Mullen and Iannarone, P.C.
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Long Island Elder Law Blog

About silent trusts

New York residents who are trustees of irrevocable trusts have certain duties regarding informing beneficiaries about the trust. Specifically, they have an affirmative duty to give some information about the trust to beneficiaries. In turn, beneficiaries are given the right to ask for certain information about the trust.

The rights of the beneficiaries and the responsibilities of the trustees are meant to make sure that the beneficiaries have the information they need to adequately protect their interests. The trust settler may be able to use the trust instrument to restrict or put aside the requirement in some states. In other jurisdictions, due to public policy, the requirement cannot be waived.

What to do after executing an estate plan

For New York residents and others, creating an estate plan is an ongoing event. After the paperwork has been drafted and executed, there are many tasks that still need to be completed. For instance, it may be necessary to make sure that a trust is properly funded and that the trust owns the items placed inside of it.

It is also important to know that beneficiary designations are handled outside of a will. Therefore, if they are not made properly, it can have a negative impact on an entire estate plan. At some point after an estate plan document has been crafted, it could become obsolete for a variety of different reasons. Generally, documents need to be altered because of a change to the tax code or because of a change in personal circumstances. For example, an individual may get divorced, have a child or otherwise be in a situation where estate plan needs have changed.

Reasons to use estate planning

New York residents may use estate planning as a way to help prevent their estates from being overly taxed. However, with the passage of certain federal estate tax legislation, which has increased the number of exemptions for estate, federal, gift and GST taxes, people may want to take the time to consider other reasons why estate planning can be a good idea.

One important reason for a person to create an estate plan is that it can provide a sense of order after he or she has died. In the immediate aftermath of a loved one's death, surviving family may find it difficult to have to manage a disorganized estate. This can be avoided with a well-developed estate plan that can help guide surviving loved ones through the management of the estate. Estate plans should include a will, revocable trust, itemized lists of assets and debts, a list of login information for digital assets and detailed instructions regarding the creator's last wishes.

Business owners can benefit from an estate plan

Small business owners in New York may have particularly strong reasons to think about their estate plans. Several celebrities have died without wills, leaving behind confused beneficiaries and valuable music catalogs. For exampleAretha Franklin's 2018 death without a will came despite the fact that she had an estate worth approximately $80 million. Prince died without a will in 2016, leaving behind a $300 million estate that has still not been finalized due to disputes among potential beneficiaries. The kinds of delays and problems caused when something like a business is not addressed can be devastating to the future of the enterprise as well as emotionally draining to loved ones.

When people don't have a will, their property is distributed according to state law on intestacy. In general, these laws favor spouses, children and parents. Even when people's relationships with their family members are positive and mutually supportive, making a will can help to avoid complicated issues that can arise. For example, in order to satisfy the percentage division under state law, a business could be sold and the proceeds divided. This could be averted by having a will that covers this issue.

Why everyone can benefit from an estate plan

Being too young or being single and childless are some of the common excuses people in New York often use to justify not making estate planning a priority. According to one survey, the majority of millennials don't have a will. While some people may not want to think about what will happen after their death, procrastinating can have potentially serious consequences. For instance, if an individual dies without a will, which is referred to in legal terms as intestate, the state will determine how assets and property are divided. Without a medical directive in place, the default decision is usually to prolong life artificially.

With wills, decisions about how assets are divided can be made proactively, and an executor can be named to ensure that everything is distributed as specified. Single, healthy millennials may be advised to also consider a durable power of attorney, a document that states who is authorized to make financial decisions in the event that an individual is unable to do so. With an advance medical directive, decisions concerning life support and comfort measures can be made ahead of time, or a specific individual can be named to make such decisions.

Tim Conway's daughter petitions court for guardianship

The comedic actor Tim Conway, whose fans in New York may have first encountered in his television roles on "McHale's Navy" and "The Carol Burnett Show", has been overcome by dementia. A dispute about his care has erupted between his wife and his 56-year-old daughter. The daughter wants the right to oversee his medical care and has filed court papers seeking an appointment as his conservator.

Court documents reveal the daughter's concern about the intention of her father's wife to remove him from a skilled nursing facility. His wife allegedly plans to place the 84-year-old actor in another facility where he would lose access to 24-hour care and a speech therapist. The speech therapy is meant to alleviate Conway's difficulty with swallowing. According to his daughter's petition, Conway needs assistance with personal care and eating. If the court approves her guardianship request, she will personally manage her father's medications.

How to incorporate digital assets into an estate plan

The rise of digital assets has drastically changed estate planning for many people. An individual can't simply add a digital wallet to their will as if it was a vacation home in New York or expensive jewelry. They'll need to include quite a bit of additional information so that those assets are quickly handed over to heirs.

While digital assets should be listed just as if they were any other type of valuable, most can't be accessed unless an individual has the correct username and password. That information must be handed over to the executor during the process of developing the estate plan. The executor might also need to access certain websites or email accounts in order to pass along the assets.

Estate planning considerations for single people without children

Many individuals in New York do not have a spouse or children to call upon for help as they age. Nationwide, approximately 19.5 million people age 65 or older live alone. For people who do not have any close relatives, issues involving financial security and long-term care during their elderly years pose extra challenges.

Like most people, singles will want to create a will to record their wishes about the distribution of assets. A will could prevent the state from sending an estate to a distant relative not of a person's choosing. Powers of attorney for financial affairs and health care should be completed as well. Single people might need more time to identify trusted individuals to grant the power to handle money or make health care decisions in the event of incapacity. Married people often name each other, but single people must draw upon other relationships to complete these important documents.

Strategies for transferring wealth to future generations

A parent in New York who is trying to decide how to divide their assets should have confidence in their ultimate decision. This is true regardless of what adult children or other family members may feel. Children are urged to not let the size of their inheritance act as a proxy for the size of their parent's love. Parents should talk with their children and others ahead of time to discuss how assets will be divided.

In some cases, this may be based on what a child or grandchild may need in the future. For instance, a son or daughter who is struggling financially may need more money than another child who has $500,000 in the bank. Parents may also decide that current efforts to help a child who is struggling financially should be taken into consideration when deciding on the size of an inheritance.

Important issues to consider when choosing a trustee

Establishing a trust can provide must-appreciated peace of mind for individuals in New York looking to ensure that important assets are distributed appropriately to a spouse, children, other family members or close friends. One of the most critical steps in establishing a trust fund for the preferred beneficiaries is to determine who will be the trustee. There are some issues anyone setting up a trust may want to consider to improve their confidence when naming a preferred trustee.

Discussing the possibility of being named a trustee with a candidate for this role can be helpful. Some individuals assume that a relative with business or financial experience will automatically be willing and able to handle estate administration responsibilities without asking them if they wish to accept this responsibility. In some situations, the nature of the estate can matter. For instance, it may be preferable to have someone with real estate experience handle an estate largely comprised of real estate holdings.