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Wills, Estates and Trusts

Do You Have a Child Graduating From High School, Turning 18 or In College?

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If so, it is time for your child to do Advanced Directives.  An Advance Directive gives a person (called an agent) a voice at a time when he or she is not able to do so.  There are Advance Directives for health care decision-making (health care proxies and HIPAA Authorizations) and for financial decision-making (powers of attorney).

Advance Directive

Without a health care proxy and HIPPA release, if your child gets sick or is in an accident while away from home, you would likely not be able to get medical information about him or her, nor would his or her doctor be able to speak with you – even though you are the parent! Your child’s Heath Care Proxy appoints someone to make medical decisions if your child is unable to make medical decisions for himself/herself.  A HIPPA Authorization authorizes you to speak with the doctor of your 18-year-old even if your child is able to make decisions (you get to be a second set of ears).

And last, but not least, we recommend your 18-year-old execute a living will.  A living will doesn’t designate authority to an agent, but it permits your child to describe what kind of health care decisions your child would want if he or she becomes unable to make his/her own decisions regarding health and medical treatment.  We have two basic versions of the living will: “please stop treating if there is NO hope of recovery” and “treat treat treat”.

Please contact us for more information about these documents (and all other estate planning options), and to assist your child in preparing and executing these important documents.

Estate Planning: Do You Have a Digital Inventory?

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One aspect in estate planning which is often overlooked is creating (and updating) a digital inventory.  Every person should develop a digital inventory – a list of digital assets and how to access them.

Generally, you could say that digital assets have no physical location and only exist inside a person’s computer.   Strictly speaking, digital assets are crypto currencies and non-fungible tokens (NFTs), but we’re using the term more broadly – to encompass any non-paper asset (even if, like a checking account, it also exists in the real world) and access to information and assets.

 

Why it is Important for You and Someone Else to Have this Information

There are several reasons why you need to prepare, save, and then update this information:

We all create usernames, passwords, and answers to security question.  Remember that each one should be unique and somewhat difficult.  Most people juggle between 10 and 100 unique assets and/or points of access.  It is easy to forget them or forget which are the current ones.  Jotting down notes in a code that only you understand isn’t particularly useful.  Letting your phone remember your passwords isn’t particularly secure.

Digital Inventory and Estate Planning

You may need someone to help you access an account. You may be traveling or need assistance for some other reason.   If you simply forgot your access information and if you are alive and competent, and if you remember your security code answers, then you can change the passwords yourself.  If.  If.  If.  If you are incompetent or impaired for some reason, or if you don’t remember, then no one can pay your bills or access your information, or re-register your car, or order food or other necessities on Fresh Direct or Amazon or whatever, unless you’ve made a plan.  Here the plan is to create an Inventory.

The function of the Inventory is to have information ready for you and for a person you trust, so your Trusted Person can assist you.

After you die, someone (presumably the Executor of your estate) is going to need to access your accounts to collect your assets, stop unnecessary charges, maybe update your Facebook page, figure out your debts and taxes, and then make a distribution according to the terms of your Will.

Types of Digital Assets and How to Complete Your Inventory

Remember, we are using the term “digital assets” includes any non-paper assets and access to assets. At Rosenthal & Markowitz, LLP, we have developed a three-page Digital Inventory worksheet to assist you in making your own inventory.  We include any asset and information, whether physical or non-physical, that you access electronically.  When you have prepared your digital inventory, you have a written record of all the places and information which is relevant to you – all the information someone might need, or you might need, to access.   The inventory is only as good as the information, so the inventory must be updated.  We urge you to date the inventory and then re-date it every time to make a change.  Your inventory should include username, password, and answers to your security questions.

Then, you need to give the inventory to someone you trust who you know will keep it safe and confidential. If something happens to you, or you are locked out of your email, your checking account, digital shopping network, or other important sites, you can contact the person who has your information so you can regain access to it.

For more information about developing a digital inventory as part of your estate planning, contact us at Rosenthal & Markowitz, LLP. You may also call 914.347.1292.

