FREQUENTLY ASKED QUESTIONS
The planning process could often be a confusing and overwhelming experience. To help guide you and answer any general questions that you may have, we have created this page to provide you with helpful information on a variety of Life & Estate Planning topics.
If you would like additional information or have more in-depth questions regarding your particular situation, please feel free to contact us at (914) 686-7272. We are here to assist you with all your Life & Estate Planning needs.
Q. What is the difference between "Life" and "Estate" Planning?
A. Basically, the area of "Estate Planning" covers the scenario of "what happens after you die?" It addresses how your assets will be distributed and to whom. It generally includes the use of Wills and Trusts to carry out your wishes, minimize estate taxes, and ensure that the maximum amount of your estate will pass on to your loved ones.
On the other hand, the area of "Life Planning" addresses "what happens while you are alive?" For example, what will happen to you, your home, and your assets if you are involved in a serious accident, suffer a medical emergency, experience a debilitating illness, or subsequently become incapacitated, etc? Life Planning will address these real-life concerns and put a plan in place to ensure that your health care wishes will be followed; that the costs of your long-term care will be covered; and that your home, your financial assets, and your loved ones will be fully protected in the event something should happen to you.
Many law firms offer "Estate Planning" services. However, to ensure that you and your family will be fully protected, both now and in the future, it is important to consult with an attorney who is knowledgeable and experienced in both the areas of "Life Planning" and "Estate Planning."
Q. Do I need a Life & Estate Plan?
A. Every adult (i.e., age 18 and over) should have some form of a Life & Estate Plan in place. If you don't have a fully-effective Life & Estate Plan in place, the laws of the State in which you reside will control what happens to you if you become ill, require long-term medical care, or become incapacitated. Furthermore, State law will dictate what happens to your estate (i.e., who gets what and how much, etc.) when you die, and it most likely will not be what you would want. If you want to control your destiny and ensure that your wishes regarding your health care, your home, your financial assets, and your estate will be carried out, then you should absolutely engage in Life & Estate Planning.
Also, having a Life & Estate Plan eases the burden on your family and loved ones as your most important wishes regarding your medical care, home and financial assets, and remaining estate will be clearly documented and made known to them. As a result, your family won't be left "in a lurch" having to guess or decide what needs to be done on your behalf - you already laid it all out for them. This not only eases the burden on your loved ones, but it also serves to prevent disputes and preserve family harmony.
Q. What is a Power of Attorney?
A. A Power of Attorney is an important document that can be extremely helpful to you and your family. If you are unable to manage your affairs due to an accident, an illness or even absence (e.g., extended time abroad, etc.), the Power of Attorney gives your agent the power to manage your affairs as you would handle them yourself. If you become incapacitated, it will be too late because you will no longer be able to execute a Power of Attorney at that point. If you are unable to handle your affairs and have no Power of Attorney, your spouse or family may have to petition the Court to have a Guardian appointed for you. The court-appointed Guardian would then be tasked with having to post a bond, file an inventory of your assets, and prepare regular accountings. The hassles, expenses and delays of a guardianship proceeding can easily be avoided by selecting an agent of your own choice and executing a Power of Attorney now, while you're able to do so.
Q. What is the difference between a Health Care Proxy and a Living Will?
A. A Health Care Proxy permits you to name an agent to communicate your health care wishes on your behalf if you are unable to do so yourself due to illness or incapacity. The Health Care Proxy is more general in nature and typically includes your wishes regarding medical tests, surgical procedures, medications, nutrition and hydration, etc. In contrast, a Living Will is more specific and sets forth your wishes as to whether life-sustaining treatment should be administered, withheld or withdrawn if you sustain a substantial and irreversible loss of mental capacity (e.g., if you are comatose or in a persistent vegetative state).
Q. What is HIPPA, and how could it impact me?
A. HIPPA stands for the Health Insurance Portability & Accountability Act of 1996. The purpose of this law is to protect a patient's privacy by regulating the disclosure and dissemination of sensitive medical information by healthcare plans and healthcare providers without the patient's consent or knowledge. However, during an emergency when a family member or healthcare agent needs to obtain relevant medical information and quickly act on behalf of an incapacitated loved one, this law often proves problematic. To avoid any such problems, it's important that any person designated as a healthcare representative be fully authorized to access and obtain all necessary health information protected under HIPPA - so that the necessary medical information is available to make all required healthcare decisions on the patient's behalf.
Q. Do I need to have a Last Will & Testament?
A. A Last Will & Testament enables you to direct the distribution of your property and control "who gets what" after you pass away. It also allows you to appoint an Executor to oversee the distribution of your assets and ensure that your testamentary wishes are carried out. If you have minor children, the Last Will & Testament should also designate a Guardian to care for and provide for the financial needs of your children. If you don't have a valid Last Will & Testament, State law will determine who gets your assets and who should be appointed as legal guardian of your minor children - and it likely won't be what you would want.
