trust - Trust and Estate Planning Law Office

How to keep your money within

Planning for your future is imperative for preserving and passing on your wealth. An estate plan will not only allow you to secure your earnings for your loved ones but also save money in estate taxes. When leaving an inheritance, your heirs may be subject to various estate taxes and fees associated with passing on assets. The idea of estate planning may seem unnecessary to some, whether due to non-marital status, not having children, or a perceived lack of assets. However, these are misconceptions that underestimate the value of your estate. Everyone, regardless of their family situation and finances, has an estate that can benefit from estate planning services. By seeking the expertise of an experienced estate planning attorney, you can preserve your estate, retain its value, and strategically plan for the future.

Why is estate planning significant? An estate plan enables you to decide who will inherit your assets, how they will be distributed, make plans for your funeral and burial, as well as select guardians for your children. For individuals in single households without children, spouses, or living relatives, estate planning becomes even more crucial as you need to consider the future of your assets and healthcare. Planning ahead ensures you are prepared for any sudden life changes.

Initiating a Trust

For individuals with substantial estates or concerns about their heirs' responsibility with inheritance, creating a trust and appointing a trustee for asset distribution is critical. There are many ways to set up a trust, but an irrevocable trust provides the most tax benefits. In an irrevocable trust, the money no longer belongs to you but to the trust itself, which protects it from estate taxes. Another way to ensure your money stays within the family is by setting up a dynasty trust, which safeguards the money within your estate for future generations and shields it from divorce, lawsuits, and creditor claims. In New York state, a dynasty trust remains effective for another 21 years after the death of the last person for whom the trust was created. This trust not only avoids estate taxes but also the generation-skipping transfer tax.

Retirement Accounts to Roth Accounts

Leaving heirs with traditional 401(k) or IRA accounts can result in substantial tax bills. Under current laws, non-spouse heirs are required to withdraw all the money within the account within a ten-year span, potentially leading to higher taxes due to the increased taxable income. Converting traditional accounts to Roth accounts can help avoid these tax burdens. While the amount converted is subject to regular income taxes, withdrawals from Roth accounts are tax-free, providing long-term tax savings.

Plan for Long-Term Care Expenses

Long-term care expenses can significantly impact your assets and financial well-being. Incorporating long-term care considerations into your estate planning can help mitigate these costs. One effective strategy is to explore long-term care insurance options that provide coverage for medical and care expenses in the event of a chronic illness or disability. Additionally, Medicaid planning allows you to structure your assets and income in a way that qualifies you for government assistance while preserving your estate. Setting up trusts, such as irrevocable Medicaid trusts, can protect assets from being counted for Medicaid eligibility purposes. Proactive planning for long-term care expenses safeguards your assets and ensures that you receive the necessary care without depleting your estate.

In conclusion, estate planning is a multifaceted process that can save you money and provide financial security for your loved ones. By considering the various aspects of estate planning, such as trusts, retirement account conversions, and long-term care planning, you can strategically manage your assets, minimize tax liabilities, and protect your estate. Consulting with an experienced estate planning attorney is crucial to ensure that your estate plan is tailored to your unique circumstances and goals. Take the first step in securing your financial future by contacting the Trust and Estate Planning Office at (718) 333-2395.

Why is it important for Black families to write a will?

Writing a will is not just an administrative task—it is a critical step that ensures your loved ones are provided for even after you are gone. Surprisingly, many individuals, including celebrities, neglect this essential aspect of estate planning. A-listers such as Chadwick Boseman, John Singleton, and PnB Rock tragically passed away without a will in place, leaving their hard-earned legacies to be tangled in lengthy and costly probate battles. However, it is Singleton and PnB Rock’s estate that draws our attention, serving as recent and instructive case studies from which we can learn valuable lessons.

Estate Planning Within the Black Community

Startling statistics from a recent 2021 survey on wills and estate planning reveal a stark reality: while 33% of Americans have taken the crucial step of creating a will, only 27.5% of Black Americans have done the same. It is estimated that over the next 25 years, $68 trillion will be transferred from American households to inheritors and charity. However, due to the underrepresentation in estate planning, the Black community stands at risk of missing out on a substantial portion of this transformative wealth transfer.

