ESTATE PLANNING BLOG

Date: 6/9/2016 12:53 PM EDT

Estate Planning is about considering and addressing the contingencies that arise as the result of a person’s death or incapacity. Of the majority of people I meet who have children, the overwhelming majority are concerned with the care of their children under such dire circumstances.  That is because the vast majority of parents want what is best for their children and wish to create a situation where the tragic loss of a parent creates as little disruption in the lives of the child as possible.   This is especially true of the single parent who must balance a myriad of concerns and issues when considering the needs of their children.  Fortunately, there are methods for dealing with these concerns. They are through the use of a Guardianship Clause in a Will, the Standby Guardianship and the Designation of Person in Parental Relation.
In a Guardianship Clause of a Will, a parent names a guardian and an alternative to raise his or her child or children in case of the parent’s death.   The benefit of this is immense.  Naming a guardian is a major step in assuring that a child  is raised by a close and trusted friend or family member whom the parent believes  will best raise your child or children   Naming a guardian also has the effect of limiting conflict over that very question because guardianship clauses are given great weight by courts in guardianship proceedings.
Parents can also add an additional layer of protection for their children by creating a Standby Guardianship document.  This type of guardianship document is useful if a parent will be away on travel and becomes stranded because of war or natural disaster, or if the parent becomes incapacitated or even dies. The Standby Guardianship gives the named guardian the right to act as a child’s “parent” in the absence or incapacitation of the legal parent or guardian. It does not take away the rights of a parent, rather it provides the standby guardian the same rights as the parent.
The Standby Guardianship offers the parent flexibility because it enables a parent to establish a termination date, and can be done through writing if certain formalities are observed.   The parent’s intention to name the stand by guardian in the event of the incapacitation or death of the parent is required.  The child or children should be named, as well as the parent, the guardian and an alternative.  The temporary guardianship generally lasts for sixty days before permission of a court is required to continue the guardianship or at the death of the parent.
Finally, if a parent will be out of the country or away on an extended trip, he or she might utilize a “Designation of Person in Parental Relation” as a method of ensuring that a competent adult has the authority to make decisions related to a child’s school or health while the parent is away. The use of HIPPA authorization in conjunction with the Designation may be considered for most effective use.
The use of guardianship documents and clauses can be used in conjunction with other estate planning documents to provide for as many contingencies as possible. They are effective and can be drafted with the help of your attorney.

Posted by Robert J Maher | Post a Comment

Date: 5/31/2016 12:40 PM EDT

There have been a number of high profile deaths this year that illustrate the importance of having an estate plan. David Bowie and Prince both left behind large estates that will be distributed very differently. Bowie’s Estate will pass pretty much in the manner he wanted, while early indications suggest that the resolution of Prince’s estate may result in conflict.
There is an inherent difficulty in comparing the estates of these two performers because their circumstances, like the general public, were different from each other.  David Bowie was a little older and suffered from terminal cancer for quite some time. Prince had health issues, but he was younger and from what we know, did not suffer from a terminal illness. Prince may have felt that he had “time.”  The reality is we do not know how much time we have.  As a result, the manner in which their respective estates are to be distributed are quite different and illustrate some crucial points in estate planning that can apply to all of us. 

The truth is that we all have a plan when we die.  We either die with a will, or intestate (without a will).  When we have a valid will, the named executor is appointed and the will determines how the estate will be distributed i.e. who inherits our assets. When we die intestate, an Administrator is appointed by the court and the Administrator follows the rules for intestacy for the state in which the deceased lived.  David Bowie died with a will and we have heard very little about the related proceedings. The Surrogates Court of Minneapolis, on the other hand, recently appointed a bank to be the Administrator of Prince’s estate, and the bank as Administrator will rely upon the state of Minnesota’s laws relating to intestacy to resolve issues related to the Estate and ultimately distribute its assets. 

The question of whether Prince wanted his estate divided amongst his siblings is an open question. Nevertheless, the task of the Administrator in dealing with the myriad of issues related to his personal and business life will require a lot more time an additional expense than if he had planned ahead. Not to mention substantially delay the distribution of his estate. It’s unlikely to be a smooth or neat process.

