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3 Major Benefits of Living Trusts

Estate Planning

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Most people believe that naming beneficiaries in their last will and testament is their only option for leaving property and assets to surviving loved ones at the time of their death. While this is indeed an option, perhaps a better option is to use a legal tool known as a living trust. A living trust, also known as an “inter vivos” or “revocable” trust, is a written legal document through which your assets are transferred to a trust which you control during your lifetime. At the time of your death, your assets are then transferred to your designated beneficiaries by your chosen representative.

Here are the top ways in which a living trust can help you:

  • You can avoid probate: One of the greatest ways in which a living trust can benefit you and your family is that it can allow you to completely avoid the hassle and cost of probate. Even with a valid will, your estate would ordinarily have to go through probate and its associated legal proceedings before your assets would eventually be distributed, potentially taking months and costing your family thousands in legal costs. With a living trust, on the other hand, your assets are immediately transferred to your successor trustee and distributed as instructed.
  • Protection against court challenges: While court challenges against wills and living trusts are rare, living trusts are largely considered to be far more difficult to attack. Since living trusts require your continued involvement after their creation, this can often be seen as evidence that you were legally competent to manage your affairs.
  • You can avoid a conservatorship: In the event that you should become incapable of managing your living trust, such as through physical or mental illness, your successor trustee will be able to easily step in on your behalf. Without this authority, your family would instead be forced to go to court over the control of your financial matters – an oftentimes painful and highly public process. Most trust documents require the primary trustee to be certified as incapacitated by two physicians before the successor trustee may assume control.

Create a Living Trust Today – Dial (516)-928-6594

Nobody knows what the future holds. As such, it is important you take control and plan early to ensure your wishes are protected. At Davidov law Group, our Nassau County estate planning lawyers can eliminate the guesswork of creating a comprehensive estate plan and guide you towards a legal solution that is right for you. To find out more about how our team of top-rated Super Lawyers® can do for you, schedule your confidential case review today.

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While nobody ever wants to entertain the thought of their own death, it is an inevitability that must be planned for ahead of time. One of the most important ways for you to plan your final affairs is to draft a thorough and legally sound last will and testament. This document will provide your surviving loved ones with clear instructions regarding how you want your property and assets to be distributed. But, like many legal matters, creating a will can be complex and somewhat confusing at first glance. Where do you even begin, and what exactly should you include within your will’s language? Our firm has put together a quick list of matters that must be addressed when drafting your will to ensure your wishes are properly memorialized.

  • Decide what property to include: To begin, make a list of your significant assets and determine which you will include in your will and which you will distribute through other means. While real property, vehicles, and more may be included within your will, assets such as jointly-owned property, proceeds of a life insurance policy, or money in certain retirement accounts may require alternative methods to be distributed, such as a payable-on-death account or a living trust. Likewise, it is important to remember that if you are married, both you and your spouse must each make a separate will, and you may only leave your share of assets you jointly own with your spouse. An attorney can help you sort through your assets and determine the most appropriate method for each.
  • Decide who will inherit your property: Once you decide which property to include, your next priority will be to determine who gets what. While this may seem relatively straightforward, things can get complicated if you are considering leaving certain individuals out of your will, such as your spouse or children. Once you decide, make sure to include alternate beneficiaries in case your first choices do not survive you.
  • Name an executor: Every will must name someone to serve as an “executor” or “administrator” who will carry out its terms, including distributing your assets and ensuring that your final debts are paid. Make sure you choose someone you trust and that they are willing to serve this responsibility when the time comes.
  • Choose guardians: If you have children younger than 18, it is imperative you decide who you want to raise them in the unlikely event that you and your child’s other parent should be unable to care for them. Prospective guardians must be at least 18 years of age and should have a genuine concern for your children’s welfare. It is also important to consider any special needs of your children, the health and financial stability of your chosen guardian, and whether or not they share the same values.
  • Choose someone to manage your children’s property: If you have chosen to leave property or money to your minor children, you must also choose someone to manage whatever they inherit until they become of age. This person may be considered a property guardian, a property custodian, or a trustee depending on your state.

