vacation home

How to Protect the Legacy of Your Vacation Home

vacation home

For generations, the children in your family have learned to swim by jumping off of the dock of your family’s vacation home. It’s a rite of passage for each grandchild to learn how to bait a hook from grandpa while fireflies flicker in the summer heat. The legacy of a vacation home is the pinnacle of the American Dream. Many people work their entire lives to afford a home in their dream destination. While you dream of passing down this home (and the memories) for generations to come, have you thought of how to protect this family legacy?

Leaving the family vacation home directly to your children may be the simplest way for transferring ownership, however, when multiple children are involved, they would all need to agree with how the property is managed and maintained in the future. These decisions are proven to be challenging not only for your children to agree on, but also their future spouses.

An LLC is often used by families, in which each family member would have a certain membership interest in the home or to give away in a controlled manner. If the home is rented at certain times of the year, the LLC can help limit the liability of the family and profits could be used to help maintain the property.

Trusts are another tool used to protect a family home. This legal agreement allows you to specify how you would like the property to be managed once you die. You can use the trust to identify who will own your vacation home, when they will have access to it, and what they will be allowed to do with the property.

One of the many benefits of placing your vacation home in a trust is to avoid probate. When you pass away, assets that legally belong to a trust will be passed on to your beneficiaries without going through probate. There are several trust options available to align with your specific needs. I few most common trusts are:

IRREVOCABLE TRUST

The house can be placed into an irrevocable trust with your children named as beneficiaries. The terms of the trust would outline the management and use of the home. An irrevocable trust helps to protect the family from possible creditor liens.

REVOCABLE TRUST

A revocable trust can be used to transfer the property to family members at the time of your death. This option can set up what is called a subtrust to manage your vacation home after your death. There is usually a set amount of money set aside in the trust to help care for the property for a period of time.

QUALIFIED PERSONAL RESIDENCE TRUST

This allows you to gift the property at a reduced value, while allowing yourself to use the property for a set amount of years, after that time has expired the home can transfer directly to family or to a trust for future generations.

Contact a New York Estate Planning Attorney

Preserving your family’s legacy of summers full of fun is important to avoid future family conflicts and avoiding litigation. Choosing the right financial structure for your family to enjoy and use the property will help guarantee family fun for future generations. An experienced estate planning attorney can help you to assess your unique needs and goals. Contact Amoruso & Amoruso, LLP for a personal meeting.

estate planning

When Was the Last Time You Updated Your Estate Plan?

estate planning

For many, an estate plan is created and never looked over again – until it’s necessary to do so. But did you know that you should really look at your estate plan as something that grows and changes with you?

Think about what has happened in your life since the last time you looked over your estate plan. Maybe you bought a new home, got married, or welcomed your second child. Each of these events demonstrates exactly why keeping your plan up to date is just as important as creating a well-designed plan in the first place – because life is full of beautiful changes.

And life will continue to offer these changes, especially as you grow older. Your health, financial situation, income, and the overall value of your assets continuously change with you and over time. Plus, the needs of your loved ones will change over time as well. After all, people get divorced, remarry, have children, buy and sell homes, start a business, change jobs, and sometimes they suffer unforeseen financial difficulties like bankruptcy or personal problems like alcoholism.

By having an established schedule to review, and, if necessary, revise your estate plan on a regular basis you’ll be able to account for every change life brings your way, and better protect both you and your loved ones in the process. But, if you believe any recent life events may have impacted your estate plan’s effectiveness, we urge you to have your plan reviewed immediately.

On top of that, the law is constantly changing. Over the years, new laws may take effect and others may be repealed which could make some options for protecting assets less attractive than they were previously or offer new opportunities for wealth preservation and growth. Working with a knowledgeable estate planning attorney as you update your estate plan will ensure you have a strategy in place that will take advantage of every legislative update.

So, whether or not you and your loved ones have experienced any recent life changes, it’s best to have your plan reviewed at least every two years to make sure your existing strategy takes into account any changes to the law, tax code, or financial landscape. It’s a great feeling to know you have thoughtfully prepared for your and your loved ones’ future financial, physical, and emotional well-being with your estate plan. Now, it’s simply a matter of keeping your plan up to date so that the same level of carefully considered protection lasts for years to come.

estate planning

A Will is a Key Component of Any Estate Planning, But It’s Not Enough

estate planning

When most people think of estate planning, usually writing out their will comes to mind. While a will can help you accomplish a number of important planning goals, it’s certainly not a complete plan to protect your future.

Many people know that a will allows you to control how your assets are distributed after you pass away. And, that without a will, your assets would simply be distributed in an action carried out by the state. Known as intestate succession, the state acts in an objective, and simply procedural, manner because your assets are required to be distributed. The process of intestate succession will completely ignore your wishes because what you “would have wanted” is simply irrelevant to the state without a formal will in place.

