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A charitable trust is a financial account that allows you to donate money to a charity while receiving a tax benefit for you and your heirs. There are two major types of charitable trusts: charitable remainder trusts (CRTs) and charitable lead trusts (CLTs). Of these two types of trusts, CRTs are the most common. These types of trusts are usually funded with a minimum of $100,000. CRTs are attractive, because in addition to the income tax and estate tax deductions that are available, the donor of the trust also receives income from the trust for a specified period.

A CRT is a trust which allows for a specified distribution, which must occur at least annually, to one or more beneficiaries. At the very least, one of these beneficiaries must not be a charity. The trust is set up for life or for a term of years, with an irrevocable remainder interest to be held for the benefit of, or paid over to, charity.

CRTs are further broken down into two types: charitable remainder unitrusts (CRUTs) and charitable remainder annuity trusts (CRATs). Both are irrevocable trusts that pay out a portion of the value of the trust assets each year to a beneficiary chosen by the trust donor. The beneficiary can be the donor or his or her spouse. The difference in these trusts lies in the fact that the CRUT pays a fixed percentage of the value of its holdings, and the CRAT pays a fixed dollar amount.

Charitable lead trusts (CLTs) are different from CRTs in that they pay income to a qualified charity for a set number of years or for the lifetime of the individuals who establish the trust. At the end of the trust, the assets are returned to the donor, the spouse, children, or other specified individuals. A great benefit of a CLT is that if the trust earns more than it pays to the designated charitable beneficiary, those extra earnings will then pass on to the non-charitable beneficiaries without racking up additional estate or gift taxes.

If you or your spouse wishes to establish a charitable trust, you should contact an estate planning attorney, who can offer you guidance about which type of trust will be right for you and 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.

The recent repeal of the federal estate tax is having a profound impact on the estate plans of millions. Littman Krooks LLP is offering a complimentary estate tax seminar for those who wish to learn more about how they might be affected.

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.

All parents want to minimize the opportunity for conflict among their children once they have passed away. Sometimes, however, conflict arises when parents have gifted money to one of their children and not to the others. Such conflict may be avoided by including provisions in your estate plan for gifts and loans previously made to children.

Parents’ intentions regarding gifts to children should be made clear in their estate planning documents. A document could state, for example, that you are not making any adjustments based on gifts you have made. Doing so will make it clear that none of the children should receive a reduced share of the estate based on past gifts. On the other hand, you could list past gifts that have been made and carefully explain why one child is receiving a reduced share of the estate.

Loans made to your children should also be addressed in your estate planning documents. Verbal loans can be particularly tricky. You might, in this case, make a provision in your documents that classifies all verbal loans as gifts. If, however, there are verbal loans that you do not wish to have considered as gifts, you should state this in writing. If you wish to consider loans made to your children as advances on their inheritance, then this should also be specified in your estate planning documents.

Carefully considering and planning how you would like to deal with gifts and loans to your children will help avoid conflict among them in the future. You should consult an estate planning attorney to ensure that your legal documents provide guidance regarding your intentions.

Learn more at Littmankrooks.com.

New amendments to the SEC Custody Rule will take effect this month. These changes will impose a number of additional controls on registered advisors in order to decrease fraudulent activity.

The SEC’s adoption of amendments to Rule 206(4)-2 under the Investment Advisers Act of 1940 (the “Amended Custody Rule”) and related changes to Form ADV are effective March 12, 2010.

The primary purpose of the amendments to the custody rule is to impose additional controls on registered investment advisers (RIAs) who have access to client funds and securities. RIAs have “custody” of client assets when they have: possession of client funds or securities, are authorized to withdraw client funds or securities maintained with a third-party custodian, or possess legal capacities that gives them legal ownership of, or access to, their client’s funds or securities.

These amendments are part of the SEC’s attempt to deter fraudulent activity, to restore the public’s faith in the investment advisory industry, and to restore their faith and confidence in the SEC.

The amended custody rule will now require an advisor with custody to complete the following actions:
submit to an unplanned, annual audit of all discretionary accounts administered by an independent public accountant registered with the Public Accounting Oversight Board (PCAOB) in order to verify client assets
the advisor or related person must obtain an annual written internal controls report from an accounting firm registered with PCAOB, unless these accounts are held at a third-party custodian
the advisor must send a notice to the client, if the advisor is opening an account on behalf of him/her with a qualified custodian. This notice must include contact information for the custodian as well as a statement encouraging the client to compare the account statements of the custodian and advisor.

the advisor must have a reasonable basis for believing that the custodian sends statements to clients on a quarterly basis.

