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Where should I keep my important estate planning documents?

I generally recommend against keeping important documents in a safe deposit box. In case of an emergency, it is another stop you would have to make in order to get the documents out rather than having them accessible in your home. If someone goes to the hospital late at night or on the weekend, the bank is not likely to be open in order for you to obtain the documents.   Also, if someone dies, you will need a court order to access the box. It does not matter if you are a joint owner on the account. The banks will restrict access to a safe deposit box when one owner dies.   You can obtain an order from the court to obtain access to the box and inventory it with a bank employee, but you will not be able to remove any items from the box.

What happens if there is a flood or fire and my documents are destroyed?

It’s a good idea to keep an inventory of your important papers, and keep it either on line in a secure cloud storage and/or a hard copy in your office or a safe place (it’s fine to keep this inventory in a safe deposit box). We maintain one set of originals of our clients’ estate planning documents, with the exception of the original will, which is returned to the client. If your documents are damaged or destroyed in a flood or fire,   we can help you to re-execute the documents.

If an original will that was in the possession of the testator is lost, depending on the circumstances, a copy of the Will could potentially be admitted to probate. However, this is a very fact-specific situation and is not always guaranteed.

How will my agents or executor find my documents if something happens to me?

It is recommended that you inform your nominated agents and successor agents of the roles you have nominated them for.  We also provide our clients with “document locator” cards to give to your nominated fiduciaries. There is a place on the document locator card for you to fill in the location of your important documents (i.e., “bottom right hand drawer of my desk,” etc.). It also has a line for the name and contact information of your health care agent. You can put the card in your wallet so that your agent can be contacted in an emergency where you might not be able to communicate. The document locator card also contains the firm’s name and number, so that we an be reached by the agent and can transmit copies of documents where authorized by the client and when necessary.

How often should I revise or change my planning documents?

You don’t necessarily need to revise your documents when you change your phone number or move your residence, but you should review your documents every year. Tax season is a good time to pull them out and review them to make sure that they still meet your circumstances. Now that your children are older, is the chosen guardian still the person you want to serve? Has your asset structure changed? Have you moved to another state? Is it time to think about the next step in building an estate plan like implementing a trust? Or has some other life-changing event occurred, like a death, illness, divorce or re-marriage for you or another member of your family? Even if you don’t review your documents every year, a life-changing event is a time when you should take out the documents to make sure they still fit your needs, or whether changes are required. It can help to meet with your lawyer for an hour or so to start the discussion.

What is Estate Planning?

An Estate Plan ensures that your needs, your families’ needs, and financial goals are met during your lifetime and upon your death. A thorough and comprehensive plan would include a Last Will & Testament, Health Care Proxy, Living Will, and Power of Attorney and for some a Trust may also make sense. Everybody needs an Estate Plan because it states how your assets are to be distributed upon your death through a Will and/or Trust and whom you would want to handle your financial and health matters during your lifetime with a Health Care Proxy, Living Will and Power of Attorney. It is critical to have Estate Planning documents done by an attorney, even if you think you may not have a “taxable” estate. Leaving the administration of your affairs to chance without a will, or with documents not specifically tailored to your personal needs and circumstances, can lead to drastic and often costly consequences.

How do I start the process of making an Estate Plan?

First, evaluate and inventory your assets. Assets include but are not limited to your residence, real estate or business interests, stocks, bonds, annuities, retirement savings, and insurance policies. This list is not exclusive. It can include art work, jewelry, collections, antique furniture — whatever is of some monetary value. You then need to ask yourself the following questions:

  • Who would you want to make medical decisions on your behalf if you were unable to do so?
  • Who would you want to handle your financial affairs if you were to become incapacitated?
  • Who would you want to wrap up and distribute your estate upon your death?
  • Upon your death, how would you want your estate divided?

Once you have reviewed your assets and have considered these questions, you should meet with an Estate Planning Attorney to discuss a plan conformed to your needs. (Note: you do not need to definitively answer these questions; an Estate Planning attorney can help you work through these questions and help you make a decision). Your attorney may also want to include your financial planner and/or accountant in the planning.

