Special Needs Beneficiaries Can Be Explicitly Included in Estate Planning This article for The Voice® was written by Mark B. Heffner, CELA, a graduate of Harvard College and Boston College ...
COVID-19: SEC and FINRA Issue Temporary Relief on Regulatory Obligations and Offers Guidance on BCP for Broker-Dealers By Hermione M. Krumm, Esq., Littman Krooks LLP As the novel coronavirus (“COVID-19”) continues to spread and its impact on ...
Elder law is a relatively new area of law that refers to the myriad of issues people face as they approach retirement and beyond. Elder law encompasses a broad range of topics under the larger umbrella of estate planning, including Medicaid planning, asset protection, guardianship, as well as estate planning and administration. Elder Law attorneys, Littman Krooks, in Westchester, White Plains and New York can help families more easily deal with the legal issues they face. Our team of knowledgeable New York and Westchester County estate planning attorneys is led by Bernard A. Krooks, the founding partner of Littman Krooks.
Medicaid Planning and Asset Protection Lawyers
According to the most recent estimates, 47 percent of men and 58 percent of women will need long-term care at some point. These costs are substantial. For example, the median cost of long-term care in Long Island is over $140,000 per year. Unfortunately, Medicare does not provide coverage for most long-term care needs. While Medicaid covers long-term care, many families do not initially qualify for these benefits due to the program's strict asset and income limitations. Without proper planning, families may need to "spend down" their assets until they meet these requirements. Of course, if only one spouse needs long-term care, as is often the case, the ongoing needs of the spouse who does not require long-term care must be considered.
Families have options if they plan ahead. By creating trusts, gifting assets and strategically structuring ownership interests, families may be able to avoid the unnecessary spending down of their assets. With an effective asset protection plan, families can ensure that Medicaid benefits are available when needed, while also providing for the needs of the community spouse. At the New York City law firm, Littman Krooks, we have over 30 years of experience helping families plan for their future needs through effective Medicaid planning.
Estate Planning Lawyers
For many parents, discussing what happens after they pass is a topic to avoid. However, engaging in an open conversation about estate planning is crucial to preserving wealth and ensuring that familial assets are distributed according to their wishes.
The two tools of estate planning are wills and trusts. A will is a written document outlining how someone wants their property to be distributed upon their death. If someone dies without a will, state intestate laws dictate how that person's property will be distributed. Thus, a will is crucial to maintaining control of familial assets and ensuring they are available for future generations. However, wills do not protect assets from going through the costly and time-consuming probate process, which is why most New York estate plans also utilize trusts.
The term trust refers to a three-party relationship based around the ownership of property. In most trusts, the grantor sets up the trust and transfers property into the trust's name. The trustee is the person overseeing the property in the trust. The beneficiary is the person that will ultimately end up with the property. Almost any type of property can be a trust asset, including real estate, vehicles, boats, artwork and other personal property. Through effective estate planning, a family can use trusts to transfer ownership of familial assets to avoid the probate process as well as decrease the amount of estate taxes. A White Plains and New York City estate planning lawyer with Littman Krooks can help you plan for your future.
When someone can no longer make their own legal, healthcare or financial decisions, certain steps must be taken to protect their interests. By planning in advance, families have options; however, these options decrease in number as the need for a guardianship becomes immediate.
Guardianship is the process in which a court appoints one person to make decisions on behalf of another. In New York, there are several types of guardianships. For example, an Article 81 guardianship plans for the potential of sudden and unexpected incapacitation of an adult. Because a guardianship impacts an individual's rights, a court will conduct a hearing to see if a guardian is necessary and determine the guardianship's scope. Once the guardian is appointed, they become legally responsible for making decisions on behalf of the disabled individual. Guardianships continue until the ward dies, or the court determines that a guardianship is no longer necessary.
Besides guardianships, there are less restrictive alternatives that may satisfy the caretaking needs of an older loved one. For example, a power of attorney, allows a loved one to handle certain specified matters in the future, should certain conditions be met. Of course, the person signing a power of attorney must be competent to do so, so it is important not to wait until the need arises.
Estate planning is an essential tool that families can use to preserve wealth for future generations. Through the effective use and implementation of wills and trusts, Littman Krooks estate planning attorneys, in Westchester, White Plains and New York City, can help families at all stages of life reduce the tax burden on future generations and make sure that their wishes are carried out after they pass. Creating a comprehensive estate plan will simplify the process for heirs and beneficiaries. Our team of knowledgeable New York and Westchester County estate planning attorneys is led by Bernard A. Krooks, the founding partner of Littman Krooks.
