Posts By: Gene Osofsky

Along with the rest of the nation, you are probably watching the progress of various versions of the health care legislation making their way (or not making their way) through Congress. An article in the Deember 13, 2009, issue of the New York Times points out that the current bill contains a “major new federal insurance program for long-term care” — although many are not aware of it. It is sometimes referred to as the “CLASS ACT”, so known by the initials for the full title, the Community Living Assistance Services and Supports Act.

Should it become law, the program might have a significant positive benefit for a social problem that is already bad, and promises to get worse. That is, how are we to care for members of our society who can no longer care for themselves, but might live for years? To give just one prominent example, former President Ronald Reagan revealed his Alzheimer’s diagnosis in 1994, but did not pass away until ten years later.

Nursing home costs have the potential to bankrupt families that are not prepared with legal planning. Drafted by the late Sen. Edward M. Kennedy several years ago, this federal insurance program might be an important tool in addressing the problem, but critics say it will be unsustainable. Instead of families going bankrupt paying for nursing home care, it will be the government, in their view.  Supporters view the matter quite differently, and believe that it will not only help with the reduction of the Deficit but, more importantly, will enhance the quality of life for the elderly,  disabled and their families.    Read the entire article here.

Posts By: Gene Osofsky

Have you ever wondered just how little you could get away with in your last will and testament? Aletta Stager of Brooklyn, NY holds the distinction of having executed one of the shortest wills on record—a mere 2 lines long!

“Nov. 29, 1895. I give to my cousin, Nettie M. Cowan, all money that I have in the Bowery Savings Bank.
Aletta Stager, 131 Berkeley Place, Brooklyn, N.Y.”

Of course, things have changed in the probate and estate planning world in the one hundred plus years since Ms. Stager executed her will. A glaring omission from the two lines above is the nomination of an executor. If you don’t nominate an executor in your will the court  may choose one for you. Also, even if you have only one person in mind as your beneficiary, you’ll want to include secondary beneficiaries, who can include charities and non-profits if you don’t have any family or friends to whom you’d like to leave your estate.

Even back in 1895 Aletta Stager’s property ended up going to the state of New York when no heirs—including the named beneficiary—could be found. Perhaps if Ms. Stager had included a couple more lines in her will her estate could have gone to benefit her favorite charity instead of being swallowed up by the state.

Posts By: Gene Osofsky

The question on every estate planning attorney’s mind (and on the minds of our clients) is what will happen to the estate tax next year? There is less than a month left before the estate tax expires, and although nobody expects our representatives in Washington to actually let that happen, as of yet there are no firm resolutions regarding the matter. We are, however, getting closer.

The House recently voted not to let the estate tax expire, but instead to let it continue indefinitely at the current rate. Unfortunately the legislation has yet to make it through the Senate, and considering the gridlock that body is experiencing over health care reform, holding our breath for a decision on the estate tax before year’s end isn’t recommended.

The issue that estate planners are most concerned about at this time is not actually what the final decision will be (although that certainly is important), but how long it will take our government representatives to reach that decision. It is generally assumed that any decision reached in 2010 regarding the estate tax will be retroactive, which means that any estates opened next year before the decision is made might at some point have to pay estate taxes retroactively. The possibility of retroactive estate taxes means that holding off on your estate planning until after the legislation has passed is not as wise a decision as you may think.

We know our lawmakers have a lot to think about as 2010 approaches, but so do you—the taxpayers. Let us help you start the New Year off on the right foot: Making your own decisions about your estate planning, and keeping one step ahead in the game.

Posts By: Gene Osofsky

Why do people give so many charitable gifts in December? The holiday spirit may not be the only thing inspiring people to give to the less fortunate this month, it may also have something to do with lowering your 2009 tax bill. If it’s taxes you’re worried about, there are a few other moves you can make after you’ve done your charitable giving. Ashlea Ebeling of Forbes has a whole list of things you can do to lower your 2009 tax bill before year’s end, we’ll mention just a few of them here:

  • Fund those retirement savings accounts. As the article above points out, you can fund your 2009 retirement accounts up until April of 2010, but if you have an employer who will match your investment it’s likely they’d like to know before the end of the year what amount they’ll be matching. If you’re self employed you’re on a tighter schedule because the deadline for setting up a solo 401(k) is December 31.
  • If have plans to receive any expensive medical procedures in the near future that won’t be covered by your insurance, you may want to consider having them done before January 1st. Unreimbursed medical expenses that exceed 7.5% of your adjusted gross income are deductable.
  • If you’re in the market for a new home, the homebuyer credit has been extended from November 30th to May 1st 2010. This credit used to be only for newcomers to the real estate market, but is now available for both new homebuyers and longtime homeowners looking to purchase a new home.
  • A different—but related—course of action is making upgrades to the home you already own. Certain energy efficient improvements to your home can also get you a credit on your taxes… if you get the improvements done before the end of the year.
  • One more way you may save money on your taxes this year that you won’t find mentioned in the Forbes article is to create an estate plan. To the extent that the legal planning services cover tax advice or regard income producing property, a portion of the professional fees that you invest in establishing your plan may be deductible from your federal income taxes (providing that your itemized expenses exceed 7.5% of your adjusted gross income).

