Davidov Law Group

E-Book Download

Call for your complimentary assessment

(516) 253-1366
Call Us Now
E-Book Download

SHOULD I CREATE A JOINT TENANCY WITH MY CHILD?

Davidov Law Group

by

There are many different ways to arrange for the transfer of property to your children. The optimal course of action will vary depending on your objectives and the unique nature of your circumstances.

Joint tenancy is one option. A joint tenant is a co-owner of property. You could potentially add your child to your home deed or the title of some other type of property. He or she would become a joint tenant.

Under right of survivorship, he or she would inherit the entirety of the property after you die. This transfer would take place outside of the process of probate.

Probate is a legal process that comes into play when you maintain direct, sole possession of property until your death. It is not inherently negative, but it can be time-consuming. You can eliminate this step by arranging for asset transfers that take place outside of the process of probate.

Joint Tenancy & Medicaid Planning

In addition to the probate avoidance angle, joint tenancy can be useful for those who are engaged in Medicaid planning. Medicaid pays for most of the long-term care that is received by seniors in the United States. This is because Medicare doesn’t pay for long-term care.

To qualify you must have very limited financial resources, but you can maintain ownership of your home. However, the Medicaid program can seek recovery of monies spent after you die through the attachment of your property.

If you were to name your child as a joint tenant of your home, he or she may be able to assume ownership of the entirety of the home without facing the prospect of attachment by the Medicaid recovery unit.

Drawbacks of Joint Tenancy

The question of whether or not you should create a joint tenancy with your child is a complicated one. We have briefly outlined some of the positives, but there are drawbacks as well.

When it comes to Medicaid, there is a five year look back. You can’t find out that you need long-term care today, make your daughter the joint tenant of your home tomorrow, and qualify for Medicaid the next day. If you give away assets within five years of applying for Medicaid, a penalty is imposed. This penalty delays your eligibility.

Therefore, to use joint tenancy as a Medicaid planning strategy you have to act well in advance of applying for the program. You would be divesting yourself of full ownership of your property before there is any actual need to do so.

As a result, the property would be subject to attachment if your joint tenant was to experience financial difficulties. He or she would also have to sign off on the sale if you decided that you wanted to sell the home, and this is another drawback.

Learn More About Joint Tenancy

If you would like to learn more about joint tenancy, download our free special report on the subject. To access your copy of the report click this link and follow the simple instructions: The Trouble With Joint Tenancy.

by

Most people have heard about last will challenges, but can you challenge a trust? If you look for the answer to this question on the Internet you may get some confusing answers.

Popular Misconception

Before we talk about trusts, let’s talk about last wills first. A will must be admitted to probate before the heirs to the estate receive their inheritances. It is up to the probate court to examine the will to determine its validity.

Because of this inherent court involvement it is relatively easy to challenge a last will. The will is in the hands of the court already. The court is charged with the responsibility of determining whether or not it is valid. Therefore, the entire process is set up to allow for challenges to the validity of the will.

Now, back to trusts. When you hear the above, you may immediately think that you could use a trust rather than a will to avoid challenges. There are those who contend that a trust will prevent a challenge.

When you arrange for asset transfers through the utilization of a trust rather than a last will, the transfers take place in a direct manner outside of probate. The trust is not admitted to the probate court like a will would be, so there is no built-in forum within which a challenge could be presented.

This does not mean that it is impossible to challenge a trust. You could challenge the terms of a trust by initiating a lawsuit.

No-Contest Clauses

There are those who will contend that you can eliminate this possibility by including a no-contest clause within your trust. A no-contest clause would stipulate the total disinheritance of anyone who challenges the terms of the trust.

Let’s say that your father creates a trust late in his life and makes you a beneficiary. He got remarried when he was in his eighties, and you are not receiving as much as some of the newer people in his life. You feel as though he was not of sound mind when he created the trust agreement. You have reason to believe that he was unduly coerced by his wife. The trust includes a no-contest clause.

If you initiate a lawsuit to challenge the terms of the trust and you lose, you will in fact be disinherited entirely. Therefore, a no-contest clause can certainly serve as a powerful disincentive, because you would be taking a big risk.

However, such a clause does not make it impossible for you to challenge a trust. You could win the lawsuit and you would not be disinherited, but others who thought they were protected by the no-contest clause may fact be left out in the cold.

by

You may get the impression that a trust of any kind will provide asset protection. The idea is that you are divesting yourself of personal ownership of property that you convey into a trust.

This is not entirely true. Let’s look at some of the details.

Revocable Living Trusts

Revocable living trusts are very popular, and part of the appeal lies in the fact that you can retain control of assets that you convey into this type of trust.