Wills: The Core Element of Any Estate Plan
Wills are an essential element of any New York estate plan. When someone who does not have a will dies, their assets get distributed according to the New York intestate laws. These default rules are inflexible and do not account for how a person wants their assets distributed. However, by creating a will, an individual can override these default rules. Wills vary in complexity, but at their most basic, a will should:
- Provide the names and contact information for all beneficiaries
- Select to be the executor of the estate
- Choose a guardian for any minor children
- Determine how debts will be paid
- Explain how the estate assets should be divided among the beneficiaries
While wills allow individuals to determine what will happen with their assets after they pass on, a will does not protect assets from the probate process. Similarly, sizable estates may still be subject to estate taxes. Those interested in limiting estate tax and reducing the amount of probate assets in their estate should consider creating one or more trusts.
Trusts: Tools to Reduce Estate Taxes and Limit Probate Assets
A trust is a legal arrangement in which a person places property under the ownership and care of a trustee for the benefit of one or more beneficiaries. Trusts are an integral part of any New York estate plan because they are a useful tool for transferring assets to future generations. When properly created and funded, trusts can remove assets from the probate process and reduce the overall tax burden of an estate.
Trusts come in many varieties; however, all trusts fall into one of two categories: revocable and irrevocable trusts.
Revocable trusts: A revocable trust is created during the grantor's lifetime, allowing the grantor to retain control over the trust assets. Revocable trusts are flexible in that the terms of the trust can be amended, or the grantor can dissolve the trust at any time. Assets transferred to a revocable trust will typically avoid the probate process; however, they will likely still be subject to estate taxes. It is common for revocable trusts to become irrevocable upon the death of the grantor.
Irrevocable trusts: Irrevocable trusts can be used to ensure that estate assets will not need to go through the probate process while also shielding them from estate taxes. Once transferred into an irrevocable trust, the legal title of the asset shifts to the trust. Thus, the asset does not become a part of the grantor's estate. Any income generated by assets in an irrevocable trust belongs to the trust, potentially reducing the grantor's income tax liability. Importantly, once a grantor creates an irrevocable trust, they no longer dissolve the trust or change its terms.
Through a comprehensive estate plan, a family can custom-tailor trusts to meet their specific needs. For example, a special needs trust is an effective tool to provide for the continued support of a loved one with a disability without impacting their eligibility for government benefits. Another example of a common estate planning trust is the spendthrift trust, which controls the amount of funds a beneficiary has access to at any one time. Spendthrift trusts are useful for families with younger beneficiaries, or those who have yet to develop good money-management skills.
Providing for the care of a loved one with a disability requires careful planning. Families that have children with special needs can take advantage of a variety of tools to adequately provide for their child's future without affecting the child's eligibility for the government benefits they are entitled to. These include special needs trusts and ABLE accounts. At the same time, it is crucial families also consider guardianship and transition planning. At Littman Krooks, our team of skilled special needs planning attorneys in Westchester, White Plains and New York City, can help families plan for a secure future of their children. Our team of attorneys is led by Bernard A. Krooks, the founding partner of Littman Krooks.
Special Needs Trusts
A special needs trust is a specific instrument used to provide for the ongoing support of a child or other loved one with special needs. Often, individuals with special needs qualify for various government benefits such as Social Security and Medicaid. However, each of these programs has strict asset and income limitations. Thus, without the proper precautions, a sizeable inheritance could result in an heir losing eligibility for essential benefits.
Once created, a special needs trust must be funded. Special needs trusts can contain almost any type of asset; however, cash is the most common. Income-generating assets, such as real estate, are also common. The beneficiary will not have direct access to the trust assets, which are managed by a trustee who will oversee all disbursements. Assets in a special needs trust can be used for supplemental needs, including:
- Assistive technology
- Travelling, including vacations
- Caregiving expenses
- Necessary services, such as cell phones and internet
Notably, assets in a special needs trust cannot be used for basic needs, such as groceries or housing. While some expenses clearly qualify as a supplemental need, others, however, can occupy a gray area. This is where the importance of naming an experienced trustee comes in.
A New York ABLE account is a state-administered program intended to help people with disabilities save money that can later be used for disability-related expenses. Assets in an ABLE account are not counted when determining eligibility for government benefits. Thus, with an ABLE account, individuals with special needs can save money for future expenses without fear of losing Medicaid or SSI benefits.
New York ABLE accounts are flexible in that anyone can contribute to an account, and there are many ways to contribute, such as through an ATM. The maximum contribution to a New York ABLE Account is $15,000 per year. ABLE account owners who earn income may contribute more to their accounts than the program's annual $15,000 limit.