Q. What is the difference between a Last Will & Testament and a Living Trust?
A. A Last Will & Testament and a Living Trust both control the distribution of assets upon death. However, the manner in which this happens is one of the main differences between a Will and a Living Trust. A Last Will & Testament has no effect until you die; and, when you die, the Will must go through the Probate Court system before your estate can pass to your beneficiaries. The time frame for probating a Will generally takes six months to one year even if it is a relatively simple estate and nobody is contesting the Will. In contrast, a Living Trust becomes effective upon the creation and funding of the Trust; and, when you die, the trust assets automatically pass to your beneficiaries without having to go through the probate process.
Q. Should I have a Trust to protect my assets?
A. Generally, Trusts are excellent vehicles for protecting assets. They may be utilized to protect your home and financial assets from taxes, creditors (including Medicaid), as well as the court costs and delays associated with the probate process. In addition, with a Trust, you can control how and when distributions are to be made to your beneficiaries (e.g., upon reaching a certain age, in certain installments, to be used only for certain purposes, etc.). It is recommended that you consult with an experienced Life & Estate Planning attorney to determine whether a Trust makes sense for your particular situation.
Q. What can I do to protect my home?
A. There are a number of different strategies, including setting up a Home Protection Trust, which may be implemented to protect your home from potential creditors (including Medicaid), as well as to minimize your property taxes and capital gains taxes. To determine which home protection strategy would work best for your particular situation, it is recommended that you speak with an experienced Life & Estate Planning attorney.
Q. Being newly married, what sort of planning should my spouse and I be doing?
A. As you enter into this new stage of life, at a minimum, it's important to consider setting-up new Powers of Attorney, Medical Directives and Last Wills & Testaments to reflect your changed circumstances and ensure that you and your spouse will be legally empowered to carry out each other's wishes. In addition, it is important that you both consider updating the beneficiary designations on all your accounts to reflect your new marital status.
Q. What can I do to protect my children in the event something should happen to both me and my spouse?
A. As parents with young children, it's important to have a Last Will & Testament (and/or a Trust) which designates a legal guardian to care for the personal and financial needs of your children if something (e.g., a serious car accident, a major illness, etc.) should happen to both you and your spouse. If you don’t have a Life & Estate Plan which sets up a guardian plan to care for your children, then your children could end up in Child Protective Services until the court system can sort out who should be appointed as their legal guardian(s).
Q. How can I ensure that all of my disabled child's future care needs will be taken care of?
A. We can help you answer difficult questions like this, and assist you by designing a Special Needs Trust ("SNT") which could make funds available to provide for your child's care needs during his or her lifetime and, at the same time, preserve his or her eligibility for means-tested government programs such as Supplemental Social Security Income ("SSI") and Medicaid. The funds placed in the SNT can be used to pay for "supplemental" things that are not covered by the government programs; things such as home modifications, a wheelchair-accessible van, clothing and personal items, education, vacation and travel expenses, entertainment and recreational costs, special medical and dental care, etc. In short, a properly designed SNT would provide for the "extra" care and services that could significantly improve your child's quality of life.
Q. I'm going through a divorce, so planning-wise, what do I need to do?
A. If you are divorced, or in the process of going through a divorce, it is important that you immediately review and update all your planning documents (e.g., Power of Attorney, Health Care Proxy, Living Will, Last Will & Testament, etc.), update title ownership on all your financial accounts, and update the beneficiary designations on your brokerage accounts, retirement accounts and insurance policies, etc. to reflect the change in your marital status. If you don't update your plan accordingly, it could result in unpleasant and unintended consequences such as your ex-spouse remaining as a beneficiary of your assets and/or your ex-spouse remaining in charge of making financial, property and health-related decisions on your behalf.
Q. I'm getting re-married, if something should happen to me, how can I make sure that my new spouse will be provided for while, at the same time, making sure that my children from my previous marriage won't be left out?
A. Upon remarriage, issues often arise when there are children from a previous marriage. On the one hand, it's natural to want to make sure that your new spouse is provided for after your death. On the other hand, you probably would also want to ensure that your children are provided for as well. As much as you may love and trust your new spouse, if you leave your estate directly to your new spouse, it's possible that he or she could deplete all the assets, re-marry (and decide to leave everything to the new spouse), or have a falling-out with your children; meaning that, in the end, your children could end up with nothing.
