Previously, only probate assets were subject to an estate recovery of Medicaid costs. But now that joint accounts, annuities, life estate interests in deeds, and other assets are now subject to estate recovery, individuals and their loved ones need to get legal guidance to review their estate plans and protect their assets even more. The changes in New York are due to budget laws that were passed earlier in the year.

Since these regulations are so new, individuals should seek a qualified elder law attorney and estate planning attorney. If you already have a trust or deed with a life estate, a skilled estate planning lawyer can review your existing plans and assets too.

Littman Krooks LLP counsels individuals and families on how to access government benefits such as Medicaid while protecting assets. Our New York City, White Plains and Fishkill estate planning attorneys and elder law attorneys are accomplished in comprehensive estate planning including these new regulations, probate matters, and asset protection. To learn more about New York estate planning, visit http://www.littmankrooks.com/estate-planning/.

Being unprepared can particularly affect women more as they are often called on to be the caregiver and deal with health and financial problems of their own later on in life. When women can get education and legal guidance to prepare for their retirement and long-term care needs, they can lessen the risk of their golden years being a difficult time.

Having a skilled estate planning attorney review assets, health care needs, and end of life wishes can help women feel confident about the years ahead. Getting legal guidance early on will establish a roadmap to show a woman how to save for a comfortable retirement, prepare documents with the input of family members, and help a senior live more independently.

Littman Krooks LLP counsels individuals and families to create appropriate estate plans, plan for long-term needs and government benefits, and protect assets. Our New York City, White Plains and Fishkill estate planning attorneys and elder law attorneys are accomplished in asset preservation, trusts, and estate planning. To learn more about New York estate planning, visit http://www.littmankrooks.com/estate-planning/.

Unless a doctor has cleared the patient and has informed all parties in a sufficient manner, a CHHA cannot cut services without warning. If a CHHA is illegally doing this, they can receive violations for not adhering to state regulations and policies. Individuals and their loved ones can seek to have a fair hearing about the issue. Until a decision is made at the hearing, home health care must continue.

Some CHHAs are blaming the changes due to Medicaid payment cuts or state budget constraints. But state law specifically says that, “Agencies may not discriminate against a patient based on source of payment, and may not diminish nor discontinue services solely because of a change in the patient’s source of payment.” Around-the-clock care is still available for patients who receive a doctor’s orders for this type of care.

When patients are able to complete daily tasks on their own again and a doctor has approved this, a CHHA must follow defined procedures to discharge the patient from the home health care plan. This is also a critical component of the Medicaid home care procedures.

People who have had services unjustly cut or diminished need to contact a New York elder law attorney or New York special needs attorney. New York law firm Littman Krooks LLP excels in helping the elderly and people with special needs get their present and future needs upheld.

Our New York City, White Plains or Fishkill Elder Law and Special Needs attorneys have substantial experience in standing up for your rights. To learn more, visit www.elderlawnewyork.com.

IRAs vary depending on which style you have. Roth IRAs are not tax-deductible and when it is time to withdraw the money at retirement age, taxes will not be taken. Individuals are not forced to take monies out at any age. And with a Roth IRA, your heir can withdraw monies tax-free over their lifetime. A traditional IRA is tax-deductible and withdrawals are subject to income tax. Minimum distributions must start at the age of 70 ½.

Naming your beneficiary is the number one priority, not only when the IRA is set up, but modifying it as necessary when big life events happen. Especially for individuals who want to give monies to a child with special needs, minor children, or other special circumstances, an IRA can designate a trust as a beneficiary. Proper documentation with the assistance of an estate planning attorney will ensure that the monies can go to a child with special needs and still maintain his or her government benefits.

Littman Krooks LLP counsels individuals and families to minimize taxes, probate expenses, and carry out the legacy they want to leave to their beneficiaries. Our New York City, White Plains and Fishkill estate planning attorneys and elder law attorneys are accomplished in asset preservation, trusts, and estate planning. To learn more about New York estate planning, visit http://www.littmankrooks.com/estate-planning/.

People often incorrectly assume they will outlive their pet, or that a friend or family will take care of their pet when they are gone, according to Anne Culver, director of Disaster Services for the Humane Society. Formal provisions can ensure a pet will receive proper care in a loving home after its owner has passed away.

It is important to outline a temporary plan for a pet before even drafting a long-term plan. Estate plans can take time to carry out, especially if they are contested, but pets need daily care and immediate attention. A designated friend, family member or neighbor can ensure a pet’s needs are met while an estate plan is being carried out.