While the adoption of these amendments may work to decrease fraudulent activity, adopting these measures will also impose significant costs on investment advisors without offering a proportionate benefit to their clients. In spite of the potential costs of these new amendments, all SEC-registered investment advisors are required to comply with theses updated custody rules by the effective date, unless other compliance dates have been specified.

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.

Establishing a Special Needs Trust for a loved one with disabilities can ensure that he or she will be taken care of in the future. However, it is important for families to choose the right type of trust. There are two major types of Special Needs Trusts: testamentary and intervivos. The major difference in these trusts is that a testamentary trust is created through a Will, and it only becomes effective after the death of the parents or primary caregivers of the child with special needs have passed away. The trust is created whenever the decedent’s Will has been probated, and the assets are then transferred to the trust. Many parents choose to establish this kind of trust if they are concerned with having all of their assets available to them during their lifetime. Also, establishing this type of trust requires less work on the part of the parents or caregivers, as they simply need to establish the trust in their Will.

On the other hand, an Intervivos Special Needs Trust is also meant to protect the future of the person with the disability but allows parents or caregivers to deposit money and other assets into the account and manage it while they are still living. Parents do not have to wait until the child turns 18 to establish this trust but can establish it at any time. An Intervivos Special Needs Trust offers several key benefits:

• The trust is completely separate from the family’s main estate.

• There is more freedom in managing the trust, as it is normally managed by the child’s parents.

• Using this account will help to keep a record of all the supplementary items that have passed government scrutiny. This will make it easier for the future trustees to know which items are appropriate and will provide a guide for them to use in the future.

• These types of trusts will allow family members to give money to the trust now, rather than just upon their deaths, where there may be significant tax issues that prevent them from donating as much money as they would like.

In creating an Intervivos Special Needs Trust, families will ensure a secure future for the person with the disability. This type of trust will continue to function without interruption in the event that parents have to go into a nursing home or die suddenly. Also, the trust allows for greater flexibility and the ability to build up assets over time.

It is important for family members to consult with an attorney who specializes in special needs planning, as they consider the benefits and drawbacks of each type of trust.

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.

Financial elder abuse is a serious problem for many senior citizens in the United States. Being able to recognize and report this kind of abuse will ensure the safety of your loved ones.

Elder abuse occurs when a victim is financially exploited, usually due to his or her diminished mental capacities. Financial elder abuse can take a number of different forms, including stealing money and other assets, forcing the elder to sell his or her property, and withholding money from the elder for daily living expenses. Taking an elder’s money and using it for purposes other than caring for or increasing the elder’s quality of life may be financial abuse.

Abuse of this nature is a crime, and it is often committed by someone who is close to victim– a family member, close friend, or even a service provider such as a doctor or therapist. Fraud, theft, forgery, extortion and the wrongful use of a Power of Attorney are other popular forms of financial abuse. This kind of exploitation may occur with or without the victim’s knowledge. Often, this kind of abuse may go unreported because of the elder’s inability to identify the situation, fear of the abuser, shame at the fact that he or she can’t control the situation, fear that he or she will not be believed, or a feeling that he or she is incapable of accurately describing the situation due to mental incapacitation.

Financial elder abuse also occurs when the victim is manipulated into signing legal documents, such as changing a Durable Power of Attorney, trust details, or Living Will. This practice commonly affects elders who have decreased mental capabilities, which makes it easier for them to be manipulated.

If you suspect this is happening to one of your elderly loved ones, there is something you can do to correct and even prevent it. Importantly, if the elder in question has any form of cognitive deficiency or he/she has been diagnosed with dementia, you can obtain a letter from the elder’s physician stating that the elder is no longer competent enough to handle finances. Without any medical or psychological evaluations of the elder, it is difficult to provide protection from financial abuse.

To prevent this kind of abuse, you may wish to consult an elder law attorney, who may be able to obtain permission from the court for an evaluation, even if the elder’s “agent,” does not wish to obtain such a test. An elder law attorney can help guide you through the process and help to secure your loved one’s health and happiness.

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.

Students with disabilities cannot and should not be denied the right to pursue a post-secondary education. Recently, more and more students are making the decision to move forward with their education beyond high school. It is important for these students to understand their rights at a post-secondary institution and know how those rights differ from the rights they have in high school. Students should also understand the responsibilities of the colleges to which they are applying.