A trust involves the grantor, who is the person who creates the trust; the trustee, the individual or entity that administers the trust; and the beneficiary, who is the person that receives distributions out of the trust.

When you create a revocable living trust you are the grantor. Even though you are the grantor, you may also act as both the trustee and the beneficiary while you are alive and of sound mind. Because of this, you have full control of the assets that you have conveyed into the trust.

Beyond this, remember, this is a revocable living trust. Aside from the control that you retain while the trust is active, you can actually revoke it at any time. It would no longer exist, and the assets that you have conveyed into it would become your personal property once again.

Because you are retaining incidents of ownership, the assets that have been conveyed into the trust are not going to be protected from tax collectors, creditors or litigants seeking redress.

You may be wondering why anyone would want to create a revocable living trust given the fact that they do not provide asset protection. Even though you retain a great deal of control, revocable living trusts facilitate the transfer of assets outside of the process of probate. They are useful as a probate avoidance tool.

Other Types of Trusts

There are other types of trusts that could be useful for those who are seeking asset protection. When you create an irrevocable trust you are surrendering incidents of ownership. Therefore, certain types of irrevocable trusts are used by people who want to protect assets.

Asset Protection Planning: Explore Your Options

When you have been successful throughout your life you should certainly do everything possible to protect the assets that you have been able to accumulate. On the one hand you should protect them for your own purposes, and on the other you should make sure that assets that you are passing along to your loved ones are protected.

You have various different options available to you. If you would like to discuss asset protection planning with a licensed estate planning attorney, we invite you to contact our firm to request a free consultation.

by

Many estate planning attorneys also focus on elder law issues. When you hear the term “elder law” you may wonder exactly where the focus lies.

In a general sense, elder law attorney assist people who are concerned about legal issues that are of interest to senior citizens. Some elder law attorneys focus on legislation that impacts seniors. They may advocate certain positions.

Most elder law attorneys are involved in personal interactions with clients who want to prepare for the eventualities of aging.

The most pressing issue that an elder law attorney in Kew Gardens NY is facing at the present time is the matter of long-term care. The United States Department of Health and Human Services tells us that the majority of senior citizens will need assistance with their activities of daily living eventually.

Fortunately, a lot of this care is provided by family members, friends, and neighbors. In many cases seniors who need help with their day-to-day needs can remain in their homes.

However, this is not always the case. A significant percentage of seniors ultimately reside in assisted-living communities and nursing homes.

These facilities are expensive, and they are totally out of reach for some people. Others could possibly afford it, but it would wipe out the assets that they always intended to leave behind to their loved ones.

Medicaid Planning

Elder law attorneys focus in large part on Medicaid planning. Medicaid actually pays for most of the long-term care expenses that are incurred by elder Americans. This is because of the fact that Medicare will not pay for an extended stay in an assisted living community or a nursing home.

Medicaid rules are complex. Because it is a need-based program, technically you must be in possession of assets that do not exceed $14,550 (2014) if you want to qualify.

The good news is that some of your assets, such as your home up to $814,000 of equity in 2014, don’t count initially. This can be comforting, but Medicaid recovery is a factor. The Medicaid program could seek reimbursement from your estate after you pass away.

If you retained personal ownership of your home at the time of your death, it could potentially be lost to Medicaid recovery.

Elder law attorneys assist clients who are interested in qualifying for Medicaid without losing everything that they own in the process. If you plan ahead effectively well in advance of applying for the program, you may be able to keep a significant store of assets within your family.

Because of the fact that the population is rapidly aging the field of elder law is becoming more and more important. Seniors are looking for answers, and if you are among them you can become fully informed if you discuss everything with a licensed elder law attorney in Kew Gardens NY.

by

If you use a last will to arrange for the distribution of your assets after you die, who is actually going to put the plan into action? Is the document going to act on its own?

Clearly, there is a human element to take into consideration. When you are drawing up your last will you must include the nomination of an executor.

This is the person who will be charged with the responsibility of administering the estate. If you did not choose your own executor, the court would be forced to appoint a personal representative to act as the estate administrator.

What Does an Executor of a Will in Kew Gardens New York Do?

Imagine the situation that would exist after you pass away. You were in possession of all different types of property. There is a last will that contains your final wishes regarding the distribution of this property.

This is well and good, but the executor must make these wishes come to fruition in reality. This can be a very challenging task.

First off, the executor must secure the physical assets that comprise the estate. Why must this be done? Imagine Uncle Harry rummaging through the house grabbing this and that, contending that the decedent wanted him to have these items. Then Cousin Jane arrives doing the same thing, and an old college buddy, and so on.

The executor must make sure that all of the property stays secure so that it can be properly distributed in accordance with the wishes of the decedent.

