2010-04-02 / Columnists

Spotlight on Elderlaw

Some Oft-Asked Questions
Commentary By Nancy J. Brady, RN, Esq. And Linda Faith Marshak, Esq.
What is Estate Planning and Elderlaw?

Estate Planning entails making sure all legal documents are in place to ensure one’s wishes are carried out with regards to who will inherit from them, and to make sure the process of their wishes is carried out as quickly as possible. Estate planning also involves making sure their loved ones have all the tax advantages available to minimize state and federal taxes.

Elderlaw encompasses many areas. The attorneys at Brady & Marshak consider “elderlaw” to involve family members from all generations, since the planning for the elderly client will have a direct impact on the younger generations. What typically happens at the client’s first meeting with the attorneys?

The attorneys meet with clients for an initial consultation, which may take an hour’s time or more, during which clients’ legal needs are established. The consultation may take place in the attorneys’ offices or the client’s home. If necessary, the client can be seen at the hospital, nursing home or assisted living facility. A typical initial meeting will involve the review of any estate planning documents the client may have completed in the past, as well as any financial and/or health concerns. After establishing the client’s wishes, the attorneys work closely with the client to develop a plan to ensure that all necessary legal documents are in place to meet the client’s goals. Once the legal documents are completed, the attorneys’ relationship with the client most often continues – clients meet with the attorneys for many situations that arise after the initial meetings – if family circumstances change, or illness or passing of a loved one for example. What happens in an emergency, when someone has not done any planning for illness or death?

Although estate planning is best done in advance, sometimes clients retain the attorneys in the “eleventh hour” – or a crisis – when Mom, Dad, Aunt, Uncle or Wife needs care because they are incapacitated, and no planning has been done, and no documents are in place.

Some clients come to see the attorneys because their relative has died and they need assistance to access and distribute the property in the decedent’s estate. While no one likes to think about the unpleasantness of illness, or mortality, those situations would be that much less stressful without having to lose some or all of their loved one’s money or property.

Proper planning can avoid one’s family having to pay nursing home or home care bills for their loved ones out of pocket; or being forced to pay estate taxes because no estate tax planning has been done; avoiding probate and the legal fees and time involved with the probate process – which can take many months, sometimes even years.

These situations are the reasons it is so important to think about executing some basic documents, review your beneficiary designations and titling of your assets, and keep your important documents readily available and organized to avoid your family being in these unfortunate circumstances. What legal planning documents should most or all people have in place?

The basic estate planning documents are the Power of Attorney and Health Care Proxy, documents which should be completed and in place while you are alive; and the Last Will and Testament, completed during one’s life, which goes into effect upon one’s death. In addition to these basic documents, people who own real estate and have other assets (bank accounts, real estate) owe it to their families to become familiar with how Trusts can protect their assets. These planning tools are outlined below.

THE POWER OF ATTORNEY is a document that enables you, as the “principal” to name one or more persons as your representative to make financial decisions and transactions for you. If you are married, your spouse can be your representative. If you have adult children whom you trust, you may want them to be your representative along with your spouse, or as alternates, so that if your spouse were unable to act for you there would be someone named who could. Be aware that the power of attorney is a very powerful document, and you should not name someone as your agent unless you trust them implicitly. A valid durable power of attorney does, however, preclude the necessity for an expensive, lengthy guardianship proceeding to access an incapacitated individual’s assets. You should have an attorney prepare the Power of Attorney for you, to make sure it is properly drafted and executed to avoid any delays if your agents ever need to use it. You should be aware, as of September, 2009, the law was changed with regards to the requirements and execution of the Power of Attorney, and the requirements are much more extensive than in the past ...

THE NEW YORK STATE HEALTH CARE PROXY enables one to select one agent and one alternate agent to make medical decisions, and access medical records in the event they are incapable of doing so themselves. This form can also avoid guardianship proceeding, and enables the persons of your choice, to whom you have previously made your wishes known, to make important medical decisions for you. A Living Will is a document that provides specific instructions for your health care proxy in the event of certain circumstances (such as terminal illness with irreversible conditions).

A LAST WILL AND TESTAMENT is a written document, executed under the requirements of the laws of the State of New York, that details how you want assets held in your name alone (probate assets) to pass. The Will also allows you to pick the person you want to be in charge of carrying out the distribution of the assets. You can name guardians to take care of minor children, and you can name guardians to be in charge of the children’s assets as well. If you die without a will in New York State, your assets pass in a certain order of priority. If that’s not what you want, you can change that order in your Will. For example, if someone should die without a Will, leaving no close relatives the State of New York could be entitled to the estate. With a validly executed Will, that individual could have named more distant relatives, close friends, or even charities to inherit. A Will has to be executed according to the specifics of the law in New York State. Therefore you should have an experienced attorney draft and supervise the execution of your Last Will and Testament. While it’s a good idea for everyone to have a Will in place, it’s best if possible to title assets so that probate and the related time and expense can be avoided. Assets can be titled in a variety of ways and avoid probate – it’s best to review your assets and how they are titled at regular intervals with an estate planning attorney in conjunction with your accountant or financial advisor. What can people do to protect themselves from nursing home and other long-term health costs?

In addition to the basic documents outlined above, most clients wish to protect their home and money from the cost of long term care (either at home with home care, or in a nursing home setting). For those of us in the “middle class” real estate may be our most valuable asset, and careful consideration must be taken before jeopardizing one’s interest in the home. The first thing we tell clients is it is never a good idea to transfer title outright to the children – transferring assets to one’s children can jeopardize your hard earned money and the value of your home if the children should ever have financial, marital or legal difficulties. Additionally, as we have seen too many times, the child holding title to the home sometimes predeceases his parents. In that case in-law children have a claim to the title of the home, which is most often an unintended outcome.

IRREVOCABLE “MEDICAID” TRUSTS

Transferring the deed to real property as well as liquid assets to an irrevocable trust has all the advantages we have already mentioned, with some added protections. The trust can be drafted with language to protect the Grantors’ lifetime interest, so that if the property needs to be sold during the grantor’s lifetime the trust can purchase another property, or the proceeds from the sale can be held in the trust, and will be protected in the event the grantor should require nursing home care in the future.

These are some of the most frequently asked questions the attorneys are asked by their clients. If you have any similar concerns, the attorneys would be happy to meet you at the Health Expo, at our offices, or at any of the attorney’s seminars which are usually held once a month. The attorneys can be reached at 718-738-8500.

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