 

 

Women & Wealth Webinar, Friday, May 15, 2020 at 12 noon

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Women and Wealth Webinar

Join Rienas & Brown Wealth Management for An Inspiring Presentation Created for Women, Friday, May 15, 2020 at 12 PM, Via Webex

Topics include:

  • Estate Planning from Linda Markowitz, Esq.
  • Daily Money Management from Ilene Amiel, Personal Affairs Administrators Inc.

Please see call details below and feel free to invite any friends, family members or colleagues you think might be interested.
This event is available through WebEx videoconferencing as well as phone dial in.

On Friday, May 15, 2020 at 12 noon, join the Webex meeting here:

Join by phone

Join from a video system or application

Kathy Rosenthal Speaks to Seniors about Estate Planning

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On June 12, 2018, Kathy N. Rosenthal spoke to White Plains seniors who meet every Tuesday evening at Dory’s Diner.  She delivered helpful information about her favorite topic: Estate Planning.  Kathy created and distributed a primer entitled The Most Important Things You Possibly Already Know About Estate Planning – But Probably Don’t Want To Deal With.  The primer has a very funny subtitle: Sticking Your Head In The Sand Is Not An Estate Plan.

Kathy Rosenthal Speaks on Non-Traditional Estate Planning

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Kathy Rosenthal on panel speaking about Non-Traditional Estate Planning

On May 2, 2018, partner Kathy Rosenthal spoke on a panel joined by colleagues, Julia Peloso-Barnes, a financial planner at Morgan Stanley, and Doug Ruttenberg, a CPA with PKF O’Connor Davies.  The program, sponsored by the Westchester Estate Planning Council, focused on estate planning issues critical to planning for Non-Traditional Families.

As we know, family units do not always consist of one mom, one dad and 2.2 children.  We spoke about planning for…

  • a single person
  • a single person with a minor child
  • a same-gender couple
  • a couple married for the second time with children from their respective first marriages
  • issues around an adult disabled family member.

Every family has unique planning needs.  Each of the adults need his or her own Will, health care proxy, living will and power of attorney.  Some people also need trusts (for asset protection for themselves or their beneficiaries or for estate tax planning or to avoid probate).  Some need pre or post-nuptual agreements or partnership agreements.

Non-traditional families, especially those bound by choice, not by marriage or blood, also need these documents, but planning for a non-traditional family is essential because the family’s interests and needs can be more “outside the box” and the family members are not protected by state laws and more traditional planning options.

For the legal and financial professional, planning starts with asking the right questions and listening more intently to the answers so the professionals can educate each client about his or her options and then work with the client to implement the plan.

Estate Planning Primer 1: How Property Passes At Death

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Estate Planning Primer1:
How Property Passes At Death

by Kathy N. Rosenthal, Esq. (c) 2013

This is the first in a series of articles which Rosenthal & Markowitz makes available because you will be a better advocate for yourself when you are well-informed. The focus of this introductory article is how property passes at death and some of the ramifications of passing property by operation of law.

Getting started:

Estate planning requires taking control, making informed decisions and then implementing those decisions. Everyone can do it and should do it – whether your estate is modest or complex.

First, you need to gather information and create a list of your assets and assess the needs and capabilities of family members to manage assets. Second, you need to contemplate your planning goals (such as minimizing taxes and/or maximizing control to protect some of your beneficiaries from themselves and their creditors). Third, you need to know information about inheritance laws and tax laws (and insurance laws, matrimonial laws, Medicaid laws and property laws too). Estate and gift tax planning should be done with a competent attorney, experienced in estate planning (and, if appropriate, the related fields previously mentioned).

Estate planning can be very complicated and may require juggling competing interests. It is certainly very fact-specific. The tax and property laws change regularly, so the information given here is general and meant to be introductory in nature only. Even though this Primer is detailed and full of information, it barely scratches the surface of information needed to manage and coordinate the laws of gifting during lifetime and at death, charitable gifting, insurance laws, retirement planning, banking, domestic relations laws, and last, but never least, taxes (property, income, gift and estate taxes) all of which must be considered simultaneously.

How property passes at death:

At death, property passes one of three ways: (1) by the laws of intestate succession, (2) by Will, or (3) by operation of law.