The last will must be admitted to the Surrogate’s Court so that the process of probate can be initiated. This is another responsibility that is probably going to fall to the executor.

During probate the executor is in charge of administering the estate. This can include paying final debts including taxes. The assets that comprise the estate must be prepared for distribution to the heirs. This can involve arranging for appraisals and liquidation.

The executor is the point of contact for anyone who has an interest in the estate. He or she must be prepared to answer questions along the way.

Choosing an Executor of a Will in Kew Gardens New York

When you consider the length and breadth of the estate administration tasks, you can see that the executor has a great deal of responsibility. It is not an honorary or ceremonial role.

When you nominate an executor of a will in Kew Gardens NY you should make sure that the person can handle these business oriented tasks. In addition, the executor must have the time that it will take to administer the estate.

This may sound like an instance in overstating the obvious, but you should also make sure that the person that you would like to nominate to act as executor is actually willing to take on the responsibility.

by

When you evaluate the surveys that are done periodically, you find that far too many people procrastinate when it comes to estate planning. One of the reasons for this is a lack of information. Invariably, once you understand the facts you recognize why estate planning is important. With this in mind, let’s look at the process of probate in Kew Gardens NY.

A Last Will

Someone who is procrastinating may justify it, thinking that immediate action could be taken if necessary. If there are any indications that you should take precautions, you draw up a quick last will and you are covered.

This is an assumption. Assumptions can get you into trouble. However, when it comes to estate planning assumptions, you won’t be around to pay the price. If you make mistakes, your family will be left behind to deal with the outcome.

Let’s say that you draw up a last will without considering any alternatives. You pass away. Your family is not going to receive their inheritances until the estate has been probated.

There could be immediate financial need, and this could present a problem. Short of this, the sooner you get your inheritance the better, even if it is not absolutely needed.

Probate in Kew Gardens NY – How Long Does It Take?

The process of probate in Kew Gardens NY can sometimes be quite time-consuming. It is not just a mere formality. The Surrogate’s Court will be charged with the responsibility of determining the validity of the will. If interested parties wanted to contest the will, they could do so.

If the will was hurriedly constructed without professional guidance, there could be problems.

The extent of the assets, and the form that they are in, will impact the time frame. The family dynamic will also be a factor.

Under complicated circumstances probate can take multiple years. Even simple, routine cases will take months.

Informed Decisions

While it is true that probate will not run its course overnight, it is not necessarily a bad thing. Probate provides protections. What if a challenge to the will was valid? What if you signed it while you were woozy from medication? What if you did not really understand what it contained?

This is just one type of scenario.

Over the years the state of New York as made an effort to streamline the process, so it is not something that is all bad.

On the other hand, there is nothing wrong with arranging for the transfer of your assets outside of probate if this is your choice.

The key is to make informed decisions. Consult with a licensed Kew Gardens NY estate planning attorney before making any assumptions. Ultimately, you can construct an estate plan that works for you, whether it involves probate or not.

by

At some point in time you may get serious about preparing for the eventualities of aging. There are certain contingencies that you may face when you reach an advanced age, and they are easier to address if you made preparations beforehand. The best way to make these preparations is with the assistance of a licensed elder law attorney.

Elder Law Attorneys

What does an elder law attorney do? Generally speaking, an elder law attorney will advise people who need legal advice regarding matters that are of particular interest to senior citizens.

One of the major issues that elder law attorneys must address is that of long-term care costs. Medicare does not pay for an extended-stay in a nursing home or an assisted living community. These facilities are very expensive and out of the reach of many people.

Elder law attorneys will assist people who want to take steps to prepare for these expenses.

Locating an Elder Law Attorney in Kew Gardens NY

How do you find the right elder law attorney in Kew Gardens NY? One way to go about it would be to broach the subject among people that you know. Family members, friends, neighbors, and coworkers may be able to provide you with recommendations.

If you know someone who has had a good experience with a particular elder law attorney, it is likely that you will have a similar experience.

Checking for affiliations with respected professional organizations can also be very worthwhile when you are looking for an elder law attorney. For example, we are members of the American Academy of Estate Planning Attorneys. If you were to check their database for members, you would find reputable law firms that focus on elder law matters.

Once you identify an elder law attorney that you are interested in working with, communicate openly. Don’t be afraid to ask questions while you are on the phone initially. If the person that you are speaking with does not seem to be welcoming and empathetic, you may want to look elsewhere.

Estate planning involves discussing some very sensitive and personal issues. A good estate planning attorney will be well aware of this fact. You want to feel totally comfortable with your attorney, so you should be discerning when you are making a connection.

Some firms will provide you with a free consultation. Our firm is one of them. If you sit down and speak with an attorney face-to-face, you will certainly come away with a distinct impression.

