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Decanting a Trust Can Be an Effective Strategy to Update an Irrevocable Trust

By Alberthe Bernier, Esq., Littman Krooks LLP

In the past, making alterations to irrevocable trusts was an expensive and public process that was generally done through the courts.  In 1992, New York was the first state to enact a decanting statute.  In 2011, this statute was amended, making it easier to alter irrevocable trusts.

Trust decanting is a powerful tool which allows trustees to shift assets from one trust to a new trust. The ability to decant a trust empowers a trustee to extend the term of a trust or push back the age at which a trust beneficiary will have a right to the trust funds, create tax advantages, correct drafting errors, remove trust beneficiaries, and consolidate two or more trusts or create separate trusts.

Decanting is especially helpful in situations where the irrevocable trust has not been updated in response to changes in the law or in a family’s circumstances.  If a trust meets certain criteria, decanting can be done outside of the court system, making it more affordable and private.

Trust decanting can be particularly useful where a beneficiary may be disabled and needs to rely upon government assistance.  There are occasions when a trust is initially created, perhaps by a grandparent or parent for the benefit of a grandchild or child and the beneficiary’s disability may not have been known at the time. Under certain circumstances, the trust can be decanted to a new trust that provides for special needs trust provisions for the beneficiary, which will allow the beneficiary to maintain eligibility for government assistance.

Reviewing your trust documents regularly is important to assure that your documents reflect your family circumstances.  Meet with one of our experts to determine if trust decanting can be helpful to you.

Learn more about our legal services at www.littmankrooks.com or www.elderlawnewyork.com.


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This entry was posted on Tuesday, May 19th, 2015 and is filed under Asset Protection, Elder Law, Estate Planning, Special Needs Planning | no comments | Leave a comment

File and Suspend:A Social Security Strategy for Married & Single Retirees

The Social Security claiming strategy known as “file and suspend” is often used by married couples entering retirement, but it can be useful for single retirees as well.

Most people approaching retirement age are aware that the decision of when to start taking Social Security retirement benefits affects the amount of the payments. Retirees can start accepting benefits at age 62, at age 70, or somewhere in between. The longer the delay, the greater the monthly payments will be. For each year a person waits after full retirement age, the lifetime payout increases by about eight percent.

“File and suspend,” in the context of a married couple, is used to allow a spouse to claim a spousal benefit while the main beneficiary delays collecting benefits. The main beneficiary files for benefits at full retirement age but immediately suspends receipt of the benefits; the spouse can then begin receiving a spousal benefit based on the main beneficiary’s monthly benefits at the time of filing. However, the main beneficiary’s monthly benefit continues to grow due to delayed retirement credits.

The file and suspend strategy also has a benefit for single retirees. A single person may choose to file for retirement benefits upon reaching full retirement age, but immediately suspend receipt. Having done this, the retiree then has the option, anytime before age 70, of receiving those benefits retroactively in a lump sum. While this would result in the retiree losing the delayed retirement credits, it is an option that many people may wish to have available.

Learn more about our legal services at www.littmankrooks.com or www.elderlawnewyork.com.


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This entry was posted on Monday, May 11th, 2015 and is filed under Elder Law, Estate Planning | no comments | Leave a comment

Community Center Offers Programs for Seniors and Children

A new intergenerational community center has opened in White Plains.

The Lanza Family Center for All Ages opened February 24, 2015. It is modeled after the award-winning My Second Home in Mount Kisco, also operated by Family Services of Westchester (FSW). Seniors benefit emotionally, socially and physically from being around children. Rita Bellamy, the director of My Second Home, said that the intergenerational aspect helps seniors experience a sense of purpose and avoid isolation.

The Lanza Center is named for philanthropist Patricia Lanza who provided a $1 million challenge grant. FSW was able to meet the challenge, purchase the building at 106 North Broadway in White Plains, and renovate it to create a warm and inviting community center.

The Center will provide programs for older adults and children, both separately and together. Programming will include adult day services with caregiver support, youth development programs and early childhood education. Children, teens and older adults will participate together in activities such as gardening, cooking, sharing meals, singing songs and participating in special events.

Enrollment in the Center’s programs is now open. Family Services of Westchester also has continuing opportunities for volunteers to participate in its programs, and members of the community can further support the Lanza Center, and honor loved ones, through the buy-a-brick program.

Learn more about our legal services at www.littmankrooks.com or www.elderlawnewyork.com.


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This entry was posted on Thursday, April 23rd, 2015 and is filed under Elder Law | no comments | Leave a comment

Managing the Legacy of a Family Business

There is a lesson to be learned from Tywin Lannister, the influential patriarch of Game of Thrones. Despite amassing great wealth and power throughout this life, his attempts to create a business legacy for his family failed.

