Frequently Asked Questions
about Elder Law and Estate Planning in New York
Health Care Proxy
A “Health Care Agent” under the NYS Health Care Proxy will be able to make any and all medical decisions on your behalf if and when you are unable to make decisions on your own. This can include a range of decisions, from routine health care options to end of life choices, as well as the ability to make decisions concerning artificial nutrition and hydration when this power is included in the form.
This is your statement of your health care choices when you are unable to express your wishes, particularly with a focus on end-of-life issues. This statement will inform your health care agent of your wishes and provide “clear and convincing” evidence needed in New York State to enforce your end- of-life choices, such as refusing mechanical or artificial means of life support. This directive will only take effect when there is no hope of recovery, or no treatment you would benefit from.
Power of Attorney
When you sign a Power of Attorney, you appoint a person known as your “agent”, whom you trust to handle your legal and financial affairs should you become incapacitated. New York has a standard form, which should be used in order to ensure New York financial institutions will accept it. This form contains important powers necessary for making lifetime gifts, as well as implementing tax and Medicaid planning, and includes sanctions if a New York bank fails to accept the form. We recommend using the New York State-approved Power of Attorney form.
Gift & Estate Tax Planning
Your wealth passing after death may be subject to federal and state estate taxes. Estate Planning can reduce this tax burden for your beneficiaries and ensure your family receives the assets you worked so hard to acquire. The 2017 federal Tax Cut and Job Act greatly increased the estate tax exemption amount to over $11 million per person, which has minimized the impact on most estates. It is to be noted that the 2017 law will expire in 2025, and we are unsure what the new estate tax statute will be. We recommend you consider examining your estate plan now to take advantage of the current law’s benefits.
Medicare, Medicare Part D + Choice and Medigap Policies
Almost everyone over 65 or disabled will have Medicare benefits if they worked the required work quarters. Enrollment can begin at age 65 or at a determination of a long-term disability. Upon enrolling in Medicare, you may make an election as to which type of coverage will be best for you (regular original Medicare or a Medicare Advantage Plan (Part C)). Part C plans change on a yearly basis, and because your health condition may change over time your Medicare coverage should be reviewed yearly. Regular Medicare has many deductibles and co-pays, and only covers 80% of regular charges. Therefore, Medigap policies, also called Medicare Supplemental Policies, may be needed to off-set or help you pay the hospital and medical deductibles and co-payments, as well as other fees not covered by Medicare. Medicare also provides prescription drug coverage, called Medicare Part D. Individuals must select Part D coverage during the set enrollment period. Medicare enrollment can be complex and must be integrated with coverage you may receive as a retirement benefit. Our firm can help you sort this out.
What is Long Term Care Insurance?
If you have a concern about the cost of Long Term Care (“LTC”), including the cost of home care and nursing home care, you may need to determine if long term care insurance makes sense for you. You may need insurance to specifically cover long-term health costs such as nursing home, home care and/or assisted living care. This type of insurance gives you the ability to meet the catastrophic costs of long-term care. It is best to buy these policies by age 60, when your risk factors are lower, which will be reflected in the annual premium. New LTC insurance policies are now being offered in hybrid form which includes life insurance type death benefits. Shop carefully for these policies as the premiums are substantial and you must have the discretionary income to cover the annual premiums or the coverage will lapse.
What are Joint Assets & Designated Beneficiaries
Holding assets jointly titled with another confers rights to the joint owner and gives both owners free access to this asset. Joint assets are useful to avoid the probate process. When two people jointly hold title to an asset the person who survives becomes the sole owner, thus avoiding any need to get court approval for access to the accounts (for example) when the owner dies. This technique is a useful Will substitute, but should be used with caution, and it must be understood that this asset will operate outside your Last Will and Testament or Trust and pass by operation of law directly to the joint owner.
What is a Last Will & Testament?
A Will provides instructions on the distribution of your assets upon your death, and should be reviewed and updated every few years to adapt to changes in your family situation, your assets, or a change in estate law. A Will must go through probate in the Surrogate’s Court of the county in which the decedent resided. If you have property in multiple states, such as a vacation or second home in another state, this can result in two probate proceedings — one in the decedent’s resident state and an ancillary probate in the state in which the second property is located. Probate in many states is not complex, although often slow and expensive. Probate should be avoided if there is family disharmony or unknown intestate heirs, and if immediate access to assets for a minor child(ren) or disabled heirs is needed.
What is a Living Trust?
If you have substantial resources or complicated assets held in multiple states, or you anticipate a challenge to the validity of your Will, a living trust can avoid the cost and delay of a Surrogate Court proceeding and probate. A living trust can shelter your assets from creditors and can also provide for special needs or disabled heirs. There are several types of Living Trusts: Revocable, Irrevocable, Medicaid Asset Protection and Special Needs Trusts are all to be considered in developing a proper estate plan.
What are Retirement Funds, IRA’s & Income Tax?
You need to regularly review your retirement fund portfolio, which may include such plans as IRAs, 401(k)s, tax deferred annuities, and other qualified retirement assets, to update your investments and your beneficiary designations. Retirement savings are a central part of your financial security in the later years as an important source of your income. Distributions from these types of accounts have income tax liability as tax deferred assets., You should consider these assets along with all of your savings in developing a plan to determine which assets should be used for your support in your retirement years. Required minimum distributions must be taken at age 72 and taxes must be paid on these distributions.