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How You are Remembered May Hinge on Your Having a Will

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If you think you don’t have a will, think again. You do.

It may not be the one you wanted, but you have one. It’s the one that New York State (or Florida) thinks you want to have.

You may not like that kinship generally governs the distribution of your assets. You may have a sibling who you have barely been able to be in the same room with for the past twenty years, but absent a will and a spouse, that sibling may be your primary heir.

Or you may have distant relatives whom you’ve never met who are found and notified that they are your heirs, to the dismay of closer family members, or friends whom you wanted to take care of in your will.

And you may not like the thought of your children fighting over whether you are buried or cremated, or if your business is sold to the lowest bidder because one son wants to wrap the whole thing up, fast. 

These are some things easily prevented by signing a properly drafted will.

We have all read about Aretha Franklin’s three handwritten wills, which have now led her children to be in an estate battle that has become so heated that the judge has decided that the estate’s administration needs to be under court supervision.

But the rich and famous are far from the only people whose families are subject to fracturing and division because of a failure to have a will or an estate plan.

A recent article from The Washington Post, “You will die. Don’t exit leaving a hot mess behind,” shares the stories from a funeral services planner in a church, who sees families and how they behave during a time of grief. Two stand out:

A man who dies and leaves his girlfriend of two years the entire proceeds of his life insurance policy. Her adult children had no idea she was his sole beneficiary. They want her to use the money to pay for the funeral, and she says no. When she shows up at his funeral, the family calls the police.

An older man with a much younger wife dies. He had never taken his first wife’s name off of the house or changed the name of his beneficiary on his life insurance policy. The first wife gets everything, and the new wife goes to live with her mother.

Don’t leave a disaster for your family, or put your surviving spouse in a terrible position. Call our office, make an appointment, and leave your family with a sense you were always looking out for them. That’s a much better way to be remembered.

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Even Fools Know Medicare Can Be a Problem

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Pre-retirement, many folks think they have only to enroll in Medicare and all will be well – including their health care budget. It would be great if it was that simple. It’s not. And not understanding how Medicare works and which plan to pick can make medical expenses a bigger part of a retirement budget than expected.

“79% of Future Retirees Are Dangerously Ill-Informed About Medicare,” reports The Motley Fool, and we think that’s on the low side.

Our office now includes a conversation about Medicare when people come for estate planning and elder law matters. We have found that many educated and informed people don’t know some basics about Medicare. Few understand the complex labyrinth of rules that can have a big impact on their monthly health care budget—and their overall health care costs.

Let’s start by setting one thing straight: Medicare Part B is NOT free. You have to pay for it.

Medicare A is divided into Parts. Many Parts.

Medicare Part A is free. It covers hospital care, but: there is a deductible: $1,364 if you land in the hospital before Medicare kicks in to cover the rest of your services. You may also be responsible for coinsurance, depending on how long you are in the hospital.

Medicare Part B is not free. It covers preventive care, like doctor visits and screening tests. There is a premium to be paid, and the current standard premium is $134.40. But if you are a high earner, your premiums will be higher. For example, a married couple with an income of $170,000 to $214,000 must pay $189.60 for Medicaid Part B.

These are 2019 numbers. The numbers only go up.

For prescription drug coverage, you’ll need Part D. Here’s where it gets tricky and most folks mess up. There are any number of plans, and make the decision about which plan to select based on what medications you take routinely. Co-pays will depend upon the plan.

Medicare does NOT cover dental care, vision exams and hearing services. If you don’t want to pay out of pocket for those expenses, you’ll want a Medicare Advantage plan. But be careful—Medicare Advantage is an alternative to traditional Medicare. Costs vary by plan.

And there’s something else: Medigap, also known as supplemental insurance. You’ll pay for Medigap, but it will pick up the costs for certain deductible, coinsurance and copay costs under Medicare. But it’s another bill to pay.

There’s a lot more. Visit www.medicare.gov, and expect to be a little overwhelmed. Or make an appointment with our office for a Medicare Review Appointment. Call 516-307-1236.

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Stephen J. Silverberg Named By Super Lawyers Magazine as Top New York Metro Area Super Lawyer for 2019 in Elder Law

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Congratulations to my colleagues who share with me the prestige of being named to the New York Metro Super Lawyers list for 2019 in Elder Law.  It is an honor to be have been selected for the past eleven consecutive years.

Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys.