The confusing reality of wealthy individuals, including Black celebrities, who fail to establish a will after their passing raises a fundamental question: How could individuals with significant wealth find themselves in such a vulnerable position? The answer lies in a larger issue: the lack of emphasis or education surrounding the importance of wills and estate planning, not only for these individuals but also within the broader Black community.

This can be attributed to various complex reasons such as redlining, a discriminatory practice that emerged in the 1930s and refused financial services to individuals on the basis of race and ethnicity. Through this practice, segregation was reinforced as limited housing opportunities forced Black individuals into concentrated pockets for poverty thus limiting the ability to move into more prosperous neighborhoods. Concentrated pockets of poverty translates to restricted access to quality education, healthcare, and job opportunities. All of these factors have an impact on knowledge of wealth building opportunities such as estate planning to this day.

The Case of John Singleton

John Singleton is a Black film director, screenwriter, and producer who passed away in April 2019. He’s best known for his film debut “Boyz n the Hood”, and most recently his work as co-writer for the Hulu Original “Snowfall”. At the time of his death, his estate was valued at $6.8 million. The contents of his estate include a Los Angeles home, a 1999 Lexus, a 2003 Mercedes Benz, a 2012 sailboat, ownership of 70% interest in Crunk Pictures, LLC, and was the owner of the New Deal Productions that was valued at $3.2 million.

However, at the time of his death, Singleton had no trust and an outdated will that was created in 1993. He was a father to several children, but only his eldest daughter was included in the outdated will. As one can imagine, when it came time to settle the distribution of his estate, his children were in a battle to acquire their portion of the foregone estate. This battle began after the Singleton’s passing in 2019 and recently ended in February 2023. This is a testament to the extensive process of probating. Aside from the tragic passing of Singleton, another tragedy is the effect probating has had on his family. For the past 4 years, the Singleton family have slandered each other on social media amid discourse about various subjects, but specifically about the distribution of the estate. This not only tarnishes the household name, but also the grieving process. This could have been avoided had the will been updated.

PnB Rock and the Importance of a Will When You’re Young

The rapper and singer PnB Rock is another example of a celebrity who made the mistake of not writing a will. PnB Rock passed away in September of 2022, and left behind Stephanie Sibounheuang, his girlfriend and the mother of his daughter. On Instagram LIVE, she shared that her boyfriend had no life insurance or a will. “We didn’t have nothing set up. We’re so young, we didn’t plan on death. I don’t get no death benefits. I don’t get nothing.” Furthermore, the mother of his child, due to the absence of a will, has been faced with the task of providing for herself as well as her child on her own.

Writing a will is essential to making sure your loved ones are taken care of. No matter how young or old you are, having a will should be a priority. Life is unexpected and as Sibounheuang stated, they were so young that they didn’t plan on death. Death is not something that can be planned but an estate is. Writing a will seems intimidating to many, but with help from a credible attorney, the process will be made simpler.

The trust and estate planning office specializes in wills and trusts while also understanding the unique challenges faced by Black Americans when it comes to estate planning. In addition to Inna's impressive credentials, our clients have consistently praised her compassionate approach to addressing their concerns during what can be a stressful process. One client expressed, “First she made you feel at ease with [the] entire process and spoke to my family very frankly and openly giving them episodes from her experience [of] how something could go wrong so they had a good idea of what type of trust they need to set up.” When seeking will and trust services, Inna Fershteyn is the professional to trust. To begin drafting your will today, please contact our dedicated Trust and Estate Planning Office at 718-333-2395.

Why Are Trusts Needed to Protect Your Assets From Being Seized?

In New York since the 1980s Businessmen have found legal ways to target homes in Black and Latino Neighborhoods. New York City today is filled with opportunities to make a profit off long-time homeowners, many of whom do not leave wills. Even if the homeowners do leave a will, they are written in a manner that can be questioned and taken through litigation which is timely and costly. Under New York City Law anyone who has a percentage of interest in a property has the right to go to court and demand a judge to order the sale of said property. Which would split the proportional proceeds among the recognized shareholders.

