June 4, 2010 in Elder Law, Legal Articles by jferris

A Closer Look at Charitable Trusts

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.

April 25, 2010 in Elder Law, Legal News by admin

Amendments to the SEC Custody Rule

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.

April 25, 2010 in Elder Law, Legal News by admin

Comparing Testamentary and Intervivos Trusts

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.

April 25, 2010 in Elder Law, Legal News by admin

Understanding Financial Elder Abuse

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.

May 29, 2009 in Estate Planning, Legal News by admin

Estate planning attorneys at Littman Krooks encourage families to know their rights when sending a child with disabilities to college.

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.

May 29, 2009 in Estate Planning, Legal News by admin

Bernard A. Krooks to speak at Estate Planning Council of New York City, Inc.

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.

May 29, 2009 in Estate Planning, Legal News by admin

Transitioning a Child With Special Needs Into Adulthood

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.

May 29, 2009 in Estate Planning, Legal News by admin

Technology Adds a New Dimension to Estate Planning

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.

April 28, 2009 in Estate Planning, Legal News by admin

Patient Advocacy Groups Support Legislation to Eliminate Two-Year Medicare Waiting Period

The Coalition to End the Two-Year Wait for Medicare enthusiastically supports the introduction of the Ending the Medicare Disability Waiting Period Act of 2009. The Act would eliminate the current two-year delay in coverage for people with severe disabilities who are waiting to become eligible for Medicare coverage.

Among the advocacy groups in support of this bill, are the Special Needs Alliance (SNA) and the National Academy of Elder Law Attorneys (NAELA). Bernard A. Krooks, a founding partner of Littman Krooks LLP, is current President of the SNA and past President of the NAELA.

The Coalition consists of over 115 organizations that work to ensure access to health care for people with disabilities. The Coalition is urging Congress to make coverage for people with disabilities a priority while addressing the issue of national health care reform.

The 24 month waiting period has been in effect since 1972 when Congress stipulated that people with disabilities must first receive Social Security Disability Insurance (SSDI) for 24 months before gaining Medicare eligibility. The legislation to address this issue, introduced by Senator Jeff Bingaman and Representative Gene Green, will phase-out the waiting period for all people with disabilities over ten years, while immediately eliminating the waiting period for people with life-threatening conditions.

The 24 month waiting period has resulted in many individuals with disabilities going without health insurance during their wait. Nearly 40 percent of people with disabilities are without health insurance coverage at some point during their wait for Medicare; 24 percent have no health insurance during this entire period. The waiting period forces people with severe disabilities to endure two years during which treatment and care of their conditions are put at risk. Many forgo medical treatment and/or stop taking medications, compromising their already fragile health and resulting ultimately in conditions that are often more costly to treat when Medicare coverage finally begins.

The Special Needs Alliance (SNA) is a national, not-for-profit organization of attorneys dedicated to the practice of disability and public benefits law. Individuals with disabilities, their families and their advisors rely on the SNA to connect them with nearby attorneys who focus their practices in the disability law arena. SNA membership is based on a combination of relevant legal experience in the disability and special needs planning fields, direct family experience with disability, active participation with national, state and local disability advocacy organizations, and professional reputation. SNA members average 20 years of experience in special needs planning and disability law.

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

April 28, 2009 in Estate Planning, Legal News by admin

Living Trusts provide valuable estate planning benefits

The Revocable Living Trust has been growing in popularity as an estate planning tool for several years. The trend toward making a Living Trust an important element of an estate plan is understandable. A Living Trust offers benefits to both the individual who has established the Trust, called the Settlor or Grantor, and to his or her beneficiaries.

A Living Trust is a legal document that is intended to act as a partial substitute for, as well as a supplement to, a Will. The Settlor may transfer major assets like his or her, home, savings and investment accounts, to the Trust. The trust document contains instructions for distributing these assets upon the Settlor’s death. This type of Trust is referred to as “revocable” because the Settlor can amend or revoked at any time during his or her lifetime. It is a flexible document that can be updated given a change in circumstances such as a marriage, divorce or the birth of a child.

Revocable Living Trusts are managed for the benefit of the Settlor during his or her lifetime. Generally, Settlors name themselves as trustees of their Living Trust so that they may have full control over the management of their assets. If you have named yourself as trustee, you must also name successor trustees in order to establish who will manage the trust once you are no longer willing or able to do so.

The biggest advantage of a Living Trust is savings in both cost and time. Unlike a Will, a Living Trust does not have to go through probate to be executed. Probate is the court supervised process through which assets in a Will are distributed. The probate process can take months depending on the complexity of the estate and whether or not anyone chooses to contest the Will. Since the assets held in a Living Trust are transferred directly to the appropriate beneficiaries, the courts do not have to become involved in the process at all. All assets can be liquidated and distributed within weeks.

Living Trusts are also easy to administer, making it easier to choose trustees and successor trustees. Family members or trusted friends with no legal background will be able to serve as trustees. Being able to manage your own trust and have a family member become a trustee when you are no longer able can add to your peace of mind and make the process easier on your heirs.

A Revocable Living Trust allows for flexibility and security. Assets in the Trust can be built up over time, and access to income for beneficiaries continues uninterrupted should you become incapacitated. A Living Trust also ensures that your heirs will be able to avoid any aggravation and frustration that probate may cause. An experienced estate planning lawyer can set up the right trust for you and your loved ones.

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.