Formal, long-term arrangements for a pet can be created with the help of a lawyer in the form of a special will, trust, or other document. When selecting a caregiver, seniors should consider close family or friends who have met the pet and who have successfully cared for a pet of their own. If an estate plan includes more than one pet, they should be kept together, especially if they have bonded. Seniors should keep in contact with potential caregivers over time to ensure that their circumstances have not changed, and they are still willing to care for the pet.

In the event that a caregiver cannot be found, the executor of a will can be authorized to find a satisfactory new home for a pet. This may take time, so careful instructions and proper funding are paramount. An estate plan can include funding for a pet’s temporary and permanent expenses.

A trust for a pet may also be set up as an alternative to a will. Unlike a will, which only takes effect upon death, a trust goes into effect as soon as a senior becomes incapacitated. This means that a pet can be cared for immediately.

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To learn more about New York elder law, New York estate planning, visit http://www.elderlawnewyork.com or http://www.littmankrooks.com

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The results were released just days before World Elder Abuse Awareness Day, a worldwide effort to bring attention to elder abuse and neglect that takes place annually on June 15.

The study warned that women between the ages of 80 and 89 who live alone and require some type of outward assistance are the most targeted victims of financial abuse in the United States. Men between the ages of 30 and 59 accounted for 60 percent of crimes against the elderly.

According to the study, 51 percent of all instances of financial abuse of the elderly are crimes committed by strangers. Approximately 34 percent come from family, friends or acquaintances. This figure is a decrease from the estimated 55 percent in 2008. Crimes classified as “scams” committed by strangers accounted for 28 percent of all financial abuses, business-related exploits made up 12 percent, and Medicare and Medicaid fraud accounted for 4 percent of cases.

The study found that the majority of cases involved strangers who exploited seniors with visible vulnerabilities, such as the use of a cane, a handicap tag hanging in a vehicle, or clear signs of confusion. These cases tended to involve physical assaults, purse snatchings or cons.

When family or friends were involved in elderly abuse, the study found that most cases involved forged checks, stolen credit cards, drained bank accounts, and transferred assets.

MetLife conducted the study by analyzing news articles that referenced financial abuse of the elderly and extrapolating data from the findings.

To learn more about New York elder law, New York estate planning, visit http://www.elderlawnewyork.com

Most of them, at some point, will develop a chronic disease or disability. So who will call the  insurance company or ensure that they’re taking their medication?  Most in-home care for the elderly is performed by family members. Hospital stays are getting shorter, driven by cost-saving initiatives, making it even more likely that these seniors will need outside help at some point in their lives.

Their options include friends, paid caregivers and government-sponsored social services. There may be an increased need for long-term care insurance to cover in-home, as well as nursing home, services. And more advance directives are likely to designate friends as health and financial decisionmakers.

Stories are beginning to appear about women building networks of close friends to share household and home care costs, to advocate for one another, and to provide the emotional support that might otherwise come from a spouse or child.  So far, it appears, men have  been less likely to test such situations.

One problem is that such measures are largely unprotected by law.  The Family Medical Leave Act, for instance, provides no benefits to individuals who may wish to care for a grievously ill friend.

There is also little guidance on how to financially structure such mutually supportive arrangements. There’s an emerging movement, though, that seeks to change that.  Some legal scholars are  espousing the establishment of “friendship law,” which would confer certain rights upon “designated friends”  who play a significant caregiver role—including hospital visitation,  tax breaks and claims to an estate if no will has been established. This is, to say the least, controversial.

On the other hand, when the nuclear family can’t provide an answer, what sort of “caretaking community” can step in? There’s  research to support the important role that friends play in the aging process.  Studies indicate that, especially for seniors, having friends can improve both physical and mental health.  It reduces stress, correlates with better immunity and may even be a factor in women’s longevity, given their .greater likelihood of having strong social networks. Ethan Leib, who teaches law at the University of California at Hastings, points to public savings that accrue when friends step in during illness and other emergencies.

Boomers have repeatedly changed our culture. Although childless seniors would seemingly be at greater risk than others, research indicates that –so far—they do not receive less care or enjoy life less than their counterparts.

Do you know someone in this situation? How is that individual planning for the likelihood that, at some point, outside help will be needed?

For more information, visit www.elderlawnewyork.com or www.littmankrooks.com.

