How to Prepare for a Meeting With an Estate Planning Attorney

Estate planning can often be an overwhelming process. Aside from having to get your affairs in order, you are also forced to think about things you may have never thought of before. For example, what would you want to happen at the event of your death?  What should be done with your home? Who would you like to give your assets to? Thus, there is a lot to consider and it can get very stressful. This is where an estate planning attorney comes in to guide you.

How to Prepare for a Meeting With an Estate Planning Attorney

What is estate planning? 

Estate planning is the process by which an individual arranges their assets and designates who will receive them at the event of their death or incapacitation. Its purpose is to ensure your wishes and goals are fulfilled in the best way. 

When the time comes to meet with your estate planning attorney, there are a few things you can do to be prepared and make the process smoother:

  • Inventory

One of the first things you should do is review your assets, this can be both tangible and intangible.

Tangible assets may include: 

  • Homes, land, real estate 
  • Vehicles like cars, boats, motorcycles 
  • Collectibles, antiques or other personal valuable possessions  

Intangible assets may include: 

  • Checking and savings account
  • Stocks, bonds, mutual funds
  • Retirement plans like 401K, 403B, IRA’s, etc.
  • Ownership in a business 
  • Life insurance policies

  • Documentation 

Once you have finished inventory of your assets, your next step should be preparing to provide documentation of financial statements, this may include but not limited to: 

  • Bank and investment account statements 
  • Business agreements 
  • Grant deeds to real estate 
  • Life insurance information 
  • Mortgages 
  • Trademark, patent and copyright registration certificates 
  • Divorce agreements 

  • Account for Family

One of the most important steps is to discuss your wishes with your family and consider what you want to leave for them in the event that you are no longer with them. Although it may be difficult, it's important to be clear and open about your decisions, as other family members may have different views than you. Some things you may want to consider:

  • Assigning a guardian for your children if need be
  • Having enough life insurance 
  • Documenting your wishes for your family's care
  • Taking consideration for special care needs of family members with disabilities 
  • Deciding what specific assets you want to leave for each member 
  • It is also important to have information on all family members (names ,ages, contact information, etc.)

  • Establishing Roles

During estate planning, there are different important roles that come into play that you should think about. This includes deciding who you assign to be an:

  • Executor- someone who carries out directions in a will that deals with financial affairs and assets.
  • Beneficiaries- anyone you name in your estate plan to receive benefits.  
  • Trustee- someone who takes legal ownership of your assets held in a trust and is responsible for managing them.  
  • Successor trustee- someone who takes role of a trustee in the event the original trustee dies or becomes incapacitated.  
  • Guardian- if a minor is involved, a Guardian needs to be appointed in the event both parents die before the minor becomes an adult  
  • Agent (health care)- someone you give the power to make medical decisions for you if you are unable or incapacited. (a health care agent cannot override any preferences you have set in a living will) 
  • Durable power of attorney- a person or people you authorize to make decisions on your behalf when you are not physically or mentally capable. 

  • Be Prepared With Questions

Estate planning can be a tricky process, therefore you should never hesitate to ask an attorney any questions you may have. After all, they are there to help you and make this process as simple as possible !

For assistance on your estate planning needs, contact the Law Office of Inna Fershteyn at (718)-333-2395 for highly qualified advice.

5 Different Types of Trusts That Can Be Created in New York

There are many different ways a person can set up an estate plan to protect and prepare for the future of their assets after their death. One way that this is done is through the creation of a trust. A trust is a legal arrangement that allows a third party, a trustee, to hold and manage assets on behalf of the beneficiaries until they are able to inherit them. Its purpose is to ensure that a person's assets are protected and utilized in a way they deem fit. There are various types of trusts that serve for different purposes. Therefore, it's important to understand the different types of trusts in order to know which will suit you best. 

Different Types of Trusts That Can Be Created in New York

What are the different types of trusts?

1.) Irrevocable Trust

An Irrevocable Trust is a type of trust that, once executed, cannot be changed or revoked without consent of all beneficiaries or a court approval. Essentially, this means once your assets are in the trust, you no longer have full control over them as well as the freedom to make any revisions you want. However, a benefit of this type of trust is that assets in the trust will not be subject to state or federal estate taxes. In addition, assets are also protected from creditors and legal judgment which avoids lawsuits and false claims. 

2.) Revocable Trust

A Revocable Trust, also known as a living trust, is a type of trust that allows you to modify or change anything at any time you see fit, without needing the consent of any beneficiaries. With a revocable trust you have full and complete control over your assets, how you want them distributed and if you want to add or revoke any. It is also commonly used for those who want to avoid the probate process, which can take months to years. However, assets in this trust are subject to state and federal estate taxes. In addition, assets are not protected from lawsuits and creditors. 

3.) Special Needs Trust

A Special Needs Trust, also known as a supplemental needs trust, can be established as a living trust and is generally designed for a loved one with a disability. It is commonly  used for a dependent such as a child, sibling or parents that are unable to provide for their own financial needs. It is also made to continue caring for a person with special needs without disrupting government entitlement benefits such as SSI or medicaid. 

4.) Charitable Trust

A Charity Trust is an irrevocable trust that is made to simultaneously benefit you, your beneficiaries and a Charity of your choosing that is qualified under IRS rules. There are 2 types of charitable trusts:

Charitable Lead Trust - The way a charitable lead trust works is, individuals are allowed to choose charities that will receive interest from the financial gift they have assigned to them for a specified period of time. Once the period has ended, the remaining assets may either go to their family or beneficiaries. 

Charitable Remainder Trust - The way a charitable remainder trust works is that you, your family or your beneficiaries can receive interest from a financial gift assigned for a determined period of time. Then, once that period has ended, the remainder of the assets go to the charity of your choosing. 

