect Medicaid planning, past, present and future.

First, the good news - the changes do not place new restrictions on Medicaid eligibility. The “spousal Refusal” strategy has not been eliminated. The transfer-of-asset rules remain unchanged.

However, the manner and extent to which the state is entitled to seek recovery, after the death of a Medicaid recipient or his or her surviving spouse, of Medicaid benefits paid has been significantly altered. Under the prior rules, post-death recovery was limited to the Medicaid recipient’s estate – that is, assets passing under the terms of his or her Will. The new rules permit recovery against property in which the person has a legal title or interest at the time of death. This will include, among other things, joint accounts, jointly held property, retained life estates and interests in trusts.

Certain exemptions apply. As before, recovery is limited to Medicaid payments made after the Medicaid recipient reached 55 and only for a maximum period of 10 years. Also, the new rules do not authorize recovery of Medicaid benefits paid for one member of a couple against a trust created under the terms of the Will of his or her redeceased spouse.

Of note is that the changes that have now been implemented will impact Medicaid planning options. For example, under the prior rules, Medicaid could not recover against bank accounts that were owned jointly “with right of survivorship” because, at the death of one account owner, the remaining balance was automatically paid to the surviving account owner. The new rules create a presumption that all of the assets in a joint account belong to the Medicaid recipient and are subject to recovery. The survivor can only protect that portion of the joint account which he or she contributed. If the account was funded solely with the Medicaid recipient’s funds, the entire account will be available to reimburse the state for paid benefits. Unless complete and proper records have been maintained, even the portion of a joint account that was legitimately contributed by the survivor will be subject to recovery.

Life estates have also been affected. Where a Medicaid recipient has retained a life estate in real property, he or she possesses the rights and obligations of an owner during lifetime but, at death, title to the property passes to the remainder persons. Under the old rules, and because the life estate of the Medicaid recipient is extinguished at death so that 100% of the value of the property is then owned by the remainder persons, there could be no Medicaid recovery against the property. Under the new rules, the Medicaid recipient’s estate will be deemed to own an interest in the property that will be the equivalent of the value of his or her life estate as of the moment before death. The calculation of this value is based, in part, on an interest rate which is adjusted monthly. The greater the interest rate, the higher the value of the life estate.

Additionally, when real property is transferred subject to a life estate, the value of the transfer is calculated the same way, utilizing the interest rate in effect at the time of the transfer. Currently, the interest rate is at an historical low. As the rate increases, the value of the life estate will increase, as well. This could result in a higher valuation of the life estate immediately before the Medicaid recipient’s death, resulting in a higher potential recovery by Medicaid.

If a Medicaid recipient has an interest in a trust, it is also potentially at risk. That includes not only trust principal but also income which the Medicaid recipient was entitled to receive during his or her life but was not paid before death. Generally, since the “income only” trusts used for Medicaid planning purposes customarily preclude the use of trust principal for the beneficiary, the recovery against such a trust should be limited to the undistributed income.

Finally, under the principles of Debtor and Creditor Law, a creditor could claim that assets transferred by a debtor to avoid a judgment were “fraudulently conveyed” and obtain a return of the transferred assets. Previously, the state did not assert fraudulent conveyance in its efforts to recover for Medicaid benefits paid. Under the new regulations, this strategy is now available to the state.

There are still good and valid reasons for maintaining joint accounts, creating asset-protection trusts and retaining a life estate in real property, even in the face of the new estate recovery rules. There are also circumstances in which one might decide against implementing one or more of these strategies. The benefits of these techniques, and whether they outweigh the risks involved, is something that should only be determined on a case by case basis. The decision as to how to best plan for the future, or revisit and “improve” existing plans, must be consistent with the needs, wishes and goals of each individual or couple. It is important to discuss this with an attorney.

If you have already undertaken asset-protection or Medicaid planning, we urge you to have it reviewed. Contact our Long Island Medicaid Planning Attorneys  immediately to schedule an appointment to identify and consider how the new rules affect you, if at all. Even if you were initially assisted by another attorney, we are available to review your plans with you. With tens of thousands of dollars potentially at risk, it is well worth the nominal fee that we charge to determine how these changes have affected YOU. Please contact us without delay.

Let’s face it: we are all going to die one day. At that point, our family members may be asked about donating our organs and tissue. A decision on this sensitive issue is much more difficult for our loved ones to make unless, during our lifetime, we have shared our views and expressed our intentions. For various reasons, personal, cultural or religious, and because it raises concerns which are genuine or superstitious, most people avoid talking about the end of life. But, we probably should.

Tens of thousands of Americans are on organ and tissue transplant waiting lists, hoping for that precious “Gift of Life.” The national waiting list count is continuously updated throughout the day. The decision as to who should have priority to organ and/or tissue transplant is based solely on medical factors. Blood and tissue type, body size, geographic location and medical urgency determine the recipients. The transplant waiting list is blind to the age, gender, race, religion, wealth or celebrity status, and no one can advance his or her position on the waiting list based on these factors. Moreover, in the U.S., it is illegal to sell human organs and tissue. Violators are subject to imprisonment and fines. One of the reasons for this rule is the government’s concern that buying and selling organs might lead to inequitable access to donor organs with the wealthy having an unfair advantage.

People of ALL ages, from newborns to the very elderly, may donate organs and tissue. Do not rule yourself out due to health concerns: people of ALL medical histories, even those with diabetes, cancer and hepatitis C are potential donors. The circumstances of death, the donor’s medical condition at that time and the condition of the specific organs and tissue will determine their viability for donation. Donors are evaluated on a case-by-case basis to ensure the medical suitability of their organs and tissue.

You can donate such organs as the heart, kidney, liver, pancreas and lungs. Tissue donations include skin, bones, eyes/corneas, heart valve and cardiovascular tissue, middle ear, blood vessels, arteries, tendons and connective tissue. It costs nothing to donate, none of the costs are passed on to your family or estate. All costs related to donation are paid by the organ or tissue recipient, usually through insurance, Medicare or Medicaid.

Some people are under the impression that a doctor will stop trying to save his patient’s life if he is informed that the patient wishes to be an organ donor. The medical team whose job it is to save lives is completely separate from the transplant team. The organ procurement organization (“OPO”) is not notified, and organs are not removed, until all life-saving efforts have failed and death has been determined. In order to prevent conflicts of interest, the physician who determines death is never a member of the transplant recovery team. The OPO does not notify the transplant team until the family has consented to the donation.

Often people believe that donation will result in a delay in the funeral arrangements or that they may be disfigured. The donor is treated with extreme care. The donation takes place under sterile conditions in procedures similar to surgery. The donation does not usually delay or interfere with chosen funeral arrangements, even an open casket.