When you are making a decision about who you to work with to help your family navigate estate planning, long-term care, Medicaid, and related issues, you want to work with a professional with experience and focus in these areas of the law. A professional who includes estate planning or elder law as an occasional part of their practice will not have the knowledge as one who has devoted his career to attaining a higher level of skills.

Super Lawyers is just one of my credentials that, I believe, elevates my practice above many of my peers.

I am one of only 500 CELAs® in the entire country, which requires meeting rigorous qualification standards from the National Elder Law Foundation (NELF). The purpose of the certification program is to identify those lawyers who “…have the enhanced knowledge, skills, experience, and proficiency to be properly identified to the public as certified Elder Law attorneys.”

I have also been recognized by Martindale, with an AV-Preeminent rating (5 out of 5) that I have maintained for many years.

Not every Elder Law attorney has attained these achievements.

I invite you to read my professional biography and if you have questions, please call me at 516-307-1236 to make an appointment.

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Medicare Beneficiaries Get it Wrong – We Can Help

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We see more and more of this– a man enrolls in Medicare Parts A and B at age 65. He’s in good health and decides he need not enroll in a Medigap plan. This is fine for a few years until he receives a cancer diagnosis. He calls his insurance agent in a panic, needing to discover how fast he can sign up for a Medigap plan once the election period began mid-October.

However, with his diagnosis, he won’t be approved for coverage. Even if he did initially enroll in a Medigap plan, he probably could not even switch plans.

What about open enrollment, asks an article from Forbes, aptly titled “One Thing That Nearly Every Medicare Beneficiary Gets Wrong”?

Open enrollment doesn’t apply to Medigap plans. It only pertains to Medicare Advantage plans and Part D drug plans. There’s no free pass to a Medigap plan without the underwriting process. You can only obtain a Medigap policy without underwriting is when you initially apply for Medicare.

While this man could have enrolled in a Medicare Advantage plan, it would not have been a good fit. His oncologist didn’t participate in the Advantage networks, and many Advantage plans charge a 20% coinsurance for chemo. He couldn’t afford that.

Understanding how Medicare’s election periods work and applying for the right program at the right time is a critical part of preparing for the health care costs of retirement and aging. Because we have seen how often people have trouble determining the Medicare benefits most suitable for them, we are offering help to clients with these decisions, and how to protect themselves from making very expensive mistakes.

Here are time limits for Medicare enrollment you need to know about:

Initial Enrollment Period –A seven-month window begins three months before you turn 65 (not your full retirement age under Social Security currently age 66) to enroll in original Medicare Parts A and B and sign up for either a Medicare Advantage plan or Part D drug plan. If you have health insurance through your employer, you must still enroll in Medicare Part A. There is no premium for Part A. If you lose your employer health insurance, your initial enrollment period expires seven months after you end your employment. Being eligible for COBRA coverage does not change this period. Generally, the maximum COBRA period is eighteen months. However, even if you choose COBRA, you must still enroll in Part B and Part D within the seven-month initial enrollment period.

Also, if you work for a company with fewer than twenty employees and are covered by your employer’s health insurance plan check with your employer before you turn 65. In this situation, the law says Medicare becomes your primary health insurer unless your employer elects opt-out of this provision. Your employer’s health insurance plan becomes secondary. If your employer has not opted out, you must apply for Medicare Parts A, B and D. If you do not, your employer’s health insurance plan will only pay for benefits Medicare does not cover.

Medigap Open Enrollment Period—A six-month window begins with your initial Part B effective date. You can use this period to apply for any Medigap plan in your area with no questions asked. For people with chronic health conditions, this may be their ONLY opportunity to get Medigap coverage without being turned down.

General Enrollment Period—If you miss your initial enrollment period, you can sign up for Parts A and B during general enrollment, which runs from January 1 to March 31 each year. Benefits begin the following July. Generally, unless you are transitioning from employer-provided health insurance after turning 65, your Medicare premiums are increased by approximately 10% for each year you are late. This increase is for life.

Medicare Advantage Open Enrollment Period – If you are enrolled in an Advantage plan and decide it’s not a good fit, you can go back to original Medicare and get a Part D drug plan or make a one-time change to a different Advantage plan. This period runs from January 1 to March 31.

Annual Election Period—Also known as the “Fall Open Enrollment” this is when you can enroll in, change or disenroll from a Medicare Advantage Plan or Part D drug plan. The benefit under either plan can change substantially from year to year. Your insurance carrier will notify you in September of the upcoming year’s changes in premiums, benefits, copays, etc. You then need to determine if the plan still suits your needs.