Do I need a Will if my assets are all in Joint Accounts?

The unequivocal answer is Yes. Many people erroneously believe that they do not need an Estate Plan or Estate Planning documents if all of their assets are in joint accounts with their spouse or their children. Although joint accounts are intended to pass directly to the joint account holder after the other account holder’s death, it remains critical to have a Last Will and Testament in place to administer assets that may be outside of those joint accounts at death (i.e., outstanding checks that have not been cashed). If the decedent had applied for and received Medicaid benefits, it is particularly important to have these documents.

Keep in mind that a “joint account” can be challenged. The law allows a presumption of joint ownership but that presumption can be overcome. Sometimes a parent will title an account jointly with their child because the parent wants the child to handle his or her banking, pay bills and to have uninterrupted access to the account if the parent becomes incapacitated, all for the parent’s benefit. This is a “convenience account” that is deemed property of the probate estate and subject to collection by the Executor. Alternatively, the parent names the child as a joint owner to have the account pass to the child on the parent’s death without probate. In that instance, the child is a co-owner of the account and not merely a signatory for the convenience of the parent. However, in order to avoid any dispute as to account ownership, it is particularly important to sign a written statement indicating that all assets held in a joint account shall be considered the joint owner’s property on the parent’s death and NOT a convenience account. Additional precautions may help provide evidence as to what type of account was intended.

Why should I pay an attorney when there are forms available on the Internet?

A form is not able to give you specific legal advice tailored to your particular situation and needs. The laws impacting estate planning are constantly changing. Retaining counsel to help you navigate the process is critical and will help your descendants avoid unnecessary litigation and probate or administration costs. As baby boomers and their parents age, they are living longer and often, living with chronic medical conditions. The cost of long term care continues to spiral out of control and families struggle to meet the needs of their aging members.

If you already have an Estate Plan in place you should review it throughout your lifetime as each stage of life brings different reasons for an estate plan; different issues that need to be addressed, and often changes in the law which may need to implemented into your plan. Your Estate Plan should be reviewed with the birth of a child, upon a divorce, with the death of a spouse or child, each decade, upon a decline in health, retirement, and if there is a significant change in financial circumstances.

By implementing an Estate Plan now you can avoid bickering and confusion later. An Estate plan spells out to your family members and/or beneficiaries how you would want things handled were a crisis to arise or upon your death. Being clear about your intentions can not only prevent drawn out costly legal battles but can keep harmony amongst your loved ones.

Who Needs a Will?

Everyone. Whether you realize it or not, even if you never executed a Last Will and Testament, you already have a Will. The State has written one for you. This is called intestacy. Because of the intestacy laws, everyone essentially has an “estate plan” already; the only question is whether you write it or the government does. The default intestacy plan may not reflect your ideal distribution. New York’s intestacy laws allow a spouse to inherit $50,000 plus half of the balance, with the remainder to the children. Without a spouse or children, the law leaves your estate to your parents, then your siblings, in that order. Although clients delay estate planning because it forces them to make difficult decisions, a Will affords you control over who inherits and in what proportion, and to name an executor who is in charge of the administration of your estate. Advanced directives are further critical to ease financial and end-of-life decision-making. It is far better for you to decide these issues in advance than to leave it to chance.

Basic planning documents – a will and advanced directives (power of attorney, health care proxy, living will), and, for some, a trust– are particularly imperative for those who are themselves or have family members who are minors, disabled, or are in unmarried or same-sex relationships. If you have minor children, you must specify who will take care of them in the event of your death. While the Court has final say who will be their guardian, your nomination is given great weight.

Without a Will designating a trust for minors or disabled beneficiaries, the Court must appoint a guardian to collect their interest in your estate. This adds another layer of court oversight and can be expensive. The Court also requires full distribution to minors at age 18, while a well- drafted minor’s provision lets you direct an age when the child is mature enough to handle the money.

By implementing an Estate Plan now, you can avoid dissension, stress and confusion later. An Estate Plan declares to your family members and/or beneficiaries how you would want things handled were a crisis to arise or upon your death. Dictating your intentions prevents lengthy, costly legal battles and preserves family harmony.