If you wish to be a donor, it is important to express your wishes to your family. This will make it easier for them to consent to the donation and make sure that your instructions are honored. Hospitals are required to follow certain protocols in asking family members for permission to procure organs. If you make no provision for donation, under New York law, only certain individuals are authorized to consent on your behalf: (1) your spouse; (2) an adult child, 18 years of age and older; (3) either of your parents; (4) siblings, 18 years of age and older; and (5) a guardian appointed by court prior to your death.

If you are 18 years of age and older, there are several ways to express a wish to become a donor: by joining a donor registry, a computerized database of people who wish to be donors; by signing an organ and tissue donor card and carrying it in your wallet; by indicating the intent to donate on your driver’s license; or by including donation in your health care proxy and/or living will. You may specify the desire to make a gift of only a particular organ, or to make a donation to a specified individual. You may specify if you want your organ(s) or tissue to be used for research or educational purposes or for transplantation.

The decision to be a donor is a difficult one, but one that can be truly rewarding and meaningful. Having a greater understanding enables us to make better decisions and to express them in a way that will help our loved ones, in a time of great sorrow, to carry out our wishes. If you have questions or concerns about organ and tissue donation, please do not hesitate to contact our offices. Our Long Island, New York elder law attorneys will be happy to discuss these issues with you in further detail.

Proposed Changes In New York State's Medicaid Program

The New York State Health Budget, enacted in late March 2011, cuts funding for programs that assist the elderly and disabled. As a result, there will be significant changes in New York’s Medicaid program and Medicaid planning undertaken on behalf of our clients will be affected. The Budget Bill calls for the adoption of regulations to implement the changes. However, as of the writing of this article, regulations have been proposed but not yet adopted. It is likely that the proposed changes will be adopted. This article will address the anticipated changes. You can check our website at www.berwitz-ditata.com for more information concerning the new rules and regulations as it develops.

The good news is that the proposed changes do not place new restrictions on eligibility. The “Spousal Refusal” strategy has not been eliminated. The transfer-of asset rules remain unchanged.

What will change if the proposed rules are implemented is the manner and extent to which the State is entitled to seek recovery of Medicaid benefits paid after the death of a Medicaid recipient or his or her surviving spouse. Estate recovery is currently limited to the Medicaid recipient’s estate - that is, assets passing under the terms of a Will. Under the proposed changes, the definition of the term “estate” is expanded to include property in which the person has legal title or interest at the time of death. This will include joint accounts, jointly held property, retained life estates and interests in trusts. Certain exemptions still apply. As before, recovery is limited to Medicaid payments that were paid after the Medicaid recipient reached 55 and only for a maximum period of 10 years. Also, the proposal does not authorize recovery of benefits paid to a surviving spouse against trusts created under the terms of a Will of a predeceased spouse.

As a practical matter, these changes impact Medicaid planning options. For example, joint bank accounts, with rights of survivorship, are not part of a probate estate. They are automatically paid to the surviving joint account owner. Under the proposed rules, these accounts are no longer protected. The survivor can only protect that portion of the account which they contributed. If the account was funded solely with the Medicaid recipient’s funds, the entire account may be used to reimburse the state for paid benefits. Without maintaining all of those records, even the portion legitimately contributed by the survivor will be subject to recovery.

Where a Medicaid recipient has retained a life estate in real property, he or she has all the rights and obligations of an owner during lifetime but, at death, the title to the property passes to the remainder persons. Under the old rules, because the value of the life estate became zero at the death of the Medicaid recipient, and the remainder person owned 100% of the value, there could be no Medicaid recovery against the

property. Under the proposed changes, the value of the life estate will be calculated as of the date of the Medicaid recipient’s death, based upon his or her actuarial life expectancy. Upon the sale of the property, the percentage of the value based upon this calculation would be subject to Medicaid recovery.

If a Medicaid recipient has an interest in a trust, it is potentially at risk. That includes not only trust principal but also income which the recipient was entitled to receive but was not paid before his or her death. Generally, since the “income only” trusts used for Medicaid planning purposes customarily preclude the use of trust principal for the beneficiary, the recovery against such a trust should be limited to any undistributed income.

Under the principles of Debtor and Creditor Law, a creditor could claim that assets transferred by a debtor to avoid a judgment were “fraudulently conveyed” and obtain a return of the transferred assets. Previously, the State was not entitled to claim fraudulent conveyance in its efforts to recover for Medicaid benefits paid. Under the proposed rules, this strategy would now be available to the State.

While there are additional proposed changes, most will affect a smaller number of Medicaid recipients or those planning for Medicaid eligibility. Space precludes our review of all of the issues. The full proposal can be found on our website. Also, please look forward to our future issues of A Step Ahead for updates once the final regulations are implemented.

If you have engaged in Medicaid planning, it is advisable to have your plan reviewed in light of the new law. Who is affected? Those who have done Medicaid planning for asset protection purposes, those whose loved ones are already receiving Medicaid benefits after having transferred assets or engaged in Medicaid planning and those who are interested in this type of planning. We encourage you to arrange to meet with our Long Island elder attorneys to discuss how these changes will impact the results you hope to achieve. While there will be a nominal fee charged for this service, it is important to ascertain what impact the proposed changes will have on your plan and what, if any, techniques are
available to you.

Reference: elder law, medicaid, medicaid planning, NY Medicaid changes, New York state Medicaid proposed changes, New York State Health Budget, Long Island, New York

In our last issue we addressed the importance of the decisions we must make about when to start taking Social Security benefits and introduced certain strategies available to married couples. While many people wish to retire as soon as they can, and the number of Americans who begin receiving Social Security benefits early has increased since 2008, good planning should involve an analysis of the earning and investment power we relinquish when we stop working at age 62.

In this article, we review the principal reasons to delay the onset of Social Security benefits until “full retirement age” (FRA) and discuss how to maximize benefits for the surviving spouse.

First, it is important to refer to the charts provided by the Social Security Administration. These charts help you identify your individual FRA, which is based on your year of birth. The longer you refrain from accessing benefits, the greater your monthly benefit will be. If you begin receiving Social Security benefits before FRA, you forfeit the additional monthly income that you would have received had you waited until your FRA to begin receiving benefits. For instance, if you forego taking your benefit until FRA, the benefit will be as much as 33% higher and, if you delay taking benefits until age seventy, your benefits will increase another 32%. Your annual cost-of-living adjustment is also based on your benefit. Your adjustment will be permanently lower if you take benefits early.

