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Estate Planning

Estate planning is among the most essential branches of the law because it addresses a situation that affects 100% of the population: Death. Nearly everyone leaves an “estate” of some sort when they pass on, whether it is simply a car and a checking account, or a sprawling real estate portfolio. While the size of estates may vary greatly, the end result is the same: We can’t take assets with us.

Taking charge of your estate planning can be empowering. Structuring a well-thought-out, seamless plan for the distribution of assets after death brings peace of mind. Putting a plan in place doesn’t mean that one is ready to die; it means they are mindful and ready to enjoy the time they have left.

Chaves Perlowitz Luftig LLP values a personalized approach to estate planning that focuses on each client’s individual needs and goals. We become trusted advisors to our clients’ families and form long-term relationships around estate plans that we structure.

Our Estate Planning services include:

Whereas a Will is a set of instructions that become effective when someone dies, a trust is a living estate plan; it exists as soon as it is signed as a container of assets. If John Smith makes a Will, it will have no legal effect until he passes away. But if he executes the John Smith Living Trust, it becomes relevant immediately. He would change the title on the deed to his property to the trust’s name, and he would adjust his investment accounts. The trust is akin to a company that John Smith has created for himself.

For most of our clients at Chaves Perlowitz Luftig LLP, we typically focus on trusts over wills for several reasons, including:

Elimination of Probate

When someone dies with a Will, the estate has to go through court for the executor to be formally appointed in the role. Everything is at a standstill until this probate process can be resolved. It can be months before an Executor can sell property, pay taxes, or satisfy the beneficiaries.

Trusts avoid the probate process altogether. They are private documents that are settled outside of court. Trusts can be settled quickly and cost effectively.

Disability Planning

Whereas a Will becomes relevant and effective after someone dies, a Trust is a plan for life that can transition seamlessly into a plan for disability. Trusts have Successor Trustees who can step in and manage assets in the event of disability, usually avoiding a guardianship proceeding.

Flexibility

The Trusts we create provide maximum flexibility to allow the powers and provisions to change as the situation and life circumstances require.

Privacy

Wills are filed in the local Surrogate’s Court and are typically available to the public. Trusts are normally private documents between you and your family.

The Medicaid Asset Protection Trust (MAPT) is a specialized trust intended to protect assets from the costs of long-term care, nursing home costs and other creditors. It can often allow a client to apply for Medicaid to get those costs covered.

Grantor and Trustee

The client creating the trust is known as the Grantor. The individual in charge of the trust’s management is the Trustee. With the MAPT, the Grantor and the Trustee must be different people. The Grantor cannot have the right to access and manage the trust. Therefore, if a client creates a MAPT to protect assets, he or she will usually make an adult child or other relative the trustee. If there is any problem with the Trustee down the line, the Grantor can retain the right under the trust to fire and replace him/her.

Income Only

A great many clients place only their homes inside their trusts. Real property is often one of the largest parts of a client’s estate, and it is certainly always exposed to probate and long-term care costs. If a client chooses to also place money inside the MAPT, then the income-only can apply. They can receive income, interest, and dividends out of the trust, but principal stays locked in.

Irrevocable Trust

The MAPT is a type of irrevocable trust. The term “irrevocable” can be unsettling to people because it implies rigidity and loss of control. However, the title is something of a misnomer here.

The Grantor may reserve the right to change the beneficiaries or the trustees of the MAPT at any time. Additionally, we often also include language which allows the Grantor or another person to redirect the distribution of the remaining trust assets following the Grantor’s death.

At Chaves Perlowitz Luftig LLP we aim to build maximum flexibility into the trusts we prepare to allow for the fine-tuning of an estate plan in the future — even in “irrevocable” documents.

Five Year Look-Back

When someone divests their assets or makes a trust for the purpose of Medicaid Planning, there is a waiting period of five years before they qualify to get Medicaid to cover their nursing home care. For example, someone who made a trust on July 31, 2020 will be eligible on August 1, 2025. When a nursing home patient applies for Medicaid, they are required to produce bank statements and other financial records going back 60 months. If these records show transfers to trusts or other entities, it will limit or sometimes eliminate their Medicaid eligibility.

Community Medicaid (care in the home) does not have the same look-back period, and it can be sought out immediately without a lookback.

If a loved one is in need of nursing home care right away and there is no chance of passing through a look-back period, all hope is not lost. There are still strategies that elder law attorneys can often use to protect a portion of the assets.

Simply put, a Last Will & Testament is a plan for the disposition of assets following death. At Chaves Perlowitz Luftig LLP, we often emphasize the advantages of Trusts over Wills, but Wills still have an important place in the world of estate planning.

Accompany a Trust

Every client who makes a trust also makes a simple “pour-over will” that accompanies their Trust. It accomplishes three basic tasks:

  • Cancels and revokes any Will the client had ever made in the past;
  • Names an Executor; and
  • Leaves the probate Estate to the Trust

It’s called a “pour-over” because it pours any residuary items in the estate into the trust. The goal is to avoid using this Will and going to probate, but it’s a back-up plan. It’s there in case a client wins the lottery on Saturday and dies on Sunday, or if they forget to name a beneficiary on a bank account. The Will ensures every item is accounted for and distributed appropriately.

Plan for Minor Children

A Will names a guardian for minor children. It is vitally important for parents to decide not just who would manage their money, but who would care for their kids in the event of an unexpected death.

Starter Estate Plan

It often does not make sense for a healthy young person with simple assets to make a trust. All clients’ life circumstances are different. Many young people may start with a Will as their Estate plan and move on to a Trust when appropriate.

A Power of Attorney appoints an agent to handle legal and/or financial matters when someone is unavailable or unable to handle these things for him or herself.

Power of Attorneys may be used for real estate closings, trusts, IRA withdrawals, court proceedings, banking, taxes, estate and tax planning, and more.

A healthcare proxy is a medical plan for disability. It appoints an agent to talk to doctors and to make end-of-life decisions if someone is incapacitated or unable to express his or her own wishes regarding medical care.

A living will expounds upon an individual’s wishes regarding life-sustaining treatment in the event of an incurable illness. It covers such topics as mechanical ventilation, intubation, antibiotics, dialysis, and more. It allows a client to specify whether they’d prefer to spend their last days at home or in a medical facility.

While these topics may seem grim, it is important to have a plan in place so that your wishes will be executed effectively. It is equally important to discuss these matters with your family and the agents that you appoint, to make them aware of your wishes.

While these topics may seem grim, it is important to have a plan in place so that your wishes will be executed effectively. It is equally important to discuss these matters with your family and the agents that you appoint, to make them aware of your wishes.

When someone dies with a Will, the Will has no legal effect until it has been submitted and vetted through County Surrogate’s Court via a process called Probate. Chaves Perlowitz Luftig LLP encourages clients to explore using trusts to avoid the probate process altogether, but we offer a full range of services for clients who die with Probate Estates.

The Executor of the Will cannot act until he or she is formally appointed in the role by the Surrogate’s Court. Thus, probate is required before property can be sold, taxes can be paid, and beneficiaries can claim their shares. The Executor is required to submit a Probate Petition, Court fees, and supplemental documents.

If there is no Will at all, the Estate goes through a process called Administration, by which it is transferred to the next of kin based upon a set of default rules established by statute. Unfortunately, these rules do not always reflect what the decedent would have intended. This is fairly similar to a probate proceeding, but the heirship must be proven to the satisfaction of the Court.

Chaves Perlowitz Luftig LLP takes the guesswork out of probate and estate administration for clients. We prepare the documents and handle the process from start to finish, keeping clients updated and informed along the way.