Do I need a Will ? – Essential Estate Planning

Do I need a Will ? “I don’t own anything.”  “It’s too complicated.”  “I’m too young to think about a Will.”  I have heard all of these reasons and more for not adequately preparing an estate plan.

“Do I need a Will ?” is a very important question and this article will shed light on your Will’s importance and what happens if you don’t have one. While it may trigger unwanted emotions, having your “affairs” in order is the best gift you can give to your family and friends.

What happens if you do not have a Will? For the family and friends of those who have died without indicating their wishes for the disposition of their assets after death, not having a Last Will and Testament can be a nightmare.  State law determines where assets go when someone dies without a Will and the state doesn’t always get it right.  If you are married, your spouse receives your estate.  If you are married with children, most states direct half of your assets to your spouse and the other half to be divided among your children.  This may or may not be appropriate depending on an individual’s wishes and the ages of their children.estate planning trust, estate planning gay estate planning, lgbt estate planning, glbt estate planning, Wills, trusts, gay family law

If you do not have children, the state will look to your closest living legal relative as a recipient of your estate. This is where it gets tricky.  In most cases, a surviving parent is next in the line of succession, then siblings and their children.  If you do not have siblings, nieces or nephews, then the court will look out to your aunts, uncles and cousins.  The reality of this scenario is that someone who you may have never met, or had a relationship with may be the beneficiary of your estate if you do not plan carefully.

How does a Will work? A Last Will and Testament is the foundation for all Estate Plans and it passes only probate assets, or assets that are owned    in one person’s name without a designated beneficiary.  Examples of probate assets include land, homes, cars, personal belongings and bank accounts.  A Will does not cover non-probate assets.  A non-probate asset is something that is owned jointly or an asset with a designated beneficiary.  Examples of non-probate assets include jointly held real property, a joint bank account, a life insurance policy with a designated beneficiary and an IRA, 401(k) or other investment account with a designated beneficiary.  You may also name a “TOD” (transfer on death) designation for a bank account you own solely in your name.

The above described assets pass outside a Will, the benefit of which is a faster and easier transfer of someone’s money or property when they die. If, however, you are single and there is no appropriate person to name as a designated beneficiary, it is imperative that you have a Will to pass your property where you want it to go upon your death.

What else does a Will do? A Last Will and Testament, in most states, is the only document that will allow you to name a guardian for children if something happens to both legal parents.  If you have young children, it is critical that you have a Will to state who you want to care for them if anything were to happen to both parents.  A Will also allows you to name an executor.  An executor is the person who will be in charge of marshalling your assets, identifying your debts and ultimately paying them off and making a final distribution according to your wishes as written in the Will.  If you die without a Will, your closest living legal relative will be the first choice for an executor.  Only you know whether this would be appropriate or not.

What happens after I die? If you die with a Will, the executor named in your Will petitions the probate or surrogates court in the county where you lived to receive authorization letters from the court.  This process is called “probate” and it ensures that a Will has been drafted and executed correctly, as well as managing the asset distribution.  Authorization letters will allow you to set up a bank account in the estate’s name and start paying any bills that are due.  If an executor must spend their own money to start a probate proceeding, it will be reimbursed prior to any distribution of assets.

Each state is different and will have a different time line and fee structure, so it is imperative that you meet with an attorney in your area to discuss the process in detail. If you find yourself asking, “Do I need a Will ?,” now you know better how to answer that all important question.
For more information, visit www.timeforfamilies.com or email me at Anthony@timeforfamilies.com.

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Unmarried Estate Planning Information

While America has transformed in its understanding of marriage equality over the last five years, unmarried estate planning is still vital for those who, by choice, remain unmarried.

Unmarried estate planning was the bulk of my practice prior to marriage equality. In 2010, I published a law review article on estate planning for unmarried couples discussing just this material.  Finding the loopholes that would provide protection for unmarried couples is an art form and many today who are unmarried by choice, must know these rules and regulations that may negatively affect them without proper planning.