If you are contemplating retirement, you must consider a variety of factors: leaving a job with good pay at age 62 means that you are not likely to replace that income if you later need to return to the work force; you will not qualify for Medicare until age 65; you will have to pay for private health insurance in the interim. It is interesting to note that the cost of private health insurance is rising faster than inflation or Social Security cost-of-living increases. Thus, by taking your Social Security benefit early you essentially reduce your benefit and then use it to pay for health insurance until you qualify for Medicare. On the other hand, if you keep working past age 62, you can build your retirement savings by taking advantage of “catch-up contributions” to tax-advantaged savings plans. These “catch-up contributions” allow you to exceed the normal limit on pretax contributions to 401(k) plans, bolstering your retirement savings. Also, because the Social Security Administration calculates your benefit on your 35 highest years of pay, if you are earning at the top of your employment history, the benefit amount for which you are eligible is still increasing and delaying retirement can boost your final benefit amount.

What about taking early retirement benefits based on your surviving spouse’s work record? When you claim benefits at age 62 based on your spouse’s work record, your benefit is reduced by 30% of what it would be at your FRA. The sophisticated strategies, “claim and suspend” and “claim now, claim later,” discussed in our last issue are not available until at least one spouse reaches FRA. Moreover, upon your death, your spouse is eligible to receive your monthly Social Security payment as a survivor benefit if it is higher than his or her own. When you take Social Security before your FRA, you are permanently decreasing your spouse’s survivor benefits. Delaying your claim provides extra security for your spouse.

The rules for surviving spouses are complicated and it is worth consulting with the Social Security Administration to help frame your options, especially if you plan on marrying again. In a nutshell, if you are widowed, you are entitled to receive the higher of your own benefit, based on your work history, or your deceased spouse’s benefit. If you wait until your FRA, you can claim 100% of your deceased spouse’s benefit. There are two strategies to consider here too. If you are under 70, you can claim a survivor’s benefit and let your own benefits increase to their maximum, at age 70, and then claim under your own work history. The other strategy, which requires that the marriage was at least 10 years of duration, is to claim your own benefit now, as a widower, and switch to a survivor’s benefit later. Survivor benefits continue to increase, after a spouse dies, until the survivor reaches FRA.

Retirement planning takes time and energy but it is an investment that will help you maximize your Social Security benefits and have a more secure retirement.

If you need assistance, please contact our Long Island estate planning attorneys and estate attorneys.

One important way to plan, in advance, for life’s end is to prearrange and fund a funeral plan, also called a “Pre-Need Agreement.” The funeral service, the charges of the funeral home, its staff, facilities and equipment, the arrangements for the preparation of the remains, the casket, vault or grave liner, transportation, and other incidental expenses such as permits, death certificates and obituaries are determined in advance and pre-paid.

If privately funded or paid from an individual life insurance policy, a funeral plan arranged informally through a funeral home or funeral director is not subject to regulation. However, each state has promulgated rules governing formal funeral arrangements which regulate how plans are to be sold and funded, what the contracts must provide and what recourse purchasers have in the event of fraud or default. New York State residents benefit from the most comprehensive laws. The monies are deposited into an investment backed by the U.S. government, usually FDIC insured certificates of deposit, and 100% of the principal and interest must accrue to the benefit of the trust.

There are a number of advantages to pre-planning and pre-funding. First, it allows individuals the opportunity to make a personal and specific selection of the products and services that meet their needs. For some, it is comforting to know that money has been set aside and will reduce the burden on family members at a difficult time and when they are most vulnerable to manipulation. It ensures that the family will not raid savings, sell assets, take loans or arrange other financing to pay for a funeral and burial. It may ensure that, if products and services currently purchased are not available in the future, equivalent substitutes will be provided at no additional cost.

Under New York law, pre-arrangements may be cancelled at any time prior to death and the entire balance, including interest, must be refunded unless the plan is intentionally irrevocable, which it customarily is for a Medicaid or SSI recipient. Even an irrevocable preplan may be transferred to a different funeral home at any time. Pre-need arrangements may be “guaranteed,” meaning that the price of the goods and services is guaranteed not to exceed the balance in the trust account at the time the funeral is provided, or “non-guaranteed.” Either way, within 10 days of the arrangement, the funeral director must deposit the funds to the funeral trust program.

For Medicaid applicants, funeral pre-planning is an important step. To the extent that funds are available that might otherwise disqualify the applicant from eligibility, funeral planning can be undertaken and the funds contributed are “exempt.” If only one member of a married couple is applying for benefits, the funeral pre-arrangements for both are considered “exempt.”

Unfortunately, there may also be problems with prepaid funeral arrangements. If a purchaser moves to another state and wishes for the final arrangements to be made there, there may be no transfer options or different rules governing the funding option. Unless the plan properly itemizes the goods and services, the provider could later substitute less expensive items or omit goods and services that were originally anticipated. If the goods and services purchased are not available in the future, the family may be required to pay more than the budgeted amount. If the provider goes out of business, or fails to secure the funds for the future payment, there may be no recourse.

Important Social Security Benefits information, 2011

Most of us like to be smart about our money. Understanding how monthly Social Security benefits are paid is important to ensuring that we make the most of this guaranteed lifetime income.

One of the most important decisions that we make about Social Security is when to start receiving benefits. You can start receiving benefits as early as age 62. Your full retirement age (FRA) is the time at which you may begin drawing your full payment. Full retirement age depends on the year you were born. Please see the chart below to find your FRA.

Year of birth         Full Retirement Age

1937 or earlier         65
1938                 65 and 2 months
1939                 65 and 4 months
1940                 65 and 6 months
1941                 65 and 8 months
1942                 65 and 10 months
1943-1954             66
1955                 66 and 2 months
1956                 66 and 4 months
1957                 66 and 6 months
1958                 66 and 8 months
1959                 66 and 10 months
1960 and later         67

If you choose to take Social Security benefits after age 62 but before your FRA, the
amount you receive will be reduced. If you begin to take benefits after your FRA, the monthly benefit will be increased. Generally, the longer you wait to begin receiving your Social Security benefits, the higher your monthly payments will be.

Comprehensive planning should be undertaken before making the decision as to the onset of your Social Security benefits. An examination of your expenses and other sources of income, such as pensions, annuities, investment income and inheritance is a good place to start. While delaying the onset of benefits results in an increase in your monthly income stream later in life, it means you will have less money earlier in your retirement. Thus, for instance, if you retire with fewer assets, their growth potential is lower, the income you will earn on them is less, and your expenses may be hard to meet. In that scenario, waiting to begin taking Social Security benefits until age 70, for example, may not be optimal: you may need the cash flow earlier.