Prepare for the Future with Davidov Law Group

While many websites provide do-it-yourself will creation forms, they often contain legal loopholes or are so generic that they fail to cover all issues that may arise in the event of your death. At Davidov Law Group, our skilled Nassau County estate planning attorneys can walk you step-by-step through the process of creating a comprehensive will and estate plan, ensuring all aspects of your and your family’s future are covered.

To find out more about what our 25+ years of experience can do for you, call (516)-928-6594 or contact our office online today.

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It is never too early to begin thinking about the future and if you have a child with special needs, you must take extra care to plan for their future as well as your own. When planning for the future of a special needs child, there are additional factors to consider on top of traditional estate planning. By utilizing tools such as a special needs trust, you can provide your child with long term care after you pass.

A special needs trust is an essential part of an estate plan that will provide care for your child after you are no longer able to. A trust is an agreement set up between (1) a benefactor whose assets are held in the trust, (2) a beneficiary who receives these funds, and (3) a trustee who oversees the administration of the trust according to the terms set by the benefactor. A special needs trust can be set up to pay for any number of goods and services as you see fit and that may not be covered by public aid.

A central benefit of a special needs trust is that assets placed in a properly-drafted trust will not impact the eligibility of your child for government programs. Governmental programs such as supplemental security income (SSI) and Medicaid are often vital to the financial support and wellbeing of special needs children. These programs have financial limits for eligibility and you must take care that an inheritance does not disqualify your child from receiving the care they need. A skilled attorney in family law and estate planning can help you decide on the type of trust which is right for you.

There are two main types of special needs trusts:

  • First-party trust: Funded by assets that are legally owned by your child such as their inheritance.
  • Third-party trust: Funded by assets which are owned by a person other than your child such as the parent.

Estate planning is an ongoing process, especially when the care of a special needs child must be considered. As you and your family continue to grow, you will need to update your plan as new situations present themselves. The estate planning attorneys from our firm can use tools such as a special needs trust to ensure that, when you pass, your child will be well cared for.

Compassionate Estate Planning Services

If you are considering creating an estate plan for your special needs child, a Nassau County estate planning attorney from the Davidov Law Group can help you decide on the best options for your family. It is our goal to ensure that when the time comes, your child will be provided with the best care possible.

Call (516)-928-6594 to schedule a personal consultation and talk to an attorney about planning for your family’s future.

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Many people think incapacity planning is not for them, assuming only those who are approaching retirement age can benefit. The reality is, accidents can occur at any time and leave us mentally incapacitated. A car accident, for example, can leave victims in a coma while medical conditions such as Alzheimer’s disease can slowly take away a person’s mental capacity. By establishing a detailed incapacity plan, you will be able to select a representative to act on your behalf in the event that you are unable to manage your affairs.

Creating a Power of Attorney

A durable power of attorney is a legal document which designates a specific person to act on your behalf if you become incapacitated. This person, known as the “attorney-in-fact” or “agent”, will be responsible for making financial decisions, such as managing your debts and investments, as well as overseeing your medical treatments. While you are mentally competent, you have the power to dictate how you wish your agent to act if you are ever incapacitated.

A “durable” power of attorney refers to the fact that the legal document will not expire if you are mentally unable to manage your affairs. In contrast, a “nondurable” power of attorney is no longer valid should you (the principle) become mentally incapacitated. Despite its name, your attorney-in-fact does not have to be a legal professional, in fact agents rarely are. They must, however, be someone you can trust and will not abuse or neglect their responsibilities.

One person may not always be the best choice to handle both the medical and financial decisions. Separate documents are often drafted for the medical and financial powers of attorney and you are able to distribute responsibilities between different people as you see fit. In the event that you choose a single person to act on your behalf, it is a good idea to designate an alternative candidate. This way, if something should happen to the attorney-in-fact, you will still have a representative to carry out your wishes. By making these choices and preparing early, the agents you choose to act on your behalf will have time to understand and prepare for their responsibilities.

Avoiding Conservatorships

In the event of an accident, if no valid attorney-in-fact has been established, the state may designate a conservator to handle your affairs. This can leave a family member to administer your estate, leaving them with a responsibility that they will likely be unprepared for. It can also lead to a dispute in cases where there is no clear indication of what the incapacitated party would have wanted.