A will is also critical when you have minor children. The terms of your will can give you control over how your minor children are raised should you and your spouse pass away. In your will, you can name a trusted person to serve as a guardian, someone who will raise and care for your children when you cannot. However, without a will, a court decides who will raise your children; a decision that may appoint a person you never would have selected yourself.

In sum, yes, a will is an important document to create so you can rest assured your wishes will be respected after you’ve passed away. Yet, it’s important to consider the limitations of a will as well. For instance, your will does not allow you to manage your affairs should you become incapacitated.

Working with an experienced estate planning attorney to establish a durable power of attorney and advanced medical directive will ensure that you retain some control over what is done on your behalf if you become incapacitated. Each of these documents empowers one or more individuals to make decisions about your assets or medical care when you are unable. If you do not have either document in place, a court will decide who to appoint to fill these roles for you. Again, leaving the decision open for the court to decide could lead to the appointment of someone you would not have chosen for yourself; someone who would then have the power to take actions they believe are in your best interest regardless of your personal preferences.

Further, many financial accounts require a beneficiary designation, instead of a will, to determine how the assets will be distributed. Ownership of assets such as life insurance, annuities, retirement accounts like IRAs and 401(k)s, and jointly-owned property all look to the beneficiary designation form for guidance on how the asset is to be distributed after the owner’s passing. In fact, many IRS rulings and court cases have concluded that the owner’s statements and intent in his or her will do not matter if they contradict what was written on the beneficiary designation form. This is why it’s important to also review your beneficiary designations periodically to ensure they reflect your wishes now, and not what you wanted when, for example, you opened the IRA 20 years ago.

A trust is another estate planning tool families can utilize to provide a greater level of flexibility in how their future is managed. For example, a revocable living trust allows your estate to avoid probate entirely—and the public scrutiny that accompanies it. Trusts can also protect your assets against creditors and other threats while protecting your heirs’ inheritances against creditors, predators, remarriage, and even their own poor decisions if they are not yet mature enough to handle an inheritance on their own.

Contact a New York Estate Planning Attorney

In short, while a will can help you accomplish important goals, additional estate planning tools and strategies are available to protect you and your loved ones both after you pass away and in the event of tragedy while you are still alive. An experienced estate planning attorney can help you determine the best tools and strategy for you.

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Choosing a Trustee for Your Special Needs Trust

special needs trustee

Choosing the right trustee for any trust is a difficult and extremely important decision. In the case of choosing the right trustee for the trust you have created to protect your loved one with special needs, the decision is even more important—particularly if your loved one is a young child. Let’s take a look at some of the options and discuss the pros and cons of each.

Your Parents

Many couples consider this first. After all, your parents know and love your children, and understand your wishes. However, this is only a temporary solution, as your special needs trust must protect your loved one with special needs for his or her entire lifetime.

Your Siblings

Like your parents, this may be a good temporary solution. But the same drawback applies here as well. Your siblings are unlikely to outlast the trust itself, and you will need a successor trustee.

Your Other Children

This option seems logical to many couples because their children know one another well and are roughly the same age. However, you must consider a number of factors with this option. First, the role of trustee is a difficult one, fraught with potential liability. Do your other children have the time and capacity to serve as trustee? Then you need to consider the dynamics of your family. Should all of your children be named as co-trustees, or should only one of them be named as sole trustee, and how will this impact the relationship between family members. That is, will you be perceived as “playing favorites?”

A Bank or Trust Company

Most banks, brokerage houses and trust companies will only accept large trusts, ranging from a minimum of $300,000 to more than $1,000,000. Many will not accept special needs trusts at all. However, if you have a special needs trust that meets the institution’s minimum requirements, and the institution’s trust department has an outstanding reputation, this may be a long-term option worth considering.

As you can see, there are a variety of options, each of which has advantages and disadvantages. Sometimes, the best choice is a combination of one or more options. We are here to guide you through the various options and help you choose the trustee, or combination of temporary trustee and successor trustee, best suited to your particular situation and needs.

guardian

8 Factors to Consider When Choosing a Guardian for Your Children.

guardian

Who should raise your children if for some reason you or your spouse is unable to do so? It’s not an easy question to answer, but if you have young children, it is a topic you most certainly should address in your estate plan. Otherwise, a court will decide, and their decision will probably not be the same as the one you would have made, and may not even be in the best interests of your children.