Married couples have additional strategies available to them. For example, you can claim benefits based on either your own earnings or your spouse’s. You can even qualify to receive benefits if you have little or no work history! If you claim your spouse’s benefits, you will receive 50% of what your spouse is entitled to receive if you wait until your full retirement age. If you opt to receive benefits before FRA, the amount will be reduced.

Another strategy for married couples to consider is to “suspend” Social Security payments. It is referred to as the “claim and suspend” strategy. This strategy can only be implemented when the suspending spouse has reached his or her FRA. It is recommended when (1) the higher-earning spouse wants to continue working and the lower-earning spouse wants to retire and (2) the higher-earning spouse’s benefit is significantly higher than the lower-earning spouse’s benefit, so much so that the lower-earner would be better off receiving 50% of the higher earner’s benefit than the benefit calculated on his or her own work history. Here’s how it works: the higher-earner files for benefits and suspends them until a later date. As long as the lower-earner has attained age 62, he or she can start receiving benefits based on the higher-earner’s work history, and the higher-earner’s future benefits will continue to increase work life.

Another way for couples to enhance benefits is for the higher-earner to initially claim spousal benefits of the lower earner, and allow his or her own benefits to grow, and then switch to their own benefits later in life. This is a good strategy for couples who can handle lower income benefits at the beginning of their retirement and look forward to higher payments later. The “claim and suspend” strategy described above works best when the couple has very different work histories. This one is best for the couple whose lower-earning spouse would not be better off with 50% of the higher-earner’s benefit – their Social Security benefits are less disparate. It should also be considered if the lower-earner expects to outlive his or her spouse. Here’s how it works: once the higher-earner has reached FRA and the lower earner is at least 62, the higher earner claims the spousal benefit of 50% of what the lower-earner’s full benefit at FRA will be. The higher-earner receives 50% of the lower earner’s benefit as if he or she had already reached FRA. The lower-earner gets his or her reduced benefit at age 62. After a few years, when the higher earner’s monthly benefits have grown, the higher-earner can begin receiving his or her own benefit, increasing the couple’s combined monthly benefit thereafter until the higher earner’s death, and even beyond, read on.

After the death of one spouse, the survivor is entitled to receive the higher of the two benefits. This is called the survivor’s benefit. Thus, if you die, your spouse can claim your full monthly amount if it is higher than his or her own. naturally, the monthly amount of the survivor’s benefit will be lower if either the first-to-die elected to receive benefits before he or she reached FRA or the survivor begins to receive the benefit before reaching FRA. This is something for couples to consider: if you commence receiving benefits before your FRA, you are permanently limiting your spouse’s survivor’s benefit. Delaying your claim means your benefit will grow and your surviving spouse will have extra financial protection upon your death. This is a strategy you may wish to employ if your monthly Social Security benefit at full retirement age is higher than your spouse’s and your spouse is in good health and expects to outlive you. How about working while receiving Social Security benefits? If you work and are beyond FRA, you can receive your benefits without any reduction. If you work and claim your benefits before reaching FRA, your benefits will be reduced. When you are younger than your FRA, your Social Security benefits will be reduced by $1 for every $2 you earn over $14,160. The year you reach FRA, the benefits will be reduced by $1 for every $3 you earn over $37,680. These strategies can help maximize your Social Security benefits and should be part of your overall retirement planning.

Call the Long Island estate attorneys at Berwitz & DiTata LLP if you have questions about this or other retirement planning strategies.

Reference: Social security benefits attorneys Long Island, social security lawyers Long Island, social security claim attorney Long Island, claim benefits, when to claim social security benefits

Berwitz & DiTata LLP - Trusted Family Advisor Program

Major lifetime events trigger changes in estate planning. Often our clients only think to call us at the sad times in their lives. When illness, incapacity or death of a family member occurs, our clients pick up the telephone to let us know so that we can assist them in handling the new issues - guardianship, probate or trust administration, asset protection and Medicaid planning. We are also remembered when a beneficiary, trustee or executor passes away. But we would like to celebrate the happy events with you, too. At the births of children and grandchildren you may want to provide in some special way for the newcomer.

You may have questions about whether the addition of a family member changes the plan - or you may want it to. You may decide to purchase a new home or move from a large home to “more manageable” quarters. Children may marry - or divorce, your assets may undergo significant change (increase or decrease), you may inherit - or suffer business setbacks. We encourage our estate planning and Medicaid planning clients to advise us of these changes because plans need to be monitored periodically to accomplish the goals that have been established.

In order to better serve all of our clients and friends, we are initiating the “Trusted Family Advisor” (TFA) Program which we hope will make us more valuable to you. The TFA Program is simple. Just contact our firm any time you or a member of your family requires the services of an attorney - for any purpose. Pick up the telephone and give Berwitz & DiTata LLP a call.

We hope that you will never need an attorney because of an injury, car accident, medical malpractice, employment dispute, divorce or Family Court matter, commercial or civil litigation, or landlord/tenant issue. However, while our practice does not include these types of law, we will refer you to an attorney who has expertise in the appropriate area and who can protect your rights. Of course, we will provide you with representation in any of the areas encompassed by our practice, elder law, guardianship, Medicaid planning and obtaining Medicaid benefits, estate and retirement distribution planning, and probate and trust administration, including contested matters.

It is our hope that you will take full advantage of the TFA Program and allow us to be your Trusted Family Advisor. We would welcome any thoughts or suggestions you might have to make this Program as helpful to you as possible. We always look forward to hearing from you.

On Thursday March 3, 2011, Maureen was a featured speaker at a continuing legal education program, offered at the Nassau County Bar Association, entitled “Legal Issues Involving Elderly or Disabled Persons and Their Pets.”  Attorneys in New York are required to continue their legal education by taking a certain number of classes, or credits, each year. 

Maureen prepared and presented the following materials as an aide to her presentation and to assist other attorneys in honing their estate planning skills.  Her presentation focused on estate planning for the lifetime care of pets.  She briefly discussed the history of Pet Trusts and then addressed estate planning devices such as Powers of Attorney, Wills and Pet Trusts, how to create a Pet Trust, drafting considerations, how to help a client select the “fiduciaries,” the trustee, pet caretaker and trust protector, how to provide for the care of pets and companion animals during estate administration or when the pet owner is disabled or incapacitated, alternate care arrangements and pet trust taxation.

Here is an excerpt:
As estate planning practitioners, our one of our jobs is to help our clients anticipate "the future"and prepare for life's contingencies.  We have become adept at thinking through difficult family dynamics and complex tax strategies.  We grapple with the manner in which property is titled, review retirement accounts to ensure that beneficiaries have been properly designated, analyze insurance contracts and craft intricate documents to assist our clients in carrying out their wishes.  I like to say that we "close life's loopholes."


Click the link to read the entire article, "Estate Planning For Pets: Closing Life's Loopholes."