What unmarried couples must know – The law protects married couples in a way that is truly unique.  While some argue against making marriage the benchmark for protection, it nevertheless remains the standard in America.  Without proper planning, a surviving unmarried partner can face a number of pitfalls that could have been prevented with careful planning.  The main categories of awareness center on death, property, health care and asset transfer.tips for estate planning

Death – When an unmarried person dies, their Will is the operative document for distribution of assets upon their death.  If that unmarried person dies without a Will, the state in which they live will decide through the law of intestacy who receives from their estate.  Blood relatives are given priority.  In many states, New York included, if an unmarried person dies with a Will, their closest living legal relatives are also required to consent to the probate of the decedent’s Will.  The emotional and financial costs of these notification provisions can run high depending on the legal family of the decedent.

To best prepare for these issues, maximize your non-probate assets, or assets that are titled solely in the name of the one unmarried partner.   Create “POD,” or payable on death, designations for your bank accounts so they don’t have to go through probate.  Place real property titled in one unmarried partner’s name into a trust, which removes it from probate.  Also, verify all of your non-probate asset designations, such as life insurance beneficiaries, IRA beneficiaries and 401(k) beneficiaries.  These assets will pass directly to whomever you designate, as long as you make a designation.  If you do not, those assets pass into your estate and must go through the probate process.

Real property – You cannot discuss unmarried estate planning without talking about real property ownership.  If there is one legal owner of a house or apartment, then upon death the property will pass either through the Will of the decedent unmarried partner, or through a trust if they were savvy enough to create one.  If you purchase the property together, make sure to hold the title as Joint Tenants With Right of Survivorship.  This will ensure that the property passes to the surviving joint owner without having to go through a probate or an administration proceeding to pass to the surviving partner.

Health Care – One of the most important aspects of unmarried estate planning is addressing one another’s health care needs.  Each partner should have a carefully crafted Medical Power of Attorney, or Health Care Proxy, and a Living Will.  These documents will ensure that your individual wishes are met given an end of life situation and that your partner will make the medical decisions necessary if you cannot.

Asset Transfer – One of the real benefits of marriage is the unlimited transfer of assets between spouses, both during life and after death.  If an unmarried partner wanted to add their partner’s name to the deed of a home or apartment, they would have to file a gift tax return for half the value of the property.  If, however, they were married and did the same transaction, no gift tax return would be required.  Likewise, gifting of over $14,000.00 to any one person who is not your spouse in a calendar year also requires the filing of a gift tax return.

For more information about unmarried estate planning, please visit www.timeforfamilies.com or email me at Anthony@timeforfamilies.com.

 

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Living Wills and Health Care Proxies

Living Wills and Health Care Proxies, sometime know as Medical Powers of Attorney, are vital aspect of an individual’s, couple’s or family’s estate plan. Many overlook these critical documents, but it may be at their own expense.

Why are these documents so important? – No estate plan is complete until it addresses unexpected medical crises which could leave someone alive, but in a compromised mental or physical condition.  Many people feel uncomfortable even thinking about these situations; however, they are exactly the reason why comprehensive estate planning is so important, including Living Wills and Health Care Proxies.

Without Living Wills and Health Care Proxies, a person may not be able to decide for themselves what medical decisions can be made about their condition or who can make them.guardianship, Gay Estate Planning, estate planning for same sex couples, estate planning law firms

What are Living Wills and Health Care Proxies – A Living Will is a witnessed and notarized document that states exactly what medical measures a person wants or does not want if a specifically outlined medical conditions arise.  It is important to note the Living Wills only apply to medical conditions which are terminal, with little or no hope of recovery.  If a doctor or hospital can get you better, they will use everything at their disposal to do so.  Living Wills address those situations where there is no hope for recovery, then you are empowered to decide what treatments a doctor or hospital to perform.

A Health Care Proxy, or Medical Power of Attorney, allows a person you designate to have access to medical records and make specified medical decisions for you. Comprehensive health Care Proxies will also allow the designated person to look into your medical file if needed to make the best decision.  This is accomplished by including a HIPAA (Health Insurance Portability and Accountability Act) waiver which authorizes hospital; and doctors to share your medical information with the proxy you have designated.

Other Considerations – It is also important to discuss with your Health Care proxy what your wishes are as defined in your Living Will.  You should never designate someone without first ensuring that they are capable of and comfortable with carrying out your end of life wishes.