Our objective is to assist our clients in the present as we build long-term relationships, because estate planning is an ongoing process. If you take a moment to request a consultation, you will invariably find us to be quite responsive and genuinely interested in the well-being of your family.

by

When you are preparing for your senior years, you are invariably going to envision your active retirement years. This type of planning is important. However, you should also consider the twilight years that will follow your active retirement years. The eventualities are something that you should discuss with an elder law attorney in Kew Gardens New York.

Questions to Ask an Elder Law Attorney in Kew Gardens

HOW WILL YOU PAY FOR LONG-TERM CARE?

This is one question that you should definitely ask an elder law attorney. Long-term care is very expensive, with the average annual expense for a room in a nursing home exceeding $130,000 in the state of New York. These expenses are very high right now, but long-term care costs have been rising by a few percentage points year-by-year. If you are not concerned because you are going to be qualified for Medicare, you should definitely become apprised of the facts. Medicare won’t pay for long-term care. Assistance with your activities of daily living is considered to be custodial care rather than medical care. Medicare does not assist with custodial care costs. When you discuss this matter with your elder law attorney, you will hear about Medicaid planning. Medicaid is a government health insurance program that will pay for long-term care costs. As you are probably aware, Medicaid is a need-based program. If you have significant assets and income you cannot qualify for Medicaid. However, many people who were not poor throughout their lives ultimately rely on Medicaid to pay for long-term care. Some of them suffer great losses. They do not plan ahead, and they wind up spending everything that they have paying for long-term care. At that point, once they actually do have significant financial need, they can qualify for Medicaid. Others take a different approach. If you decide that you want to be prepared to apply for Medicaid at some point in the future, you can take steps now to position your assets with Medicaid eligibility rules and regulations in mind. It may be possible to preserve resources for the well-being of your loved ones while still being able to gain eligibility if you take the right steps.

THIS CAN HAPPEN TO YOU

When you are considering the relevance of Medicaid planning, you may take it with a grain of salt. You have always been healthy enough to take care of yourself. You don’t see that ever changing, even if things may become more difficult. In fact, according to the United States Department of Health at Human Services, most Americans will need help with their day-to-day needs eventually. This is something that is relevant to everyone, regardless of your health or lifestyle at the present time. Hopefully you will never need living assistance. However, prudent individuals will definitely prepare for the possibility.

by

High net worth families must be aware of the existence of the federal gift tax. Actually, everyone is potentially exposed to the gift tax. The reason why most people don’t pay this tax is because there are exclusions. One of these exclusions is the annual gift tax exclusion.

$14,000 Per Person, Per Year

Under currently existing laws, you can give as much as $14,000 per year to any number of gift recipients free of the gift tax. This is not $14,000 total; this is per person, per year. You could give $14,000 to everyone watching a Yankee game with you at Yankee Stadium free of the gift tax.

However, if you gave one person $15,000, the transfer of $1000 would be taxable.

Unified Gift/Estate Tax Exclusion

Though that $1000 would be taxable, you could use a portion of a different exclusion to give the gift entirely tax free. There is another exclusion that you could use that exists in addition to the annual $14,000 per person gift tax exclusion.

The federal gift tax is unified with the estate tax. The gift tax exists to prevent wealthy people from giving gifts tax-free while they are living to avoid the estate tax.

There is a unified lifetime gift and estate tax exclusion. The amount of this exclusion in 2014 is $5.34 million. We must emphasize the fact that this exclusion is something that is completely separate from the annual per person exclusion.

You don’t have to use any of this exclusion until and unless you give a gift to someone in excess of $14,000 during a calendar year.

Marital Deduction

It should be noted that you do not have to use any of your annual exclusion or unified lifetime exclusion to give a tax-free gift to your spouse if you are in fact married. There is an unlimited marital deduction that allows you to transfer any amount of money to your spouse free of taxation. This applies to lifetime gifts, and it also applies to the value of your estate when you leave your spouse an inheritance.

Combining Annual Exclusions

While we are on the topic of spouses, you should understand the fact that your spouse has a $14,000 annual gift tax exclusion. You have your own annual $14,000 gift tax exclusion. If you combine the two, as a couple you could give as much as $28,000 to an unlimited number of gift recipients every year tax-free.

If your assets exceed the amount of the estate tax exclusion, you would naturally be looking for ways to transfer assets in a tax-free manner. The utilization of this annual gift tax exclusion could be part of the plan.

If you make measured divestitures over a significant period of time utilizing this annual gift tax exclusion, you can transfer assets tax-free to people who would otherwise be inheriting them. At the same time, you would be reducing the taxable value of your estate.