MISTAKES AND MISCONCEPTIONS: WILL, LIVING WILL, OR LIVING TRUST

Estate planning, whether simple or complex, requires careful attention to details which, if overlooked or misunderstood can undermine the plan’s effectiveness. We will devote space in each issue to highlight common estate planning mistakes and misconceptions.

People often confuse the terms “Will,” “Living Will” and “Living Trust.” A Will, also known as a “Last Will and Testament,” is a legal document which directs the disposition of one’s property after death to named persons or entities. A “Living Will” is a written expression of one’s intentions about health/medical care and end-of-life decisions, including whether to receive or refuse life-prolonging treatment when one is incapable of communicating one’s wishes either as a result of illness, accident or incapacity. The “Living Will” is sometimes also confused with a “Health Care Proxy” by which one can designate an agent to make health, medical and end-of-life decisions. A “Living Trust” is an entity created during an individual’s lifetime which is frequently utilized in estate planning to provide for the management of trust assets both during the creator’s lifetime and after death. It can be an extremely flexible estate planning tool tool and can serve to distribute assets after the creator’s death, much like a Will.

If you need help determining the right option for your personal situation, feel free to contact our wills and trusts attorneys in Garden City, NY.

More information about wills and our wills and trusts attorneys.

Most of us hope to spend our last days at home. Certainly, we expect to remain at home for as long as possible. If we become ill or incapacitated, we may be able to remain at home with the services of an aide or home care attendant, but the cost for these services can range between $170.00 and $400.00 a day.

Medicaid affords home care benefits to those individuals who meet certain requirements. Among other things, an applicant must disclose income. Once an applicant is approved for Medicaid home care benefits, Medicaid will pay all or some of the home care costs. The Medicaid recipient is presented with a budget requiring that monthly income exceeding $767.00, $1,117.00 for husband and wife (“excess income”), must be paid to the agency providing home care services. Living on this budget in the New York metropolitan area is problematic, particularly if the Medicaid recipient owns a home or apartment.

The good news is that Medicaid allows disabled individuals to establish a Pooled Income Trust (“Trust”), managed by a nonprofit organization. This provides a mechanism for protecting the excess income. Once the Trust is established, instead of paying the excess income to the agency providing services, the Medicaid recipient may deposit it into an account set up for his or her benefit and use it to pay expenses, including rent, utilities, homeowners’ insurance, real estate and school taxes, credit card bills, food, clothing and household items. The funds cannot be used to pay income taxes or for prescription drugs, alcohol or tobacco. But the funds are also not considered available resources for Medicaid eligibility
purposes. For these reasons, the ability to establish a Trust is often what enables Medicaid recipients to remain in their homes as they have the use of the excess income, monies which would otherwise be lost.

In order to establish a Trust, an application and other documents must be completed and signed. If the applicant is incapable of applying, his or her agent under a Power of Attorney may submit the application. However, the Power of Attorney must be broadly drafted so as to afford the agent the authority to establish such a Trust on behalf of the applicant. Unless the Power of Attorney is sufficiently broad, the nonprofit organizations which manage these Trusts will refuse to establish an account for the applicant and the planning may fail. Absent an appropriate Power of Attorney, a guardianship proceeding, which is both costly and time-consuming, may enable the guardian to establish this type of Trust.

We recommend that, when determining whether to apply for Medicaid home care benefits, serious consideration be given to the use of a Pooled Income Trust to protect income. If this is a strategy that makes sense, it is important to also review the existing Power of Attorney. If you have questions concerning Medicaid home care benefits, the establishment of an account under a Pooled Income Trust, or if you wish to have a Power of Attorney reviewed or a new one created, please call our office and we will be happy to assist you.

More information on Trusts
More information on Medicaid

Mark Twain wrote, “Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself.” After being totally irresponsible and failing to act prior to 2010 to address the expiring estate tax provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”)(please see our article entitled “Economic Growth & Tax Relief Reconciliation Act of 2001 Revisited” on our website), Congress has finally passed, and President Obama immediately signed, legislation increasing the unified credit and reinstating the “stepped-up basis” rules for decedents dying in 2010 and thereafter. However, the new legislation is only effective for two (2) years. Congress will have another opportunity to prove Mark Twain wrong at that time.

On Friday, December 17, 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the 2010 Tax Act). This Act extends, for the next two (2) years, many of the individual and capital gain/dividend tax cuts enacted during the Bush presidency. The 2010 Tax Act reduces payroll taxes, increases bonus depreciation, provides for alternative minimum tax relief and reinstates the estate tax. A summary of the estate tax provisions are discussed below.

Under EGTRRA, the estate tax had been suspended for decedents dying in 2010. It was scheduled to be revived in 2011, utilizing the one million dollar ($1,000,000.00) unified credit and maximum tax rate of 55% that was in effect in 2001, before EGTRRA was enacted.

The 2010 Tax Act decreases the maximum estate tax rate to 35% and establishes the unified credit against estate taxes at $5 million, $10 million for a married couple. The exclusion amount is to be adjusted for inflation. It reinstates the traditional “stepped-up basis” rule for all assets included in a gross estate. Prior to its passage, under EGTRRA, the stepped-up rules were replaced with modified carry over basis, see our article entitled “Capital Tax Time Bomb” on our website and the Spring 2009 edition of our newsletter “A Step Ahead.”

For decedents who died during 2010, the 2010 Tax Act allows the representative to elect between (a) an estate tax based on a $5 million exemption, a 35% tax rate and an unlimited step-up in basis or (b) no estate tax and a modified carry over basis. The time within which to file estate tax returns and make payments has been extended, for estates of decedents dying after December 31, 2009 and up to the date of enactment of the Act, for nine months.

The 2010 Tax Act allows a surviving spouse of a decedent who passed away after 2010 to elect to use the unused portion of the estate tax exclusion of a deceased spouse, which provides the surviving spouse with a larger exclusion.

The 2010 Tax Act has also made some significant modifications to gift and generation skipping transfer taxes. Under the Act, the gift tax is retained. However, the highest gift tax rate is reduced to 35% and the lifetime exclusion is increased to $5 million. Under EGTRRA, the Generation Skipping Tax (GST) did not apply for the year 2010. The 2010 Tax Act revives the GST with a 35% rate and $5 million exclusion. It also reunifies the Gift and Estate taxes for gifts made after December 31, 2010. Each tax type had a separate exclusion amount prior to the enactment of the Act.

Clearly the 2010 Tax Act could significantly impact estate plans regardless of when they were implemented. If you have any questions related to how this Act might affect your existing estate plan, please contact our Garden City, NY estate planning attorneys to arrange for a consultation. As a courtesy to readers, we will charge a nominal fee of $350.00 for the consultation.