In scenarios such as this, a special type of Trust called a Qualified Terminable Interest Trust ("QTIP" Trust) could be set up to hold your assets and provide your spouse with an income stream for life (thus, allowing your spouse to maintain his/her accustomed standard of living). Then, after your spouse's death, the Trust would direct that the remaining Trust assets pass on to your children. In sum, if set up properly, a QTIP Trust is an excellent way to provide for your second spouse while still protecting and preserving assets for your children (or any other beneficiaries that you wish).
Q. Doesn't Medicare cover the cost of nursing home care?
A. Many people make the mistake of thinking that after they turn 65 years of age, Medicare will pay for nursing home care. However, in reality, Medicare pays the full cost for only 20 days of “rehabilitative” nursing home care. After that, it covers up to another 80 days with the patient paying the first $200.00 (the co-pay amount in 2023) of daily costs. After these 100 days, Medicare coverage ends and the patient is responsible for the full amount of the cost of his/her long-term care. Thus, if one’s primary goal is to protect their hard-earned assets from being depleted by the exorbitant costs of long-term care, alternative sources of funding such as long-term care insurance and Medicaid should be looked into and considered.
Q. What should I do to ensure that I will have enough money to cover the costs of my future care needs?
A. The average cost of nursing home care in the New York City metropolitan area currently exceeds $14,000 per month, and this figure is only expected to continue rising in the future. Unfortunately, most people end-up depleting their life savings within a year or two after entering a nursing home. To make sure that you (or a loved one) will be in a position to cover any future care needs without losing your home and your life savings, it's important to speak with an experienced Life & Estate Planning attorney to conduct a comprehensive review of your particular situation and discuss your planning options. It's important to understand that the earlier you engage in long-term care planning, the more options you will have available to you, and the more assets you will ultimately be able to preserve.
Q. Is long-term care insurance worth the cost?
A. Over time, the premiums associated with long-term care insurance can certainly add up. However, for those who later need to utilize such policy benefits to cover their substantial long-term care costs, it could truly end up being a worthwhile investment. As part of our Life & Estate Planning services, we could have you speak with one of our trusted long-term care insurance advisors (at absolutely no obligation to you) to explore the various policy options and related costs (i.e., perform a cost-benefit analysis), and see if long-term care insurance would make sense for your particular situation.
Q. My mother was just admitted to a nursing home, and we learned that it will cost over $16,000 per month - how is she supposed to afford that?
A. If your mother doesn't have the funds to privately pay for her care, and she does not have a long-term care insurance policy in place, then Medicaid will likely be her only option. Unlike Medicare, Medicaid is a government program that covers costs associated with long-term care. To qualify for Medicaid, a person must meet strict financial and other eligibility requirements. The rules governing Medicaid are complex, and are frequently changing - so great care must be exercised when planning and applying for Medicaid benefits. If you wish to establish eligibility for Medicaid benefits, it is recommended that you speak with an experienced Life & Estate Planning attorney.
Q. How do I qualify for Medicaid benefits?
A. The regulations regarding Medicaid eligibility are complex and fraught with many pitfalls for the unwary. Generally, to establish Medicaid eligibility, an applicant needs to be below certain asset and income limits (which change from year to year). In addition, there is a "look-back" period during which time Medicaid may look back at an applicant's property and financial records to examine what he/she has done with his/her assets. Any uncompensated transfer of assets (i.e., gift transfers) will result in a period of ineligibility (i.e., a "penalty period") during which time the applicant will not be eligible to receive Medicaid benefits. Until the applicant establishes his/her eligibility for Medicaid benefits, he/she will be responsible for privately paying for the ongoing cost of his/her long-term care.
Q. Could Medicaid take my house?
A. Generally, a person's primary residence is considered to be an "exempt resource" for Medicaid eligibility purposes if the applicant and/or the applicant's spouse resides in the home; or, if the applicant has a child who is under the age of twenty-one, blind or disabled residing in the home. If your home does not meet these requirements to qualify as an exempt resource, Medicaid could deny your eligibility or place a lien on your home. However, with the proper planning, there are effective legal strategies that may be implemented to protect your home from Medicaid.
Q. My mother is currently receiving home care Medicaid benefits, but Medicaid is taking almost all of her monthly income - how is she supposed to afford to pay her monthly household bills and living expenses?
A. A Pooled Trust provides an excellent way for a Medicaid recipient to preserve his/her surplus income (i.e., income over the Medicaid monthly income allowance). Once the Pooled Trust is set up, the funds transferred into the trust may then be utilized to pay the home care Medicaid applicant’s living expenses such as food, clothing, monthly rent or mortgage, telephone, electricity, taxes, home repairs (basically all living expenses except medical premiums and medical bills). In sum, a properly prepared, Medicaid-approved, pooled trust would allow the home care Medicaid recipient to: (1) preserve his/her “surplus” income, (2) pay his/her living expenses, and (3) maintain his/her accustomed lifestyle while still qualifying for home care Medicaid benefits.