Guardianship and Transition Planning
Generally, when someone reaches the age of 18, they can make their own decisions. As children who have special needs transition into adulthood, families should remain proactive in addressing the issues that may arise. One of the most common issues confronting parents of a child with special needs is establishing a legal right to make decisions on behalf of their child who cannot make their own decisions.
Parents have several options to help oversee the life decisions of their adult children.
Power of Attorney – A power of attorney is a document designating one person as the agent of another. In this context, a power of attorney document can give parents the legal ability to make decisions on their child.
Guardianship – If a child living with a disability reaches the age of 18, and there is no power of attorney document in place, a family may need to petition to the court to appoint a guardian. Parents of adult children living with a disability are not legally presumed to be guardians and must obtain a court order. A court will conduct a hearing before appointing a guardian to ensure that a guardian is necessary.
All children – including those who live with a disability – are entitled to a "free and appropriate public school education." However, from requesting a student get evaluated for an Individualized Education Program (IEP) to addressing compliance issues with an existing IEP, the special education process can be overwhelming for parents. At Littman Krooks, we proudly advocate on behalf of families who have students with special needs, ensuring they receive the education that they are entitled to. Our team of special education advocates in Westchester, White Plains and New York City, led by founding partner Bernard A. Krooks, will ensure our clients’ children receive the education and benefits they are entitled to.
Educators design the general education curriculum to meet the needs of most students. However, this curriculum is not a good fit for all students, especially those students living with one or more disabilities. In many cases, a student's inability to thrive in a traditional education environment has little to do with their intelligence, and more to do with the child's learning style or a lack of necessary accommodations.
The special education process in New York is designed to ensure that all students who need special education services are identified and accommodated. Most often, the process begins with a referral made either by the child's parents, medical providers, or school faculty. The Individuals with Disabilities in Education Act (IDEA) imposes an affirmative requirement on schools to "identify, locate, and evaluate every child who may have a disability requiring special education services." Parents who believe their child may require additional educational support can refer their students for an IEP evaluation.
In New York, there are 13 disability classifications, including:
- Emotional disturbance
- Hearing Impairment
- Intellectual disability
- Multiple disabilities
- Orthopedic impairment
- Other health impairment
- Speech or language impairment
- Traumatic brain injury
- Visual impairment
In theory, the special education process functions to ensure all students obtain the education they need and deserve. However, parents may encounter many problems along the way. For example, schools routinely deny parental requests for an evaluation, citing a lack of evidence that the child has a disability. When a school refuses a parent's request, the school must provide the parent with a detailed explanation of why an evaluation was not conducted. Parents who disagree with the school's findings can follow up with a request for mediation or by filing a New York due process complaint.
Even when a school agrees to conduct an evaluation, parents may not agree with the assessment. Parents have the right to pursue an independent evaluation by someone not affiliated with the Department of Education. However, this evaluation's cost may be the parents' responsibility unless the school agrees to pay for the assessment.
If, after an evaluation, a child is determined to need additional education services, the next step is an IEP meeting. An IEP team consists of certain core members but may include others if specifically requested by parents. The core IEP team includes:
- The student
- The parents, or anyone in a parental role
- General or special education teacher
- A school psychologist
- A school social worker
- A district representative
An IEP typically contains information about the student, their strengths, as well as areas that the student needs additional support. In essence, the IEP is a system of special education supports and services that will allow the student to participate in the general education curriculum. Every IEP is different; however, many contain the same elements. For example, an IEP should establish the student's current level of performance at school as a baseline. The IEP should also include measurable annual goals that provide a way to assess the effectiveness of the IEP.
A focus of any New York IEP is inclusion, or time spent learning in classrooms alongside students without disabilities. Not only is an education in the "least restrictive means" required under the IDEA, but studies have shown that an inclusive education fosters self-esteem and increases post-school success rates among students with disabilities.
Occasionally, a school claims that it cannot provide a student with the supports detailed in an IEP. In other situations, schools claim to try, but end up failing. School districts may be responsible for a student's private-school tuition if it cannot provide an appropriate education to special needs students.
Disagreements between parents and school administrators regarding both the formation and implementation of an IEP are not uncommon. However, the issues facing parents with special needs students are not limited to those related to the IEP. At Littman Krooks, LLP, we have a deep understanding of the rights students have under the law. We will work with you, your child, teachers and the school district to ensure that your child receives the education services they require. We routinely work with special needs students outside the context of IEP matters, including school discipline issues, test accommodations, transition planning and more. The law is clear; access to education is a fundamental right that should not be affected by a student's disability. At Littman Krooks, we make sure each of our clients is afforded the education they deserve, regardless of their disability. To learn more, call 914-684-2100 to schedule a meeting with an attorney today or visit our New York City or White Plains locations.
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