Reference: Tax Relief, Unemployment Insurance Reauthorization, Job Creation Act of 2010, The 2010 Tax Act, 2010 Tax Relief Act, The 2010 Tax Act Can Impact Your Estate Plan, Estate Planning Long Island, New York, Tax Act News

Attn: Long Island, NY: Annual Renewal of Eligibility is Required for Medicaid Recipients

Just when you thought it was over, that the painstaking process of record collection and accountability, which is necessary when applying for Medicaid benefits, was just a well-forgotten memory, you receive a letter from the local Medicaid office notifying you that it is time to review your loved one’s eligibility. What’s this? Can it be? We start all over again?

In New York, Medicaid benefits, for both institutional and home care, are granted for only a limited period, generally not more than 12 months. Once a year, or whenever there is a change in the Medicaid recipient’s circumstances, such as marital status, health, residency, or asset level, the Medicaid office must determine the recipient’s continued eligibility. This process is called “Recertification.”

Generally, at least sixty (60) days prior to the date coverage “expires,” Medicaid notifies a recipient, or his/her representative, that current information and documentation must be provided in order for benefits to continue. It forwards a recertification/renewal package which must be completed, dated, signed and returned with the required documentation by the deadline provided. Failure to do so may result in the termination of benefits.

For each annual recertification, Medicaid requests income verification and financial documentation establishing a continuing right to benefits. Current statements from banks and other financial institutions must be provided along with information as to other resources, for instance receipt of or entitlement to an inheritance or the proceeds of a law suit.

Medicaid also seeks updated information regarding residence, marital status and health insurance. Home care recipients are required to furnish a medical form, completed by their doctor following examination. As with the initial application process, at recertification, a recipient who is married must disclose information concerning the spouse’s income and resources.

Once the initial packet has been reviewed, a caseworker will either demand additional documentation or issue a notice of recertification of eligibility for the next 12 months! Take heart. You won’t hear from them for another 10 months, when you will start the recertification cycle once again.

Please remember that our Long Island Medicaid Attorneys are always happy to help you in the Medicaid recertification process. Please do not hesitate to contact us.

Reference: Medicaid, Medicaid recertification, Medicaid updates, New York Medicaid benefits, New Medicaid Attorneys, Medicaid facts, PJ5VFDYMNVAW

If you feel like we do, you would prefer not to be bothered by junk mail or email, telephone solicitations and unwanted messages on your answering machine or voice mail. Most of the time the offers are for services or products that have no relevance to us. Sometimes they cause concern and stress. And they are almost always a waste of resources. In this digitalized world, what can be done about it? Fortunately, a lot. The Federal Trade Commission has a campaign which allows us to stop the madness of these unsolicited marketing strategies and “Just Say No.” All it takes is a few clicks of your mouse or telephone calls.

Reduce or Eliminate Telemarketing Calls: Call 1(888) 382-1222 from the telephone number you want to register or go to www.donotcall.gov. You can register up to three telephone numbers at a time. Once your number has been on the registry for 31 days, most telemarketing calls will stop. However, not all calls are eliminated. You will continue to receive calls from companies to whom you have given permission. Calls from, or on behalf of, political organizations, charities, and telephone surveyors are not restricted. Calls from companies with whom you have an existing business relationship may call you for 18 months after a purchase or three months after the submission of an inquiry or application, unless the company is requested to place your number on its own “do-not-call” list. You should keep a record of the date you make each such request.

Pre-approved Credit Card Mail Offers: It is wise to shred these offers to preclude someone from submitting an application without your knowledge. Under the Fair Credit Reporting Act (FCRA), the Consumer Credit Reporting Companies are permitted to include your name on lists used by creditors or insurers to make “firm offers” of credit or insurance that are not initiated by you. However, by calling 1(888) 567-8688 or visiting www.optoutprescreen.com, you can opt out for 5 years or permanently and, if you ever want to resume receiving these firm offers, the same website permits you to “opt-in.” Be aware that it will be necessary to provide your social security number to take advantage of this program.

Unsolicited Commercial Mail and Email: How much junk mail do you throw out without even opening it? What a waste of resources. The Direct Marketing Association’s Mail Preference Service allows you to opt out of receiving unsolicited commercial mail and e-mail for five years. To take advantage of this service go to www.dmachoice.org.and be ready to pay a $1.00 registration fee for this service. On this site, direct mail is divided into four categories: Credit Offers, Catalogs, Magazine Offers and Other Mail Offers. You can request to start or stop receiving mail from particular companies in each category or from an entire category at once. First, determine whether you are considered a “prospect” or a “customer.” If you receive mail from companies with whom you have never done business, you are a “prospect” and your name is on a list the company is using to identify new customers. If you have done business with a company in the past, you are considered a “customer.” This is an important distinction. Even if you request to be removed from an entire category, for instance, you don’t want to receive any more catalogs, any company of which you are a customer is permitted to maintain you on its mailing list for invoicing or returns. You will be removed from the prospects list but will continue to receive mail. We are advised that you must contact these companies directly, through their websites or customer service departments, to be permanently removed.

We hope these tips will help make the process of managing your mail as quick and hassle-free as possible.

Authors: Berwitz & DiTata LLP is a Garden City, NY law firm that practices in the areas of estate planning, retirement distribution planning, probate and trust administration and elder law.

Long island estate planning attorneys

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Mistakes and Misconceptions: Why Putting Your Will In A Safe Deposit Box Is A Bad Idea

Estate planning, whether simple or complex, requires careful attention to details which, if overlooked or misunderstood, can undermine the plan’s effectiveness.
Many people believe that it is important to keep their original Last Will and Testament in a safe deposit box. Each bank has its own rules regarding the use and access to its customers’ boxes and, for this reason, unanticipated problems arise.

Ordinarily, only persons authorized under the contract, or agreement under which the box was opened, may enter the box. A box that is leased in two names, jointly, means that, while both lessees are alive, either may freely enter the box alone, examine, remove or insert contents, and/or surrender the box. Some banks permit the appointment of a “deputy,” one who has equal access to the box with the one who has appointed him, but only during the lifetime of the owner of the box. What most of our clients don’t realize is that the bank also has the right to refuse access to a box if it learns that a lessee is incapacitated or has died. This is true even if there are two names on the box and the other lessee is the one who seeks entry.

Your Will should not be kept in your safe deposit box because, after your death, when the Will is needed, access may be denied by the bank and a special proceeding may be required in order to secure the Will for filing.

If you have any questions, our Long Island estate planning attorneys are happy to speak with you. Call 516-747-3200.