There are potential substantial tax implications as well.  Both Bowie’s and Prince’s sstates exceed the current federal threshold for estate tax purposes. At least a portion of Bowie’s estate could potentially be passed to his wife through the use of marital deductions and other rules that permit married US citizen couples to shield their estates from taxes.  Prince’s estate - on the other hand – is likely to be diminished by federal estate taxes as high of 45% on the value of his estate exceeding 5.45 million dollars, the exclusion amount for 2016. 

These two examples are instructive for all of us even if we are not millionaires.  Having a plan in place removes uncertainty, lessens conflict and lowers the ultimate cost of managing our affairs when we are gone.  A Will combined with Health Care Advance directives and a financial power of attorney go a long way toward this goal.  If you are not willing to take the time required to put a plan in place, do it for those closest to you. You won’t regret it.
If you want to start thinking and planning about protecting your loved ones, take a look at our e-Guide on estate planning for families on our website (www.robertmaherlaw.com).


Posted by Robert J Maher | Post a Comment

Date: 5/2/2013 12:19 PM EDT

In a recent new York Times article, entitled "He Left a Fortune, to No One," highlights the dangers of failing to create even the most basic estate plan.  The subject of the story,  Roman Blum, died without any known heirs or relatives.  His estate valued at approximately forty million dollars,  may escheat, ore revert, to the State.  This is an extreme example.  However, it highlights the importance of having at least a basic estate plan in place.  Preparing a Will, a Living Will, a Health Care proxy and a short form Power of Attorney will go a long way.  Here's why:

1. A will can direct how assets are distributed. 
If you do not have a will, the State in which you are domiciled (your permanent home)  at the time of your death will determine how your assets are distributed.   For example, suppose you are married and have one child. If you die intestate (without a will) in New York, according to the New York State Estates, Powers and Trusts Law, your estate will be distributed as follows: fifty thousand dollars and one half of the estate passes to your spouse and the remainder to your child.  If you have small children, this could mean that your minor child has inherited a substantial amount of money.  A will affords you the opportunity to create a situation whereby a trusted adult, often a "trustee," "custodian" or "guardian," in legal terms, manages the assets for a child and distributes them to the child at a time specified by you, the parent. 

2. You can name a guardian for your minor child if you are a single parent.
You can name a guardian for your minor children in your will.  The death of a parent is a traumatic experience for a child. Naming the person that you wish to raise your children in the event that you die is one way to help your child deal with the loss of you, the parent.  Children fare much better when there is certainty and stability in their lives.  Naming a guardian may also lessen inter-familial conflict after  your death.  There is much less conflict when the wishes of the deceased are clear. 

3. Your end of life wishes are known to all.
By creating a Living Will your wishes are clear.  A living will is a document that describes in detail how you want to  be cared for when you are no longer able to make medical decisions for yourself. Living wills inform family members and healthcare professionals of your wishes regarding artificial measures used to keep you alive in a situation where there is little or know hope for recovery. 

4.  Medical Professionals and Family Members know who is responsible for making medical decisions for you when you are unable.
A Healthcare Proxy is the person named by you who makes  healthcare decisions for you when you are unable.  This person should know your wishes regarding medical treatment.  Your Living Will will reflect those wishes.

5. A Power of Attorney will enable your Agent to complete financial transactions for you if you are incapacitated. 
Giving a trusted friend or family member power of attorney protects you if you are incapacitated.  The New York Short form Power of Attorney  gives you Agent the authority to pay your bills, buy and sell property, and complete other financial transactions on your behalf.  In a situation where you are unable to pay your mortgage for instance, the power of attorney could be exceptionally useful. 



Posted by Robert J Maher | 1 Comment

Date: 1/25/2013 11:32 PM EST

I read an interesting article by fellow attorney Antonia J. Martinez in the New York State Bar Association's Trusts and Estates Law Section Fall/Winter 2012 Newsletter. When parents are planing their estates, they normally consider who will care for their minor children when they are deceased and do not consider who will care for a minor child in the event of their incapacity.  Enter the Standby Guardianship.

As the author explains, a Standby Guardianship is similar in nature to a power of attorney, which grants the appointee, or agent, the authority to manage the affairs of individuals who cannot manage their financial affairs.   In the case of a Standby Guardianship, a parent names a guardian to take care of a child while the parent is incapacitated.  The guardianship lasts for an initial period of  up to sixty days.  At that point, the guardian has to petition the court to be named permanently. The Standby Guardianship is especially helpful for single parents.  It gives a parent some say in who will care for a minor child in the event of his or her incapacity.

