Articles Tagged with NYC elder law

If you are the beneficiary of a trust, there are a number of considerations you should be making when filing your taxes. When filing taxes each year, you should determine how much of your trust distributions made throughout the year will be taxable. In the event that a trust retains income after the calendar year has ended, they will be subject to taxation on that leftover income, thus, it is important to communicate to your trustee, whether that is an individual or a corporate entity, your tax status and what you would like to maintain.

A trust consists of both income and principal. Principal is the corpus of the trust, being any trust property owned by the grantor and now the trust, as well as stocks and investments that have funded the trust. Income is the monetary amount made off of the investments or other products attributed to principal. Based on what distributions were made from principal and what were made from income, the trust must file a K-1 and a 1041.

The 1041 is the tax document important to the trust and trustee because it provides the trust’s deductions from its taxable income distributions made to beneficiaries. The K-1 is given to the beneficiary and gives them a breakdown of the distribution and what their tax liability is to be reported by outlining what distributions were made from income and what came from principal.

There are a variety of different types of trusts that an individual can use to their benefit while they are alive or in order to preserve their wealth for their family after they pass. Depending on it’s purpose, the grantor of a trust will make either a irrevocable or revocable trust. Irrevocable trusts cannot be modified without permission of the beneficiary since the grantor is giving up rights to their assets to the trust, versus a revocable trust where the grantor can modify the trust terms as they desire during their lifetime and upon their death, the assets transfer to the trust.

One unique type of trust that a grantor can establish for their benefit and for the benefit of a charity is a charitable remainder trust unitrust. Charitable remainder unitrusts are a type of irrevocable trust with specific characteristics setting it aside from other trusts. This type of trust distributes a certain percentage of the value of the assets in the trust to a beneficiary that is not a charity, usually a grantor of the trust or whomever the grantor has named to receive the named distribution. The grantor sets a specific timeline for the distributions to the beneficiary, and upon the termination of that timeline, the remaining assets are distributed out to the charity named.

In order to determine how much the non-charitable beneficiary will receive, the trustee must use a formula that requires minimum distributions from the trust annually. The trustee will first determine the fair market value of the trust at the end of the given year by obtaining a valuation of the assets in the trust and then will distribute out the percentage of that asset value named in the document.

Aging comes with a number of considerations, including how to deal with ailments, conditions associated with older age, as well as how method of treatment is best for you or a close loved one. Today, there are an overwhelming amount of options to choose from when it comes to pain management and treatment for chronic conditions, however, many of them can become very addictive. One somewhat controversial treatment option for pain management being used by a number of elderly citizens is the use of medical marijuana.

Although the use of marijuana whether medicinally or recreationally is illegal under federal law, over half of the states have decriminalized and now approved it for use medicinally. Based on numerous studies and research, it has been shown that as compared to other pain management treatments, the use of marijuana leaves less risk for addiction, fewer side effects, as well as allowing individuals to still go about their daily lives while managing health issues. Health issues associated with aging include autoimmune diseases such as multiple sclerosis, arthritis, as well as cancer, dementia and Parkinson’s disease, which have all been approved under conditions managed using medicinal marijuana.

While the current elderly population has been somewhat skeptical of what they have known as an illegal drug being approved for use in the medical setting, as more states make it legal for use, approval among the older generations increases. Since many seniors are seeking to determine if use of marijuana is suitable for their condition, many nursing homes and assisted living facilities have had to come up with their own policies, either endorsing or shaming it’s use. Almost a dozen nursing homes in the state of Washington have amended their policies to respond to the demand for approval of medical marijuana as treatment in their facilities.

Aging comes with a wide variety of issues and relying on the care of your family is not a resource available to all. Whether it is due to lack of accessibility, estranged familial relationships, or advanced care requirements, many elderly find themselves alone in their older age.

This is not a phenomenon specific to America, it is an issue experienced by countries across the world. Certain cultures are more focused on caring for their elders, much like those elders helped raise them, while others have a less integrated idea of family including care for their elders.

In fact, the issue of elderly abandonment was such a large problem in Japan it was deemed “granny dumping”. While this practice, where senile senior citizens were taken up to the top of mountains and left there by loved ones due to the inability to care for them, is a very old practice, the modern version of abandonment is once against becoming a problem. Today, elderly individuals are being taken to local hospitals, churches and charities, and being left like they used to in the mountains.

Daily, thousands of baby boomers are forced to make the decision as to whether they need care and assistance as they continue to age. Currently, there are 1.4 million adults residing in nursing homes and that number will only continue to grow over the next few decades. Plans for how to cover the millions of adults who thought they would rely on Medicare and Medicaid in their old age as well as where they will live and who will assist in taking care of them if needed, are questions that must be addressed soon.