For more information on estate planning and wills you can click here:

Long Island Estate Planning
Long Island and New York Wills
Long Island and New York Trusts



Reference Terms: Wills, Safe Deposit Boxes, Estate Planning, Last Will and Testament.

How are you protecting yourself from identity theft?

Medical identity theft is the newest, and least recognized category of identity theft. While it still only represents a small percentage of the identity theft cases reported each year, it is a problem that may have life-threatening consequences.

Typically in these cases, a thief uses your medical insurance to receive medical goods or services, such as prescription drugs, durable medical equipment, treatment or even surgery. The thief’s medical information is entered onto your medical records and is indistinguishable from yours. Imagine the consequences if the thief is diabetic and you are not, or if you have allergies and he or she doesn’t. This could have a serious impact on your treatment plan, particularly if you require emergency medical care and cannot participate in decision-making!

Medical identity theft is hard to detect. To protect yourself from medical identity theft, take these steps:

(1) store your health insurance information and other personal information in a secure location

(2) closely monitor the explanation of benefits from your health insurer

(3) request and review a copy of your medical records from your health care provider periodically.

Reference Terms: Medical Identity Theft, Identity Theft, New York, Long Island, Identity Theft Facts, Identity Theft Protection, Theft Of Identity, Identity Protection, Protection From ID Theft

The New York State Business Corporation Law (“BCL”) sets forth the responsibilities of owners after the corporation has been formed.  The BCL requires non-exempt New York corporations to hold at least one meeting of shareholders each year and to maintain a record of these meetings.  Meetings are for the election of directors, even if the same directors are elected year after year.  If you are a business owner, even of a small, closely held business, the BCL applies to your business.  Annual meetings do not need to be formal, they can be held in your kitchen over dinner, but an annual meeting is a crucial part of the business owner’s year.  Failure to comply with this corporate formality may result in personal liability for all corporate debts and obligations.

The corporate by-laws, which are typically part of the corporate set-up, address when meetings of the shareholders and board members should be conducted and how the notice of these meetings should be given.  Ordinary business of the corporation should be addressed in addition to the election of board members and officers.  Regular meetings and votes are critical.  The board is responsible to keep a written report of each meeting, in the form of minutes.

The by-laws, corporate books, records and minutes are internal documents which must be maintained by the corporation.  They need not be filed with the Department of State or any other state agency.  Many business owners neglect their obligation to maintain the corporate books and records.  This can be dangerous.  If you have any questions pertaining to the issues discussed in this article, or wish to have any assistance with maintaining and/or updating your corporate books, please do not hesitate to contact Berwitz & DiTata LLP.  We will be happy to help you. 

Reference Terms: New York State Business Corporation Law, BCL, annual Shareholder Meetings, Corporate Law, Corporate By-Laws, Corporate Books & Records.

All too often, when we review the estate plan of a new client, or are retained to assist in the administration of the estate of a decedent who was not our client, we find that the options which are available to protect the inheritance of a special needs beneficiary have not been properly implemented.


        Understandably, the parent of a child with special needs does not want that child’s future inheritance to reduce or interfere with governmental benefits the child is, or will be, receiving.  Do-it-yourself estate plans, or those which are prepared by uninformed attorneys, “disinherit” the disabled child by giving that child’s share of the estate to other children with the expectation that a healthy sibling will segregate the disabled child’s share and use it for the disabled child’s benefit.


        Unfortunately, this frequently doesn’t work.  What if the healthy child dies before the disabled child?  Where will the money intended for the disabled child go?  What if the healthy child’s marriage fails?  Will the divorcing spouse wind up with some of the money intended for the disabled child?  What if the healthy child falls into financial difficulties or has creditor problems?  All of these very real situations can jeopardize the assets intended to benefit the special needs child.


        In New York, one can provide for a disabled beneficiary by creating a Supplemental Needs Trust which is specifically intended to supplement but not replace the benefits provided by the government, to enhance the beneficiary’s quality of life.  By redirecting the disabled beneficiary’s inheritance to an SNT, ordinary testamentary goals can be achieved without any of the risks.  The healthy sibling can be named as a trustee without jeopardizing the plan.  The trustee’s death, divorce or creditor problems do not invalidate the trust or place the trust assets at risk.  A successor trustee can assume the responsibility of administering the trust if a trustee dies or cannot otherwise serve.  The assets in the trust are insulated from a trustee’s divorcing spouse or the trustee’s creditors.


        We can not overemphasize the importance of having your estate plans reviewed periodically by an attorney who is familiar with this type of planning.   While we can modify estate plans that do not meet your goals during your lifetime, there will unfortunately come a time when the plan can no longer be changed.  Do not let this happen to you.

One of our readers, Warren M., writes: “Traditional IRAs have required minimum distributions after reaching 70½ but not Roth IRAs. I have been told that Roth IRAs are also subject to required minimum distributions re Medicaid nursing home costs. They use a single table vs. IRS using the joint table? True or not?”

Beginning at age 70½, traditional IRA account owners are required to take annual minimum distributions based upon their life expectancy. The IRS has established various tables to determine the life expectancy of the account owner in order to calculate the minimum distribution. What was formerly the IRS table utilized by a married account owner is currently utilized by both single and married individuals. If a married individual has a much younger spouse/beneficiary, a different table may be utilized to calculate the annual required minimum distribution. In contrast, no distributions are required to be taken by the account owner of a Roth IRA.

Generally speaking, the value of the assets in either a traditional or Roth IRA are not utilized in determining eligibility for Medicaid benefits provided that the account is in “pay-out status.” Pay-out status means that yearly distributions are required to be taken from the account. For account owners of a traditional IRA, the account is in pay-out status upon reaching 70 ½ years of age. A Roth IRA, or a traditional IRA owned by someone who has not attained the age of 70 ½ years, can only be in pay-out status if the account is annuitized, meaning that distributions must be made from the account at least annually. In Nassau, Suffolk, New York City and many of the other counties in New York State, the local Medicaid office requires the utilization of a table created by the Social Security Administration (SSA), not the IRS, to determine the annual required minimum distribution for Medicaid applicants. The SSA table contains shorter life expectancies, resulting in larger annual distributions. There are some counties that will allow the IRS table to be utilized.

The distributions made from the retirement account are considered income in the year received and must be accounted for in determining Medicaid eligibility and budgeting. Additionally, distributions are considered taxable income in the year taken and could increase income tax liability for that year.

Our thanks to Warren M. for his question. Just a reminder: obtaining Medicaid benefits for those who are indigent may be a straightforward process. But obtaining benefits for those who have assets that they wish to protect can be a minefield that, if incorrectly handled, can result in significant financial problems and the delay or denial of benefits. It should be done with the assistance of an attorney who has a complete understanding of the Medicaid eligibility rules.