Some of the most important issues to consider when choosing a guardian include:

  1. Does the prospective guardian have a genuine interest in your children’s well-being?
  2. Does the prospective guardian share your values?
  3. Can he or she handle the role physically and emotionally? What about financially, if you cannot provide him or her with enough assets to raise your children?
  4. Does the prospective guardian already have children of his or her own? Will he or she be able to make enough time to adequately care for and look after your children?
  5. Where does the prospective guardian live? Would that be a good fit for your children? Would having to move far away make an already stressful situation for your children even more so?
  6. Is it essential that all your children share the same guardian? Most parents say yes, but in some circumstances, such as when your children are of significantly different ages, naming more than one guardian is an option.
  7. Should you choose one person to act as personal guardian and another to manage the financial arrangements for your children—that is, name a second person to act as Custodian or Trustee? In certain situations, such as when the best surrogate parent for your children is not necessarily the best person to handle financial matters, this option is worth considering.
  8. Perhaps most important of all, have you spoken to the prospective guardian about taking on such a responsibility, and does he or she seem readily willing to do so?

Contact an Experienced Guardianship Attorney

We have helped many couples select the ideal guardian for their children and designed wills or other planning documents to ensure their wishes are carried out. We welcome the opportunity to do the same for you.

Living trust concept: a young family preparing breakfast in the kitchen

Make Sure Your Revocable Living Trust Is Properly Funded

You’ve taken the time to plan for the financial well-being of your loved ones and yourself. You’ve created a customized estate plan to address your goals and concerns. Your plan includes one of the most powerful estate planning tools out there, the Revocable Living Trust, which allows your heirs to avoid probate upon your death and provide for management of your assets without interference from the court should you become disabled or otherwise incapacitated.

Living trust concept: a young family preparing breakfast in the kitchen

Properly Funding Your Living Trust

All is well and good—unless you have not taken the steps necessary to fund your trust. Without proper funding, your trust is worth no more than the paper it is written on.

It’s hard to believe, but many families take the time to create a comprehensive estate plan, together with a Revocable Living Trust, then fail to properly fund the trust. And even though a Will may provide that all assets pour over into your trust for further disposition, this takes place only after said assets pass through probate, thereby negating one of the primary benefits of creating the trust in the first place.

Another important factor to consider is that assets such as life insurance, individual retirement accounts and pension plans pass to designated beneficiaries. If the trust is not named as the beneficiary of such assets, they will not be held (and protected) by the trust. Likewise, assets held in joint tenancy with rights of survivorship will go to the surviving joint tenant, not the trust. In addition, assets held in your name alone will not go to the trust until probate has been completed, which can take several months, a year, and sometimes even longer.

Given all of this, it is extremely important for you to review all of your assets to determine which titles should be changed to your trust. Assets you will want to review, and possibly title to your trust, include all of the following:

  • Bank accounts
  • Certificates of deposit
  • Investment accounts
  • Retirement accounts
  • Stocks and bonds held in certificate form
  • Real property
  • Tangible personal property such as art, rugs, jewelry, vehicles, etc.
  • Promissory notes
  • Closely-held business interests

Contact an Experienced New York Estate Planning Attorney

We can counsel you on the best strategies to employ so that your assets are correctly titled and your trust properly funded to achieve your goals and ensure your wishes are carried out.

Insurance policy on a desk.

Have You Reviewed Your Beneficiary Designations Lately?

Beneficiary designation documents on a desk.

Maybe it’s an insurance policy you took out years ago. Or the retirement plan you set up with your employer the day you started working for the company. Or the IRA you have been scrupulously contributing to for two decades.

You created them all to protect your financial future and that of the people you care about most. But over time, your personal situation may have changed. Perhaps you have gotten divorced and remarried? Or one of your children has gotten married, and you are not exactly thrilled with your new son or daughter in law? The fact is, change is a part of life. The question is, have your beneficiary designations kept pace with the changes in your life?

We understand that reviewing your designations is something that’s easy to put off, the kind of chore you’ll get to “any day now.” The consequences of not doing so, however, can be catastrophic. At the very least, it will thwart your wishes regarding precisely who you want to receive your hard-earned assets after you are gone. As your estate planning counselor, we can’t help but implore you—okay, maybe even nag you—to review your designations as soon as possible. Preferably today… right now!

prenuptial agreement

Do You Need a Prenuptial Agreement?

Okay, so you popped the big question, and he or she said yes! Whew, what a relief! Now there’s so much to do, so many plans to make: the guest list, the invitations, the reception, the band, the cake, the honeymoon…  the prenup?

prenuptial agreement

While it is hardly the most glamorous aspect of planning a wedding and a life together, many couples should at least discuss it. Why? A prenuptial agreement can protect you from financial loss in case your relationship breaks down—no small concern when you consider that half of all marriages end in divorce.

Is a prenuptial agreement a good idea for you and your intended spouse? Probably, if any of the following scenarios apply:

  • Either of you has children from a previous marriage
  • You own a business or are involved in a family-run company
  • Either of you has significant assets that you want to keep separate
  • One of you is concerned about the other party’s debt
  • You are giving up a lucrative career to get married

If you think a prenuptial agreement makes sense in your situation, the next question is when the topic should be broached and documents prepared. The short answer is this—the sooner the better.

