Articles Posted in Caregiving

We’ve been examining adding a revocable (a/k/a living or inter vivos) trust or irrevocable trust to your estate plan. Trust instruments are an important part of your estate plan, particularly if you have a spouse and young children you wish to provide for upon your death. When mistakes are made, in establishing or setting-up a trust, the errors are borne by your survivors.

When problems arise in trusts they tend to involve issues with trust funding, policy titling, and beneficiary designations. When neglected these issues have their way of creeping into the lives of your loved one and will require significant amounts of money and time being spent that could have otherwise been avoided. What follows is a primer on the top 4 scenarios your survivors will need to get through to correct any problems associated with trust funding, policy titling, and beneficiary designation.

No. 1 – Avoiding probate

On August 15, 2019, the U.S. Food and Drug Administration (FDA) rolled out thirteen (13) proposed warnings in full-color utilizing graphics for rotation on cigarette packages, meant to encourage people to stop smoking or taking up the habit.

According to the U.S. Centers for Disease Control and Prevention, (CDC) the leading cause of preventable death in the U.S. is smoking.

  • Nearly 480,000 people die in the U.S. each year from smoking-related illnesses.

In July, the Trump Administration announced by Executive Order that the United States intends to change how patients with kidney disease are managed in the United States. Instead of receiving dialysis at an outpatient dialysis treatment center, patients will be moved to in-home dialysis treatment. Additionally, by 2025 the Trump Administration has set a goal that 80% of end-stage kidney disease patients should receive home dialysis. This initiative will affect older adults since half of the 125,000 People diagnosed with kidney failure each year are 65 and older.  

According to the National Kidney Foundation,

  • 10% of the population worldwide is affected by chronic kidney disease (CKD), and millions die each year because they do not have access to affordable treatment.

There are a range of situations that could prompt a parent to disinherit a child. For example, some children completely ignore their parents. An extreme example is when an adult child tries to commit his parent to a mental institution. A more common example are situations where an adult child physically or financially abuses a parent. But what if you don’t have children? Some nieces and nephews of the will maker are just as awful as some of the wayward children described above. How do you disinherit any close family members and ensure that a will contest will be resolved as you wished?

  1.   Hire legal counsel to draft your will or trust document. If you want to make sure that a family member will be disinherited as you wish in your will, especially if the disinherited person is your child, hire an attorney to draft your will or trust document. Do not rely on a handwritten or internet will. If they were difficult to manage while you were alive, they will be doubly difficult to control once you are dead. An errant child or nephew may try to challenge your will, even if they lose, to force the other children or family members to pay them off. Hate has a funny way of applying both ways.
  2.   Provide details and instructions as to why you are disinheriting your child or family member to your executor. An executor of a will is responsible for submitting the will to probate and will be required to represent your wishes and defend you in court if your will is challenged. Leaving a written explanation as to why you were disinheriting your child or other family member will both explain and corroborate your decision. Demonstrating that your decision to disinherit a family member was a thoughtful process and not simply a rash act will ensure that your actual wishes are followed if challenged. Especially if the family member you are seeking to disinherit is combative with your other children or family members. Remove all doubt that another child or family member pressured you to disinherit the other family member.

It is not uncommon in our region for people to own real property outside of New York State. Increasingly, people own other home or investment properties out of state and even out of the country. A will generally disposes of all of an individual’s assets. The rules are different however if the asset is real property. There are three rules to keep in mind and carefully consider when dealing with assets outside of New York as part of your estate planning process.

Consider the following rules when drafting or revising your will:

  1.   If the out of state asset is real property it is vital to develop your estate plan in conjunction with the law in that locality. Real estate assets are governed by the laws of the country or state in which they are situated. This means that the law of the other locality will determine if the New York will is recognized as valid there with respect to the real property.