What is a Trust?

A living trust is one that you create during your lifetime (as opposed to a testamentary trust which is created in your last will and testament) and provides for management of your assets during your life and disposition of your assets at your death. When you create a trust, you are essentially signing an agreement between yourself as the Grantor and the Trustee, the individual that will manage your assets.

A trust can be Revocable or Irrevocable. Upon your death, the assets held in either of these Trusts would be distributed to your beneficiaries. If your Trust is properly funded, it could enable your loved ones to avoid the probate process altogether.

Should you later become incapacitated after establishing either type of trust, they both can provide for a seamless transition in the management of your financial affairs. Thus, either Trust would help avoid the need for the court appointment of a Guardian to manage your property.

What is a Revocable Trust?

A Revocable Trust is designed to give the grantor flexibility and, sometimes, to avoid probate. Although it may initially cost more to create a Revocable Trust than it does to execute a Will, a Revocable Trust may ultimately save attorney’s fees and time delays for your beneficiaries since there is no court supervision over the distribution of the assets.

In addition, since you may act as your own Trustee, you can maintain your autonomy and independence. If you are acting as your own Trustee, you will maintain control over those assets you chose to transfer to the Revocable Trust. You can transfer assets into and out of the Trust, amend or revoke the Trust at any time, and make all decisions with reference to the Trust as absolute owner.

If you should become incapacitated, a Revocable Trust can provide for a seamless transition in the management of your affairs. The person(s) you have selected as successor or co-Trustee, will simply take over the management of your assets and affairs. This will avoid the need for the appointment of a Guardian and a potentially costly and acrimonious guardianship proceeding.

A Revocable Trust will not change your lifestyle or the way you handle your day-to-day affairs. It is important to note, however, that despite some notions to the contrary, there is no income tax or estate tax savings when using a revocable trust.

If you have a simple estate, do not own out of state property and you are not disinheriting your spouse or your children, then the probate process can be very simple. However, if your wish is to disinherit a child, children, or spouse, you may be opening your estate up to a probate battle. The problem is further exacerbated if you have no spouse or children, and missing heirs as they would need to be located and the cost can be enormous. Additionally, if you have out of state real estate your executor will most likely have to bring an ancillary proceeding in the state where the property is located. In any of these mentioned situations, a living trust might be a good alternative.

What is an Irrevocable Trust?

By contrast, in an Irrevocable Trust, you would name a third-party (not a spouse) as trustee, and the principal is no longer accessible to you or under your control. However, you as Grantor are entitled to any income the Trust generates. Assets commonly transferred into these Trusts include residences and investments such as bank accounts, certificates of deposit, stocks and bonds. You as the Trust creator (Grantor) continue to earn all income (interests, dividends, etc.) generated by either Trust. You also retain any property tax exemptions you were entitled to prior to the transfer.

A key difference between these two types of Trusts is that the Irrevocable Trust allows for asset protection should you require long term skilled nursing care, a Revocable Trust does not. Once a five-year period has elapsed from the date of the transfer of an asset to the Irrevocable Trust, the transfer of that asset will no longer impact your Medicaid eligibility.

Today, not even the comfortably well off can afford the $12,000 to $14,000 a month cost for nursing home care on Long Island and upwards of $20,000 for nursing home care in New York City. Most individuals do not want the money they have worked their whole lives for to be used to pay for their nursing home care were they to become ill. There are several ways to protect your assets in the event you are struck with a catastrophic illness requiring long term care, and an Irrevocable Trust is just one of these vehicles.

While many individuals are uncomfortable with losing “control” over their assets, they may still want to consider establishing an Irrevocable Trust in which to place their residence, as it will not change their lifestyle. Despite the recent decline in real estate value, more often than not the residence is a major portion of an estate. The benefit of the Irrevocable Trust is that you retain the right to live in the home for their lifetime yet the house could be sold if necessary and the Trust can purchase replacement property without the asset being considered available to the Grantor for Medicaid eligibility purposes. You would also retain your STAR and any Veteran’s exemption. Title to the property does not pass to one’s heirs until the Grantor’s death and the termination of the trust.