If you don’t like your current plan, use the annual election period to apply for a new plan starting on January 1.

However, this does not give you a free pass into a Medigap plan.

Understanding Medicare is overwhelming for everyone. In weeks to come, we will be talking more about Medicare and how our office is making it easier for seniors.

If you have questions, call us at 516-307-1236 and ask for a Medicare Review Appointment.

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STEPHEN J. SILVERBERG, ESQ. NAMED TO 2020 EDITION OF THE BEST LAWYERS IN AMERICA© IN ELDER LAW

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For the sixth consecutive year, I am honored to have been selected by my peers as one of the 2020 Best Lawyers in America©  in the practice area of Elder Law. I thank my colleagues who nominated me to this select group of Elder Lawyers.

As you may know, being selected by Best Lawyers doesn’t happen to every lawyer. The only attorneys who are permitted to nominate and give feedback are those who have already attained the recognition from Best Lawyers. 

Attorneys are not permitted to self-nominate. Best Lawyers only wants to hear from our colleagues and also checks in with local bar associations to ensure that candidates are in good standing. 

This is an honor that I share with the entire firm, which continues to be named also as a Best Law Firm from Best Lawyers® since 2015.

Congratulations also to my peers who have been named to the Best Lawyers in America. 

Best Lawyers®, first published in 1983, is universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. Over 83,000 industry-leading attorneys from around the world are eligible to vote. It received over 10 million evaluations on the legal abilities of other lawyers based on their specific practice areas around the world. For the 2020 Edition of The Best Lawyers in America©, 7.8 million votes were analyzed, which resulted in over 60,000 leading lawyers in the new edition. Corporate Counsel magazine has called Best Lawyers, “the most respected referral list of attorneys in practice.”

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Thank you Natalie Choate!

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I want to thank my esteemed colleague Natalie Choate, who included the strategy I uncovered and developed in the latest edition of her book “Life and Death Planning for Retirement Benefits” (available at https://www.ataxplan.com or Amazon). Natalie is the national leader in planning for retirement benefits from qualified plans and IRA accounts; I am honored to call her a friend. Natalie was gracious enough to review the pre-publication version of my article “A Clear Winner in the Tax Cuts and Jobs Act of 2017: Qualified Disability Trusts.” The article, which was published in the Tax Section of NAELA News Online, explored a wrinkle in the new tax law.

A Qualified Disability Trust (“QDisT”) is a non-grantor trust for a disabled beneficiary. The Tax Cuts and Jobs Act of 2017 (the “Act”) greatly enhances the income tax benefits for a beneficiary of a Qualified Disability Trust (QDisT). This especially true if the beneficiary is a minor or a student under twenty-five; income from a QDisT is exempt from the Kiddie Tax and taxed at the beneficiary’s income tax rate that substantially lower than the trust income tax rate or the beneficiary’s parents’ income tax rate (used for years before 2018).

Additional income tax benefits of a QDisT include:

  • A trust income tax exemption of $4,150 (indexed for inflation). The income tax exemption for other trusts is $100 or $300 depending on the trust. A QDisT can retain the exemption each year income tax-free.
  • The beneficiary of a QDisT can claim an income tax standard deduction of up to $12,000. Previously, if the parent of trust beneficiary claimed the beneficiary as a dependent on the parent’s income tax return, the maximum allowable standard deduction was $1,050. When combined with the trust income tax exemption, the first $16,150 of income is income tax-free.

As a result of the Act eliminating many deductions and exemptions, the importance of the QDisT as a planning tool is greatly enhanced. Most third-party SNT’s are grantor trusts. The grantor, usually a parent or other relative is taxed on income generated by the trust, wasting the trust exemption and child’s standard deduction.

Due to the changes in the Act, the Elder Law and Special Needs Planning attorney must discuss with clients the benefits of a QDisT to preserve their tax benefits. It is important for Elder Law and Special Needs Planning attorneys to re-examine existing third-party grantor trusts and consider the benefit of terminating the grantor trust status or decanting the trust to take advantage of the substantial income tax saving under the Act.

Read the complete article here: Tax Section of NAELA News Online.

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What Is a Trustee Responsible For?

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If you have been appointed as the trustee of a trust, consider it a vote of confidence in your judgment and trustworthiness. It is also a major responsibility. A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a “trustee,” holds legal title to property for another person, called a “beneficiary.”