Pets are frequently overlooked in the aftermath of an accident or death. Sometimes pets are only discovered days after a tragedy. Several months ago, as an introduction to this important topic, we wrote an article about Pet Trusts, a legally enforceable method to provide for the care and maintenance of pets in the event of the owner’s disability and/or death. The response to our article was overwhelming! We discovered that many of our clients and friends had never considered what would happen to their pets if something unexpected happened to them.

What can you do to protect your pet’s future? While pet owners should certainly consider the care and maintenance of their pets when preparing their estate planning documents, certain important and simple steps can be taken right away.

First, identify emergency caregivers. A responsible friend or relative who has the key to your home should be given important information about your pets. Include feeding instructions and the name and contact information of your veterinarian. Neighbors should know how many pets you have and how to contact your emergency caregivers. Some pet owners carry cards in their wallets that identify their pets and list the emergency caregivers and their contact information.

Post a sign on all entrances to your home to alert emergency personnel, in case of fire or other home emergency, that pets are inside. Indicate the number and types of pets. On the inside of the doors, post a large, clear listing of the contact information for your emergency caregivers.

While these steps will help protect your pets temporarily, it is very important to include formal, written arrangements, that cover care and even ownership of your pets, as an integral part of your estate plan. To do this, you must select a permanent caregiver and, perhaps, an alternate. From time to time, reach out to those whom you have designated as caregivers to ensure that they remain ready and able to care for your pets. If circumstances change, your formal documents should provide for a contingency plan. With proper advance planning, “no-kill” shelters, pet sanctuaries and pet retirement homes can be given authority for perpetual care or the right to find a family to adopt your pets. Some programs require contributions. Almost all require advance enrollment.

The most reliable mechanism for providing for your pets is to create an enforceable trust in favor of a human beneficiary or caregiver and then require distributions from the trust to the caregiver to cover your pets’ expenses and, possibly, compensation to the caregiver. Provisions for pets should also be incorporated in your Power of Attorney and Last Will and Testament. The Power of Attorney can include specific instructions with respect to your pets in the event of your incapacity. It can also authorize the expenditure of your money, during your lifetime, for the care of your pets. While the instructions which you may have incorporated in your Last Will and Testament may be informative, remember that it is often weeks, months or longer before your Executor is empowered to act in accordance with those instructions.

If you want to ensure that your pets will be continually cared for, please call our Long Island estate planning attorneys at 516.747.3200 or make an appointment to talk about this important addition to your estate plan. Learn more about pet trusts here.


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More and more of our clients who are retired thought that they had planned well for the future only to find that rising medical costs, shrinking investment portfolios and other factors have caused them to incur debt.  “USA Today” recently reported that more seniors are in debt than ever before.  Most live on fixed incomes and have no way to pay off debt such as credit cards and home equity loans.  Sometimes the debt is incurred to cover deficits in the household budget.  In order to meet their financial obligations, seniors sometimes skimp on food or decline to take medications.  They pare down their lifestyles, pinch pennies and still don’t make ends meet.  Most have worked hard all their lives and managed their debt. They didn’t anticipate the most recent recession, the rising costs of health care and prescription drugs, or the possibility that they might outlive their savings.  The good news is that help is available for some of these individuals.


Reverse mortgages - A Home Equity Conversion Mortgage (HECM), or reverse mortgage, provides seniors with an opportunity to tap into their equity interest in their home without the obligation of repaying the loan in monthly installments.  Instead, the cash flow is reversed and the senior receives payments from the bank, hence the title “reverse mortgage.”  A reverse mortgage may provide a solution for seniors who have owned their homes for a long time and are “house rich but cash poor.”


Life settlements - Life insurance policies that have cash value can be sold under the right circumstances.  Often, the sales prices is significantly greater than the cash surrender value. Even some term life insurance policies which contain the option to convert coverage to permanent life insurance will qualify for a life settlement.


Government Programs - Seniors should not overlook government programs which subsidize the purchase of food and housing, help with medical expenses and provide tax credits. For veterans there is free health care, inexpensive prescription drugs and disability income. Area agencies on aging offer individual counseling, legal help and advice. 


For seniors living on a fixed income, dealing with debt can be an overwhelming burden. The advice of a knowledgeable elder law attorney can assist in easing this burden.

 

Tax season is over! Spring has sprung! It’s time to “review and renew.” It’s time for the annual Berwitz & DiTata LLP “Review and Renew” program. Each spring, we encourage our clients, friends and “would be” friends to focus on estate planning, refresh those resolutions and stop procrastinating.

 

If you have never created an estate plan, now is the time. Although estate planning is a topic that some people find difficult, we are dedicated to helping clients identify and implement their estate planning objectives with ease and efficiency. We believe that our success is founded on this fundamental commitment to communicate with our clients in a caring and responsive manner.
 
Those who have met with us in a one on one consultation know that we believe that everyone can benefit from estate planning regardless of personal income or net worth. Everyone has concerns regarding the future.

For instance:
     How can I avoid probate and the dissipation of my assets to estate taxes?
     How can I avoid losing control of my assets if I become disabled?
     How do I protect myself and my family from devastating nursing home costs?
     How can assets be transferred if a relative is already in a nursing home?
     How can I protect my minor children?

 

In designing strategies to effectuate our clients’ goals, we offer detailed advice and a high level of technical expertise. Now is the time to achieve estate planning peace of mind! Ask those questions, explore the options, get it done.

 

If you created your estate plan, or reviewed it last, more than 3 years ago, now is the time. Are your documents up to date? Have there been changes in the law or in your life that should now be considered? The documents that address the needs of a single person are frequently insufficient when he or she marries. If a couple has children, the appointment of a guardian should be a key factor in estate planning.

 

Those documents that were created when the kids were small may no longer reflect their parents’ wishes now that the kids have grown and flown. Indeed, once your child reaches the age of 18 years, he or she should have a valid and enforceable Health Care Proxy empowering you or another to make health care decisions. The “sandwich generation” is discovering that the joy and responsibility of raising children is all too frequently overshadowed by the illness of parents.

 

The need for estate planning takes on new meaning as one approaches retirement and, if illness threatens, timing becomes more critical. Lifetime changes affect estate planning. Even if we can’t imagine what changes in our lives could affect these important documents, an estate planning review is a vital element to ensuring that your wishes will be accomplished.

 

Because Berwitz & DiTata LLP understands the importance of keeping the plan current, we offer our clients a unique value-added component: a complimentary three year review. For those who have not yet retained our services, there is a nominal fee to review your plan. Let us help you realize your estate planning objectives.

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