Your Assets may Not Be Protected

It’s no secrete that many people are concerned that they may suffer some injury or disability that may require hospital or nursing home care. This is not an attractive prospect. Depending on the level of ones stay or care, both may be very costly. Although nobody expects to end up in either facility, the possibility of such a prospect is always looming as people get older. Therefore, the question is, how do you protect your assets in the event you have no insurance or are receiving Medicaid Benefits.

Placing assets into an irrevocable trust is the best strategy. It not only protects family assets from creditors, it also eliminates the countable assets for Medicaid eligibility purposes and therefore accelerates the time when Medicaid benefits can kick-in. An irrevocable trust is a legal structure that cannot be amended or undone once signed into existence. It is a structure recognized by Medicaid administrators as being validly used by families to protect assets from hospital bills and/or the nursing home spend-down. Establishing an irrevocable trust and placing a portion of your assets in that trust is an effective strategy for protecting those assets from Medicaid and/or creditors.

It is not unusual to transfer the major portion of family assets into the trust, even the family house, so as to leave only a small amount of assets outside the trust. A transfer into an irrevocable trust can be considered a gift for Medicaid eligibility purposes. This gift status will be helpful for people applying for Medicaid assistance. In particular, both “penalty period” and 60 months “look-back period” rules apply.

You should think ahead and determine whether you believe that you will need Medicaid sometimes in the near future. If so discuss the matter with your loved ones and seek legal advise from an attorney who is an expert in Estate and Trust matters. If necessary, you should have an irrevocable trust prepared well ahead of the time Medicaid assistance is expected to be needed for the most comprehensive protection. If the person needs nursing home care during the 5 year look-back period and there are no funds available to pay for that care because they have all been placed in the trust, a common tactic is for other family members to finance that interim care. It may be possible to draft the trust deed so as to allow the trust to distribute income to those family beneficiary members to cover for this eventuality. A Medicaid irrevocable trust is a binding, rigid structure for the outside world and relatively flexible for the beneficiaries when drafted correctly. If assets placed in the trust are suddenly needed, they will be difficult to access by outside creditors, but the assets can be accessed by the beneficiaries if implemented properly. Thus, it is critical to have an expert do the trust writing and in some instances, maintain some assets outside the trust. Trust assets will no longer be “owned” by the person that established the trust, although they may still receive the benefit of the assets as a beneficiary. They will, in time, upon the grantor’s death, transfer to the beneficiaries in accordance with the terms in the trust.

Disclaimer
This article is strictly a way to assist in your estate matters. Please note that the content is written on a broad level and is general in scope, therefore your personal information is not considered. You should not consider the content personal advice or guidance, nor should you consider it personal financial advice or personal financial guidance. We recommend that you consult with an attorney or a professional who is familiar with your individual circumstances before making any final personal decisions or financial decisions.

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Disinheriting Your Spouse

While it is more common to hear of people disinheriting their adult children, disinheriting a spouse is rare. That’s because in the State of New York, you cannot disinherit your spouse. You cannot leave the surviving spouse with nothing nor can you leave the surviving spouse with a mere portion of your estate. Stating it in your will or leaving your spouse completely unmentioned in your will is not enough to disinherit your spouse, despite your reasoning.

Spousal Right of Election
New York’s spouse’s right of election essentially protects the spouse from getting disinherited or receiving a small token of the estate. As is common with wills, surviving members of the family often disagree and contest against the contents of the will. According to the spousal right of election, the surviving spouse can elect against the contents of his or her spouse’s will. The surviving spouse can take half of the estate if there are no children involved. If children are involved, the surviving spouse can take a third of the estate or $50,000 depending on which is the greater of the two. The remaining estate then goes to the children or whoever was mentioned in the will. The surviving spouse has six months to elect against the will.

Dying Intestate
Dying intestate or dying without a will does not disinherit your spouse. If there are no children involved, then the surviving spouse gets the entire estate. If children are involved then the surviving spouse receives $50,000 and half of the estate after taxes and debts are settled. The remaining portion of the estate then goes to his or her children or grandchildren. The surviving spouse has two years after the spouse’s date of death to assert his or her right of election.