Even though it may be a sound financial decision, asking for a prenup is obviously a delicate situation. The person who brings up the subject may be seen as lacking trust in his or her mate. Requesting a prenuptial agreement well in advance should give you and your intended spouse the time to discuss the subject at length and come to an understanding. This is infinitely more preferable than, say, approaching your beloved a few days before the wedding and saying something like “Oh, by the way darling, my lawyer says I need you to sign this.” In addition to the shock involved in such a last-second approach, there are sound legal reasons for broaching the subject as soon as possible. Chief among them is that it avoids the appearance of coercion, which renders some agreements null and void.

A prenuptial agreement should be signed, at the very latest, one month before the wedding, and before any invitations are sent out. Also, each party should have his or her own attorney involved in the design and review of the prenuptial agreement.

Contact a New York Estate Planning Attorney

An experienced estate planning attorney can help you to assess your unique goals and determine if your particular situation calls for a prenuptial agreement. Contact Amoruso & Amoruso, LLP for a personal meeting to discuss your particular needs and goals.

Your Legacy is More than Just the Money You Leave to Loved Ones

When we hear the word legacy, many of us think of money left to people and institutions that have come to mean the most to us over the course of our lives. But your legacy is much more than that. It includes your memories, values, wisdom, family history, and more that do not necessarily have monetary value. How can you pass those on to future generations?

You could begin by writing down, or making a recording of yourself sharing, stories about your parents, grandparents, and other relatives. Don’t just talk about where they lived and what they did for a living. Try to convey a sense of who your family members were, what was important to them in life, and the values they held dear.

You’ll want to take a similar approach in telling your own story. Describe why you made certain decisions, what you learned from mistakes, how you achieved success, and what you would do differently if you could. It’s been said that a picture is worth a thousand words, so be sure to preserve photos that depict your history and that of other family members. You might even want to create a website featuring your stories and photos, and invite family members to contribute to it.

Now let’s consider items that may not be worth much money but have a great deal of sentimental value: an old watch owned by your uncle, for instance, or the rocking chair that your mother used for many years. You’d be surprised at how many family disputes arise over items like these. If one of your children has shown interest in such an object, you could specify in your will that he or she receives it when you pass away. Regarding sentimental objects that have not been “claimed” by your children, consider using an estate planning letter to designate the person you would like to inherit it, and why.

What about your values, is there a way to increase the likelihood that these will be passed on as well? One approach is to use an estate planning tool, such as an Incentive Trust, to encourage certain behaviors while discouraging others. For example, your trust could reward your children for graduating from college, entering a certain profession, purchasing a home, or doing charitable work.

In the end, you may be surprised by how much your values, wisdom, and family history—the nonmaterial aspects of your legacy—mean to the people you love and future generations.

Contact a New York Estate Planning Attorney

To learn more about passing on your legacy to future generations, contact an experienced Estate Planning lawyer at Amoruso & Amoruso, LLP for a personal meeting to discuss your particular needs and goals.

children adult

If Your Children Have Turned 18, They Need Their Own Legal Documents

When your children turn 18 they are legal adults. They might not act like adults all of the time, and you may still be supporting them financially, but in the eyes of the law they are indeed adults. This means that you can no longer make certain decisions for them, including health care decisions. Furthermore, you can no longer obtain medical information about your adult children without their authorization—even in an emergency.

children adult

Consider the following scenario. Your son is away at college and gets severely injured in a car accident. When you become aware of what has happened you immediately call the hospital for information about his condition, but nobody will tell you anything. This is because the law—specifically, a statute enacted in 1996 called the Health Insurance Portability and Accountability Act (HIPAA)—prevents the disclosure of a patient’s health information without the patient’s consent. The hospital in question could be prosecuted for violating HIPAA guidelines.

This is why your adult children need a legal document called a HIPAA Release. It allows your adult children to list the people who are permitted to receive medical information about them.

Another crucial legal document your adult children need is a Power of Attorney for Health Care, which is also called a Health Care Proxy. It allows them to name a person they trust to make health care decisions on their behalf if they cannot do so themselves. Medical decisions covered by a Power of Attorney for Health Care can include the types of treatments allowed in an end-of-life situation, such as the use of a feeding tube, as well as do not resuscitate orders.

Similarly, a Power of Attorney for Finances allows your adult children to designate a trusted individual to make financial decisions if they cannot make them on their own.

If your adult children have their own Powers of Attorney for Health Care and Finances, and they name you as their agent in the documents, you will be able to make medical and financial decisions on their behalf if they become incapacitated. If you are named in your adult children’s HIPAA release, you can get medical information about their condition in an emergency.

Contact a New York Estate Planning Attorney

To learn more about obtaining legal documents for your adult children, contact us for a personal meeting to discuss your particular needs and goals.