In elementary, middle and high school, districts are required to provide a free appropriate public education (FAPE) to each child with a disability within their district. The school must identify the needs of each student with a disability and provide appropriate learning and educational tools to those individuals.

Colleges and other post-secondary institutions such as trade schools are not required to identify the needs of their students. They may not legally discriminate against a student with disabilities and must make appropriate academic adjustments in order to avoid discrimination. They are also required to provide housing that is comparable to that provided to all other students. However, they are not required to work proactively to address a student’s needs.

One of the most important rights afforded to students that wish to pursue higher education is that no student may be denied admission because of a disability. As long as a student meets the school’s essential requirements for admission, a disability cannot be cause for denial of admission.

If a student believes that they may need their college to make certain arrangements to meet their needs, then they have the right to request an academic adjustment. Academic adjustments include things like priority registration, reducing a course load, providing note takers or sign language interpreters, providing extended time for testing and equipping school computers with screen-reading.

Each college should have reasonable procedures for applying for an academic adjustment. It is important to inquire about the application process and submit your request as soon as possible. Since post-secondary institutions are not required to identify a disability, students and their parents must take care to ensure the appropriate steps are taken. Schools may not charge for this application process.

If a student believes that he or she is facing discrimination at college, there are several ways to address the issue. Colleges are required to provide a staff member who coordinates the school’s compliance with the law. This coordinator should be available to students who wish to have their concerns addressed.

Colleges must also have a procedure for a student who believes they are being discriminated against to file a grievance. As a last resort, if the student is not satisfied with the outcome of the grievance process, they may file a complaint against the school with the Office of Civil Rights or through the courts.

Pursuing a college education can be both exciting and frightening. Students who face the challenge armed with knowledge of their rights will have the tools they need to help them succeed in their pursuit of higher education.

To learn more about New York elder law, New York estate planning, NY elder law, New York special needs planning, visit Littmankrooks.com.

Littman Krooks attorney Bernard A. Krooks will lead an interactive discussion and analysis of New York’s new Power of Attorney law. Significant changes have been made to the New York general obligations law and the statutory short form Power of Attorney.

The new law affects both the content and execution of the Power of Attorney form. Some of the major changes include:

• The agent must sign and date the Power of Attorney and that signature must be acknowledged by both the principal and the agent.

• A “prudent person standard of care” is provided that has statutorily defined responsibilities. Responsibilities include record keeping (with receipts) and a requirement for the agent to make records available within 15 days of a written request by a monitor, co-agent, certain governmental entities, a court evaluator, a guardian, or a representative of the principal’s estate.

• In order for the agent to have the authority to make gifts, the principal must initial a provision granting gift-making authority plus the execution of a “statutory major gifts rider” which must be acknowledged and have two witnesses.

According to Mr. Krooks, the program is a must for all estate planning practitioners. The new law will go into effect on September 1, 2009.

The program begins at 8:30 am. on March 31. A brown bag breakfast will also be served at Marcum & Kleigman offices in New York, located at 655 Third Avenue, 16th floor.

Bernard A. Krooks is a founding partner of the law firm Littman Krooks LLP with offices in New York City, White Plains and Fishkill. Mr. Krooks is President of the Special Needs Alliance (SNA), a national network of attorneys dedicated to assisting families with special needs planning. Mr. Krooks is past Chair of the Elder Law Section of the NYSBA, Chair of its Legal Education Committee, and past Editor-in-Chief of the Elder Law Attorney, the newsletter of the NYSBA Elder Law Section.

To learn more about New York elder law, New York estate planning, NY elder law, New York special needs planning, visit Littmankrooks.com.

Planning for the future of a child as he or she transitions into adulthood is full of challenges for both the child and the parent. Children with special needs and their parents face an additional set of challenges. Preparations must be made for living arrangements, financial arrangements and the variety of caregivers that may be involved in the child’s development and adult life.

As a child with special needs approaches the age of 18, a variety of circumstances change. Programs that are available to help with the care of minors may no longer be available for adults. Leaving the public school system and pursuing a post-secondary education brings with it a new set of responsibilities. Eligibility for public financial benefits is subject to strict rules. Health care decisions are not automatically left to parents or guardians.