This is what happened to several families in NYC for years now, with Business men like Eddie Doran targeting families, such as Deborah Thomas for their properties. Aston Smith bought his home in 1995, which was co-owned by his wife Deborah Thomas and his mother who passed away. After his mothers passing his estranged brother Raymond Smith inherited half of the real estate which included a little over 16% of Aston Smiths home. Doran and his co-investors found Raymond and bought his share, therefore, becoming co-owners of Aston Smith’s home. To avoid the costly nature of litigation and the risk of losing their home they paid the co-investors and Doran $235,000 even though they only bought the share for $65,000. This has happened to several communities that are on the verge of gentrification in New York City.

To protect your home and your assets so you don’t fall victim to this target in New York City consult with a well versed Estate Planning Attorney, Inna Fershteyn. The Law Office of Inna Fershteyn, will assist you with your will or trust, review documents to ensure if they should be signed or not in terms of your estate, and assisting you in setting up a detailed will or trust to ensure your loved ones or you do not become targets of these NYC businessmen.

For further Estate Planning inquiries please contact the Law Office of Inna Fershteyn at 718-333-2395 to best prepare for your future through will drafting, trusts, power of attorney, health care proxy, and living will documentation.

Five Reasons to Protect Your Retirement Accounts

Throughout your lifetime, your retirement account offers asset protection, but as soon as you transfer it to a loved one, that protection ends. Creditors have the right to confiscate your retirement account even if your partner, child, or other close relative inherits it. Therefore, if you lose just one lawsuit, all of your hard-earned savings may be lost and your loved ones can end up without money. Thankfully, there is a fix for this issue. You can shield retirement savings from creditors by using a unique trust called a standalone retirement trust (SRT).

It is important to make sure that your intended recipients, like your loved ones, are receiving the benefits from your retirement account. Consider using an SRT to safeguard your retirement assets if any of the following apply to you or your beneficiaries:

Your combined retirement plans are sizable. An SRT can be used to protect loved ones' retirement accounts against creditors.
You worry that your beneficiary won't be very responsible with the money. If you are concerned over how your beneficiary might manage an inheritance, you should think about setting up an SRT since you can control the amount and timing of the distribution.
You worry about lawsuits, divorce, or other potential legal proceedings. A properly written SRT can safeguard the inherited retirement savings from those creditors if your beneficiary is embroiled in litigation, is about to be divorced, about to file for bankruptcy, or is otherwise involved in legal proceedings.
Your beneficiaries receive assistance. It's crucial to be aware that inheriting an individual retirement account could result in the beneficiary losing any needs-based government benefits they may be receiving or be eligible for. It is possible to draft an SRT to prevent disqualification.
You have remarried and have children from a prior marriage. Even if you named your children from a previous marriage as the contingent (backup) beneficiaries on your retirement account, identifying your partner as the primary beneficiary of the retirement account could allow your partner to purposefully (or unintentionally) disinherit your children. You can prevent this by designating your partner as the lifetime beneficiary of an SRT while designating your children from a prior marriage to receive the remaining funds after your spouse passes away.

An SRT is a unique kind of trust created for your beneficiaries to inherit your retirement assets after your passing. Your retirement account assets may be shielded from your beneficiary's creditors. In fact, an SRT can incorporate trust clauses that specifically shield your partner from harm in circumstances like:

Remarriages
Divorce
Failure of business
Bankruptcy
Lawsuits resulting from auto accidents, malpractice, or evictions

A Standalone Retirement Trust (SRT) that has been effectively drafted can offer creditor protection and help you plan for the future. If you would like assistance with protecting your retirement account, please contact the Law Office of Inna Fershteyn at (718) 333-2395.

Advice on Selecting The Right Trustee For Your Trust

You have worked hard to obtain and protect assets such as your house, car, business, etc…In order to properly protect your assets and to provide for the most important people in your life, you may be advised to put some or all of your assets into a trust.

If you are deciding on establishing a trust, you will need to appoint someone to make sure that the trust is administered in accordance with your wishes. A trustee is a person who takes on the position and responsibilities of managing the trust’s assets. The responsibilities and regulations which the trustee must follow are outlined in the trust. The creator of the trust can be a trustee and even one of the trust's beneficiaries. However, trust creators may also appoint another person or even an institution as their trustee.