A family-owned business is a hard-won commodity and is considered a legacy to be passed from one generation to the next. However, that legacy is often lost in the transition because of poor estate planning. More than 70 percent of family-owned businesses do not successfully survive the transfer from one generation to another.

How can a business owner ensure their plans for the future are successful?  As a first step, he or she should communicate with family members about their intentions for the business. Then, a business succession plan that transfers control and ownership to primary family members (including in-laws or other relatives, if they are involved with aspects of the business) should be established.

The business succession plan may also include details that preserve “institutional memory” to keep legacy reputation intact. Plans should specify who actually owns the business, what advisers are on board to help with the ownership transition, who is in charge of the day-to-day business activities, and what provisions have been put into place for the heirs not actively involved in the business.

The business owner should work with an estate planning attorney to establish this business succession plan. . The estate planning attorney can also assist with plans to ensure that the business has access to a significant cash flow to pay estate taxes, to provide compensation, supervision and training for employed family members, and to establish a buy-sell agreement in place for future sale of company shares or partnerships.

Ensuring that the family business does not fall victim to the same fate as the Lannisters requires a unique combination of proper estate and tax planning, business acumen and common-sense communication with those closest to you. Hiring an experienced estate planning attorney to help put these plans in place is a necessary step in protecting one’s legacy.

Learn more about our services by visiting www.littmankrooks.com.


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This entry was posted on Monday, April 13th, 2015 and is filed under Estate Planning | no comments | Leave a comment

Bill Overhauling Medicare Passes in the House

By Alberthe Bernier, Esq.

Before the House adjourned for a two-week recess, representatives passed legislation overhauling the outdated method for paying physicians who accept Medicare.  Physicians and seniors across America are breathing a sigh of relief, as the bill ensures access to better healthcare services and professionals, many of which quit treating Medicare patients altogether due to the dysfunctional Sustainable Growth Rate Formula (SGR) implemented in 1997.  Littman Krooks Medicare Planning

Here are the highlights of the bill:

  1. The legislation replaces the current model of paying physicians based on the services provided (also known as ‘fee-for-service’) to value or outcome based payment (‘fee-for-value’);
  2. The popular Children’s Health Insurance Program (CHIP), which provides health care coverage for low-income children was extended for another two years; and
  3. The bill requires seniors who make more than $133,500 to pay more for Medicare coverage starting in 2018.

Although the bill will add $141 billion to deficit over a decade, the bill promotes higher quality of care for Medicare patients and long-term sustainability of the Medicare program. The House passed the bill in an overwhelming bipartisan vote of 392-37.  Now the U.S. Senate must pass the bill when Congress reconvenes April 13.

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This entry was posted on Wednesday, April 8th, 2015 and is filed under Elder Law, medicare | no comments | Leave a comment

Don’t Forget Dependent Care Tax Breaks on Your 2014 Return

Littman Krooks estate planning

By Tom Breedlove, Director, Care.com HomePay

As the April 15th tax filing deadline gets closer, those who have put off their taxes until the last minute – and there are a lot of us – are apt to forgetting minor details that can impact our returns. In the household employment world, two commonly overlooked tax-time items for New York families are the federal and state dependent care tax breaks.

To qualify for these, both spouses must either be working or a full-time student and have expenses related to the care of someone they can claim as a dependent. For the federal tax break, families should use IRS Form 2441. They may itemize up to $3,000 for 1 dependent and $6,000 for 2 or more dependents. Most families will receive a 20% tax credit on these expenses, saving up to $600 if they have 1 dependent and up to $1,200 if they have 2 or more dependents. According to 2012 data from the IRS, approximately 420,000 New York families took advantage of this credit and saved an average of just under $600.

The New York state tax credit for dependent care is very similar to federal tax credit. Families can use Form IT-216 and claim the same expenses they reported on IRS Form 2441. The state tax credit for most families will be 20% of the credit they receive from the IRS – meaning they can save up to $120 if they have 1 dependent and $240 if they have 2 or more dependents. It seems like a small amount, but every little bit helps.

Please keep in mind that these tax breaks assume the family is paying their caregiver legally. The IRS and the state of New York only reward those who put forth the effort to do things the right way. The tax breaks exist to help offset the cost of paying employment taxes, which means paying the caregiver “on the books” isn’t really as costly as many people think.

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This entry was posted on Wednesday, April 1st, 2015 and is filed under Estate Planning, Tax Planning | no comments | Leave a comment

The Able Act: Better Economic Future for People with Disabilities

Littman Krooks attorney Amy C. O’Hara, Esq., presented on the Able Act at Arc of Westchester’s Family Resource Day, a day of transition and transformation including seminars, demonstrations, art exhibition opening and a special needs vendor resource fair.