Exceptions to the Spouse’s Right of Election
In the state of New York, you cannot disinherit your spouse nor can you give him or her less than $50,000. Unfortunately, divorce is one of the most effective solutions if you do not want your spouse to inherit a portion of your estate. While New York law protects the disinheritance of a spouse, it does not protect the disinheritance of a former spouse. Divorce, essentially, terminates the spouse’s right of election. Unlike the spousal right of election, you can, however, state in your will that you want your former spouse to inherit from your estate. Abandonment by a spouse is also an acceptable occurrence that can waive the surviving spouse’s right to elect. Spouse’s right of election can also be waived in a prenuptial agreement if both parties enter into the agreement completely informed of what they are waiving and the consequences of waiving this right of election. If your spouse has disinherited you in the will or did not establish a will at all, our expert attorneys are here to help guide you.

Disclaimer
This article is strictly a way to assist in your estate matters. Please note that the content is written on a broad level and is general in scope, therefore your personal information is not considered. You should not consider the content personal advice or guidance, nor should you consider it personal financial advice or personal financial guidance. We recommend that you consult with an attorney or a professional who is familiar with your individual circumstances before making any final personal decisions or financial decisions.

You May Not Be Sufficiently Protected

Many people are not told by their brokers regarding the importance of Uninsured and Underinsured motorists coverage when they’re buying auto insurance. This coverage is most commonly seen on insurance policies as UM/UIM coverage, and going without this coverage completely or having too little could cost you much more in the future than it does in premium. This coverage is there to protect you, and passing on it means you’re rejecting an important coverage you may need one day.
People often say, “I have full coverage”, assuming their policy covers them in an accident. However, “full coverage” means your insurance company will pay for damages suffered by another person if the accident was your fault.  That’s what your liability coverage does (bodily injury and property damage). People get liability coverage because they know it’s required by law and in most cases will protect them from personal liability.
UM/UIM coverage is there to protect you. If you’ve ever been in an accident, you know the immediate, sickening feeling that follows. You also know how that feeling mounts when you start wondering if the at-fault driver has insurance or enough insurance to pay your damage or medical bills. Now imagine how sick you’d feel if you did find out the driver didn’t have coverage or speeds off, leaving you with the bill.
If the person that caused the accident does not have insurance and can’t pay for your medical bills, legal costs, property loss, and other incidental expenses like lost wages, the UM/UIM coverage on your policy would pay for these expenses. If you don’t have this coverage and the person at-fault doesn’t have insurance, you’re out of luck when it comes to recouping any damages, losses, or expenses you incurred from the accident. The only thing you could do is take the person to court and cross your fingers, but odds are, if they don’t have insurance, they’re probably not going to have thousands and thousands sitting in their checking account to pay for your damages. Unfortunately, the odds are against you if you’re in an accident with someone who doesn’t have auto insurance.
UNINSURED/UNDER-INSURANCE MOTORIST COVERAGE (UM/UIM)
 
UIM coverage helps pay for any differences in expenses and losses that you incur if the person who is at fault doesn’t carry enough insurance to pay for the damages. If your loss, damages, medical bills, or other expenses cannot be covered by the other person due to an insufficient amount of coverage, UIM coverage will kick in once your expenses have exceeded their limits.
For example, let’s say you’re in an accident and have a great insurance policy, as they say, you have “full coverage” with comprehensive, collision, and bodily injury liability of $100,000. You also have a UM/UIM coverage limits of $100,000. If you get into an accident and are injured and the other car which was at fault carried only a $25,000 liability coverage, your UM/UIM coverage can pay up to $75,000 to you for your injuries. Again, UM/UIM coverage is to protect you against other motorists, if necessary.
Another plus in that situation is that once you’ve reported the accident to your insurer and they’ve discovered the driver has insufficient coverage, your insurer may pay the difference and then go after the driver to get paid back. this is known as subrogation.
Bottom line:Make sure your UM/UIM insurance policy is at least $100,000 in order to protect yourself from an uninsured or underinsured motorists when in an accident.
Disclaimer
This article is strictly a way to assist in your insurance decisions by providing answers to readers’ insurance questions. Please note that the content is written on a broad level and is general in scope, therefore your personal information is not considered. You should not consider the content personal insurance advice or personal insurance guidance, nor should you consider it personal financial advice or personal financial guidance. We recommend that you consult with a professional who is familiar with your individual circumstances before making any final insurance decisions or final financial decisions.