Thus, it is not surprising that it took four years and thousands of comments in the rulemaking process in order to revise the broad nursing home regulations that were put in place in the 1990s under the Nursing Home Reform Act. Nursing homes must comply with federal nursing home regulations, but some state laws have adopted more strict laws.

What New Regulations?

The cost of living continues to grow every year, making it difficult for those who have saved for the future, but did not anticipate how dramatically their expenses would increase. Several of our previous posts have noted the concern that have been raised regarding our nation’s ability to cover the costs of our aging adults through Social Security, Medicare and Medicaid, however a recently released study by the Joint Center for Housing Studies at Harvard University further confirms those notions. The study found that there the current generation that has retired or is coming upon retirement is facing greater financial trouble, leading to a lack of accessible and adequate housing, a problem for a population that will double in size.

There are specific elements of housing that need to be considered for the aging population, including accessibility to entrances either by ramp or walk up, single floor housing, whether that is in an apartment or a home, as well as wider entrances and doorways and walk in bathroom units, that are compatible with the size of wheelchairs and healthcare devices. However, according to the Center, only 3.5% of homes right now currently adhere to these elements of architectural design that are critical to elders staying in their homes. While a simple fix that many may propose would be to renovate the home in order to make it accessible, these types of renovations cost thousands of dollars that many elderly individuals cannot allocate out of their budget.

In an effort to maintain their housing situation, some elderly individuals have decided to cut back on transportation, refilling medicine that may be critical to maintain their health, as well as cutting back on buying food. All of these consequences lead elders to seclude themselves, which can further exacerbate health problems. Up to 95% of informal care for elders being taken on by family members, thus, it is important for elders to continue to maintain those relationships and for family members to be able to access their elderly family member and provide assistance in a safe environment.

Probate and Contested Estates

When an individual dies, their transfer of property through the legal system is known as probate. During this process, the court determines the validity of a legally formed will or a how property will be distributed if it has not been designated to be inherited by another named party. When an estate enters probate, all of the debts and taxes owed by the deceased on the property are paid, any remaining income, dividends, stocks or investments are sold and the property is distributed or transferred out to the heirs of the deceased. While the deceased individual can leave property or assets to any party they wish, there are certain situations that call into question the validity of the transfer. If one of these suspicious situations arises, a party may raise a contested issue with the distribution.

Examples of Contested Estate Issues

Putting your assets in an irrevocable trust has a number of benefits, including: allowing the settlor, also known as the maker of the trust, to establish how his or her assets will be kept and eventually distributed, it allows the settlor to have access to the income produced by the trust, as well as the numerous tax benefits such as capital gains taxes being either deferred or in the event of gifting, avoided.

According to the Internal Revenue Service, the federal tax code applies a gift tax on an individual level, however, that tax does not apply to trusts. If you transfer funds from your personal account, whether it is a savings or checking, to another, in excess of $14,000 you will be subject to a tax for the gift made, however, the IRS does not place these same taxes on trusts, depending on how the gift was made.

If the beneficiary makes a discretionary gift to another, a gift that can be shown to be made for the immediate benefit of another, it depends on whether the donation is viewed as present or future interest in the gift. If it can shown that the gift was made for the future interest of another, the IRS will not subject the trust to gift tax, however if it can be perceived that the gift was made for a temporary relief of another, the gift tax will be applied to the donation made.

Recently, in Ocean County, New Jersey, a well known elder law attorney was arrested and charged with stealing money from his clients. The attorney, considered an older adult himself, is charged with stealing over 1.2 million dollars over the course of five years from a number of elderly clients he served. A court order allowed officials to freeze the firm’s numerous bank accounts, seize billings records, and a number of other records implicating his crimes.

This attorney had a particular target on the elder population, however, he did not discriminate who he took money from when it came to clients. Notably, the attorney stole hundreds of thousands of dollars from clients suffering from dementia, clients who had elected him power of attorney (or so he had claimed) which allowed him to write checks from their accounts, depositing annuities proceeds into his account instead of the client, and misfiling legal fees. His behavior did not go unnoticed by some family members of clients, and when confronted, he claimed there were administrators errors and would issue repayments.

Important Questions to Ask Your Elder Law Attorney

2017 Projected Increases

Those individuals receiving social security benefits can expect another disappointing increase in their benefits in 2017. While this increase is another record low over the past five years, some view it as a win since social security beneficiaries failed to see any increase in their benefits in 2016, although costs of living continued to rise. The projected increase, coming at .3%, or $4 a month, was assessed by the federal government in response to adjusted costs of living.

How this Affects Elders

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