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What Estate Planning Attorneys Wish Clients Knew About AI      

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We live in a moment where artificial intelligence is woven into nearly every corner of daily life. People are using AI to plan vacations, write wedding vows, edit novels, brainstorm business ideas, and even redesign their homes. These tools are fast, friendly, and capable. It’s no surprise that many people wonder: If AI can do all of that, why not ask it to create my will or trust?

As an estate planning attorney, I understand the appeal. Typing questions into ChatGPT or Claude feels easier than scheduling time with a lawyer. And there is no shortage of online platforms promising quick, inexpensive wills and trusts “drafted in minutes.” But the truth is that estate planning, and especially Medicaid and long-term care planning, is not something AI can safely do for you.

Every month, our office now meets with families trying to unwind the fallout from AI-generated or online-generated estate plans. What was meant to be a shortcut ended up creating delays, disputes, extra expenses, and in some cases the loss of benefits or property. These issues often appear only after a person has passed away or suffered a medical crisis, when it’s too late to fix the problem.

Before relying on AI for something as important as your estate plan, here is what we wish every client understood.

Even AI Says It Shouldn’t Create Your Estate Plan

Out of curiosity, we asked ChatGPT whether it should be used to draft wills or trusts. The response: no. AI tools can help you learn, outline your thoughts, or understand basic concepts, but they cannot replace an attorney.

AI Cannot Apply State-Specific Law With 100% Precision

Estate planning is governed by state statute, case law, and strict execution requirements. A small mistake can have big consequences. For example, in New York, a will that isn’t witnessed properly, a Power of Attorney that is missing the statutory gifts rider, or a trust using outdated language can lead to:

  • Documents being declared invalid
  • Delays in probate or estate administration
  • Assets passing to the wrong individuals
  • Avoidable taxes or penalties

AI tools are trained on vast amounts of general information—but not on your state’s specific, ever-changing legal requirements. They also cannot comply with the New York Estates, Powers & Trusts Law (EPTL) or the Surrogate’s Court Procedure Act.  

AI Cannot Ensure Proper Execution of Documents

A perfectly drafted will is useless if it is signed incorrectly. New York requires specific witnessing procedures; certain documents must be notarized; and others need statutory warnings read aloud. AI cannot walk you through these requirements in real time or confirm they were followed.

Incorrect execution is one of the most common reasons we see documents fail.

AI Cannot Identify Hidden Issues or Address Sensitive Issues The Way a Human Can

A significant part of estate planning is uncovering issues clients don’t realize matter. AI only knows what you type into it—and clients rarely know what to disclose. For example:

  • Blended families or estranged relatives
  • Disabled beneficiaries and the need for special needs planning
  • Medicaid look-back issues and asset transfer penalties
  • Tax exposure or titling problems
  • Business succession complications
  • Creditor protection concerns

An attorney is trained to ask the questions you don’t know to ask. AI is trained to respond to the questions asked.

Medicaid and Long-Term Care Planning Is Too Complex for AI

Medicaid eligibility involves a five-year look-back period, transfer penalties, exemption rules, trust requirements, spousal allowances, and frequent regulatory changes. There is no algorithm that can analyze your assets, family circumstances, health risks, and legal options with the nuance required.

Mistakes in Medicaid planning are often irreversible—and costly.

AI Cannot Give Legally Binding Advice  

AI is not licensed, cannot practice law, cannot assume professional responsibility, and cannot be held accountable. Estate planning is not simply document drafting; it is legal advice, strategic planning, risk analysis, and fiduciary responsibility. Those duties cannot be delegated to software.

Should You Use AI to “Check” Your Estate Plan?

Another common question we hear is whether it’s safe to upload an existing estate plan to AI to “analyze” it. The answer is no—primarily because of privacy.

We are in the early stages of learning how AI systems store and process information. Just as social media felt harmless until people realized their personal data was being tracked, shared, or sold, we will likely see a similar learning curve with AI.

When you upload sensitive information to an AI system, it enters a database stored on massive servers you cannot control. It may be retained permanently or temporarily. You cannot be certain who may have access to it, now or in the future. Estate planning documents contain financial information, family details, medical concerns, and business ownership structures, all of which need not be set loose in the world.

Our firm uses multiple security systems to keep client data private. AI tools do not offer that level of protection, and their privacy policies make that clear.

