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.

Irrevocable Living Trust

The Benefits of an Irrevocable Living Trust

An Irrevocable Living Trust generally cannot be modified or terminated except under certain limited circumstances. It requires the grantor to transfer assets into the trust and give up his or her rights of ownership to these assets. So why would you want to create an Irrevocable Living Trust, as opposed to a Revocable Living Trust?

Irrevocable Living Trust

Irrevocable Living Trusts, when properly designed and implemented, can provide an almost unsurpassed level of asset protection from the high cost of long-term care. And, like Revocable Living Trusts, they spare your family the delays, frustration and expenses of the probate process. Other reasons to utilize an Irrevocable Living Trust include:

  • Tax minimization
  • Avoiding the risks of placing assets in the name of your children
  • Protecting assets against predators, creditors and lawsuits

While many different types of Irrevocable Living Trusts are available, in essence all of them retitle your assets. Assets placed in an Irrevocable Living Trust can include a business, cash, investments, life insurance policies, and more.

Why is an Irrevocable Living Trust better than a Revocable Living Trust at protecting assets against the cost of long-term care?

Under current Medicaid laws, assets in a Revocable Living Trust are not fully protected. Why? Assets in a Revocable Living Trust are available to the Grantor. Medicaid may determine that those assets be used to pay for long-term care. This is not the case with an Irrevocable Living Trust, as long as it is properly designed and implemented to take into account the latest laws governing Medicaid eligibility.

How does an Irrevocable Living Trust protect your children’s inheritance?

When you transfer assets directly to your children, they typically become outright owners of the assets. They also become responsible for the risks associated with owning the assets. A properly drafted and implemented Irrevocable Living Trust will avoid:

  • Loss of inheritances due to lawsuits, divorce, remarriage, or the inability of your children to manage money on their own
  • Gift tax liability
  • Income tax consequences for your children
  • Problems with getting financial aid to cover educational and other expenses for your grandchildren

To determine if an Irrevocable Living Trust is right for you and your family, contact us today for a consultation.

Second marraige

Estate Planning for Second Marriages

Second marriages can present unique challenges when it comes to estate planning, particularly if you or your new spouse have children from previous marriages. Let’s take a look at some of the factors, tools, and strategies to consider when planning for a second marriage.

Second marraige

Prenuptial Agreements

You’ve been married before, so you’re a little bit older and a whole lot wiser the second (or third) time around. However, this doesn’t mean you should throw caution to the wind. While it is hardly the most romantic aspect of planning a life together, many couples should at least discuss a prenuptial agreement. This is especially true if any of the following scenarios apply:

  • One of you is giving up a lucrative career to get married
  • You or your future spouse owns a business
  • Either of you has significant assets and wants to keep them separate from marital assets
  • One of you carries significant debt
  • There are children from a previous marriage

If you think a prenuptial agreement makes sense in your situation, the next question is when the documents should be prepared. The sooner the better is a good rule of thumb. This will avoid the appearance of coercion, which can render some prenuptial agreements null and void. Your documents should be signed at least one month before the wedding, preferably before the invitations are sent out. In addition, you and your future spouse should each have an attorney involved in the design and review of the prenuptial agreement.

Review and Update Beneficiary Designations

Did you know that the people you have named as beneficiaries in various retirement and other accounts will generally inherit account assets even if other beneficiaries were named in your will? Consider the following situation. You got divorced, remarried, and changed your will to make your new wife your primary beneficiary.

However, if your ex-wife is still named as beneficiary in your retirement and investment accounts, she will inherit the funds, not your new wife. Beneficiary designations typically trump wills.

Fortunately, it is relatively easy to make and update beneficiary designations. When you open a retirement account, such as an IRA, the provider generally offers a beneficiary designation form within the account itself. You can name your beneficiaries when you create the account and change your beneficiaries whenever you wish (with one possible exception). As for investment and bank accounts, making beneficiary designations will likely require you to request a transfer on death form. This, too, is easily accomplished.

The exception noted above refers to certain laws governing the passing of retirement accounts to spouses. Your spouse will typically inherit your 401(k), for example, unless he or she signs a consent form waiving his or her right to it. If your ultimate goal is to leave your 401(k) to your children, your spouse will have to agree to this in writing. Designating your children as beneficiaries of your 401(k) will generally not be enough.

Protecting Children from a Previous Marriage

If all of your estate’s assets are left to your new spouse, your children from a previous marriage may not be provided for in the manner you would have wanted after you pass away. Your new spouse could, upon his or her death, leave all of the assets to his or her children from a previous marriage, thereby excluding your children. Conversely, if the majority of your estate is left to your children from an earlier marriage, there may not be enough assets remaining to provide for your new spouse or any children you have together. It can be a balancing act, one that requires proper planning to ensure your wishes, and those of your new spouse, are carried out. At the very least, each spouse should have a will. Without one, intestacy laws will likely result in assets being distributed in a manner neither of you would have wanted.

