Fall 2017 Newsletter

Why Your College-Age Child Needs Planning

Your child is eighteen and legally an adult. However, very few eighteen year olds we come across are financially and/or emotionally self sufficient; for the most part, they continue to rely on the generous support of their parents. But what if something goes horribly wrong and your eighteen year old (or older) is in an accident or needs unexpected medical treatment? FACT: you have no right (even as the generous, supportive parents and former legal custodians of your child) to see their medical records or have any authorization to make medical decisions on their behalf. This also goes for personal and financial dealings on behalf of this adult child (accessing their bank accounts, paying their bills, signing off on contracts or other documents, dealing with the Department of Motor Vehicles regarding his/her car, etc.).

SOLUTION: Make sure your newly ‘adulted’ child is prepared for grown-up life and has a Health Care Directive (Living Will, Health Care Proxy), a Power of Attorney document, and the required HIPAA Waivers. This is wise planning; always have a backup plan.

Call us to arrange an appointment, with your adult child present of course. Our fees are based on a minimum of two meetings (one initial meeting and a signing appointment) and will be on a flat-fee basis.

Quick Do’s and Don’ts of Estate Planning

  1. Do be organized (see article, “Core Estate Planning Checklist”).
  2. Don’t keep Estate Planning documents in a bank’s safe deposit box. By doing so, this could impose additional Court proceedings before your Agent or Executor can access the deposit box.
  3. Do introduce your selected fiduciaries (Executor, Trustee, Power of Attorney Agent, Health Care Agent) and any of their successors to your Estate Planning Attorney. Familiarity is a good thing to establish before an unexpected crisis occurs. Schanker and Hochberg P.C. offers our clients a ‘family meeting’ at no additional fee to review as much (or as little) of your planning with your fiduciaries and beneficiaries as you direct.
  4. Don’t listen to your neighbor, friend or Aunt Mimi. Check with your experienced Estate Planning Attorney or meet with an experienced Estate Planning Attorney first. Aunt Mimi’s advice may be free but the consequences of ‘amateur lawyering’ are painfully expensive and time consuming (see article, “Beware of ‘Amateur Lawyering’”).
  5. Do REVIEW your Estate Planning on a regular basis to make sure you and your fiduciaries can locate the original documents, that your beneficiary designations are in place and correct, and that your planning decisions remain current.
  6. Do schedule a “family meeting” to review your planning with your family, your beneficiaries, and your designated fiduciaries.
  7. Don’t download internet forms as a quickie Estate Plan. The forms rarely are comprehensive and even more rarely executed correctly. This is a definite prime example of amateur lawyering.

Core Estate Planning Checklist

You did it! You have an Estate Plan. Those documents have been signed, witnessed, notarized and stored away in a safe and accessible location. All done? NEVER. Remember, this planning is not as much for your benefit as it is for the benefit of your beneficiaries and loved ones you are leaving behind. The actual “planning documents” are part of a bigger scheme. The following is a general checklist that everyone should adhere to, regardless of wealth or planning complexity:

  1. Legal Documents: Store your set of important legal documents in one place (not ever a bank’s safe deposit box; see “Quick Do’s and Don’ts of Estate Planning” #2). Make sure your primary and alternate Health Care Agent and your primary and alternate Agent under the Power of Attorney have access to or are already in safe possession of the document empowering them so they have the ability to show their legal authority. Make sure your Trustee(s) and/or Executors know who your Estate Planning Attorney is and where your original Trusts and/or Wills are located.
  2. Financial Information: Make sure your financial assets and any required passwords are somewhere safe and accessible to anyone who may need to act on your behalf. Your Estate Planning Attorney is bound by ‘attorney-client’ confidentiality so you may wish to consider leaving general information there for safe keeping.
  3. Contact Information: Create a list of important contacts such as your CPA, Attorney, Financial Advisor, Antique dealers, accredited appraisal services that you know of for valuable collectibles, etc. This list is so that your Executor/Trustee or Agent under the Power of Attorney know who to turn to manage and/or administer your affairs.
  4. Health Care Wishes: Set forth any particular preferences you have concerning your medical needs so that your Health Care Proxy (primary and alternate) are aware of what you specifically do or don’t want.
  5. Major Responsibilities: Identify any regular special obligations you have. Are you a Trustee for someone else? Are you a business owner or a business Partner?
  6. Final Arrangements: Specify your preferences regarding funeral arrangements, a reception, your obituary, etc. Do NOT set forth specific dates and times for funeral arrangements in the public Obituary. We have had recent cases where the decedent’s home was invaded and robbed after publishing when the decedent’s funeral was to take place.