The Irrevocable Trust is structured so that any income generated by the Trust will be taxed at your tax bracket and the trust income will be reported on your individual Form 1040. The Trustee may be required to file “informational” fiduciary income tax returns for the Trust.

There are no gift taxes due on transfers to the Irrevocable Trust because the transfer is deemed to be an incomplete gift. In contrast, if you were to transfer assets to your beneficiaries outright, any income from those assets would be taxable to the recipients at their tax brackets. In addition, placing assets in an Irrevocable Trust rather than transferring to beneficiaries outright protects those assets from that beneficiary’s creditors and/or personal problems.

Both the Revocable and Irrevocable Trusts direct distribution of your assets at your death. At death, the trust assets will not be subject to a probate proceeding, saving probate, legal, and executor fees. The Trust assets will, however, be includable in your estate for estate tax purposes. This will enable your beneficiaries to obtain a step-up in basis (fair market value at the time of death) as to any appreciated assets as opposed to receiving your original cost basis had you gifted the appreciated property to them. For example, if the residence were held in the Irrevocable Trust, your heirs would receive a step-up in basis for income tax purposes which would minimize the taxes due on the subsequent sale of the premises. Your Irrevocable Trust may also provide protection against your own creditors after your death.

While not appropriate for everyone, an irrevocable trust is one vehicle available to protect your assets and/or residence while providing an income for the Grantor and, at the same time, allowing the Grantor to qualify for Medicaid benefits. There are many things to consider before creating a trust and there are several different provisions that can be used to protect your interests in the trust property. The question is whether the strategy is good for you. As always, you should consult with an attorney or financial planner to further explore whether a Trust is appropriate for your particular situation.

What states recognize same-sex marriage?

On June 24, 2011, New York became the sixth and most populous state legalizing same-sex marriage, joining Connecticut, Iowa, Massachusetts, New Hampshire, and Vermont, as well as the District of Columbia. Other states offer a civil union or domestic partnership, or have a patchwork of case-law or other statutory laws granting some but not all benefits to same-sex couples. While civil unions and domestic partnerships offer some benefits in that particular state, that status does not rise to the level of “marriage”. It is also important to note the distinction between “performing” and “recognizing” same-sex marriage. Under the Defense of Marriage Act (“DOMA”), some states are refusing to recognize same-sex marriages performed in the seven jurisdictions noted. In other states, there is no legislative guidance and whether such marriages are “recognized” is addressed on a case-by-case basis in the various contexts it arises, such as custody disputes, divorce proceedings, and the probate and administration of estates and estate litigation.

My partner just passed away, and I'm concerned about our joint assets and about the assets he left to me in their will. What should I do?

It’s hard during such a trying and difficult time to think about having to fight to maintain the very things a heterosexual widow or widower is automatically entitled to. Your first step should be to seek out counsel that is experienced in handling trusts and estates issues for same-sex and non-spousal couples. The right attorney will be your trusted ally and advisor to help you navigate the legal waters and support you.

My partner died without a will and his blood relatives are contesting my right to inherit from his estate. What should I do?

Unfortunately, when you die without a will, the State writes one for you. This is called intestacy. The intestate scheme in New York provides for a “spouse” to inherit from a deceased spouse in intestacy; however, a domestic partneris not included in the definition of a “spouse” under the intestate statute. Even before the Marriage Equality Act, there is some favorable case law in the State of New York. In Estate of Ranfle, Surrogate Judge Glenn took a very progressive view and held that a same-sex partner was entitled to receive notice of his partner-decedent’s estate proceeding, effectively holding that he was a distribute under New York law, which is not specifically incorporated into the statute. However, there were no guarantees that this would be the result, and contrary case law from another New York State Surrogate Court held differently. Now, as a result of the Marriage Equality Act, same-sex spouses are deemed “spouses” under the intestate statute and all other areas of New York law where marital status is a factor. The most important thing to do is to consult with an estate planning attorney to determine your rights for your particular situation, and whether the facts and circumstances of your situation warrant pursuing an action to enforce your rights in the estate.