AI Lacks Human Judgment—and That Matters

Even with impressive computing ability, AI does not understand family dynamics, personal values, or the emotional nuances that shape estate planning. It cannot anticipate the “what-ifs” that attorneys deal with daily.

Consider just a few common scenarios:

  • A will leaves a home to a nephew, but the home is sold before death. Is the nephew entitled to something else?
  • A child develops substance-use issues after a trust is created. Should the trust include protection or restrictions?
  • Parents want to treat children equally, but one child receives significant lifetime gifts or caregiving support. Should the estate reflect that?

These are human questions, not software questions.

AI Also Makes Mistakes

A phenomenon often called “AI hallucinations” occur when an AI system provides answers that are simply wrong. In the legal world, this has already caused real-world harm. Several attorneys across the country were sanctioned after filing briefs containing cases, quotes, and citations entirely fabricated by AI.

Estate plans created by AI can contain similar errors—incorrect statutory language, references to nonexistent laws, or clauses that contradict one another. Unlike a wrong restaurant suggestion, these mistakes can have lasting legal and financial consequences for your family.

Human Estate Planning Needs Human Experience

Early GPS systems sometimes sent drivers into ponds. AI is no different: its output is only as good as its training, and it often fails in unexpected ways. Estate planning requires judgment, precision, and a deep understanding of human circumstances. It is as much about protecting relationships as it is about distributing property.

AI is a powerful tool, and it has its place—education, brainstorming, drafting outlines, gathering general information. But it cannot replace the experience, responsibility, and foresight of a qualified estate planning attorney.

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There’s Not Much Time Left, but You Can Still Make These Moves before December 31, 2025

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Significant changes to the One Big Beautiful Bill Act (OBBBA) take effect on January 1, 2026. There’s little time, but if you act fast, you might benefit:

Charitable giving tax rules are changing. Only taxpayers who itemize can deduct charitable gifts exceeding 0.5% of ADI. If you already know which organizations you want to support, consider making a few years’ worth of donations in 2025, before these tax benefits shrink.

Charitable Deduction Limits: 2025 vs. 2026 Comparison

Feature2025 Tax Year2026 Tax Year
Itemizer Deduction FloorNone — full deductions allowed up to AGI limitsNew 0.5% AGI floor before deductions allowed
Cash Gifts to Public Charities (Itemizers)Deductible up to 60% of AGIStill deductible up to 60% of AGI (after 0.5% floor)
Non‑Cash Donations (e.g., stock)Deductible up to 30% of AGI (typical)Same AGI limits, subject to new floor
Non‑Itemizer Charitable DeductionNot availableUp to $1,000 (single) / $2,000 (joint) for cash gifts
Deduction Value Cap (High Earners)Full value based on marginal rate (e.g., 37%)Capped at 35% of the gift value
Qualified Charitable Distributions (QCDs)Up to $108,000 (direct from IRA)Increased to approximately $111,000
Benefit Requirement for QCDsMust be to a qualified charity with no donor benefitSame rule applies

Are you unsure which organizations you want to support? Set up or contribute to a DAF – Donor Advised Fund. You’ll get the deductible contribution this year and the opportunity to distribute grants in the future.

Consider a Charitable Remainder Trust (CRT), which allows for a current-year deduction and provides an income stream. It is also beneficial to a non-spouse IRA beneficiary, as payments can be made over 20 years or until the beneficiary’s life expectancy. It avoids the 10-year payout rule.

If you’re over 70 ½ and have IRA income you don’t need, you can directly donate up to $108,000 in 2025 using a Qualified Charitable Distribution. This satisfies your RMDs and trims taxable income. You can’t use a QCD for a DAF or private foundation.

Gifting Rules are Better in 2025

While the federal estate tax and gift exemptions are now at their highest levels, families with taxable estates may want to utilize some of their exemptions in 2026. You can still give up to $19,000 per person without using your lifetime exemption.

Interest Rates make some planning ideas more attractive. Intrafamily loans allow family members to borrow at lower rates than those offered by commercial lenders. If you already made intrafamily loans in recent years, consider refinancing them at today’s lower rates.

A Grantor Retained Annuity Trust (GRAT) transfers appreciated assets to beneficiaries with minimal gift tax exposure if returns exceed the IRS Section 7520 rate, which must be distributed back to the grantor. This rate has been moving lower in 2025, improving the likelihood of a successful GRAT. Some families choose a short-term GRAT to capitalize on market fluctuations.