Here’s a brief overview of a trustee’s duties:

  1. Fiduciary Responsibility. As a trustee, you stand in a “fiduciary” role with respect to the beneficiaries of the trust, both the current beneficiaries and any “remaindermen” named to receive trust assets upon the death of those entitled to income or principal now. As a fiduciary, you will be held to a very high standard, meaning that you must pay even more attention to the trust investments and disbursements than you would for your own accounts. 
  2. The Trust’s Terms. Read the trust itself carefully, both now and when any questions arise. The trust is your road map and you must follow its directions, whether about when and how to distribute income and principal or what reports you need to make to beneficiaries. 
  3. Investment Standards. Your investments must be prudent, meaning that you cannot place money in speculative or risky investments. In addition, your investments must take into account the interests of both current and future beneficiaries. For instance, you may have a current beneficiary who is entitled to income from the trust. He or she would be best off in most cases if you invested the trust funds to generate as much income as possible. However, this may be detrimental to the interest of later beneficiaries who would be happiest if you invested for growth. In addition to balancing the interests of the various beneficiaries, you must consider their future financial needs. Does a trust beneficiary anticipate buying a house or going to school? Will the beneficiary be depending on the trust income for retirement in 15 years? All of these questions need to be considered in determining an investment plan for the trust. Only then can you start considering the propriety of individual investments. 
  4. Where you have discretion on whether or not to make distributions to a beneficiary you need to evaluate the beneficiary’s current needs, future needs, and other sources of income, as well as your responsibilities to other beneficiaries before making a decision. And all of these considerations must be made in light of the size of the trust. Often the most important role of a trustee is the ability to say “no” and set limits on the use of the trust assets. This can be difficult when the need for current assistance is readily apparent. 
  5. One of your jobs as trustee is to keep track of all income to, distributions from, and expenditures by the trust. Generally, you must give an account of this information to the beneficiaries on an annual basis, though you need to check the terms of the trust to be sure. In strict trust accounting, you must keep track of and report on principal and income separately. 
  6. Depending on whether the trust is revocable or irrevocable and whether it is considered a “grantor” trust for tax purposes, the trustee will have to file an annual tax return and may have to pay taxes. In many cases, the trust will act as a pass through with the income being taxed to the beneficiary. In any event, if you keep good records and turn this over to an accountant to prepare, this should not be a big problem. 
  7. While you cannot delegate your responsibility as trustee, you can delegate all of the functions described above. You can hire financial advisors to make investments, accountants to handle taxes and bookkeeping for the trust, and lawyers to advise you on questions of interpretation. With such professional assistance, the job of trustee need not be difficult. However, you still need to communicate with those you hire and make any discretionary decisions, such as when to make distributions of principal from the trust to one or more beneficiaries. 
  8. Trustees are entitled to reasonable fees for their services. Family members often do not accept fees, though that can depend on the work involved in a particular case, the relationship of the family member, and whether the family member trustee has been chosen due to his or her professional expertise. Determining what is reasonable can be difficult. Banks, trust companies, and law firms typically charge a percentage of the funds under management. Others may charge for their time. In general, what’s reasonable depends on the work involved, the amount of funds in the trust, other expenses paid out by the trust, the professional experience of the trustee, and the overall expenses for administering the trust. For instance, if the trustee has hired an outside firm for investment purposes, that expense would argue for the trustee taking a somewhat smaller fee. In any case, it makes sense to consult with a professional experienced with trust work who can guide you on what would be normal fees considering all of the circumstances.

Keep an eye on the responsibilities and make sure that everything is in order. You don’t want to face any questions from any beneficiaries at a later date.

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How To Prepare for Death or Disability

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No one wants to face the fact that our loved ones will not be with us forever. Facing our own mortality is frightening as well. Although none of us wants to contemplate a time when we or a loved one might become disabled or die, it is important to be prepared. 