After the death or incapacity of the trust’s creator, a person or institution is named as the successor trustee in order to manage the trust’s assets. The person or entity listed in a trust as a successor trustee should also be carefully appointed because an unreliable trustee can both mismanage and waste assets.

Because trustees have significant powers, a risk exists where an irresponsible trustee could end up harming a beneficiary. Selecting a trustee is a critical aspect of estate planning and many people tend to appoint a trustee without sufficient planning or thought. This article lists some important qualities to look for when selecting a trustee as well as some guidance on who to select as the right trustee.

Important Qualities to Look For When Selecting a Trustee:

1.) The Capability to Perform the Job

In order to successfully administer and manage a trust, trustees have to be capable of performing various tasks. Trustees must have an understanding of both vocabulary related to trusts as well as the applicable laws. They should know how to successfully manage all types of assets (physical or intangible) as well as be able to diplomatically work with the beneficiaries. A trustee does not need to have experience in areas like finance or trust management, however, whoever is appointed as trustee should be financially responsible and have some dispute resolution skills. The person appointed as trustee should also be capable of making ethical decisions which means acting in the best interest of the trust creator and beneficiaries.

2.) Remain Impartial

A trustee has a fiduciary duty to the trust’s beneficiary, meaning that the trustee must act in the best interests of the beneficiaries in mind and not favor one beneficiary over another or engage in self-serving actions. Many older parents decide to appoint their children as trustees. Although appointing your child to be a trustee can be a good idea, it can also cause conflict within the family if the trustee is can not act impartially.

3.) Willing to Act as a Trustee

Unfortunately, being a trustee is an often unacknowledged and thankless position which is why it is important to make sure to appoint someone who would want to perform the necessary tasks to administer your estate. If a trustee ends up feeling over-burned and loses interest in performing the tasks necessary for trust administration, the chance of your trust failing and your wishes being unmet will increase.

Should My Trustee Be My Spouse Or Child?

You know the strengths and weaknesses of your family members which puts you in the best position to decide if your spouse or your child can successfully carry out a trustee’s responsibilities. Under state law, there are many responsibilities of a trustee. These include, but are not limited to, remaining impartial between the interests of the current and future beneficiaries, properly accounting for all beneficiaries, and prudently investing trust funds.

Questions to consider:

Can your trustee distinguish their personal feelings and interests from those of the beneficiaries?
Can your trustee analyze investments?
Will there be a temptation for your trustee to take risks hoping for a hefty return at the expense of the other beneficiaries?
What if your spouse re-marries?
Will all parties be treated impartially if, for example, your children are not your spouse’s children?
Will a child who is a trustee be able to exercise good judgment if a sibling is a beneficiary or could tension develop between them?
Can your sons-in-law and daughters-in-law and their children work successfully together?
Will a child who is balancing their family and career have adequate time to devote to serving as a trustee?

Should My Trustee Be An Attorney, Accountant, Or Other Trusted Advisor?

Attorneys, accountants, and financial advisers sometimes have a special and trusted relationship with their clients. Those who emphasize impartiality may look to their attorney, accountant, or other advisors. If you have an extended relationship with your attorney, accountant, or other advisors then it does not hurt to consider them a possible option to be a trustee. However, just because an accountant or other advisers may understand the nature of your business or your financial goals, they may not fully understand the scope of fiduciary duty or the inherent risks and responsibilities of being a trustee.

Questions to consider:

Does your professional adviser know and understand the dynamics of your family?
What experience do they have as a trustee?
How long have you been a client with the advisor?
Do your immediate family members know of and trust the advisor?

Should My Trustee Be A Bank Or Trust Company?

Banks and trust companies provide professional fiduciary services so they can act independently and impartially. Corporate trustees have procedures and systems that will ensure your properties are being managed and funds are being invested in a fair and consistent manner. Choosing a professional fiduciary could reduce conflicts between family members while receiving experienced and professional investment and administrative management. All fiduciaries are held to a very high standard especially corporate fiduciaries because their business is to provide fiduciary services.