Make Sure Your Insurance Company Is Not Dealing With You In Bad Faith

Insurance companies are notorious for being resistant when dealing with the approval of a claim. This is especially true in cases such as personal injury claims that are the result of an automobile accident.

Many car accident and personal injury cases can be complicated when all competing versions of events are entered, which can provide considerable latitude for crafting an argument that at least reduces the level of negligence for their client. And then, there are insurance companies that negotiate in bad faith as a standard policy in dealing with all claims, choosing to force the plaintiff into court or settle quickly for a very low offer. Any of these situations could be proven as bad faith tactics by an experienced personal injury attorney who understands how to prove bad faith in court.

Explaining Bad Faith: Depending on the size and management of an insurance company, different companies use different approaches to settling claims. Knowing the policy of the insurance company being petitioned for damages can be very helpful when claiming benefits, especially if the company policy adjuster is being difficult. Sometimes the tactics are actually being ordered from the claim supervisor level. That is why handling a personal injury claim without legal counsel is usually a bad idea. And, when an insurance adjuster realizes there will be no attorney in involved, it is easy for the adjuster to negotiate in bad faith while the injured party is never aware of the potential coverage level. Luckily, this is a point where a personal injury attorney can intercede and investigate the case for bad faith activity by the insurance company. There are specific laws that govern how insurance claims are handled legally, and a violation of these rules in any manner could constitute bad faith on the part of the respondent insurance company.

Additional Damages: The real issue with bad faith insurance companies is avoiding a separate claim for bad faith negotiation. Insurance adjusters are trained professional negotiators and methods of settling claims can often borderline on illegal activity. While many adjusters will not offer all policy information in the initial stages of a claim payment, adjusters must still answer questions honestly and document communications. Failure to do so can result in an additional lawsuit against the company for demonstrated bad faith in the insurance claim process resulting from the actions of their responsible insurance policy holder. A bad faith claim is not an addendum to the original insurance claim. It is a separate legal issue, which could result in a significant punitive damage enhancement.

Signs of Bad Faith Tactics: One of the primary signs that an insurance company will be difficult to settle with is how quickly they respond to the initial claim contact. It is always a bad sign if the company is quick to want a settlement, but are requesting a full future medical release. While this may seem like the company is compassionate and concerned about the claimant, it could easily be a sign of a high level of insurance coverage for their client and a willingness to want the negotiation complete. After all, their duty is primarily to the employing company and client to reduce the total claim payout as much as possible. Ceasing benefits during the process of recovering from an injury can also be evidence of bad faith when the company cannot justify the stoppage of benefits. Many times a claimant will realize quickly that a solid lawyer for injury claims will be necessary for a full damage recovery.

Bad faith insurance companies are the main reason that it is never a good decision for a typical injury victim to attempt negotiating with an insurance company regarding the injury. Personal injury cases can get complicated and often the insurance company is successful in deflecting the level of fault assigned to their client. approaches to settling claims. Knowing the policy of the insurance company being petitioned for damages can be very helpful when claiming benefits, especially if the company policy adjuster is being difficult. Sometimes the tactics are actually being ordered from the claim supervisor level. That is why handling a personal injury claim without legal counsel is usually a bad idea. And, when an insurance adjuster realizes there will be no attorney in involved, it is easy for the adjuster to negotiate in bad faith while the injured party is never aware of the potential coverage level. Luckily, this is a point where a personal injury attorney can intercede and investigate the case for bad faith activity by the insurance company. There are specific laws that govern how insurance claims are handled legally, and a violation of these rules in any manner could constitute bad faith on the part of the respondent insurance company.

Additional Damages: The real issue with bad faith insurance companies is avoiding a separate claim for bad faith negotiation. Insurance adjusters are trained professional negotiators and methods of settling claims can often borderline on illegal activity. While many adjusters will not offer all policy information in the initial stages of a claim payment, adjusters must still answer questions honestly and document communications. Failure to do so can result in an additional lawsuit against the company for demonstrated bad faith in the insurance claim process resulting from the actions of their responsible insurance policy holder. A bad faith claim is not an addendum to the original insurance claim. It is a separate legal issue, which could result in a significant punitive damage enhancement.