If you do not have a Living Will and are unable to convey your wishes directly, a hospital has an obligation to keep you alive, whether that is your desire or not, unless your closest living legal relative (in most states) authorizes them otherwise.

The most noteworthy example of how not having a Living Will can become a nightmare was the Terri Schiavo case in Florida. Ms. Schaivo did not have a Living Will when she suffered a massive heart attack in 1995 and was declared by her doctors to be in a persistent vegetative state.  He husband petitioned the court to have her feeding tube removed and her parents opposed that petition.  In all, the Schiavo case involved 14 appeals and numerous motions, petitions, and hearings in the Florida courts; five suits in federal district court; extensive political intervention at the levels of the Florida state legislature, then-governor Jeb Bush, the U.S. Congress, and President George W. Bush; and four denials of certiorari from the Supreme Court of the United States. (procedural history courtesy of Wikipedia.)  All of this could have been prevented if she had a Living Will.

If you are incapacitated and cannot convey your wishes to a medical facility about your treatment, they will look to your Medical Power of Attorney. If you do not have one, the facility will look to your closest living legal relative for guidance.  This person may or may not be someone you wanting medical decisions for you.  The legal priority that must be followed in most states is a spouse, an adult child, a parent, a sibling, an adult niece or nephew, an aunt or uncle and finally, a first cousin.

Living Wills and Health Care Proxies are foundational elements of a person’s estate plan. These are also often the documents most critical to elderly individuals or those with preexisting medical conditions.

For more information about Living Wills and Health Care Proxies, or other healthcare documentation, contact Anthony M. Brown at Time for Families and speak to a specialist family lawyer to secure you and your family’s future.

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Family Estate Planning

Family estate planning addresses the greatest concern of most families with younger children: ensuring their stability and security if something happens to a parent.

No one wants to think about a worst case scenario; however, that scenario will become much worse if there isn’t  family estate planning in place. The good news is that once it is completed, parents do not have to worry live in worry anymore.

There are many types of family estate planning and I will review several that may be helpful to your family. They include: basic estate planning, trust planning, guardianship planning and securing all parental rights to a child through adoption, if applicable.

Basic Estate Planning – In most states, a valid Last Will and Testament is the only legal way to name a guardian, other than the other biological or adoptive parent of a child, when one parent dies.  It is critical to have a Will in order to make this designation.  Most couples are concerned about something called a “simultaneous death event,” which is defined as a single event, or series of related events, that takes the lives of both parents.  A competent attorney will be able to prepare for this possibility in a Last Will and Testament, the cornerstone of a basic estate plan.estate planning , estate planning trust, glbt estate planning, lgbt estate planning, gay family law, wills, trusts

Basic estate plans should also include health care documentation known as Living Wills and Medical Powers of Attorney, or Healthcare Proxies. A Living Will states exactly what measures a person wants or does not want if certain specifically outlined medical conditions arise. It does not, however, authorize another person to make those decisions for the Principal of the Living Will.  A Medical Power of Attorney allows a designated person to have access to medical records and make specified medical decisions for the Principal.  For more information on basic estate planning, read my article here.

Trust Planning – A family estate planning trust is useful for parents who may not want to pass significant amounts of money to their minor children upon the parent’s deaths.  Trusts allow a parent to spread payments out over a longer period of time, appoint a trustee to manage those payments, provide for investment suggestions or advisors and include provisions to protect a beneficiary child if they have a substance abuse issue.

Trusts can also be useful tools to either bypass the probate process, which in many states can be long and complicated (a revocable trust), or to avoid estate taxation in the form of an irrevocable trust. For more information about how a family estate planning trust can help your family, read my article here.

Guardianship Planning – There are two general types of Guardianship Designations that are important parts of any estate plan.  The first is an adult Guardianship Designation, the second, a Guardianship designation for your children.  A child’s Guardianship Designation allows the parents of a minor to legally give another person the right to be designated by a court as the guardian of the child’s property and person.

Unless you are naming your child’s other biological or legal parent as their guardian, you must name a guardian in your Last Will and Testament. Once named, the designated guardians will still have to go to court to be legally designated the child’s guardian.  Without your nomination in a Will, that person would not be able to seek guardianship.