Questions to consider:

How much of the trust assets will be spent on fees from a trust company and be unavailable to my beneficiaries?
Do the increased investment returns provide value for the fees charged?
Will the bank or trust company understand my family and their needs?
What can I expect from the administrator making decisions that directly affect my family and meeting the goals of my trust?

Advantages To Choosing More Than One Trustee

You may find it beneficial to choose one or multiple individuals to serve as a trustee along with a corporate trustee. It can be helpful to have more than one trustee in order to balance all of the responsibilities such as recordkeeping, investments, and other trustee duties.

A properly drafted trust agreement can concisely outline the duties of the various trustees, such as the retention of specific investments, the delegation of particular duties, or even the power to remove a trustee. One of the co-trustees could have a particular understanding of a beneficiary’s needs and help the other trustees and/or the corporate trustee in making discretionary decisions.

Choosing trustees for your trust can take time, but it doesn’t have to be difficult. Your ultimate decision should be well reasoned. You are the best one to recognize the responsibilities of managing your wealth and assets. You are also best able to understand the needs and capabilities of those closest to you. It is beneficial to consider the people who, when working together, have the knowledge, experience, and compassion to best carry out your remaining wishes.

If you need consulting on setting up a trust and appointing a trustee, please contact the Law Office of Inna Fershteyn at (718)-333-2395.

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.

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.

How to Protect Your Home If You Need Medicaid

Most people wonder how to qualify for Medicaid and if their assets will be at risk when applying. Those who need long-term care worry about the possibility of losing their home in order to qualify for Medicaid. If you or someone you love need long-term care, you don’t have to sell your house in order to qualify for Medicaid to pay for long-term care. However, Medicaid could reach out in the future to recoup the costs of treatment. Once you are approved for Medicaid, the state may put a lien (charge) on your assets during your lifetime and collect the debt once you have passed away. This process is known as "estate recovery” which can lead to losing many assets that could have been passed down to future generations, even the family home.

So how can one keep the home if they need to apply to Medicaid for long-term care costs?

Adding Someone to the Deed May Not Be The Perfect Solution

People often believe that by adding another person to the deed to their home (aka a life estate), the home cannot be used to pay back Medicaid. Unfortunately, this method won’t be enough to protect the home, and here’s why:

If the property is sold before the Medicaid recipient passes away, the value of the home has to go towards their care.
If you decide to rent out the property, the net rental income is recoverable by the nursing facility, since it technically belongs to the recipient.
Although the house avoids probate after the Medicaid recipient passes away, there could be significant capital gains taxes for the beneficiaries.

Solution #1: Transfer Ownership of The House

What if I immediately transfer ownership of the family home to another person instead of adding them to the deed? This idea is to take the home out of their countable assets. However, unless the person who receives the house is an adult child, the transfer will only lead to problems.

A basic rule of Medicaid is that if you can afford to pay for your own care then you should. If you transfer property, let’s say worth $700,000, it means that a $700,000 gift has been gifted to someone. Another basic rule of Medicaid is that there is a five-year lookback period. This means that any assets you gave away or transferred in the five years before you applied for Medicaid, you still had the asset under your control. And Medicaid will not pay for your care in that case.

The good news is that there are some exceptions to the gifting rules. The following methods are not something to be navigated without the help of an experienced elder law estate planning attorney. Here are some of the exceptions:

Your spouse. The law recognizes that your spouse needs a place to live so a transfer of the home to your spouse does not result in penalties under Medicaid rules. This is a common practice and part of Medicaid planning.

A disabled child. A parent could transfer a house to their disabled child explaining that it is needed for self-support. It is not necessary for a child to lose a home just because a parent will need Medicaid.

Solution #2: Medicaid Asset Protection Trust

One of the best ways to protect your assets is to place your assets in a Medicaid Asset Protection Trust. These are also commonly called “income only” trusts because the appointed trustee (normally an adult child) maintains control of the principal, while the Medicaid recipient can only access the income from a pension or Social Security benefits.