Clients call this law firm asking for a copy of their will or other estate planning documents because they cannot locate the original all of the time. Our first response is to tell them that if they cannot find the original document, then they do not really have a will. In New York, only a document bearing the original signature of the testator and witnesses can be submitted to probate. While a photocopy or electronic copy of the document may exist, it is not the original and will be rejected by the Surrogate’s Court when seeking to have an estate probated. It is not until the loved person becomes admitted at the hospital under an emergency or that person passes that those left behind start the search for estate planning documents. Another overlooked catastrophic event is damage or loss of estate planning documents after a natural disaster.

Domestic weather events, including nor’easters, tropical storms, and hurricanes often bring a great deal of water to the shorelines and shore communities of New York State. Emergency plans should include provisions for the preservation of estate planning documents. When people are asked or ordered to evacuate their homes, because of emergency weather conditions, they often only leave with the clothes on their backs and their loved ones. Not all temporary shelters for example, allow people to bring their pets with them and many times the pets stay behind. The last thing on peoples’ mind, when evacuating their homes, is collecting and preserving estate planning documents.

What are estate planning documents?

This is the second post in a two-part series on the opioid crisis at home. Addiction, the subject of our first post, is not the only opioid-related impact on older adults. The following post will examine the rise in elder abuse tied to the opioid epidemic.

I assisted a client with the purchase of commercial real estate property and had the opportunity to talk to the sellers at the property closing. I was surprised to learn that the building had been a family restaurant, in business for nearly eighty years. I asked the sellers why they were selling their business. They told me that they could no longer keep running it. They continued to share that they have two adult children battling opioid addiction.

The dad confided further that their children used to break into their restaurant and steal steaks and seafood to fund their drug habit. They were tired of hiding their valuables around their children and were having a difficult time anticipating what they would raid next. When the kids started breaking into the business, they knew they could not keep it going. In addition, they have grandchildren that they are raising as the primary caregivers because their children and their partners were not able to care for the young ones.

New York Governor Andrew Cuomo signed a group of bills intended to increase consumer homeowner protections. By press release, the Governor’s office announced three important improvements in an effort to strengthen homeowner safeguards and close loopholes to prevent deed fraud and mortgage scams.

Unbeknownst to the homeowner, deed fraud occurs when someone steals your identity, forges your name on a deed, and takes title to your home. The homeowner only becomes aware of the fraud when a third-party tries to collect on a mortgage or debt. Seniors are often targeted as unknowing participants in mortgage scams, especially surrounding reverse mortgage products. The purpose of the scam is to steal the equity from your home. Beware of any offer for a free home, investment opportunity or foreclosure or refinance assistance. No reputable company will be calling you cold or knocking on your door with offers that sound too good to be true.

The new laws passed in New York to protect homeowners are as follows:

Debt no matter the age of the debtor is a difficult load to carry. The opportunity to pay back debts diminishes with age because one’s income potential is decreased due to unemployment and any physical limitation to working. The fixed income that Social Security, pension, and retirement savings provide ideally should cover living expenses – such as housing, clothing, food, and medical care and expenses. Households that must stretch those dollars out to pay back debt are very vulnerable.

Senior above 60 hold $2.16 trillion in debt

Senior household debt is on the rise, contributing to a spike in senior bankruptcy filings throughout the country. According to the Federal Reserve, during the first quarter of 2019, Americans in their 60s held $2.16 trillion in debt. During the economic downturn of 2008, seniors in their 60s held $1.47 trillion in debt. For individuals in households with seniors who are 70 and older, the household debt is double what it was in 2008.

Millions of people find themselves in a middle class bind as they enter the midpoint of their retirement period. A good eight (8) to ten (10) years into retirement, many individuals are able to physically continue to live in their home and afford the upkeep and maintenance of their home with their retirement savings

Especially if the individual’s home is single-story, as health problems mature, many individuals will be physically able to maneuver their way around their home with little assistance. Multi-story homes become more difficult because climbing stairs may be a problem. Individuals in the midpoint of their retirement are generally still able to care for themselves. Many of them even hold permanent part-time jobs.

The sources of income for individuals in retirement are the fixed income they receive from a pension, an individual retirement account (IRA), Social Security, and 401K savings. Variable income is received through part-time job wages and other financial instruments like an annuity and cash savings.

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