Property which decedent (the deceased person) owns solely in her own name passes either (i) by Will (if decedent had a valid Will) or (ii) by the laws of intestate succession also called the laws of intestacy (if decedent does not have a valid Will). Property which passes by Will is subject to a probate proceeding2. Property which passes by intestacy is subject to an administration proceeding3.

Property which decedent owns jointly, or which names a beneficiary, or which is owned by a lifetime trust4 passes directly to the named beneficiary (of the account or the trust) or passes directly to the joint owner. These assets pass by operation of law. These assets are sometimes called “ non-testamentary ” or “ Will substitutes ” because they pass property at death and substitute for a Will. Property passing by operation of law does not pass under decedent’s Will; only in the rarest of circumstances is it even effected by decedent’s Will. However, even these assets which pass by operation of law may be included in decedent’s taxable estate.

The ramifications of owning assets which pass by operation of law:

Some people believe that owning property jointly or naming a beneficiary will solve all probate, Medicaid and creditor problems. Unfortunately, that is not necessarily legally correct, and owning property jointly can have disastrous effects during the owner’s lifetime. In fact, all Will substitutes have ownership and tax ramifications for the creator both during lifetime and at her death, not all of which may be appropriate for each person.

It is necessary to understand the nature of joint ownership and the legal ramifications. Here are just a few of the issues and complications which may arise:

– If you “put” someone else’s name “on” a bank or stock account as an owner, then you are presumed to have made a gift of one half to the other person.

– You may not be able to close the account or take back your money whenever you want to. The other person may need to consent to withdrawals and to closing the account.

– Half of your money may be subject to the creditors of the other person.

– Under certain circumstances, you may be liable for a gift tax on the half you inadvertently gave to the other person, and the gift may incur a look back period or penalty period for Medicaid planning purposes.

– When you die, your creditors may still be able to reach half, if not all, of the amount in the account.

– When you die, the full amount in the account may be taxed in your estate (although it may be subject to the marital deduction if the other person is your spouse).

– When you die, if the other person died first, the account won’t pass by operation of law. If you haven ’ t written a Will because you were sure you ’ d outlive that other person, then, when you die, your estate may need an administration proceeding and your property will pass under the laws of the State of New York, not necessarily to the person you ’ d choose.

Note that there are also ramifications to naming someone as a beneficiary of your stock or bank or brokerage account.

Therefore, before you put someone’s name on your account or add someone’s name to your deed or even name someone as a beneficiary of a stock, bank or brokerage account, you need to know and weight all of all of the tax, creditor and personal consequences.

As part of your estate planning, it is necessary to review all of your assets and how each one is owned and whether it passes by operation of law when you die. This review is necessary so that you can 1) understand what your legal rights are with respect to the property you own while you are alive, and 2) confirm that all of your assets will pass the way you want them to – to the person you want to inherit your assets and with whatever controls are necessary depending upon the special needs of the beneficiary, and 3) prepare for the estate and income tax impact and implications to your estate and your beneficiaries.

We hope this information has been helpful. If any of our attorneys can be of additional assistance, please do not hesitate to call, 914.347.1292. Home consultations may be available upon request.

ENDNOTES:

1. The information provided in this article is not intended to be specific legal advice or to be followed without individualized, professional guidance and assistance. All information given pertains only to New York State law, unless the article specifically states otherwise. The information given is only current as of the date it is written. Despite our best efforts to update articles as the laws change, it is possible that some of the information might not be current. Therefore, please note the date on all articles, and watch for others which are more current.

2. A probate proceeding is a proceeding which is brought in the Surrogate’s Court in the County in which decedent lived at the time of her death. The purpose of the proceeding is for the Court to approve the Will (to get the Will admitted to probate) and for the Court to appoint an Executor whose job is to settle up the estate and make distribution according to the terms of the Will.

3. An administration proceeding is also a proceeding brought in the Surrogate’s Court. The purpose of the proceeding is to establish that decedent did not have a valid Will and for the Court to appoint an Administrator whose job is to settle up the estate and make distribution according to the laws of intestacy.

4. A lifetime trust is a trust created by a person, called a creator or a grantor or a settlor. It is created by a contract called a Trust Agreement. The trust can be funded while the creator is alive and/or after her death.

revised: January 2013