A Charitable Lead Annuity Trust (CLAT) follows similar interest rate dynamics. A CLAT provides annual income to a charity for a term, and after the term, remaining assets pass to individual beneficiaries. Lower rates increase the potential remainder amount, making them even more appealing.

The end of the year is a key time to review your retirement and estate plans. Check your Wills, Trusts, Advanced Care Directives, contributions levels, beneficiary designations, and RMDs.

Changes are coming in two weeks’ time – make the most of what’s left of 2025!

Reference: Kiplinger (December 16, 3025) “Your Year-End Tax and Estate Planning Review Just Got Urgent”

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Year-End Estate Planning Wrap-Up   

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As the year draws to a close, it’s worth taking a step back to assess the legal framework that governs how your assets will be managed during life and transferred at death. Many financial and tax-related decisions, including retirement account contributions, charitable gifts, and certain trust funding activities must be completed by December 31 to maximize potential tax benefits and ensure estate planning documents continue to reflect your goals.

A thoughtfully maintained estate plan is not a “set it and forget it” exercise. It should evolve with life circumstances, family needs, and changes in federal and state law. Periodic reviews every three to five years help ensure your estate plan continues to protect those you love and operates as intended when it matters most.

Review – and Update if Necessary

If you already have an estate plan in place, you are ahead of the curve. However, even a well-crafted plan requires ongoing attention. Unless your documents were prepared or reviewed within the past year, it’s time for a checkup. Laws governing estates, trusts, and taxation evolve, and life rarely remains static. Marriages, divorces, births, deaths, relocations, and even changes in asset composition can all impact how your plan functions.

A comprehensive review should include your last will and testament, any revocable or irrevocable trusts, durable powers of attorney, and healthcare directives. Ask yourself:

  • Do these documents still reflect my current wishes and family situation?
  • Have there been any major life events that warrant revisions?
  • Have I moved to another state where probate, homestead, or tax laws differ?
  • Have I acquired new assets or sold property referenced in my plan?

Working with an experienced estate planning attorney ensures your documents remain compliant with current law and intentions are not just clearly expressed but are also enforceable.

Did Your Trust Cross the Finish Line?

Creating a trust is an important step, but it is only effective once it has been properly funded. If you established a revocable living trust in 2025, have you completed the process of transferring assets into it? Deeds, account registrations, and beneficiary designations must be updated to reflect ownership by the trust.

If you pass away before funding is complete, those unfunded assets may remain subject to probate, precisely what you sought to avoid by creating a trust in the first place. Year-end is an excellent time to verify that bank accounts, brokerage accounts, real property, and business interests are properly titled.

Additionally, review any “pour-over” provisions in your will, which are designed to transfer remaining assets into the trust upon death. These provisions work best when the bulk of your estate is already held or designated for transfer to the trust.

Are Your Powers of Attorney and Healthcare Directives Current?

Equally important are incapacity documents — durable power of attorney and healthcare directives. These instruments authorize trusted individuals to act on your behalf in managing financial affairs and making medical decisions should you become unable to do so.

The designations can become outdated over time. Agents may move out of state, become incapacitated themselves, or simply no longer be the right choice. If your chosen representative has retired to Florida while you reside in Nassau County, for example, they may not be able to assist you effectively in an emergency.

An updated power of attorney and healthcare proxy can spare loved ones significant stress and expense. Without these documents, family members may be forced to petition a court for guardianship to manage your affairs. This is a time-consuming, expensive, and emotionally draining process, easily avoided.

Review who you have named, confirm their willingness to serve, and  be sure they have current copies of your documents.

Review Beneficiary Designations

One of the most common pitfalls in estate planning involves outdated beneficiary designations. The beneficiary designations on life insurance policies, retirement plans, annuities, and certain investment accounts override whatever instructions are contained in your will or trust.

For instance, if an ex-spouse remains listed as the beneficiary of your life insurance policy, that person will receive proceeds upon your death, no matter what’s in your will or how much time has elapsed since you’ve had any contact with them. The insurer is legally bound to honor the most recent signed designation on file. Many people go to court on this issue and do not get the results they hoped for.

Take time before year-end to review all beneficiary forms and ensure they are consistent with your overall estate plan. Confirm not only your primary beneficiaries but also contingent (secondary) beneficiaries in case your first choice predeceases you.