A trust, or combination of trusts, is generally a better approach than a will for second marriages and blended families. One such trust, which provides an excellent form of asset protection, is called a Qualified Terminable Interest Property Trust (QTIP). A QTIP Trust can generate income for the benefit of the surviving spouse during his or her lifetime. When the surviving spouse passes away, the QTIP’s assets can be distributed between mutual and prior children according to the wishes of the previously deceased spouse. In addition, if the children are young, assets from the QTIP Trust can be held in another trust, under the control of an independent trustee. This approach can prevent estate assets from falling under an ex-spouse’s control. It can also protect your children’s inheritances from threats like creditors, lawsuits, and even your heirs’ poor decisions if they are not yet ready to manage an inheritance on their own.

To learn more about planning for second marriages and blended families, contact us for a personal meeting to discuss your particular needs and goals.

Millennials Are on the Move — but to Where? | RISMedia\'s ...

Yes, Even Millennials Should Have an Estate Plan

Many people believe that estate planning is only for elders. The truth is that younger folks, including millennials, can benefit from having an estate plan of their own.

Millennials Are on the Move — but to Where? | RISMedia\'s ...

 

Millennials are generally defined as individuals born between 1981 and 1996—that is, people between the ages of 25 and 40. This is the age at which many people begin their careers and start families of their own. If you have a child, you should at the very least have a last will and testament. It allows you to name a guardian for your minor children, which helps ensure they will be raised according to your wishes if you and your spouse pass away unexpectedly.

 

Another reason millennials need an estate plan is to ensure people of their own choosing can make medical and financial decisions on their behalf in the event of incapacity. Legal documents such as powers of attorney for health care and finances can accomplish this goal and spare your loved ones from having to make difficult decisions about your care and/or finances if you can no longer make them yourself.

 

Estate planning can help you accomplish many other goals depending on your particular needs. We welcome the opportunity to discuss your options.

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The Objectives and Benefits of a Spendthrift Trust

A spendthrift trust is typically used to prevent a beneficiary from receiving his or her inheritance all at once. There are several reasons why a grantor (the person who creates the trust) might want to consider such an approach. The most obvious reason is that the grantor believes the beneficiary will quickly squander the inheritance. That is, the beneficiary is a spendthrift.

Trust and Estate Planning is shown on a conceptual business photo

Other reasons to consider a spendthrift trust include:

  • The beneficiary (or the beneficiary’s spouse) has many debts and, consequently, the inheritance could be lost to creditors
  • The beneficiary’s marriage is troubled and seems likely to end in divorce
  • The beneficiary’s friends are spendthrifts (or worse) and have undue influence over the beneficiary’s behavior
  • The beneficiary is simply “not good with money”
  • The beneficiary suffers from alcohol or drug addiction

How does a spendthrift trust protect the beneficiary’s inheritance in situations like these? First, the beneficiary cannot access the assets in the trust, or promise them to someone else. Thus, creditors and other threats cannot reach the trust’s assets either. In addition, since the beneficiary’s inheritance can be distributed in specified amounts over time, the entire inheritance cannot be lost all at once. Of course, the portion that is distributed would be vulnerable unless other protective measures are taken.

The Role of the Trustee

It is crucial to choose one’s trustee carefully because the terms of the trust give the trustee control over trust assets and their distribution to the beneficiary. Similarly, it is extremely important to outline the trustee’s authority in detail. Here are some examples of factors to consider when setting the terms of the spendthrift trust:

  • Should the trustee be instructed to make fixed payments according to a specified schedule, or does the trustee have some discretion to choose the amount and timing of distributions?
  • Should the trustee make distributions in cash or provide the beneficiary with goods and services instead?
  • Can the trustee withhold distributions if the beneficiary behaves inappropriately? If so, what types of behavior would trigger the withholding of assets?

Given the importance of the trustee’s role in administering the trust and managing the beneficiary’s inheritance, the choice of trustee should not be taken lightly. The decision to serve as trustee should not be taken lightly either. In certain situations, the trustee could very well be performing the role of mentor, or disciplinarian, or even parent. In addition, the trustee can be held legally and financially responsible for failing to follow the mandates of the trust.

Other factors to consider when creating a spendthrift trust include how and when the trust will end, what will happen if the beneficiary “grows up” and develops the maturity to manage the inheritance, and what should be done with trust assets if the beneficiary passes away.

Contact a New York Estate Planning Attorney

If you want to leave a loved one an inheritance but are concerned about his or her ability to manage it, we can help you determine whether a spendthrift trust is a good solution. Contact an experienced New York Estate Planning attorney at Amoruso & Amoruso LLP by calling (914) 253-9255 to schedule an appointment.