Parents of a child with special needs child often struggle with how to treat all their children equitably. This can be difficult, since a child with special needs child generally requires a great deal of financial support. As such, parents must also consider how to make sure there are sufficient funds available at their death to care for the child with special needs.

Finally, parents of a child with special needs must also consider the best way to provide for the proper management and distribution of an inheritance for that child, through a testamentary or inter-vivos third-party supplemental needs trust. A testamentary trust is one created under the terms of the parent’s will, while an inter-vivos trust is created by the parents during their lifetime.

Parents do not have to face these challenges alone. An experienced special needs attorney can help parents work through each of these issues.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit Littmankrooks.com.

When you receive an inheritance, you will have to consider the effect this will have on your taxes. Your inheritance may incur liability for property taxes or increase your own estate so that it will be subject to estate taxes. While you are not required to pay income tax on the principal inheritance, you will have to pay income tax on the income generated by the inherited funds. Especially if the inheritance is substantial, you may want to consult an estate planning attorney to discuss the tax implications.

In addition, you may be the nominated guardian of minor children or a nominated trustee responsible for holding assets in trust for their benefit. Also, your inheritance may be held in a trust of which you are the beneficiary; your receipt of the assets is subject to the terms of that trust. These terms can sometimes be confusing and you may need an attorney to help you sort through the technical trust provisions. If you do not get along with the appointed trustee, you may need mediation or even your own estate planning attorney.

To learn more about New York elder law, New York estate planning, or New York
Special Needs visit http://www.littmankrooks.com

(1) A last will and testament.

(2) A general durable power of attorney (“GDPA”). This document designates an agent to act on an individual’s (here, a parent’s) behalf with regard to financial affairs. Parents’ GDPA should allow their agent (designated in the GDPA) to make discretionary non-support distributions to, or for the benefit of, the child with special needs and to establish a special needs trust (SNT) for the child.

(3) A revocable living trust. During a parent’s period of incapacity, the parent’s revocable living trust should contain language that permits the trustee to make discretionary non-support distributions to, or for the benefit of, the child with special needs. Upon the parent’s death, the child’s inheritance should be distributed to a third-party SNT previously established by the parent for the child’s benefit.

Having all of these documents in order will make the transition of care easier for the child and a new caretaker and/or guardian.

To learn more about New York
elder law, New York estate
planning, or New York
Special Needs visit href="http://www.littmankrooks.com">http://www.littmankrooks.com.

Living trusts are one of the best options for same sex couples because they provide the following benefits:

• Living trusts will give one partner the authority to handle the other’s assets in the event that one of them becomes disabled.

• Trusts offer more security than wills because they are harder to challenge, do not require that a notice of proceeding be sent to the  closest heirs, offer privacy since they are not part of a public record, and do not cause the delay in accessing funds that wills sometimes do.

• Putting one partner’s name on the other’s assets, or establishing joint tenancy, is not as advantageous as establishing a living trust. With joint tenancy, one partner may be held responsible for the other partner’s debts and liabilities. Also, with joint tenancy a partner would lose control over these assets once the other partner has passed away.

• Under New York law, you can designate in your living trust who you want to be responsible for your funeral arrangements.

Without proper estate planning, GLBT couples can encounter significant problems, as they may be legally precluded from having any role in the decision-making related to a partner’s care, from managing his or her affairs, or even having access to the incapacitated partner. Creating a living trust will allow GLBT couples to provide for the security and future of their partners.

Learn more at http://www.littmankrooks.com.

This repeal has the potential to affect the estate plans of millions of Americans, as wills and trusts that were once properly prepared may no longer provide protection for spouses or other beneficiaries upon the death of a family member. The lawyers at Littman Krooks LLP have carefully studied the potential impact of the repeal of the Federal Estate Tax and encourage attendance for those who want to ensure that their estate plan is not obsolete.

The seminar will be offered in two sessions on Wednesday May 12, 2010, at the Duchess County Regional Chamber of Commerce in Poughkeepsie, NY. Registration for the morning session begins at 9:30 a.m. in Room 400. The morning session will be held from 10:00 a.m. to 11:00 a.m. Registration for the afternoon session begins at 3:30 in Room 400. The afternoon session will be held from 4:00 p.m. to 5:00 p.m.

For families whose loved ones die in 2010, the repercussions of the Federal Estate Tax repeal could only add to their grief at the passing of their loved one. The seminar will cover the challenges facing estate planning in 2010 and the consequences of this unusual appeal. This appeal has created unprecedented uncertainty in the world of estate planning, and the lawyers at Littman Krooks LLP wish to offer their guidance in these uncertain times.