A Medicaid Asset Protection Trust may be a better method for protecting the home if you:

Wish to continue living in the home. These trusts offer little to no disruption to a recipient’s life since they keep the exclusive right to use and occupy the home during their lifetime (and continue to receive all the tax exemptions on the home).
Are not going directly into care. Any assets transferred into a Medicaid trust are subject to a lookback period of up to five years. After five years, you can still live at home but if you need to go into a nursing home, the full value of your assets in the trust are protected. However, even if you end up needing long-term care earlier than you thought (before the five years) you get credit for any time that has passed since the creation of the trust. For example, if you created the trust today but need nursing home care after four years, then you would only have to pay for the remaining one year out of pocket.
Are contemplating selling the house. You will always have the option to sell your house without a Medicaid penalty because the money is paid to the trust. The trustee can also buy a new property (such as a smaller home) in the name of the trust so it remains protected.

If you need consulting on qualifying for Medicaid and how you can protect your family home, please 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.

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.

Handling Bank Account Funds in an Estate

How you handle bank accounts, like any other asset owned by a deceased individual, depends on how they were owned. Here are a few scenarios in which funds are handled and how one may go about handling them under certain circumstances.

Solely Owned Bank Accounts

If the deceased individual owned the account in his or her own name and did not identify a payable-on-death beneficiary, the account will certainly be subject to probate. Probate is the legal process that takes place after the death of an individual to make sure that their assets are properly collected and distributed to the appropriate beneficiaries by the appointed executor. If the deceased left behind an estate plan, identifying their beneficiaries is as simple as reading the will; if not, their assets will be distributed according to New York’s intestate succession laws. However, if the total amount of probate assets is low enough to count as a "small estate" under state law, the rightful heirs will be allowed to claim the money using either streamlined probate processes or an affidavit.

Accounts with a Payable-on-death Beneficiary

These are the straightforward ones: because the money is still not part of the deceased person's probate estate, you do not have any control over it as executor.

The money can be claimed by the beneficiary specified by the deceased individual by visiting the bank with a death certificate and identification. The paperwork in which the account owner chose the POD recipient should be kept with the bank.

Jointly Owned Accounts

In most situations, if a deceased individual has a joint account with another individual, the surviving co-owner becomes the account's owner immediately. To be transferred to a survivor, the account does not need to go through probate.

The Right of Survivorship

There are, however, exceptions to this general norm. The "right of survivorship" applies to most accounts that are held in the names of two individuals, but not all. In other words, if one of the co-owners dies, the money immediately passes to the surviving co-owner. (It typically works in the same manner with retirement funds.)

Sometimes it may be obvious that the account has a right of survivorship. Suppose the account is named "Lisa Johnson and William Johnson, JTWROS." (Joint tenants with right of survivorship is the acronym.)

It's likely still a joint tenancy account if the account registration document at the bank only includes two names without mentioning joint tenancy or right of survivorship. In Texas, for example, in order to establish a joint tenancy account, the account owners must sign a separate contract in addition to the bank's registration card.

Disputes About What The Deceased Intended

When two people—say, a married couple—open a joint account, no one will argue that when one of them dies, the assets in the account go to the survivor. When an elderly person adds someone else's name to an existing bank account, the situation may be different.

This is frequently done to avoid probate in the event of the original owner's death. However, the second name is often added only for the sake of convenience—that is, so that the other person may write checks on the account and assist the original owner. Alternatively, the arrangement is meant to provide simple access to the assets to the second person following the original owner's death, so that the funds may be utilized for the burial or other expenditures.

When the original account owner dies, the person whose name was added to the account legally becomes the outright owner of the money. Unless it’s in writing, any previous agreement about how the money should be spent is unenforceable. The money belongs to the new owner, who can spend it on anything he or she wants. If family members are certain that the deceased individual desired a different outcome, they will have a hard time getting the money back from the surviving joint account owner if they go to court.

Bank Accounts Held In Trusts

Many people put their significant assets in a living trust to avoid having to go through probate later. You'll be able to tell if the deceased individual had a bank account in trust based on the account statements, which will reveal who the account was owned by for example, "Lisa Johnson, trustee of the Lisa Johnson Revocable Living Trust dated September 9, 2003.”. The account, like other trust assets, is managed by the successor trustee, who takes over once the original trustee passes away. The funds will be transferred to whoever inherits them under the provisions of the trust deed by the successor trustee.