Q. When is the best time to start doing Medicaid planning?
A. Early planning is the key to preserving assets. The earlier you take steps to engage in Long-Term Care Planning, the more planning options you will have available to you; and, ultimately, the more of your assets you will be able to preserve. This is an area where you could truly benefit from planning ahead and having "time on your side!"
Q. How can I protect my estate from paying estate taxes?
A. There are many sound strategies available for protecting an estate from having to pay estate taxes. for example, Trusts are an excellent vehicle for reducing or eliminating estate taxes. In addition, Trusts provide many other substantial tax planning benefits, including the preservation of the step-up in basis when transferring property, the reduction or elimination of capital gains tax, and the preservation of property tax exemptions, etc.
Q. My friend says I should do X, Y, and Z because that's what her attorney recommended for her - so, should I do that too?
A. When it comes to Life & Estate Planning (as in many other things in life), what is good for the goose is not necessarily always good for the gander. While I'm sure your friend means well, the details of each person's particular situation vary (e.g., planning goals, family dynamics, health status, amount and types of assets, tax situation, etc.) and, therefore, there many different factors which must be taken into account when considering planning strategies. Before taking any action, it is recommended that you first consult with an experienced Life & Estate Planning attorney to review the particulars of your situation and make sure that any planning strategies that are to be implemented are appropriate for your particular circumstances and won't result in any unintended consequences and/or impact your estate negatively in any way whatsoever.
Q. How often should I review my Life & Estate Plan?
A. Once your plan is in place, it is important to have it thoroughly reviewed every few years. Over time, various life events take place (e.g., marriages, births, divorces, re-marriages, illnesses, deaths, etc.), and changing laws could negatively impact an existing plan. Therefore, it is crucial to have your plan regularly reviewed to make sure it stays up-to-date with the changing times and will continue to be effective in carrying out your planning goals.
Q. What does the initial consultation involve?
A. During the initial consultation, we will conduct a comprehensive assessment of your current situation including your family relationships, health status, current planning documents (if any), home and real property ownership, financial accounts, retirement accounts, sources of income, debts, life and health insurance policies, etc. We will also fully discuss your concerns, your planning goals, and your vision for the future.
Once we have this important background information, we'll be able to accurately address your questions and discuss suitable planning options that will help accomplish your planning goals, along with the pros and cons associated with each of the planning options. We'll also explain the applicable laws to you, provide our professional recommendations for best accomplishing your planning goals and wishes, and assist you in narrowing down the various planning options into a specific "plan of action," based on your personal wishes and level of comfort.
The initial consultation typically lasts approximately one and one-half hours. After our meeting, we will quote a fee to complete any projected legal work to be performed on your Life & Estate Plan.
Q. What are your legal fees?
A. Our Life & Estate Plans are customized to each client's particular needs. As a result, our legal fees vary based on the extent of the legal work to be performed and the anticipated amount of time to be expended on each matter. Once we have an opportunity to sit down together with you and fully review your situation and determine exactly what legal work needs to be performed on your behalf, we'll quote a fee to complete any projected legal work to be performed on your Life & Estate Plan. Thereafter, you may decide whether you would like to move forward with our Life & Estate Planning Services. There is no obligation on your part to proceed beyond the initial consultation if you do not wish to do so.
Q. Do you offer any alternatives to an in-office consultation?
A. We realize that hectic work schedules and busy family lives sometimes make it challenging for prospective clients to find the time to come into our office for their initial consultation. For this reason, and for your convenience, we offer our prospective clients the opportunity to "attend" the initial consultation by way of a telephone conference call or a virtual meeting (via Zoom or Skype).
Q. Do you make in-home visits?
A. We understand that not everyone is physically capable of making it into our office for a consultation or office meeting. Therefore, in such situations, we are available to make arrangements for in-home visits (as well as visits to Hospitals, Assisted Living Facilities and Nursing Homes).
Q. How do I get started with my Life & Estate Planning?
A. A phone call to our office is all it takes to start the ball rolling. Our initial conversation will give us an opportunity to: (1) introduce ourselves, (2) get a sense of your planning goals, (3) confirm whether we can be of assistance, and, if so, (4) find a good time to sit down together and further discuss your planning needs and wishes. After our initial conversation, we'll send you an Introductory Packet which will serve to further familiarize you with our firm, summarize the topics that we will cover during our first meeting, and provide you with a checklist of helpful information and documents that you should gather and bring to the meeting.
If you would like additional information or have more in-depth questions regarding your particular situation, please feel free to contact us at (914) 686-7272. We are here to help you with all your Life & Estate Planning needs.