Attendance to this event is limited, so those interested in attending must reserve a place by phoning Melissa Hayn at 845-896-1106 or emailing mhayn@littmankrooks.com.

For more information on the firm, visit www.littmankrooks.com. Littman Krooks LLP offers legal services in several areas of law, including elder law, estate planning, veterans’ benefits, special needs planning, special education advocacy, and corporate and securities.

When designating a guardian, it is important that he or she understand your family’s unique circumstances. You will want to choose a person who knows the details of your family’s adoption and is willing to maintain the lifestyle that you have chosen for your adopted child. It may be a good idea to leave the designated guardians documentation that provides all the details of your child’s adoption. Also, you must make sure that you choose a guardian who is comfortable with the terms of your adoption. If, for example, you are in an open adoption, then you will want to choose a person who is open to maintaining this relationship with the child’s biological parents.

If you have an adopted child, particularly if it is an open adoption, the need to establish trust is extremely important, as there may be a number of people outside your immediate family, such as the child’s birth parents, who have a direct interest in your child’s life. Holding assets for your child in a Trust under the control of a trustee, whom you have chosen, will help to protect your child’s interests and will ensure that your assets will be used directly for your child’s benefit.

An adopted child only has rights to your estate once the adoption has been finalized. The length of time it takes to finalize an adoption depends on where the adoption was initiated, as well as a host of other factors. This process can take anywhere from six months to several years to complete. In the event that you pass away before this process is complete, the child would not be entitled to any of your assets. Once you begin the adoption process, you may wish to consider amending your Will to include your adopted child. This way, your Will can include specific language that categorizes the adopted child in the same manner a biological child or a child whose adoption has already been finalized.

Caring for an adopted child may require you to “put some extra thought into” a number of special provisions. If, for example, you adopted a child internationally and wish to expose the child to his/her home culture, then your Will and Trust should reflect these desires. In order to ensure that these wishes are carried out, you should consider making provisions in your Trust that specify your desires.

Consulting with an attorney who specializes in estate planning will help you to consider your options and can help you make the right choices for your family.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit Littmankrooks.com.

Community Living Centers offer veterans both short-term (less than 90 days) and long-term (more than 91 days) stays. To be eligible for short-term stay in a CLC, a veteran must be enrolled in VA health care. During a short-term stay, veterans receive a variety of services including: respite care, rehabilitation, hospice, skilled nursing, and maintenance care for those waiting for placement in the community. Long-term stays are available to enrolled veterans who need care for the term of their lives or for an extended amount of time due to a service-related disability.

State veterans homes are owned and operated by the states. States must petition the VA to receive a portion of the construction costs and to be recognized as a state home. Once a home has been recognized, the VA pays a portion of the per diem cost as long as the home continues to meet VA standards. States are entitled to establish their own eligibility requirements, as well as to determine which services will be offered for short- and long-term care. Some homes may offer specialized services to veterans.

Veterans can also receive nursing home care from some community nursing homes that have established contracts with the VA. These partnerships allow veterans to receive long-term nursing home care in their own communities so that they can stay near their loved ones.

Placement in any of these programs requires that a potential resident be medically stable, have sufficient functional defects to make inpatient nursing home care necessary, and receive an assessment by a medical provider that states institutional nursing home care is necessary. In addition to this, each potential resident must meet the requirements of the facility to which he or she is applying. An elder law attorney can assist in the process of choosing the appropriate institution.

World War II: December 7, 1941 through December 31, 1946

Korean War: June 27, 1950 through January 31, 1955

Vietnam War: August 5, 1964 (February 28, 1961, for veterans who served “in country” before August 5, 1964), through May 7, 1975

Gulf War: August 2, 1990, through a date to be set by law of Presidential Proclamation.

In order to meet the financial requirements of this benefit, the VA must determine that a veteran’s or surviving spouse’s net worth is not enough to provide adequate support for a lifetime. One’s primary residence and vehicles are not used to determine net worth. Also, a veteran’s countable income must be less than the available pension amount. Countable income is determined by deducting a veteran’s or surviving spouse’s income after deducting all unreimbursed, recurring health care expenses. These expenses can include assisted living costs, ongoing pharmacy costs, insurance premiums, and more.

Importantly, to receive this benefit and the others associated with the IPP, a veteran does not need to have a service-related injury, does not need to have retired from the military, and does not need to have been involved in combat.