To view our materials from this event, please click on the appropriate link below:

  • The Act Act (a presentation by Amy C. O’Hara, Esq.)

Learn how the able act will create a pathway for a better economic future for people with disabilities. Tax exempt savings accounts can now be set up for maintaining health, independence and quality of life, while protecting eligibility for Medicaid, Supplemental Security Income, and other important federal benefits for people with disabilities.

View Presentation

  • Able Act Passes (by Bernard A. Krooks, Esq., as published in EP Magazine, February 2015 Issue)

The community of individuals with special needs and their family members will have a new tool at their disposal: A new tool with which to maintain a private fund of assets while preserving certain government benefits.

View Article

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This entry was posted on Monday, March 16th, 2015 and is filed under Special Needs Planning | no comments | Leave a comment

How working after retirement affects Social Security

A growing number of people continue to work after retirement, some to supplement their income and some simply to stay active. Most retirees can continue to work without any negative effects on their Social Security benefits.

There is no reduction in Social Security benefits for those who continue to work, as long as they have reached full retirement age. For some, Social Security benefits may actually increase, because benefits are calculated using the highest 35 years of earning.

For people born between 1943 and 1955, full retirement age is 66 years old. For those born in 1960 or later, full retirement age is 67 years old.

Taking Social Security benefits before reaching full retirement age and continuing to work can lead to a reduction in benefits. For those under retirement age for a full year, the Social Security Administration deducts $1 in benefits for every $2 earned above the annual limit of $15,720. For the year in which the individual reaches full retirement age, $1 is deducted for every $3 earned above an income limit of $41,880 in the months before the individual reaches full retirement age.

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This entry was posted on Monday, February 23rd, 2015 and is filed under Elder Law, Estate Planning | no comments | Leave a comment

If You Want to Withdraw from Medicare Advantage

Medicare recipients choose to withdraw from Medicare Advantage for a variety of reasons, including difficulties accessing their provider, coverage problems, premium increases and issues with Part D coverage.

Medicare Advantage enrollees have through February 14, 2015 to withdraw from their Medicare Advantage plan and instead receive Medicare Parts A and B through Original Medicare. During this period, recipients can also join a Prescription Drug Plan (PDP) if necessary. There are some issues that individuals should keep in mind if they would like to withdraw:

  • During the Medicare Advantage Disenrollment Period (MADP), it is not possible to switch to another Medicare Advantage plan – the only option is to go to Original Medicare coverage Part A and Part B. Those who would like to switch Medicare Advantage plans may do so during Fall Open Enrollment, which runs from October through December.
  • Individuals returning to Original Medicare should consider how they might manage the deductibles, coinsurance and copayments they may encounter when seeking medical care and coverage. For example, individuals seeking to purchase a Medigap policy may face higher premiums or a waiting period.
  • Keep in mind, if you drop other coverage (i.e. employer or union health care coverage), you may not be able to reinstate your coverage.

To learn more about these Medicare click here: http://www.medicare.gov/

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This entry was posted on Wednesday, February 4th, 2015 and is filed under Elder Law | no comments | Leave a comment

Important Differences between 504 Plans in Public Schools and Colleges

It is important for students with disabilities who plan to attend college, and their parents, to understand how their legal rights related to their disability will change in a post-secondary education environment.

In public elementary and secondary schools, students with disabilities may receive services under the Individuals with Disabilities Education Act (IDEA) or the Rehabilitation Act of 1973. The IDEA does not apply in the workplace or in post-secondary education, so services available under IDEA, such as an individualized education program (IEP), are not available in college. However, services under Section 504 of the Rehabilitation Act may continue at the post-secondary level.

First, it should be noted that while Section 504 only applies to schools that receive federal funding, most colleges and universities do, and private post-secondary schools that receive no federal funding are still required to provide similar accommodations to students with disabilities, under Title III of the Americans with Disabilities Act.

Section 504 prohibits discrimination based on disability, meaning that the needs of students with disabilities must be met as adequately as the needs of students without disabilities are met. Colleges and universities must provide accommodations for students with disabilities. As a practical matter, this may include accessibility of classrooms, dormitories and other buildings; additional time on tests; substitution of some course requirements; interpreters or readers; adapted computer terminals and other services. Such services must be provided unless a fundamental alteration of the program or an undue financial or administrative burden would result.

Students with disabilities going from high school to college will need to advocate for their own needs more than ever. If the university has a disability support office, the student will need to make contact with that office to explain his or her needs. If a student has a history of accommodations in high school, then documentation of this should be provided to college or university officials. Most of all, students will need to be persistent, keeping a record of who they talked to, and continuing to press the matter until the needed accommodations are received.

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This entry was posted on Friday, January 16th, 2015 and is filed under Elder Law | no comments | Leave a comment