Signs of Bad Faith Tactics: One of the primary signs that an insurance company will be difficult to settle with is how quickly they respond to the initial claim contact. It is always a bad sign if the company is quick to want a settlement, but are requesting a full future medical release. While this may seem like the company is compassionate and concerned about the claimant, it could easily be a sign of a high level of insurance coverage for their client and a willingness to want the negotiation complete. After all, their duty is primarily to the employing company and client to reduce the total claim payout as much as possible. Ceasing benefits during the process of recovering from an injury can also be evidence of bad faith when the company cannot justify the stoppage of benefits. Many times a claimant will realize quickly that a solid lawyer for injury claims will be necessary for a full damage recovery.

Bad faith insurance companies are the main reason that it is never a good decision for a typical injury victim to attempt negotiating with an insurance company regarding the injury. Personal injury cases can get complicated and often the insurance company is successful in deflecting the level of fault assigned to their client. Always get an experienced and aggressive insurance claim attorney who knows when your claim can be enhanced by an additional bad faith legal action.

When Can You Leave Your Child Home Alone

Most parents understand that it is always wrong to leave an infant or toddler home alone while you go out – even for a quick run to the store. But when is a child old enough? Surprisingly, there aren’t many laws to guide parents who aren’t sure if their children are old enough to stay home alone. About 15 million children in the United States are home alone after school every day.

Enough to be Alone: State laws vary quite a bit. Some states have not set a minimum age. Others have set a minimum age of 10 years old, while states like Maryland do not allow parents to leave a child under the age of 8 alone at home or in a car. Some states set a minimum age for babysitters as well. If you aren’t sure about the law in your state, contact the state department of health or the child services agency for information.

At what age is it okay to leave my children home alone? Office of Children & Family Services is often asked questions regarding the appropriate age to leave a child alone, or what age is appropriate to allow a child to begin babysitting. There are no straightforward answers to these questions. All children develop at their own rate, and with their own special needs and abilities. Some children are responsible, intelligent, and independent enough to be left alone at 12 or 13 years of age. Likewise, there are some teenagers who are too irresponsible or who have special needs that limit their ability to be safe if they are left alone. Parents and guardians need to make intelligent, reasoned decisions regarding these matters.

Below there are some items for these decision-makers to consider before leaving a child alone. Be aware, this is just the beginning of issues to consider. It is not an all-inclusive checklist to guarantee intelligent and reasoned decision-making:

1. Consider the child: How mature is the child? How comfortable is the child with the circumstances? What has the child done in the past to show you he/she is able to take on this kind of responsibility?

2. Consider the child’s knowledge and ability: Does the child know how and when to contact emergency help? Is the child able to prepare food for him/herself? Are there hazards to the child in the environment such as accessible knives, power tools, a stove or oven?

3. Consider the circumstances: Where will the child be when left alone? How long is the child to be alone?

These same questions should be asked when considering whether a child is old enough to baby-sit. However, when considering a child as an adequate baby sitter, you must evaluate these factors for both the potential baby sitter as well as the needs of the child or children who will be cared for by the baby sitter. A child of 12 might be fine alone for two hours in an afternoon. Yet, the same child may be incapable of responsibly caring for a 5-year-old for that same period of time.

The law surrounding leaving a child home alone is complicated especially when something goes wrong. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic.