Financial planning for a child with special needs is the first step in providing a solid base of lifetime support. Once the child turns 18, his or her income will be used to determine eligibility for public benefits like Supplemental Security Income (SSI) and Disability. Earning too much because of contributions from parents will cause the loss of public benefits. This can be avoided through a Supplementary Needs Trust. Funds paid into the Trust will not be counted as income and therefore will not affect eligibility for benefits. However, the funds from a Supplementary Needs Trust can only be spent in certain ways. Planning for lifetime care must include instructions as to how the funds in the Trust are to be distributed and who will manage the trust.

Transitioning to adulthood also requires the use of more decision making skills. Parents of a child with special needs are used to making decisions for their child. As a child approaches adulthood, parents should make a determination about whether or not he or she will be capable of making appropriate decisions. In some cases, parents may need to petition for guardianship so that they can continue making important decisions. In these cases, parents will also need to appoint successor guardians to care for the child when they are not longer able.

Alternatives to guardianship do exist and may be a better option depending on the individual. The child turning 18, if he or she understands, can execute a durable power of attorney and create a healthcare proxy. This will provide for an agent to handle financial decisions and an agent to handle healthcare issues without the hassle of applying for guardianship.

Some children with special needs may wish to continue with education beyond high school. It is important for these students and their parents to understand their rights at a post-secondary institution and know how those rights differ from the rights they had in high school. Post-secondary institutions may not discriminate against students with disabilities, but they are not required to identify the special needs of their students as public schools are.

If a student believes that they may need a college to make arrangements to meet their needs, then they will need to request an academic adjustment. Academic adjustments include things like priority registration, reducing a course load, providing note takers or sign language interpreters, providing extended time for testing and equipping school computers with screen-reading. It is the responsibility of the student to request such an adjustment.

Another important consideration for parents of a maturing special needs child is housing. At some point, living at home will no longer be an option. Families will need to do significant research into their options. Will the child be able to live alone? Or will he or she require a group home or some other form of supportive housing? This should be decided well in advance so that it is not an issue during the stress of a parent’s illness or death.

Growing up and moving into adulthood is difficult for any adolescent, and even more so for a child with special needs. However, appropriate planning can help make the transition go more smoothly for the whole 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 about New York elder law, New York estate planning, NY elder law, New York special needs planning, visit Littmankrooks.com.

A good estate plan provides for the orderly transfer of property and the finalization of one’s wishes upon death. Estate planning tools, such as Wills, Trusts, gifts, and Powers of Attorney handle physical assets in a way that maximizes benefits and minimizes hassle for beneficiaries. However, as technology becomes an increasingly integral part of everyday life, “digital assets” such as email, social networking and online banking accounts also deserve consideration in modern estate plans.

Failure to make plans for online accounts or to leave behind a comprehensive list of passwords can cause unexpected hassle. Online banking accounts need to be secured and closed. Family members may want access to accounts in order to download and save any photos, writings or other digital works for posterity. In addition, family members may be able to take advantage of digital assets capable of generating revenue by having their Creative Commons licenses changed so beneficiaries can receive compensation. Most terms of use expressly forbid the use of an account by anyone other than the account holder, and attempting to address these issues without proper instructions can be difficult.

Since digital asset planning is new, the law is not always clear on the rights of online account holders and their family members. The question, which few existing laws address, is, who owns the content? And who has the right to access and close the accounts? Service providers like Facebook, Google and Twitter each reserve the right to close accounts at any time, and they are all wary of providing family members access to accounts.

Facebook, for example, expressly prohibits giving user information to family members, saying only that they will “consider” requests from close family members to close the account. Gmail, Google’s email service, will open an account to family members, but only after a copy of a death certificate, a Power of Attorney document and an e-mail sent from the deceased’s account are provided.

Estate planning attorneys and technology developers are beginning to look at digital assets like any other assets that can be bequeathed to a beneficiary after death. Companies like Legacy Locker offer the ability to safely store things like PC logins, domains and passwords to online accounts. Once the information is stored, a “beneficiary” is designated for each password and account. Beneficiaries then receive the information that has been bequeathed to them with instructions as to how it should be used after the account holder’s death.

It is increasingly difficult to make it through life without leaving an online trail of emails, accounts and passwords. These assets need to be addressed in an estate plan in order to protect your privacy and the privacy of your family, friends and business associates. Gathering information about accounts and passwords and indicating what should be done with them upon your death will ease the burden on family members and protect important online assets.

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 about New York elder law, New York estate planning, NY elder law, New York special needs planning, visit Littmankrooks.com.