5.) Irrevocable Life Insurance Trust

An Irrevocable life insurance trust is designed to help those who have estates that might exceed federal or New York estate tax exemptions. With this, trustors are allowed to exclude life insurance proceeds from the taxable estate. This then allows beneficiaries to be free from any taxes that may be placed on the trustor's life insurance policy in the estate and to transfer death benefits immediately. 

A trust is a very valuable tool when it comes to estate planning. With so many different types available, it can be tricky choosing which one is best for you. If you need an attorney to help determine which trust is best for you, contact the Law Office of Inna Fershteyn at (718) 333-2395.

Should I Create a Life Estate or an Irrevocable Trust?

As you are getting older, Asset protection and Elder Law planning becomes relevant.  As you are researching an optimal estate plan to preserve assets from nursing home bills, a life estate deed transfer may initially sound appealing. After all, a life estate deed is a legal means for transferring home ownership rights. However, there are downsides you must fully understand before making this commitment. Prior to making the decision of adopting a life estate, it is crucial to fully understand the risks.

Creating A Life Estate or Irrevocable Trust

Life estates are characterized by two or more people having ownership over a property for non-overlapping periods of time. These parties are the life tenant and the remainderman. The life tenant owns the life estate and has full control during their life. The remainderman has ownership interest upon the death of the life tenant. 

In many circumstances, executing a life estate makes the most sense. It is useful for those looking to simplify estate planning and avoiding the probate process. The transfer of the property to the remainderman is automatic, providing convenience without the need for a will. For example, parents can easily pass homeownership to their children while possessing their property for their entire lives. This provides transparency to the beneficiaries and affirms the life tenant exactly what will happen to their property when they pass away. 

Additionally, a life estate deed protects the property from a Medicaid lien and increases the tax basis. If eligible for Medicaid, the government may try to recover the costs of care from their estate once they pass away. A life estate protects the home from being included in the Medicaid recovery process.

Although a life estate may seem appealing, some caveats come with them. There are three main unfavorable aspects. If you consider these reasons as dealbreakers, a life estate will not work for your personal estate goals. 

Real Estate Related Challenges 

Upon establishing a life estate, obstacles will arise if you plan to sell or mortgage property. The remainderman must agree if you decide to borrow or sell against the property. Nevertheless, this can be solved with a Testamentary Power of Appointment in the Deed. This allows life tenants to change who receives their property by directing its disposition in their will. While it won’t sell the property, it gives the life tenant more leverage in negotiation over the remainderman. An alternative to this is the Nominee Realty Trust, where one or more children act as Trustees for all so that decisions must be followed on a majority vote.

Another obstacle is that if the property is sold, the remainderman is entitled to a portion of the profits equal to what their interest is determined to be at that time. It is also difficult to remove or change a name once it is on a real estate deed.

Legal Responsibility of Remainderman 

The problems of the remainderman become your problem as well. If this individual is in any legal predicament, such as being sued, getting a divorce, owing taxes, or filing for bankruptcy, the interest in the home is not protected. However, while claims can be made against the property, nobody can kick you out for the duration of your lifespan.

Medicaid and State Assistance Disqualification 

Giving away an interest in the property could result in disqualification from Medicaid assistance, should you need long-term care within five years of the transfer. To add on, that state could file a claim against the income portion of the payments it has made on your behalf. In this case, at least the portion of the proceeds allocated to your child would be protected.

Irrevocable Trust

Irrevocable trust is a much better alternative to protect your property from creditors including Medicaid liens and nursing home costs. For more information on irrevocable trust, please contact the Law Office of Inna Fershteyn at (718) 333-2395.

3 Reasons to Create a NY Irrevocable Trust

Elder planning is an important and necessary step to take in order to make sure that your wishes for the future are carried out in the way you intended. In this process, a decision you will make is what type of trust is best for you. A trust allows a trustee to hold assets on behalf of beneficiaries.

Creating An Irrevocable Trust

One type of trust is an irrevocable trust, which cannot be changed or revoked after signing. Giving up control over your assets is a big commitment that must be carefully considered. Individuals who would benefit from an irrevocable trust typically fall into one of three categories.

3 Reasons to Create NY Irrevocable Trust

  • Minimize Estate Taxes

The primary benefit of an irrevocable trust is minimizing estate taxes. An irrevocable trust removes all incidents of ownership, meaning your assets are removed from your name. Assets in an irrevocable trust are no longer a part of your estate, which allows for tax efficiency.

  • Government Programs 

Unfortunately, Medicare does not cover all costs that a senior citizen needs. Medicaid would pick up the tab for long-term care, but the program has strict need-based limitations. To qualify for the Medicaid income threshold, you could transfer your assets into an irrevocable trust. As long as you fund the trust at least five years before submitting your Medicaid application, the assets will not count in your qualification. After executing your irrevocable trust, a tax ID number is created which allows individuals qualifying for Medicaid to move their assets out of their name.

  • Protect Assets

To protect your assets from creditors, it usually requires your trust to be irrevocable. The Trustee and Beneficiary must be unrelated parties. For people who face lawsuits frequently, having “asset protection trusts” is important. An asset protection trust allows your hard earned money, property, etc. to be safe from creditors.

Living In a Property Transferred in an Irrevocable Trust

If you are living in a property transferred in an irrevocable trust, the creator of the trust will still play a role. For example, they are responsible for all household expenses but reserve the right to live in the house. This is known as a “life estate.” Your house becomes safe from creditors and estate taxes. However, if you change your mind about having an irrevocable trust, the grantor cannot make any changes without the permission of the beneficiary(ies). Moreover, having an irrevocable trust is a significant commitment that should not be taken lightly. 

For more information on how to decide if an irrevocable trust is right for you, please contact the Law Office of Inna Fershteyn at (718) 333-2395.