End of Year Financial Considerations

Required Minimum Distributions (RMDs)

If you are age 73 or older, you are required to take annual distributions from traditional IRA and certain retirement accounts. Failure to withdraw the appropriate amount can result in a penalty equal to 25% of the amount that should have been distributed.

Beneficiaries of inherited IRAs must also take distributions under the SECURE Act rules, which generally require the account to be emptied within ten years of the original owner’s death (with certain exceptions for eligible designated beneficiaries). Reviewing your RMD status before year-end ensures compliance and helps manage your taxable income effectively.

Flexible Spending Accounts (FSAs)

If you participate in a Flexible Spending Account through your employer, review your plan’s “use it or lose it” provisions. Some plans allow a short grace period while others permit only a small carryover amount. Any funds left unused beyond the permitted deadline are forfeited. Verify your account rules now so you can plan eligible expenses accordingly.

Tax Planning Opportunities and Year-End Charitable Giving

Year-end is also a time for strategic tax planning. Charitable giving can serve both philanthropic and financial purposes, reducing taxable income and helping causes important to you.

Whether you prefer to make cash contributions, donate appreciated securities, or establish a charitable trust, completing your gifts before December 31 is key to claiming the deduction for the current tax year. Donating highly appreciated stock can be particularly effective — you avoid paying capital gains tax on the appreciation and still receive a charitable deduction for the fair market value of the asset.

Qualified Charitable Distributions (QCDs)

Individuals aged 70½ or older can make Qualified Charitable Distributions of up to $108,000 directly from an IRA to a qualified charity in 2025. A QCD counts toward your Required Minimum Distribution but is excluded from your Adjusted Gross Income. This strategy can help lower overall taxable income and may also reduce the impact of other income-based taxes or Medicare surcharges.

It is essential, however, that the funds be transferred directly from the IRA to the charitable organization. Personal withdrawals do not qualify. Always consult your estate planning attorney to ensure compliance.

Annual Exclusion Gifting

Under current federal law, individuals may gift up to $19,000 per recipient annually ($38,000 for married couples) without incurring gift tax or affecting the lifetime exemption amount. These gifts can be an effective way to reduce the size of your taxable estate while providing meaningful financial support to family members or other beneficiaries.

In addition, direct payments for another person’s tuition or medical expenses made directly to the educational or healthcare provider  do not count toward the annual exclusion or lifetime exemption. These strategies can help transfer wealth efficiently while maintaining flexibility and control.

Estate Planning as a Living Framework

An estate plan is more than a collection of documents — it is a living framework that guides your financial and personal legacy. A properly prepared and maintained plan provides clarity for your loved ones, minimizes administrative burdens, and helps avoid unnecessary court involvement.

At its core, estate planning is an act of care. It ensures that the people you trust have the authority to make decisions on your behalf and that your assets are distributed according to your wishes. It also protects your heirs from confusion, conflict, and unnecessary expense.

If you have yet to formalize your estate plan, there is no better time to start. And if you already have one, take advantage of this year-end season to confirm that your plan remains legally sound, properly funded, and aligned with your current circumstances.

Estate planning is not a one-time task but an ongoing process that, when approached proactively, can provide peace of mind for years to come.

As you wrap up 2025 and prepare for the new year, make estate planning a priority alongside your other year-end financial to-dos. By reviewing your documents, confirming your beneficiaries, funding your trusts, and making strategic gifts, you ensure your estate plan continues to reflect your values and protect those you love.

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Open Enrollment Season is Here – What You Need to Know Right Now

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It’s Medicare season, when the millions of Americans enrolled in Medicare plans are allowed to make changes to their plans. These opportunities are limited and this year presents some new challenges. Big Medicare insurance companies are dropping plans, trimming benefits and increasing deductibles. You’ll want to do the homework to make sure you’re getting the coverage you need and the coverage you can afford.

Medicare insurance has become less profitable for big insurance companies and they’re trying to limit costs. It’s that simple. Enrollment in Medicare Advantage plans is expected to shrink in 2026, for the first time in 15 years. The companies are focused on profits, not growth.

If your medications have changed since last year or if your prescription coverage isn’t paying enough, it’s time to review your plan. Most of us have seen our premiums go up—they never go down—so a plan that worked with your retirement budget last year might not work in 2026.

You’ll need to review the Annual Notice of Change, Summary of Benefits and Evidence of Coverage. No, it’s not enjoyable reading but it’s necessary to know the changes coming to your current plan.