Although the Basic Pension benefit offers the lowest amount of benefits in the IPP plan, all benefits provided under this program are tax-free. Eligible applicants should contact an attorney who is experienced in elder law and estate planning.

Adult children often take on the care of a parent without question, and without consideration for the consequences of spending large amounts of money, or even going into debt, to fund the care. However, dipping into savings or retirement accounts to care for parents could leave individuals without adequate assets for their own future care.

An estate planning or elder law attorney can help individuals plan for the possibility of contributing to the care of an aging parent. A good estate plan will allow for the care of loved ones while preserving enough assets for one’s own future needs.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit http://www.littmankrooks.com.

Wills are living documents, meaning they can be modified or amended at any time to reflect changing circumstances. However, busy schedules may prevent changes from being made in a timely manner. Naming alternate beneficiaries will prevent the need to modify a Will during already difficult times.

Naming alternates in a Will is a good practice in general. Families with young children should name guardians and successor guardians. Alternate executors may also be named should the original executor be unable to perform his or her duties. Careful planning will help ensure wishes are carried out even when unexpected events arise.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit http://www.littmankrooks.com.

There are differences between a Roth IRA and a traditional IRA that are worth noting. Contributions to, and withdrawals from, each type of IRA are taxed differently. Contributions to a Roth are never tax deductible, while contributions to a traditional IRA may not be tax deductible. Additionally, qualified withdrawals from a Roth IRA are not subject to income or capital gains taxes. This distinction means that Roth IRAs provide tax-sheltered investment growth, while traditional IRAs provide investment growth that is only tax-deferred.

An age limit on contributions is another distinction between traditional and Roth IRAs. There are no age limits on contributions to a Roth IRA. However, contributions can only be made to a traditional IRA until the year the investor reaches 70.5. Individuals wishing to continue making contributions to an IRA account well into retirement should consider a Roth.

There are estate planning implications in deciding which IRA is appropriate. If the goal of an estate plan is to maximize assets and disbursements to beneficiaries, a Roth IRA offers unique estate planning benefits. Because a Roth IRA does not require individuals to make distributions from the account, it could grow more than an account might under traditional IRA rules.

This change in the rules will open new options for some investors. Individual investors should consider both the costs and benefits of conversion specific to their financial situation before making a decision. Consult an estate planning professional about any questions concerning account conversion.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit http://www.littmankrooks.com.

It is still unclear whether the tax will be repealed in 2010. Earlier this month, the House passed a one-year extension of the tax, essentially freezing it at current levels until 2011. The House has also passed smaller extensions, from one to three months, in an attempt to give the Senate time to come up with a more permanent solution.

However, the Senate has, at this point, not passed any legislation dealing with the estate tax. Senate lawmakers recently rejected a one-month extension of the tax. Democratic leadership has promised to take up the issue in the new year and may pass an extension that applies retroactively to January 1, 2010.

This uncertainty could make estate planning somewhat more difficult for individuals with large estates, as the Senate continues to deliberate. Some estate planning professionals are advising a “wait and see” approach. But for those who need to settle affairs quickly, the decision about how to handle a large estate may be more complicated. An estate planning or elder law attorney can advise on the best way to handle this delicate situation.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit http://www.littmankrooks.com.

The tax breaks are generally popular among both Democrats and Republicans and are routinely extended at the end of each year. However, this year legislators have reached an impasse over the proposed method for paying for the cuts. According to the House bill, the tax breaks would be funded with a tax increase on investment fund managers and a crackdown on the use of overseas tax havens.

The measure passed the house with a vote of 241-181, but it has not yet made it out of committee in the Senate. The package could be passed and applied retroactively, making tax planning and estate planning somewhat trickier in the following months. An estate planning or tax planning attorney can advise on the best financial strategies whatever measures may ultimately pass.

Bernard Krooks is a New York Elder Law and New York Estate Planning lawyer with offices in White Plains, Fishkill, and New York, New York. To learn more, visit http://www.littmankrooks.com.

We have commented on Michael Jackson’s death and the professional estate plan he created during his lifetime. Jackson protected his children and his assets through a Will, trusts, guardianship appointments, and trustee appointments, making his intentions for his estate clear and legally binding.

From the initial reports on McNair’s death, however,  it appears that he died intestate, meaning he died without a Will. It follows that since he had no Will, McNair’s estate will be divided according to Tennessee law. Reportedly, McNair’s wife will receive 33% of the estate, and his four children will divide the rest. The courts will choose an administrator, which is likely to be his former wife.