Securing Parental Rights Through Adoption – While most parents are secure in their parentage to the children living in their homes, many situations do not fit into that norm and basic protections become a vital part of family estate planning.  Same-sex couples must secure rights to the children born into their relationships through parentage order or second or step parent adoption.  Homes where children are living with step parents must pay particular attention to naming a guardian should both biological parents die.  The second or step parent adoption process in New York  is described in detail in this article.

When family estate planning becomes a priority for you, please consider me a resource. For more information on family estate planning, contact Anthony M. Brown at Time for Families and speak to a specialist family lawyer to secure your and your family’s future.

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Estate Planning Basics for Gay Couples

What are the estate planning basics that all gay couples need to know? This article will give you the information you need to take those first steps toward protecting your family.

Some of the most common errors that gay couples make regarding estate planning basics can be corrected fairly easily. Before we discuss these, it is important to know that over half the American public, regardless of orientation, do not have a Will. The number one reason I hear is, “I don’t have anything so why do I need a Will?” The truth is that most people, when they know what the state requires when someone dies without a Will, realize that they have more than they think and that they want to decide what happens when they die.

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Maximizing non-probate assets – The rule of estate planning basics is to know what assets a Will passes to your desired beneficiary. Wills cover probate assets, or assets held solely in your name. Examples include real property, bank accounts and personal belongings. Personal belongings are key because many people do not like the idea of a distant relative rooting through their most cherished items after death. Wills do not pass non-probate assets, or assets held jointly with someone else, assets held in trust for someone else or any asset that has a designated beneficiary, like an insurance policy, a 401(k) or an IRA retirement plan.

Property ownership – The most valuable asset for many people is a home, condominium or cooperative apartment. If you own that property jointly as a married couple (Tenants by the Entirety) or with someone you are not married to (joint tenants with right of survivorship), then that property will pass directly to the surviving co-owner. If, however, you are not married and own the property with another person and the title to the property simply states both names, without the words, “joint tenants with right of survivorship,” then your half interest in the property must pass through your Will. This form of ownership is called “tenants in common.” One of the most estate planning basics is to verify on your title document exactly how you own that property with another person.

Documents everyone should have – While marriage provides some very important protections for gay couples, it is always advisable to have a comprehensive estate plan to make sure that you have control over you body and your assets. The top 6 document list of estate planning basics include the following:
• Last Will and Testament – A Last Will and Testament allows the drafter of the document to control the distribution of their assets upon death.
• Durable Power of Attorney – This document allows the drafter to authorize another person to make financial decisions for them. It authorizes, among other things, payment of debts, collection of payments, redistribution of assets, withdrawal of assets from a bank account and the sale of property.
• Designation of Guardian for Property Management and/or Personal Needs – If a person were to be judicially declared incompetent or incapable of managing their property or themselves, the court would appoint a guardian for that purpose. The guardian is usually a family member. This document allows the Principal to designate who that guardian would be.
• Living Will – A Living Will states exactly what measures a person wants or does not want if certain critical and specifically outlined medical conditions arise.
• Medical Power of Attorney / Health Care Proxy – This document allows a designated person to have access to medical records and make specified medical decisions for the Principal.
• Priority Visitation Directive – A Priority Visitation Directive specifies who the Principal prefers to have priority visitation privileges, usually over family members. This is particularly important if you are no married.
• Affidavit of Burial or Cremation – This document ensures that a funeral director or funeral home administrator follows the instructions given them by the person designated in the affidavit.

Without estate planning basics – If you are married, now that marriage equality is the law of the land, certain protections are guaranteed. Your assets will pass to a surviving spouse, and you children, in defined percentages according to the state in which you live. Your spouse will be allowed to make medical decisions for you, however, financial decision making requires an executed Durable Power of Attorney. If, however, you want to make sure that specific items go to anyone other than your spouse and/or children, you must have a validly executed Last will and testament.
When you are considering the estate planning basics that all gay couples, and individuals, should have, please consider me a resource. For more information the basics for estate planning for gay couples, contact Anthony M. Brown at Time for Families and speak to a specialist family lawyer to secure your and your family’s future.

