Category

Trusts

3 Common Estate Planning Mistakes

By | Estate Planning, Estates, FAQs, Trusts | No Comments

By taking the time to create a will, you’re already avoiding the biggest estate planning mistake of all, which is to fail to create such a plan. However, there are other common mistakes people make when creating their estate plan. Read on to learn how you can avoid these mistakes.

Putting your heirs’ names on the title to large assets

By listing your heirs’ names on the title to assets such as a bank account or home, you can keep that asset from going through the probate process, ensuring it immediately becomes your loved one’s property. However, this may not be the best way to help your heirs avoid probate. Transferring a large asset in this manner could have gift tax consequences. Additionally, if you’re leaving the asset to a young heir, making a direct gift without placing any limits on how the funds are used or distributed could have unintended consequences.

Failing to consider placing your assets in trust

Rather than listing your heirs’ names on large assets, consider placing those assets, and others from your estate, into a trust. Trusts allow your heirs to avoid probate while also providing you with a way to control when and under what conditions the funds are distributed. Trusts may also be a way to avoid certain taxes placed on inherited gifts.

Neglecting to make regular updates to your estate plan

If you create a will when you’re still young and active (as you should), you’re bound to experience a number of significant personal events such as divorce or the birth of grandchildren, and to acquire additional assets you’ll want to pass along to your heirs. In order to ensure that your will remains an accurate representation of your wishes, you’ll need to return to your estate planning lawyer at regular intervals or upon the occurrence of a major life event in order to update your will. Additionally, if you’ve created a trust, you’ll need to ensure that any new property you acquire that you wish to be in the trust is titled with the name of the trust.

If you’re in need of a seasoned and detail-oriented estate planning attorney, contact the Poughkeepsie wills & trusts lawyers at Van DeWater & Van DeWater for a consultation, at 845-452-5900.

Creating a Special Needs Trust In New York

By | Estate Administration, Estate Planning, Estates, FAQs, Trusts | No Comments

Life with special needs can be challenging enough without the added challenge of figuring out how to afford the costs related to those special needs. While governmental benefits such as Supplemental Security Income (SSI) and Medicaid can be invaluable life-savers to those with special medical, psychological, or developmental conditions that make them unable to work, the income and asset standards which must be met to qualify for those benefits are highly restrictive. In order to afford the costly rehabilitative, therapeutic, and medical expenses associated with special needs, without risking ineligibility for government benefits, some families have found a solution in the special needs trust.

A special needs trust provides a way for persons with special needs to be supported financially without actually receiving the funds which would otherwise disrupt their invaluable government benefits. If you’ve ever sought to support a family member or loved one with special needs, you may have been confounded by the individual’s inability to receive cash gifts of any substantial amount without impacting their benefits. A special needs trust can be the perfect vehicle to benefit the person with special needs under these circumstances. The person who manages the special needs trust is called the trustee, and he or she is permitted to utilize funds for the benefit of the special needs beneficiary only in a manner that does not interfere with government benefits. The trust funds are to be used to supplement, but not supplant, government benefits. So, for example, depending on the particular circumstances and government benefits of the special needs person, the trustee can expend funds to pay for furnishings, clothing, educational programs, purchase a car for the beneficiary, pay for services not otherwise covered by Medicaid, and even purchase a residence. The idea is to use the trust funds to enhance the beneficiary’s quality of life and provide goods and services to help that person reach his or her maximum potential. The Social Security Administration and Medicaid guidelines are very specific as to certain terminology and provisions in these trusts, and thus, great care must be taken in drafting these trusts in order not to run afoul of regulations.

Special needs trusts can be used to benefit persons with either short- or long-term disabilities, and can be drafted in such a way that the trust can be terminated when the trust ceases to be in the beneficiary’s best interests. It is important to keep in mind that once a trust has ended, either because the beneficiary is no longer disabled, or it is no longer in the beneficiary’s best interests, or because the beneficiary has passed away, the trustee may be required to use remaining trust funds to reimburse Medicaid for medical coverage provided to the beneficiary. A New York trust and estate planning attorney with knowledge of the Social Security Administration and Medicaid rules and regulations can help you determine the best method to create and implement a special needs trust.

If you are in need of experienced, detail-oriented, and effective legal assistance with your will or with the creation of a trust, contact the Poughkeepsie estate planning attorneys at Van DeWater & Van DeWater for a consultation, at 845-452-5900.

The Revocable Living Trust: Is It Right For You?

By | Estate Administration, Estate Planning, Estates, FAQs, Trusts | No Comments

When planning your estate, you want to leave your loved ones a gift that will be easily accessible and involve a minimal amount of court involvement to obtain. Using a will for the majority of your assets will necessitate the probate process before certain assets can be distributed to the beneficiaries, a process which can be time-consuming and expensive. To avoid this, consider using a revocable living trust as a way to pass along certain assets or even the bulk of your estate.

Living trusts are a means to convey your property to your heirs without using a will, and thus forcing your heirs to go through probate. Unlike certain irrevocable trusts, revocable living trusts allow you to remain in total control of your assets while you’re alive, with the only difference being that your assets are held in the name of your living trust rather than your own name. Another advantage to a living trust is that unlike a will, living trusts are not public documents. While the contents and beneficiaries of your will become part of a court’s public records during probate, living trusts allow you to make gifts privately, since trusts are not administered through the court. It is important to know, however, that revocable living trusts are not a way to avoid income taxes on income earned from trust assets, nor will they eliminate the estate tax on the assets conveyed through the trust. A New York estate planning attorney can help you find other solutions that can reduce the tax burden on your estate.

Creating a living trust can also make it easier for a family member or trusted advisor to take over the management of your assets while you’re still alive. People are living longer, yet they may not have the ability to handle complex financial management in their later years. Additionally, as you age, the chances increase that a sudden accident or illness could leave you incapacitated. A living trust allows you to designate an individual to make financial decisions on your behalf, either permanently or temporarily as you recover from an injury or illness, and also allows you to leave detailed instructions as to how your assets should be handled when you are unable to do so yourself. This eliminates any future need by your family to seek guardianship over your affairs if you become disabled.

For assistance with any New York estate planning questions you may have, contact the experienced, knowledgeable, and respected Poughkeepsie estate planning attorneys at Van DeWater & Van DeWater for a consultation, at 845-452-5900.