Not being able to decide how your personal assets should be distributed is only one of the many downfalls of poor estate planning. Assuming that McNair also did not set up any trusts for his wife and children, his beneficiaries will lose a much greater share of his estate to estate taxes. This is unnecessary. McNair’s beneficiaries will also not be able to take advantage of any creditor protections or gifting advantages that trusts can provide.

Most people recognize the importance of estate planning but believe that it can be put off until some future time. No one likes to think about the possibility of an unexpected death. On the flip side, everyone benefits from estate planning. Everyone, regardless of age or income, deserves to determine the fate of their person and their property in the event that they cannot speak for themselves. Everyone deserves the peace of mind that comes from knowing that their loved ones will be cared for, and their wishes will be carried out.

There are several key elements that should be included in a written revocation of a power of attorney. These are:

• Your name
• A statement that you are of sound mind and your wish to revoke the power of attorney
• The date the original power of attorney was executed
• The person selected as your agent
• Your signature

The document should then be sent to the agent and any other individuals, businesses, or institutions that have a copy of the power of attorney that is being revoked. It is also a good idea to get the old power of attorney back from your agent. If this cannot be done, send the agent a certified letter, stating that the power of attorney has been revoked.

After revoking a power of attorney, make sure you appoint a new agent. An estate planning lawyer can assist you with revoking an old power of attorney and appointing a new one.

Waiting to start on an estate plan until “sometime in the future” or “a life changing event” such as marriage or having children is unnecessary due to amount of flexibility available in an estate plan. In fact, waiting to begin planning can cause undue stress and financial hardship for loved ones should something unexpected occur. It is always important to have an estate, and it is equally important to review the plan regularly to make sure it still conforms to current living situations.

A trust is simply a legal document that allows an individual to determine how and when his or her assets will be distributed upon death. The main advantage of a trust is that it allows property to be directly transferred to beneficiaries, skipping the sometimes costly and lengthy court-supervised probate process. Trusts can also help with asset protection, gifting, and tax planning.

Placing assets into a well-managed trust can help optimize financial gains and benefits earned during one’s lifetime through work, good planning, and investment. Anyone wishing to protect money and property from taxes, creditors, and the expense of probate can benefit from the flexibility and privacy of a trust.

• Who should be notified of your death?
• Did you prepare a Will? If so, where do you keep it?
• If you own a life insurance policy, pension, annuity, or retirement account, where are the applicable documents stored?
• Where are the records for your bank accounts, stocks, bonds, or safety deposit box(es)?
• If you own real estate, where are the deeds?
• If you own a business, where are your critical documents stored?

Failure to organize this information and leave accurate instructions about how to retrieve it can be costly. If you own assets such as  stocks, bonds, real estate, insurance policies, and even bank accounts, these assets, if unknown to your family, may be turned over to the state government. This happens more than people may think, with millions of dollars going into state treasuries each year.

The first critical thing that Michael Jackson did was draft a Last Will and Testament (a “Will”). Everyone, especially people with young children, as was the case with Jackson, should have a Will. Although a Will is a basic element of any estate plan, approximately two-thirds of Americans neglect this task. Had Jackson not drafted a Will, a judge, in accordance with California law, would have divided his estate. Since Jackson had a Will, his estate will be distributed according to his wishes: with reportedly 40 percent of going to his children, 40 percent to his mother, and 20 percent to charity.

Not only did Jackson have a Will, he drafted it using very clear, specific language and he appointed professional co-executors: lawyer John Branca, and business executive John McClain. He explicitly referred to his children by name as beneficiaries, and excluded his ex-wife, Debbie Rowe, leaving no doubt as to his intentions. When drafting a Will, it is always safer to be as specific and unambiguous as possible so that there is no chance of a judge or executor misinterpreting your wishes.

In addition to creating a Will, Jackson placed his assets in a living trust, also known as a revocable trust. Much media energy has been expended discussing Jackson’s lavish spending and accumulated debt. Although he did acquire a good deal of debt during his lifetime, at his death, his assets still exceeded his debt by approximately $200 million. By placing those assets in the Michael Jackson Family Trust, Jackson’s executors and beneficiaries will be able to avoid probate, thereby keeping his affairs out of the courts and, ideally, out of the public eye.

