Mr. Krooks, in an article featured in the Hudson Valley Business Journal, outlines the ways in which a recession may affect long-term planning.
The urge to ignore or put off estate planning can be particularly strong during a downturn in the economy. However, comprehensive estate planning is more important than ever during tough economic times.
According to Mr. Krooks, everyone should have basic estate planning elements in place, such as a Will and trust documents, all of which should be evaluated on a regular basis. Even as economic circumstances change, these documents remain valid. But, says Krooks, “valid” may not be optimal. Long-term planning must take into account both current circumstances and projected changes in personal finances and the overall economy.
One example of such changes is the continued burden that is being placed on state governments and, in turn, locally administered programs. Krooks continues, “The recession has hit state and local governments hard… It is almost certain that there will be additional cutbacks in long-term care services from government programs. The extent that you have assumed that the government will be there to provide your long-term care needs, that assumption may not be as defensible as it once was.”
Mr. Krooks also suggests that there are some specific circumstances that can serve as indicators that an estate plan needs adjustment. These include:
• Having an estate plan that is more than 5 years old;
• Learning of a family member with a disability;
• Having counted on Medicaid to pay for long-term care expenses;
• Large changes in net worth; and
• Changes in a child or children’s net worth or living situation
Changing economic circumstances can provide an opportunity to reevaluate documents that may be out of date or irrelevant. In addition to helping organize finances and assets in the short term, estate planning during tough economic times has obvious long-term benefits. Continuing to plan and make contributions to trusts, life insurance policies, retirement and other accounts will minimize the overall damage that could be done to your estate in the long-term.
Bernard A. Krooks, Esq., is a founding partner of the law firm Littman Krooks LLP, with offices in New York City and White Plains. He is president of the Special Needs Alliance. He is past president of the National Academy of Elder Law Attorneys, a fellow of NAELA, past chair of the NAELA Tax Special Interest Group, and former editor-in-chief of the NAELA News. He co-authored the NYSBA publication Elder Law and Will Drafting and is an adjunct asst. professor at NYU Center for Finance, Law, and Taxation. Mr. Krooks is an authority on elder law, special needs planning, and estate planning matters. Mr. Krooks has been quoted in many national publications.
Bernard Krooks is a New York Estate Planning lawyer with offices in White Plains, NY and New York, New York. To learn more, visit http://www.littmankrooks.com.