Conservatorships also have additional legal necessities such as court hearings. While these processes are in place in order to help safeguard the mismanagement of an estate, it can be a costly process and burden your loved ones with unnecessary legal fees. The best way to avoid a conservatorship is to have a well drafted incapacitation plan in place.

Secure a Compassionate Estate Planning Attorney

If you have questions regarding the estate planning process or want to create an incapacity plan, our Nassau County estate planning attorney at the Davidov Law Group can help. Our firm can provide legal guidance to help ensure that your incapacity plan meets all legal requirements and that your wishes will be carried out as you intend.

Call (516)-928-6594 to request a personal consultation and talk to a lawyer about planning for the future.

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Estate planning is essential for adults of all ages. This is especially true for married people who have children.

When you hear about tragic circumstances that befall others because of estate planning error you understand why everyone should have a good estate plan. We are all day to day as they say in the sports world. This is simply the human condition, and there is nothing anyone can do about it.

Ordinary people should certainly take steps to make sure that their spouses and children are provided for, but wealthy people have yet another layer of concerns.

The estate tax can absorb a significant percentage of the wealth that you are leaving behind if you have assets that exceed the exclusion amount. At the current time the maximum rate of the federal estate tax is 40 percent, and here in New York we have a state-level estate tax as well.

THE STEVE MCNAIR ESTATE

With the Super Bowl behind us, here’s the story of a football player who did not take his estate planning game seriously. The onetime football star Steve McNair was killed in 2009, and he was paid extraordinarily well as a top rate NFL quarterback for years. He had not taken the time to execute a last will or any other type of an estate plan.

His assets were subject to estate taxes. This is one of the reasons why his resources were frozen in probate after he passed away. Because he didn’t have an estate plan he hadn’t positioned his assets with tax efficiency in mind.

When you draw up a last will you should consider the matter of estate administration. Somebody has to actually do all the legwork as it were to make your wishes a reality.

This individual is called the executor or executrix. An executor is a male who serves this role, and a female estate administrator is called an executrix.

In cases when someone dies without having executed a last will the Surrogate’s Court is forced to name a personal representative to handle the estate administration tasks. In the case of Steve McNair his widow was named the personal representative.

McNair had a home built for his mother in Mississippi years before his death, a ranch that sits on 45 acres. She was under the impression that this ranch was a permanent gift to her.

McNair’s surviving spouse didn’t see it this way at all because the house was in her deceased husband’s name. As the personal representative of the estate she had the right to demand rental payments from Steve McNair’s mother. She asked $3000 a month in rent.

Unfortunately, Lucille McNair could not produce this type of money on a monthly basis to remain in the home. She moved out, and she took her belongings with her.

McNair’s widow took things a step further and demanded that Lucille pay over $50,000 to account for the things that she took, though the late quarterback’s mother says that these items were her personal property.

It is unlikely that Steve McNair wanted his mother treated this way, and he could have prevented it with the proper estate planning.

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You have to be careful that you don’t do more harm than good when you are planning your estate. If you are not aware of all the relevant facts you may provide assets to loved ones in a way that is less than ideal, and they may ultimately pay a significant price.

The above principle applies in a number of different situations, but we would like to look at the matter of special needs planning here.

Some people with special needs depend on benefits that they get from the government to provide very expensive treatment and care. We’re talking about care that can ultimately reach the seven figures over the life of an individual that has a disability.

Medicaid and SSI are programs that are designed to help people that have very limited financial resources. If someone who was eligible for one of these programs was to suddenly come into an inheritance all of a sudden these benefits could go away.

The person who left behind the funds thought that he or she was doing something generous for a loved one. In the end, the results could be disastrous.

There are websites that advertise do-it-yourself estate planning downloads and worksheets. You may simply use one of these services to create your own last will without understanding any of the above.

If you were to consult a licensed estate planning attorney you would hear about alternatives that don’t impact government benefit eligibility, such as supplemental trusts.

The wise course of action is to steer clear of DIY notions and seek professional advice before you make any serious estate planning decisions.

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Why not just create your own estate plan using fill-in-the-blanks documents that you can find on the Internet?