The Law Office of Inna Fershteyn can assist you in handling bank account funds in an estate. Please contact us at (718) 333-2395 for an experienced and diligent estate attorney who is familiar with the probate and trusts process.

How Will a Personal Injury Settlement Impact My Social Security and Medicaid Benefits?

Dealing with an injury that hinders your ability to work is hard enough. Many seek Social Security benefits to help ease the difficulty in times where they are injured but the process is intricate and can come with many hardships in order to receive these benefits. If you were injured in an accident, you are now also able to file a personal injury lawsuit against the party responsible for the accident. This can hinder your benefits that were already difficult to receive and though a settlement may seem nice in a situation like this, you depend on your social security benefits more. Situations like these may seem troublesome but you can seek out the help of a personal injury attorney as well as an elder law attorney as this overlap of your benefits and injury can be complicated. The personal injury attorney can help with a lawsuit for the accident but an elder law attorney has in-depth knowledge of the Social Security benefits and what will affect these benefits so you are not put at risk of losing them.

How much liquid assets can you have for Medicaid and for SSI?

You may be worried about how much liquid assets you can have to be eligible for Medicaid and SSI which include cash, stocks, bonds, and CDs. In New York, In order to be eligible for Medicaid and SSI benefits, you can have up to $2,000 in liquid assets. If you have more, you won’t meet the requirements to receive these benefits, and if you are already receiving benefits, they may be compromised.This is something to keep in mind if you have Medicaid or SSI benefits and want to file for a personal injury lawsuit. Social Security doesn’t depend on work credits and is need-based so it depends on assets. If you receive a settlement for an accident, it can potentially put you over the asset threshold hindering your eligibility for your SSI benefits. It may seem unfair that your benefits may be suspended for receiving a no-fault settlement for your injury, but this is how the system works. These are a few things you should be aware of when deciding between a personal injury settlement or the benefits you need to meet ends meet.

2 Ways To Protect Your Settlement:

A “spend down”: This option is when you spend a good amount of the settlement on resources that are exempt and needed for the benefit of the disabled recipient to ensure you are not over that asset threshold. This is a good option for those who want a simple way of using the settlement money but also helps them while ensuring they are still eligible for the benefits. Some exempt resources include household goods, personal effects, paying off your home mortgage, and paying off any existing debts. These are just a few items that are exempt from being counted as assets and your settlement fund can be used towards them to keep you under the asset threshold.
Set up a Special Needs Trust (SNT): This option is for those who don’t want to go through the trouble of spending the settlement fund but rather just set up a special needs trust. A special needs trust is a trust that is created for you to put your settlement money in and can be used for transportation, certain therapies, and nursing care without hindering your SSI or Medicaid benefits. This is good for those who want to use the funds to help recover from the accident without having to worry about their SSI benefits and Medicaid benefits being suspended, compromised or revoked. This trust can be set up with the help of an Elder Care attorney and will help make the process of protecting your settlement trouble-free.

Both these options are great for those who are considering filing for a personal injury lawsuit, but do not want to risk losing their SSI and Medicaid benefits. You should make sure you proceed with either option that best fits your situation after obtaining a settlement for an accident when you are receiving these benefits. This will help reduce the risk of your benefits being suspended and protect your settlement.

Speak with an Elder Law Attorney

An Elder Law attorney is informed of all current updates to the laws on Medicaid eligibility and SSI benefits eligibility. Unfortunately, Medicaid and SSI requirements can differ from state to state so it makes the process of applying and keeping your benefits even harder. An Elder Law attorney in your area will help simplify this process for you and advise you of all updates to the law and eligibility requirements creating fewer problems on this journey of Medicaid planning and other aspects surrounding Elder Law. Hiring an Elder Law attorney will also ensure that you're still eligible for your SSI and Medicaid benefits even if you plan on filing a personal injury lawsuit. Protecting your settlement will be a priority and an attorney will help you choose the right option to ensure you can still receive your settlement fund without hindering your benefit eligibility.

For further information on how a personal injury settlement may affect your Medicaid and SSI benefits please contact the Law Office of Inna Fershteyn at 718-333-2395 to obtain aid in options to protect your settlement fund and help with any of your Elder law needs.