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Gay Estate Planning: What You Need To Know

Gay Estate Planning – With an estimated 8 million adults within the USA identifying as gay, lesbian, bisexual or transgender, it is imperative that the facts are clear and that there is help and assistance available when considering the issue of gay estate planning.

Since the Supreme Court’s Ruling to make marriage legal for everyone across the whole of America, there has been an impact on the legislation regarding gay estate planning, which is quickly turning into traditional estate planning. Knowing exactly where you stand legally is of the utmost importance to you and your loved ones in case of the unexpected and at this point in time, there are several beneficial legal changes for same sex couples that you can use when thinking about your end-of-life plans and the arrangements for the division of your assets after- (Click here for a list of necessary documents) be smart and follow these guidelines to help you in your gay estate planning:

Maximize Your Company Retirement Plans

When one spouse dies, the other is now legally entitled to be the sole primary beneficiary of any qualified retirement plan (federal law states that this may be a 401(k); defined-contribution plan; defined benefit plan or Keogh plan for self-employed people, but not an IRA). They may therefore roll over the remaining plan to their own without having to take the minimum or lump-sum distributions until the year that the surviving spouse would usually take them (age 70.5 years in most cases). You now need your spouse’s written permission in order to name anyone else as a beneficiary for ERISA qualified retirement plans. Prior to retirement, employer benefits previously only available to heterosexual couples are now available to all married couples, and same-sex couples looking at gay estate planning should ensure that they are receiving the spousal benefits they are entitled to. To be on the safe side, always name your spouse as your primary beneficiary on your company’s beneficiary designation forms.

Ensure Your Parental Rights

Although a lot of the law has changed as a consequence of the Obergefell marriage ruling, one area where there is still contention is child guardianship. Depending on the State you reside in, you may not be regarded as the legal parent of a child even if you were married to their biological or adoptive parent. Second parent or step parent adoption is highly recommended in these cases to ensure the emotional, legal and financial security of the child and the upholding of the parental rights of the surviving spouse. Anthony Brown at Time For Families specialises in gay estate planning and family law and can help with any questions or concerns you may have about the legality of your parental status.

Take Advantage of Portability

Forbes goes into detail about this legal quirk along with ‘gift splitting’ in this article that was written after the Supreme Court declared the same-sex marriage ban unconstitutional:

This is the ability of widows and widowers to add the unused estate tax exclusion (now $5.43 million) of the spouse who died most recently to their own. The concept was introduced by the 2010 tax law (although the term was invented by tax experts and does not appear in the legislation). Portability was made permanent by the 2012 tax law.

To take advantage of portability, the executor handling the estate of the spouse who died will need to transfer the unused exclusion to the survivor, who can then use it to make lifetime gifts or pass assets through his or her estate. The prerequisite is filing an estate tax return when the first spouse dies, even if no tax is owed. This return is due nine months after death with a six-month extension allowed. If the executor doesn’t file the return or misses the deadline, the spouse loses the right to portability. (See this post, “The Deadline Every Married Person (And Financial Advisor) Needs To Know About.”)
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Use Your Gift-Splitting Rights

 Currently, you can give up to $14,000 each year to as many recipients as you would like without incurring gift tax. Spouses can combine this annual exclusion–a process called gift-splitting–to jointly give $28,000 to any person tax-free. Spouses can gift-split by giving $14,000 each, $28,000 from a joint account or $28,000 from one of their individual accounts. These restrictions apply whether you make outright gifts to individuals or put the funds into trusts for their benefit.

Any gift that’s more than the annual exclusion counts against the lifetime gift tax exclusion – the amount that each individual can give away during life without triggering gift tax. Once you have passed the limit, which is currently $5.43 million, gift tax of up to 40% applies. Couples can also gift-split with their applicable exclusion amount and together transfer up to $10.5 million through lifetime gifts.

It is essential for those considering gay estate planning to research as much as they can on the issue. However, the information available can often be overwhelming or confusing, or you may not know what action to take once you have made decisions on these matter. For a reputable and trustworthy attorney in New York who can help with family and estate issues, call Anthony M. Brown, head of Nontraditional Family and Estates division of Albert W. Chianese & Associations, at 212-953-6447 or email questions to Brown@awclawyer.com.

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