There are a number of answers to this question, but the thing that we would like to point out here is the need for a custom crafted estate plan.

Do you know what legal devices are best for your specific family dynamic, your financial standing, and your intentions? If you assume that you should use a last will you may be making an uninformed decision.

Let’s look at some common scenarios that exist that would all require specific estate planning steps.

Protecting Assets

Some people are in a position where asset protection is very important. This would commonly include individuals who are surgeons, landlords, and other people who are inherently vulnerable to lawsuits.

There are a number of things that can be done to protect your assets, such as the creation of a family limited partnership or a limited liability company. Some people absolutely must take action to protect assets.

Providing for Poor Money Managers or Heirs With Personal Problems

Not everyone is a perfect person. You may have someone in the family who could be described as a spendthrift. Perhaps you have a loved one with a drug or alcohol problem.

If you do in fact have someone on your inheritance list who is not good at handling his or her finances you could account for this by making this individual the beneficiary of a sentry trust.

Assets that have been conveyed into the trust are protected from the beneficiary’s creditors. The beneficiary can receive distributions from the trust in accordance with your wishes. However, he or she does not make decisions with regard to the principal.

You name a trustee who manages the funds. This can be a person known to you, or a professional entity like a trust company.

When you use a bank or a trust company you don’t have to worry about the trustee passing away.

To provide for someone with personal problems you could create an incentive trust. With these trusts you include incentives that must be met before distributions are given out.

Children From Former Marriages

Another circumstance that would require a particular brand of estate planning is that of the blended family situation. If you get remarried and you don’t take steps to protect the interests of your children from previous marriages you are taking quite a risk.

For that matter, if you don’t do anything to protect your own interests you are taking a huge risk because over 60% of second marriages do not last.

It is possible to protect yourself and your children while still providing for your new spouse in the event of your passing if you implement the appropriate strategies.

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People sometimes envision a hypothetical scenario. After a funeral family members gather in private and someone very close to the deceased somberly reads the last will.

This person will distribute inheritances and everything is settled.

The Probate Process

In fact the above is a myth. The estate must pass through the process of probate before anyone will receive an inheritance.

During this process the executor or executrix conducts business on behalf of the estate. Depending on the complexity of the overall situation this can take varying amounts of time.

Effective Navigation Through Probate

Probate doesn’t have to be a problem. If you work with an experienced probate lawyer who understands the New York laws thoroughly you can navigate through the process in the most efficient manner.

Most people have never dealt with the probate courts, so this professional guidance is going to be the key to an efficient passage through probate.

Download Your Free Probate Report

Our firm has prepared a special report on the topic of probate. It will provide you with a basic understanding of this legal process, and you will be able to go forward in an informed manner once you digest this information.

We are currently offering this report free of charge to our readers. If you’re interested in obtaining your copy of the report we invite you to click this link and follow the simple instructions: New York Probate Report

If you want to take the next step and speak with an attorney after reading the report you can contact our firm to set up a free consultation. We can be reached by phone at 718-793-7000.

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With a generation-skipping trust you can keep more of your hard-earned resources in the family for a longer period of time.

Why would there be any need to utilize an estate planning device like a generation-skipping trust to preserve your wealth? The answer can be broken down to three words: the estate tax.

We have a federal estate tax that is imposed on assets that you are transferring that exceed $5.25 million. The maximum rate of this tax is 40% in 2013. While New York estate tax is imposed on assets being transferred that exceed $1 million, with a graduated tax rate that caps at 16%. This tax is often criticized because people say it is an instance of double taxation. They say that the estate tax is levied on assets that are left over after taxes have been paid on earnings.

In fact, this description may not go far enough. The estate tax can be imposed over and over again as assets are passed from generation to generation, so the same assets can be taxed multiple times.

By conveying assets into a generation-skipping trust you can slow this process down considerably. With these devices you skip a generation and name your grandchildren as the beneficiaries.

Your children can benefit from assets that have been placed into the trust, so you are still providing something for them. However, they never own the assets outright so there is no estate tax imposed on that generation.

When they pass away the beneficiaries of the trust assume ownership of the assets. This transfer is taxable, but you facilitated the avoidance of one imposition of transfer taxes by creating the trust.