Keeping an estate out of probate court through the use of a revocable trust has benefits in terms of privacy, expedience, and cost. The probate process can be both long and expensive, drawing out asset distribution over months, or in some cases, years. At his death, control over Jackson’s assets was automatically transferred to his co-trustees, John Branca and John McClain. Although Jackson’s mother moved quickly to gain control of the family trust, she was unable to do so because Jackson had already named these co-trustees. Branca and McClain will distribute Jackson’s assets in accordance with Jackson’s wishes, protecting his family from invasive court proceedings.

In his estate plan, Jackson also named a guardian, Katherine Jackson, and a successor guardian, Diana Ross, for his children, all of whom are minors. If no guardian had been named, the courts would have appointed one – likely the two older children’s biological mother, Debbie Rowe. Rowe, who had relinquished her parental rights years ago, has petitioned to have her rights reinstated. The courts have yet to make a decision on this issue, but they generally side with the parent’s wishes absent a compelling reason not to.

By naming guardians, Jackson also split the responsibilities of managing his estate and caring for his family. It is a good idea to separate duties in this way if possible. Each responsibility involves unique challenges that may be handled better by a team of diverse individuals.

Some experts have indicated that Jackson could have made a better choice of guardians, given the ages of his children. Katherine Jackson is 79 years old and will be 90 years old by the time his youngest son turns 18 years old. Diana Ross is 65 years old. It is a good idea to consider age when appointing a guardian. Young children take a lot of time and energy. Also, should a guardian or successor guardian die while the children are still minors, courts will have to become involved in appointing a caregiver.

While it appeared in the moments immediately following his death that the fate of Jackson’s estate was in question, such speculation has not been borne out. At this point, according to estate planning professionals, it appears that Jackson received solid legal advice during his lifetime, and as a result, has a well-crafted estate plan in place.

There are three types of life insurance: whole life, term life and variable life. Whole life does exactly as its name implies, covering you for your entire life as long as premiums are paid. Term life covers you for a specific period of time that is specified by the policy “term.” Variable life insurance has variable returns and a variable investment component that the policy holder, not the insurance company, determines where the appropriate portion of their premium is invested.

Regardless of the type of policy, life insurance benefits are paid directly to the beneficiary in full upon your death. Because of this, your beneficiary receives all assets immediately without having to go to probate court or pay taxes. Also, since the full policy amount is available upon the policy holder’s death, life insurance is a good way to ensure a certain amount of money will be available at any time even if an unfortunate or sudden event should result in unexpected death.

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It may seem as though individuals who plan on purchasing long term care insurance and individuals who plan on taking advantage of Medicaid fall into different categories. However, in most cases, long term care insurance can be used as a part of overall Medicaid planning.

For example, anticipating the need for long term care, one could purchase a plan with a benefit period of five years. Assets can be transferred into a Trust, allowing for the individual to spend down their assets and become Medicaid eligiable. If the individual falls ill during the five year look-back period, s/he now has the long term care insurance to cover the cost of the nursing home or at home care. If this same individual had not purchased the long term care insurance but had transferred his.her assets into the Trust, s/he may now not be eligible for Medicaid benefits until the expiration of a penalty period. While premiums on long term care insurance can be expensive, they are often more cost effective than paying out of pocket for care during a penalty period. A good estate planning attorney can advise on the best way to plan for the need for future long term care.

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Anyone who meets the age requirement and has enough home equity can take out a reverse mortgage as long as they live in the home. No payment is due on the loan as long as it is outstanding and the homeowner still occupies the home. The loan becomes due only when the homeowner moves out.

A reverse mortgage can be an attractive option but it is not the right option for everyone. Reverse mortgages have up-front costs and can be expensive to originate. Reverse mortgages also take away equity that the homeowner may need for future emergencies or health care costs. And, since proceeds from the sale of the home are generally used to pay back the loan, reverse mortgages can take away from any inheritance that would be left to surviving children. Consult an estate planning attorney to see if a reverse mortgage fits into your plans.

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Unmarried couples that have been together for many years, or even decades, may give little thought to inheritance issues. However, in the absence of a Will, the state will decide upon the distribution of assets, and the state is under no legal obligation to consider a non-spousal partner or his or her children. Unmarried couples should at a minimum draft a will and establish beneficiaries for their assets.

In addition to a Will, each person should have a Power of Attorney and a Health Care Proxy. These documents will ensure that both financial matters and health care matters will be handled in accordance with the couples’ wishes. Unmarried couples do not have the legal rights to make health care decisions for each other. Drafting a Health Care Proxy and a Power of Attorney will prevent a judge from making decisions that should be left to couples and their loved ones.