If you have any questions about Standby Guardianships or estate planning in general,  please feel to call or e-mail me:

Robert Maher
Law Office of Robert J. Maher, P.C.
52 Duane Street, 7th Floor
NewYork, NY 10007
212-939-7548
RMaherEsq@gmail.com



Posted by Robert J Maher | Post a Comment

Date: 1/23/2013 12:27 PM EST

The below article recently published in the New York Times shares a startling statistic: 57% adults in the United States do not have a will.  This means that their estates will be settled pursuant to the laws of their state related to intestacy, the situation where a person dies without a will.  The issues the author raises regarding the uncertainty that exists when a person dies without leaving behind a plan or even a list of passwords are very real. 


http://www.nytimes.com/2013/01/12/your-money/estate-planning/shell-tell-you-its-time-to-think-ahead.html?_r=0&adxnnl=1&ref=general&src=me&adxnnlx=1358960496-3zJaAUnPVK6EkO01Ue5esg

If you have any questions regarding the issues raised in the article or have any questions about preparing a will, health care proxy, living will or power of attorney,  please contact me at RMaheresq@gmail.com. for a  free estate planning consultation

Law Office of Robert J. Maher, P.C.
52 Duane Street, 7th Floor
New York, NY 10007

Posted by Robert J Maher | 1 Comment

Date: 3/11/2012 6:39 PM EDT

You can choose your spouse, another family member or a close friend to be the Executor of your estate. It is a generally helpful to choose a person who is willing and able to make financial decisions, and who is organized, trustworthy and efficient.  Although the amount of work required depends to a degree on the size and complexity of the estate, the role of executor can require a considerable amount of work.  Executors are entitled to collect fees for their work.  They can also be held liable if they mismanage the estate. So, it is important that the executor seek assistance in administering a decedent’s estate.  

What is the role of the executor?
The Executor (male) or Executrix (female) of a Will makes sure that the dictates of a Will are carried out and is responsible for the administration of a decedent’s Estate.  An Estate is the property owned by a decedent at death that passes to beneficiaries under a will.  It can include cash, jewelry, a house, a co-op and any other property owned by a decedent.   It does not include property owned jointly with another, like a home owned jointly by two spouses, or the proceeds of a life insurance policy.   

The Executor gathers the assets of the decedent and manages them while the estate is probated.  Probate means to file the original will with the court and to notify those required by law of the filing of the will.  The Executor then pays the decedent’s outstanding debts.  If there is a co-op apartment or other property, the Executor may have to sell the property.    The Executor is also responsible for filing the decedent’s final income tax return and a tax return for the estate.  After all of the decedent’s expenses are paid, the Executor distributes the remainder of the decedent’s assets in accordance with the decedent’s will.  Finally, the executor may be required to file an accounting with the court.  An accounting includes a description of all of the income and expenses of the estate and lists any distributions made to the beneficiaries by the Executor. 


Posted by Robert J Maher | Post a Comment

Date: 2/20/2012 9:41 PM EST

Many people I meet ask, “What will happen if I do not have a will?” In short, the answer is that if you die intestate, without a will, the Surrogates Court or its equivalent (if you live outside of New York State) will make the decisions about your property, your investments and if you have young children and your spouse is deceased, the care of your children. The Court will follow your state's laws related to intestacy in determining how your estate is distributed.

If you wish to direct how your assets will be distributed, you should have a will.  You can leave all of your assets and belongings to one or more specific individuals, charities, or family members.  The first step is naming an executor. Typically, married individuals name their spouses; however, if your spouse is incapacitated or unable, or if you are single or widowed, you can name another individual you trust as your executor. The executor's responsibilities include collecting and organizing your financial papers, gathering your assets, paying any outstanding bills, selling your home if necessary, and answering relatives' questions and making sure that your wishes are fulfilled.  

If you have any questions, please feel free to contact me:

Robert Maher
Law Office of Robert J. Maher, P.C.
52 Duane Street, 7th Floor
New York, NY 10007
212-939-7548


Posted by Robert J Maher | Post a Comment

Date: 11/7/2011 3:28 PM EST

The Wall Street Journal recently ran this interesting article regarding the importance of estate planning for people at different stages of life:

blogs.wsj.com/juggle/2011/10/18/get-an-estate-plan-now/?mod=wsj_share_linkedin&goback=%2Egde_1701677_member_77675248

Posted by Robert J Maher | Post a Comment

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