Three Estate Plannings Everyone Needs

Many people mistakenly believe that estate planning is only necessary for the wealthy. In reality, a basic estate plan is essential for everyone, regardless of income or net worth, because we all want to minimize our estate taxes, confusion, and stress for loved ones after a death.
It’s no secret that estate planning can be a difficult topic for many families to address, but it’s a necessary one. Without proper preparation and documentation, assets-like houses, retirement plans and savings accounts-can end up in limbo for years, sometimes requiring expensive legal assistance to straighten matters out.
At a minimum, everyone should have the following three items in place:
An up-to-date will or trust.
Wills are easy to create, but they require the distribution of assets to go through probate. Probate is a legal process that involves:
1.   Validating a deceased person’s will;
2.  Identifying, inventorying, and appraising the deceased person’s property;
3.   Paying debts and taxes;
4.  And ultimately distributing the remaining property as the will directs.
The probate process often requires a lot of technical paperwork and court appearances, and the resulting legal and court fees are paid from estate property-reducing the amount that’s passed on to heirs.
A trust can be more expensive to set up and requires professional assistance, but it provides benefits that a will cannot. First, when they’re structured properly, trusts will help avoid guardianship or conservatorship if you become incapacitated. A will only works after you’ve died; a trust, by contrast, works all the time, including periods of incapacity before death.
Trusts usually avoid probate, which helps beneficiaries gain access to assets more quickly as well as save time and court fees. Depending on how it’s structured, a trust may also reduce estate taxes owed and can protect an estate from heirs’ creditors.
A durable power of attorney.
A power of attorney is a written authorization that allows someone else to make financial and legal decisions for a person if that person should become hospitalized, disabled or otherwise incapacitated.
Not all powers of attorney are created equal. Some are put in place for short periods of time only, for example, while a person is vacationing overseas, but dealing with legal matters at home. That’s why it’s important to have a durable power of attorney in place, which simply means that the agreement is not for a temporary period of time. It may be valid immediately when it’s signed, or it may go into effect at a later point. But what makes it “durable” is the fact that it will survive your later incapacity. (If a power of attorney is not durable, it is revoked when you become incapacitated – the very moment when you need it most.)
Powers of attorney for property should only be given to trusted individuals, ideally those who are good with financial and legal matters. Medical powers of attorney can be separated and given to someone else, if desired.
Updated beneficiary designation forms.
Beneficiary designation forms on life insurance policies, 401(k) accounts and other assets will generally override any conflicting provisions within a will or trust. It’s essential to make sure all forms are checked and updated regularly, ideally on an annual basis.

Three Estate Planning Items Everyone Needs

Many people mistakenly believe that estate planning is only necessary for the wealthy. In reality, a basic estate plan is essential for everyone, regardless of income or net worth, because we all want to minimize confusion, unnecessary costs, and stress for loved ones after a death.

It’s no secret that estate planning can be a difficult topic for many families to address, but it’s a necessary one. Without proper preparation and documentation, assets—like houses, retirement plans and savings accounts—can end up in limbo for years, sometimes requiring expensive legal assistance to straighten matters out.

At a minimum, everyone should have the following three items in place:

An up-to-date will or trust.

Wills are easy to create, but they require the distribution of assets to go through probate. Probate is a legal process that involves:

1.   Validating a deceased person’s will;

2.   Identifying, inventorying, and appraising the deceased person’s property

3.    Paying debts and taxes;

4.    And ultimately distributing the remaining property as the will directs.

The probate process often requires a lot of technical paperwork and court appearances, and the resulting legal and court fees are paid from estate property—reducing the amount that’s passed on to heirs.

A trust can be more expensive to set up and requires professional assistance, but it provides benefits that a will cannot. First, when they’re structured properly, trusts will help avoid guardianship or conservatorship if you become incapacitated. A will only works after you’ve died; a trust, by contrast, works all the time, including periods of incapacity before death.

Trusts usually avoid probate, which helps beneficiaries gain access to assets more quickly as well as save time and court fees. Depending on how it’s structured, a trust may also reduce estate taxes owed and can protect an estate from heirs’ creditors.

A durable power of attorney.

A power of attorney is a written authorization that allows someone else to make financial and legal decisions for a person if that person should become hospitalized, disabled or otherwise incapacitated.

Not all powers of attorney are created equal. Some are put in place for short periods of time only—while a person is vacationing overseas but dealing with legal matters at home, for example. That’s why it’s important to have a durable power of attorney in place, which simply means that the agreement is not for a temporary period of time. It may be valid immediately when it’s signed, or it may go into effect at a later point. But what makes it “durable” is the fact that it will survive your later incapacity. (If a power of attorney is not durable, it is revoked when you become incapacitated – the very moment when you need it most.)

Powers of attorney for property should only be given to trusted individuals, ideally those who are good with financial and legal matters. Medical powers of attorney can be separated and given to someone else, if desired.

Updated beneficiary designation forms.

Beneficiary designation forms on life insurance policies, 401(k) accounts and other assets will generally override any conflicting provisions within a will or trust. It’s essential to make sure all forms are checked and updated regularly, ideally on an annual basis.

We can assist you to create or update these basic items as well as provide suggestions for additional steps, if needed.