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Currently, the Federal estate tax exemption is set at $3.5 million, meaning that only assets above that amount will be subject to Federal estate taxes. The estate tax will be repealed in 2010 and reinstated in 2011 with a $1 million exemption. If a Trust contains more than $3.5 million in assets, then those assets will be subject to estate taxes when they are distributed. Furthermore, the New York estate tax exemption is $1 million, so assets above that amount will be subject to New York estate taxes. A good estate planning attorney can help draft a plan for minimizing estate taxes using both Trusts and other planning tools.

Creditors can also go after property that is being held in a Trust if the creditor wins a lawsuit. Property in the trust will be treated just as if it is still owned in your name. Distributing assets from a trust does not legally prevent a creditor from collecting those assets directly from the beneficiaries.

However, with no Will, the state will make decisions for you according to a distribution schedule it has already established. The state tries to pass assets to people it thinks benefit the most, but unfortunately, this may not be in line with your wishes or what is best for your family.

Some people also have difficulty with estate planning because of the misconception that their assets are not large enough to warrant a will. Writing a Last Will and Testament is not just for people with large estates. Most people, when all property and accounts are considered, are worth more than they think. In addition, some possessions may not have great market value, but they do have substantial sentimental value. These are items that you will want to keep in your family, and it is important that you know they will be well cared for.

The direction you take your retirement saving plan will depend on your risk tolerance and how close you are to retiring. People who can take a long-term strategy should keep more of their investments in stock than those who will need their assets sooner. In fact, in a down market, new investors can benefit from a majority stock portfolio by buying in low.

Others, however, may benefit more from having their assets in cash, trusts and fixed interest investments. No matter what your situation, a good investment plan requires regular evaluation so that you can be sure your assets are allocated to fit your needs and retirement goals. Seek the advice of your estate planning attorney to make sure you are on the right track.

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The person who you name as your attorney-in-fact does not have to be a lawyer. In fact, when choosing a person to act on your behalf, the most important characteristics to look for are trustworthiness, organizational and management skills and good common sense. You have complete control over your durable power of attorney document as long as you are still mentally competent, and may revoke the document at any time.

In New York, you have the ability to specify when you want your financial power of attorney to take effect. You may draft the document so that it goes into effect as soon as you sign it, or you may choose to make your power of attorney take effect only when a doctor has declared that you are incapacitated. Remember, you must specify that you want your financial power of attorney to be “durable” or it will end as soon as you become incapacitated.

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Understandably, the Revocable Living Trust is an attractive option. Probate can take months, or longer, depending on the complexity of the estate. Even in the case of an uncontested Will, the court fees involved with the probate process can add up. The assets in a Living Trust, however, can be transferred immediately with little expense. Incorporating a Living Trust into your estate plan will save your beneficiaries time, money and the hassle of dealing with probate.

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All of these documents work together to ensure that your wishes are carried out with regard to your property, assets and person. On top of that, they provide for family, loved ones and other beneficiaries by passing on financial benefits as well as taking away the stress of a state mandated or contested distribution of property.

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Another advantage to a Special Needs Trust created during your lifetime is that it establishes a pattern that may be used by future trustees. Parents who, as trustees, write checks for daily and monthly expenses from a Special Needs Trust are showing what types of things will be acceptable expenditures from the Trust when new trustees take over the responsibility of managing the Trust.

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Keeping in mind the real importance of estate planning will help individuals stick to their plans or give them the push they need to start planning through even the tightest of economic times. Estate planning is easier than most people think, and will create peace of mind that is well worth the investment.

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In order to use a trust for asset protection, the trust must be irrevocable. Since you cannot change the terms of an irrevocable trust, courts have held that those assets no longer belong to you and can therefore not be touched by debt collectors or other judgments against you.

Types of irrevocable asset protection trusts include spendthrift trusts, discretionary trusts, personal and self-settled trusts, an asset protection trusts. Putting your money and property into the right kind of trust protects you and your assets.

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The process of transferring assets through a living trust is often quicker than probate, and it allows those involved in the process to avoid legal fees. It is therefore a valuable supplement to your Will. You will still need a Will to provide for the distribution of any remaining assets that have not been placed into the trust at the time of your death. Your Will can also name guardians and trustees. An estate planning lawyer can advise you on the best way to use a living trust in your estate plan.

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