There are many steps families can take in advance of death or disability to avoid future conflicts or uncertainties:

  • Don’t be afraid to start the conversation. Whether you are a parent talking to your children, a husband talking to a wife, or an adult child talking to an aging parent, bringing up the topic of death and disability can be difficult, but it is an important conversation to have. 
  • Make sure you or your loved ones have done estate planning. All estate plans should include, at minimum, two important estate planning instruments: a durable power of attorney and a will. The first is for managing property during your lifetime, in case you are unable to do so yourself. The second is for the management and distribution of property after death.
  • Revocable (or “living”) trusts can also help you avoid probate and manage your estate both during your life and after you’re gone. In addition, you or your loved ones should consult with an estate planning professional about the best way to minimize estate taxes. 
  • Plan for the worst. You and your loved ones need to be prepared in the event that one of you becomes disabled and will no longer be able to make your own decisions. The durable power of attorney mentioned above is an important instrument. You will also need a health care proxy (sometimes called a health care power of attorney), which gives someone else the medical authority to communicate your wishes about medical treatment. 
  • Make sure you or your loved ones draw up a list to help your executors carry out your estate plans. The list should contain information on the location of assets, such as bank accounts, property, and stocks and bonds; the location, keys, and passwords to any safe deposit boxes; the identity of important professionals who might have information about your estate; and the location of important records, such as loan, insurance, and tax documents. The list can also contain things you want done immediately after you die, such as calling relatives or notifying employers.
  • Determine you or your loved ones’ wishes regarding funeral arrangements. You may want to pay for your funeral ahead of time to take the burden off of family, but you need to be careful and shop around. If you can’t make arrangements ahead of time, put your wishes in writing so the whole family knows what you want.
  • Figure out who is going to get what personal property and heirlooms. Preparation and planning in advance can avoid family squabbles after you or your loved ones die. 

If you don’t have an estate plan in place, call our office at 516-307-1236 to make an appointment.

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FREE Health Care Proxy for College – Age Children

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For the second year, our office is pleased to offer a free health care proxy for college age kids.

Parents always want to do everything they can to protect their children, but once a child turns 18, they are legally adults. Because of HIPAA regulations(Health Insurance Portability and Accountability Act), parents have the same legal status as a stranger. Doctors may not speak with parents about their child’s condition, and medical facilities legally may not provide information.

Parents have no legal standing to decide about their child’s care if the student suffers an illness or injury. The scenario is a frightening one for any parent to consider.

A Health Care Proxy allows the child to designate his or her parent as an agent or proxy entitled to information about the student’s medical condition, gain access to medical records and most important, make medical treatment decisions on behalf of the student.

We spend so much time preparing our kids for college, but all too often we overlook this important document. We are glad to offer it for free to members of our community as we believe it is so important. If we can help one family who otherwise could not make medical treatment decisions for their college student, this program will have been worth doing.

Students or their parents or legal guardians are invited to call the Law Office of Stephen J. Silverberg at 516-307-1236 to make an appointment for their free Health Care Proxy. The student and parent or legal guardian must come to the office together and must bring current identification.

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What Makes a Will Valid?

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Movies, television, and books like to present wills in dramatic ways–handwritten notes, videos, deathbed utterances–but what actually makes a will valid? The law varies depending on what state you live in, but there are some basic rules.

The legal requirements for a will are fairly simple. In order for your will to be valid, you must know what property you have and what it means to leave it to someone, then sign and date the document and have it witnessed according to the laws of your state.

Most states require two witnesses to watch you sign the will and then sign as witnesses. Usually one of the witnesses can be the lawyer who drafted the will. Most states do not allow beneficiaries under the will to be witnesses.

Some states allow you to make a handwritten will, called a “holographic” will. This will does not need to be witnessed, but it is much more likely to be challenged after you die. Some states require that the entire will be in your handwriting; others call for just the important portions to be in your handwriting. The writing must indicate your intent to make a will and clearly describe the property being given away. Some states require the will to be dated and signed. Doing this is risky, as the will could be deemed invalid by the court.

Very few states allow an “oral” will (called a “nuncupative” will). The states that allow this type of will have very specific requirements for when it is valid. For example, Indiana only accepts an oral will if it is made by someone in imminent peril of death who then dies as a result of the peril. States may require two witnesses and that the will be reduced to writing soon after the declaration. There also may be a limit to the amount of property someone can dispose of with an oral will. Again, a risky way to go.

Video wills are not recognized as a form of will in any state. States may recognize a video will as a valid oral will if it meets all the requirements, but a video will, by itself, is not a valid will. However, using video to record a will signing can be a good method to prevent a will contest. A video recording of the will signing allows your family members and the court to see that you are freely signing the will and makes it more difficult to argue that you did not have the requisite mental capacity to agree to the will.

The best way to make sure your will is considered valid is to meet with an estate planning attorney who is knowledgeable about the laws of your state and the requirements needed to create a will and an estate plan.

If you’ve got questions about your estate plan, please call the office at 516-307-1236.