Everyone should note that much of the difficulty could have been prevented if the decedent had validly execute a will. With limited exceptions, every individual may distribute his or her assets in a will to whomever they choose. You can leave your assets to individuals — even same-sex partners or spouses — to close or distant family members, or to none of your family members. When you fail to implement an estate plan, you leave yourself and your loved ones completely unprotected, especially in this area where the law is so unsettled.

My partner and I were legally married in New York on July 30, 2011. Does the Federal Government recognize our same-sex marriage?

No. While the individual state may recognize your Civil Union, Domestic Partnership or Marriage, and grant you rights accordingly, the Federal Government will not, and thus you are excluded from the Federal support and protections accorded heterosexual married couples. Thus, even if New York recognizes your New York (or Connecticut, New Hampshire, or Iowan) marriage, the federal government does not. Most significantly, you will not be able to avail yourself of the estate tax benefits that are afforded to heterosexual married couples, and the Federal government will effectively treat you as if you are unmarried, regardless of the various factors of your situation.

If I want transfer assets to my partner, will I be taxed in excess of what a heterosexual married couple would be?

The federal government treats heterosexual married couples as a single economic unit. Heterosexual married couples enjoy an “unlimited marital deduction” during life and at death. That means that heterosexual spouses can make unlimited transfers to each other without incurring gift tax, and may leave an unlimited amount to their partner at death, even if that amount exceeds the federal estate tax exemption at the time of death. Same-sex marriages do not enjoy this benefit. If you transfer more than $13,000 to your partner (for 2010; the amount changes every year), with limited exceptions to pay for medical or education costs, you will  have to file a gift tax return and pay a gift tax. You may elect to use your lifetime gift exemption of $1 million which is afforded to every individual, regardless of marital status, however, that exemption can be used up very quickly over time. 

What are some of the issues that same-sex couples must consider when it comes to life insurance?

Same-sex couples have additional concerns to consider when evaluating life insurance policies: income replacement, tax liabilities, and above all, the titling of policies, which can result in tax liabilities for the inheritor. However, all unmarried individuals must be careful when purchasing life insurance to ensure that it meets their needs. Most people do not realize that while life insurance is a non-probate asset and therefore does not pass through your estate, it is taxable. With the federal estate tax exemption returning to $1 million at a 55% tax rate in 2011, many people do not realize that the majority of the life insurance benefit to their beneficiary will be eroded by the estate tax liability that accompanies it. There are methods to assist with the estate tax impact on life insurance, such as Irrevocable Life Insurance Trusts (ILIT), that you should discuss with your estate attorney to consider whether it is right for your situation.

What is Joint Tenants with Rights of Survivorship (JTWROS) and how can it help us in our joint ownership?

JWTROS is a specific type of joint ownership that ensures the surviving partner will be named sole owner of remaining funds upon the death of the first partner.  Due to several complex taxation rules, it’s important that joint owners using the JWTROS designation keep detailed records.  Otherwise, the IRS may attempt to tax jointly held property in both the estate of the deceased spouse and at the death of the surviving spouse.

What are some other alternative strategies for joint ownership?

Some of the other strategies available to same-sex couples include a Revocable Living trust, Durable Power of Attorney, or a Transfer-on-Death. Please contact us at for further information.

If my partner passes away, do I automatically receive a tax-free rollover of his IRA account into my own?

No. Again, while a surviving spouse in a heterosexual married couple is entitled to take an IRA into a spousal IRA rollover, a beneficiary in a non-spousal couple has limited recourse. The Pension Protection Act of 2006 has somewhat remedied this situation, although it is only optional for an employer to grant this benefit to same-sex couples. However, it requires a complex transfer structure that must be carefully planned. Any mistake made could result in an irreversible taxation of the assets. Keep in mind that for heterosexual or same-sex married couples, all distributions remain income taxable regardless of status. Please consult an estate planning attorney on this and other issues.