All of these are good ways to save money on your 2009 taxes, but action needs to be taken before the end of the year. That gives you only… 27 days left to take action!

Posts By: Gene Osofsky

Estate and Legacy planning documents are often seen as difficult, and boring pieces of paper—which in some ways is exactly what they have to be in order to someday withstand tough legal scrutiny; but unless you’re an attorney who is practiced at reading the sentiment between the lines of dry legal jargon, these documents don’t make for sentimental family heirlooms. This is why some families and individuals are choosing to make (in addition to their legally binding estate planning documents) personal ethical wills to leave to their loved ones.

An ethical will can be anything from a letter to your children expressing your love and hope that they carry on your values, to a novella length memoir detailing your life experiences. But what about those people who don’t have the ability or inclination to articulate their thoughts in pen and ink? Well, more and more these people are turning to the camera and making their ethical wills on video.

A video will, as suggested by this article in the Wall Street Journal, is an unparalleled way to let the younger generation know about your feelings and values. “No matter how clear your memories of someone may be, if you have them on the screen in front of you, talking to you, there’s a qualitative difference.” And a video will, if made correctly in the presence of your estate planning attorney, might even have the added benefit of preventing disputes and bickering between your heirs later on.

What we like best about the idea of ethical or video wills is the personal touch. Although we work every day with the “dry and boring legal jargon”, we know that underneath all that an estate plan is about love and values—it’s about family. And an ethical or video will is a way to add a personal touch to the formal written Will or Trust, which is still necessary to meet legal requirements. So, consider doing both together to pass on, not only your assets, but also your values and hopes.

Posts By: Gene Osofsky

How much do you know about estate plans? And how do you know when you need one?

Many people have a vague feeling that they should execute some kind of estate plan eventually, but think (hope) that they really don’t need one right now. On our blog we spend a lot of time telling people that they do need an estate plan, and they probably need one right now—or yesterday!—and we hope we do a good job of explaining why you need one. But maybe it’s time for you to decide when the time is right. This quiz will help you determine just when (and if) you need to do some estate planning.

1. Do you own a house?

Owning your own home means you have at least one significant asset, which affects your need for planning in a number of ways: First, a piece of property cannot be split between people, it will have to be sold (which can take months or longer) and the proceeds divided among your heirs—often at a loss, especially if the house was undervalued to sell quickly. Second, many people who feel they have “small estates and won’t have to worry about Probate or the estate tax” are surprised when they find that the value of their home does indeed push their estate over the line. Third, if you are married,  you may need to make provisions for your spouse if you would like them to be able to continue to live in your home, especially if it is partly your own separate property acquired before marriage.

2. Do you have minor children?

If you have minor children and have not made provisions for them in case of your death or incapacity the court will make decisions about their futures. If there are no suitable family members who are willing to step forward and would be suitable guardians, your children might be placed in the care of foster parents or become wards of the state. That is not a chance you want to take.

3. Do you want your heirs to have to wait months (or years) before receiving an inheritance, diminished by the cost of probate?

Probate is sometimes a long and expensive process. Without a plan in place your assets may have to be probated before they can be distributed. Not only does this often take a long time, but the probate fees (which can be considerable) are taken out of your estate—leaving less for your heirs.

4. Do you know how you want to spend your final moments?

Most people don’t die quickly and quietly at the ripe old age of 98. Most people fall victim to accidents, illness or dementia—unable to make their own health care decisions. Without a healthcare directive or living will that specifically outlines your wishes and instructions for your health care and nominates an agent to carry out those wishes, you could end up in a Terri Schiavo situation—costing your loved ones both financially and emotionally.

(NOTE: There is much that goes into your estate plan decision-making; this is only a partial quiz, and not a planning tool.  We suggest meeting with your attorney for an in depth interview to determine what kind of planning will be best for you and your family.)

Posts By: Gene Osofsky

The days are getting shorter, the weather cooler, and the skeletal arms of trees reach for the skies as their colorful apparel rests on the ground. All of these signs point to just one thing… No, not the estate tax repeal (although that does loom close); I’m referring, of course, to the upcoming holiday season—a time to slow down, spend time with family, and appreciate the blessings in our lives.

During this time of celebration and Thanksgiving, our office would like to offer our sincere thanks to you, our clients and readers, for the time you have spent with us, the trust you have put in us, and the role you have let us play in your lives. We hope we may continue to serve you in the coming year.