Our advice, if you are not ready to discuss all of these particulars with your loved ones, is to prepare letter(s) or a ‘critical information’ list to identify some or all of the above considerations. The more organized your planning is, the more efficient it will operate. This is another element of your Estate Plan that Schanker and Hochberg P.C. assists you with to ensure you have a very comprehensive, accessible and enforceable planning structure.

Beware of ‘Amateur Lawyering’

We see this phenomenon on a daily basis. Everyone knows someone and people talk and exchange stories. We ask our beloved family members, loyal friends, and trusted neighbors for advice. This is a normal social happening. However, whenever you receive legal advice from someone not licensed to practice law, you risk significant unintended consequences; namely frustration, time delays and unnecessary, additional legal fees and expenses.

What are very common examples of amateur lawyering?

“I downloaded forms from a website and made beneficiary designations for each of my assets.”

Consequences: Someone goes to enforce the Power of Attorney just to find out it can’t be used because it was improperly executed or the power the Agent is trying to use simply is not part of the directives in the document itself; the document is defective because it isn’t comprehensive. No computer program or algorithm can evaluate your needs based on your personal circumstances. As for the beneficiary designations, if those named beneficiaries are minors or have ‘special needs’ or disabilities, are on Medicaid, or predecease you, then you have ensured legal proceedings that would never have been necessary had you prepared a Last Will and Testament or appropriate Trust document.

“We may require Medicaid assistance in the not so distant future so we transferred our Manhattan Condominium to our adult children because many people in our building did just this.”

Consequences: There are several very effective Medicaid pre-planning strategies that are available to protect assets and to prepare for the Medicaid application process. ‘Gifting’ is absolutely part of that. However, attention must be paid to the nature of the asset one is gifting and to whom. If this couple gifts their highly appreciated Manhattan Condominium to their loving children, they have made a gift which bestows their original purchase price of the Condominium as the cost basis to their children. When their children sell this apartment, they could incur some shocking capital gains tax consequences depending on how much that Condominium has appreciated in value from its original purchase price. Alternatively, if the gift was made into a qualifying Trust (for Medicaid purposes), the Condominium would be protected against any later claims by Medicaid against the Estate, eligibility for Medicaid would not be affected, and the cost basis of the apartment would be “stepped up” to the date of death value when the children ultimately inherit so that when they sell the Condominium, there most likely would not be any capital gains tax consequences (depending on the appreciation from date of death).

“Mom and Dad gave me $75,000 to shelter some of their assets and qualify for Medicaid because Medicaid has a financial needs threshold.”

Consequences: As discussed above, gifting is an effective pre-planning strategy for Medicaid eligibility; however, there are very rigid rules as to what is permissible and when this gifting should occur. Gifting without adhering to the guidelines will help nothing and protect nothing. By doing something you hear others have done is dangerous.

“My matrimonial Attorney did a quick Will for me.”

Consequences: Would you go to a Neurologist to treat your Hemorrhoids? No further explanation necessary here.

Firm Happenings

We regretfully announce that our Associate Attorney, Nicholas Klingenberg, has recently resigned from Schanker and Hochberg P.C. to pursue his legal practice in the field of Trusts and Estates in California. We wish him the very best of luck as he is certainly a bright, young Attorney with a very promising future ahead of him.

We are pleased to welcome Gina Rim to our firm. Ms. Rim is a highly skilled and experienced paralegal with significant experience in the field of Trusts and Estates. She has already made a very positive impact at our firm and we have confidence she will continue to do so as a valuable new member of our legal team.

Highlighted S&H Attorney: Andrea B. Schanker

Andrea B. Schanker, Esq. — Partner, received her Bachelor of Arts degree in Clinical Psychology from University of Rochester in 1999 and her Juris Doctor from New York Law School. Andrea is a licensed member of the New York and New Jersey Bar Associations. She was the 2016–2017 President of the Huntington Lawyers’ Club, a member of the Suffolk County Bar Association and a member of the New York State Bar Association where she is an active member within the Trusts and Estates Section and the Elder Law and Special Needs Section. Ms. Schanker is also a member of the American Bar Association.

Ms. Schanker joined Schanker and Hochberg P.C. in 2004 as an Associate Attorney specializing in Estate Planning, Estate Administration, Business Succession Planning, and Elder Law. She regularly delivers Estate Planning presentations to professionals in the financial industry and their clients. Ms. Schanker also regularly advises accountants, financial advisors, and insurance advisors in connection with her areas of expertise.

Andrea lives in Huntington with her husband, Michael Abruzzo and their daughters, Patricia Gertrude Abruzzo and Sylvia Grace Abruzzo.

General Disclaimer: While we hope this newsletter provides useful information, please know that this newsletter does not predict or guarantee the outcome or result in any particular situation and no attorney-client relationship exists or is established as a result of this newsletter or its receipt.