Happy Thanksgiving to all of our readers, and may you enjoy a wonderful holiday season.

Posts By: Gene Osofsky

Our previous installments on how to review your estate plan discussed how and why to review the more financial portions of your estate plan; for this final installment we will cover how to review the documents that may be closer to your heart: your health care documents and documents pertaining to minor children (such as a nomination of guardian.) Also covered is what is perhaps the most pressing reason of all to regularly review your estate plan—changes in the law.

Health Care– Your health care documents should include: an Advanced Health Care Directive (or Health Care Power of Attorney), a Nomination of Conservator, and a HIPAA Release. If you have minor children you should also have a document giving a close friend or family member authorization to make health care decisions for your child in case you and your spouse are unavailable in an emergency. Take note of the date these were signed, and any changes in your health status.   We recommend that Health Care documents be re-signed every 3- -5 years to keep them “fresh”.

Minor Children and Guardianship-Documents pertaining to minor children include your Nomination of Guardian, Exclusion of Guardianship (if you intend to exclude any persons who might otherwise be close family members and have “priority” under the law if you fail to nominate others), and often a Memorandum of Intent. If circumstances or relationships have changed and you are uncomfortable with anybody listed in the documents now serving as guardian, you’ll want to execute a new one. If your minor child is a teen and almost grown he or she may now want to have some input in the process. The Memorandum of Intent is not always an official document; rather, it is your letter of instruction to your guardians and other fiduciaries. As such, this document will probably change the most over the years. The good news is that you probably don’t need to make changes in your Memorandum through our office, however if you do make changes, please let us know or even send us a copy.

Legal Updates-Estate planning is a very fluid area of law. Tax laws have a tendency to change (for example the estate tax law which is slated to expire completely in 2010 and return again in full force in 2011), and incorporating those changes into your documents may be necesssary to keep your plan working the way you intend.

Reviewing your estate plan is not as intimidating as you might think, especially when you know exactly what to look for. Taking an hour now to review your plan may save your loved ones many long hours in the future. Don’t you think it’s worth it? If you feel you need professional assistance, we are here to help.

Posts By: Gene Osofsky

In our recent blog post we listed 6 essential components of your Estate Plan that should be reviewed on a regular basis and why it’s so important to keep them updated. Today we’ll go into more detail about the first of these components; what they are, and how to review them.

Fiduciaries– Make a list of all the people you’ve named in any fiduciary role in your estate plan, including Trustees, Executors, Health Care Agents, Financial Agents, Guardians, and Advisors. Has your relationship with any of these people changed? What about the person’s own family or financial situation? Do you still feel confident in each person’s ability to carry out your wishes?

Assets– Look at the schedule of assets you have with your Estate Planning materials. If you don’t already have a schedule of assets, make one right now. Don’t forget to include property, bank accounts, stocks, Retirement accounts and Life Insurance policies. Of all the assets on this list, have all of them been put in the name of your trust or has your trust named as the beneficiary? Have all of your new assets been added to your trust? If you refinanced your home, was it put back in the name of the trust? If you answered “no” to any of these questions, it’s time to call your attorney.

Distribution and Beneficiaries– For most people, the whole purpose of a will or trust is to make sure that property is distributed according to their wishes upon death. So take your time reviewing that section of your estate plan. Is your list of beneficiaries still accurate? Do you have any new children or grandchildren? If so, your estate plan should reflect these changes.

In our next blog we’ll have more information about the second part of the list of things to review in your estate plan: Health Care, Guardianship and documents pertaining to minor children, and last but not least, legal updates.

Posts By: Gene Osofsky

For many people the holiday season brings more than just celebration. Seeing family and friends you may not have seen since this time last year means seeing children who have shot up like weeds, siblings and cousins with noticeably more gray in their hair, and even sometimes seeing an empty place at the dinner table that wasn’t empty last year. In short, for many people the holiday season means facing the passage of time and the changes that passage can bring.

The passage of time is inevitable, as is the change it brings; and when your life changes it’s important that your estate plan change with it. Reviewing your estate plan every 1-3 years is essential to keeping it up to date and working the way you intended it to work. Luckily, reviewing your estate plan can be quick and easy if you know what you’re looking for. Here is a list of 6 key components you’ll want to review regularly:

  • Fiduciaries
  • Assets
  • Distribution and Beneficiaries
  • Health Care
  • Guardianship and documents pertaining to minor children
  • Legal Updates

If we’re lucky, our lives are constantly changing—our families evolve, our finances improve or decline, we meet and form strong relationships with knowledgeable friends and professionals. It only makes sense that your estate plan should change too. What seemed best for your family 4 years ago might not be the ideal situation now. By reviewing and updating these 6 components on a regular basis, and touching base with your attorney, you will insure that your estate plan will continue to protect yourself and your family the way you intended it to when you first created it.