New York residents can go to HIICAP – Health Insurance Information, Counseling and Assistance Program at the Office for the Aging or call 1800-701-0501 to speak with a counselor in your county. HIICAP can help with comparing different plans, including Medicare Advantage, Original Medicare + Part D, Medigap and understanding the benefits and costs of these plans. Help is also available for enrollment, appeals and the general paperwork that goes with Medicare enrollment.

What to Look Out For When Deciding on a Plan

There is admittedly a lot that can go wrong when picking a plan. What looks great on paper may not work in practice. Hospital systems, specialists, and networks vary significantly by insurer, so you’ll want to ask your providers to make sure your main doctors, specialists and local hospitals are included.

Medicare Advantage plans penalize claimants for going out of network. Be careful with plans that severely restrict the providers you can use. Many hospitals and doctors are leaving Medicare Advantage networks. Contact your providers directly, as the insurance company directories are typically not updated.

Plans also change from year to year. Some insurers leave markets or change counties based on their profitability. Even if your plan continues in your area, benefit changes may impact drug coverage, tier lists or prior authorizations may change.

What about Traditional Medicare?

Many people skip the Advantage plans altogether. Traditional Medicare includes most doctors and most hospitals. You’ll need a Medicare Supplement (also known as Medigap) policy, which can be expensive but covers what Medicare won’t.

Drug Plans are More Expensive

The number of stand-alone Medicare drug benefit plans (Part D) are decreasing sharply and their costs are escalating. Drug deductibles are up, and many co-pay prescriptions will require higher patient payments next year. Insurance companies are using the term “coinsurance” which is corporate-speak for you’ll have to pay for this.

Medicare.gov has a tool to review prescriptions and help identify what you’ll pay for medication under each plan.

Cost-Assistance Plans in New York

New York offers the Medicare Savings Program, which helps pay Medicare Part premiums and, in income is low enough, may pay deductibles and copays. There’s also “Extra Help” /Low Income Subsidy for Part D to help with drug costs, premiums, and deductibles. If you’re a resident, look into EPIC – New York’s Elderly Pharmaceutical Insurance Coverage program, which might help with drug costs for NY residents. All of these programs are available through the New York State Office for the Aging.

On Long Island, there are a few nonprofit advocacy groups who can help. Family & Children’s Association (FCA) in Garden City, Nassau County, provides free, unbiased guidance to local seniors through its HIIPCAP Medicare counseling efforts. AARP also offers a variety of resources for 2025 Medicare enrollment, including online guides, webinars, and tools.

How We Can Help

We recognize the process of figuring out what plan to use can be confusing. We are able to find options for specific zip codes on Long Island and identify the ones that look strongest for our clients. We do not sell insurance and are not insurance experts, but we have certain research tools that may be helpful. You are invited to contact the office if you’d like input on their plans.

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2025 Required Minimum Distribution Deadline is Near – What You Need to Know Right Now

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This is the time of year to start planning for RMDs unless you are taking them automatically. If you haven’t taken an RMD in 2025 and don’t need funds to cover living expenses, you may want to wait until December. That’s because if your RMD covers your entire tax bill, you can avoid quarterly estimated tax payments by taking the RMD in December and having your financial institution withhold a sufficient amount.

This is something most people don’t know. You can take your RMD and tell the brokerage house or advisor to withhold any amount. If the RMD is enough to cover quarterly estimated tax payments, you don’t need to make them, and the withholding on the RMD will cover the payments without penalty.

Here’s an example: Let’s say you’re required to make four quarterly estimated tax payments of $2,500 each. Your Required Minimum Distribution (RMD) for the year is $15,000. You can instruct the financial advisor to withhold $10,000 in addition to the tax due on the RMD. As a result, you will no longer need to make quarterly estimated tax payments. This allows your assets to remain in the IRA, maximizing your compound interest, which continues to grow tax-free.

Here’s why this works:

Tax-deferred retirement accounts, like traditional IRAs and 401(k)s let wage earners save pre-tax dollars. In exchange, workers pay income tax on the withdrawals and any future growth.

But you can’t keep money in tax-deferred accounts forever. That’s where the RMDs come in. They ensure Americans don’t keep saving tax free. After you reach a certain age, you are required to take a portion of the balance every year. If you fail to take your RMD in any year, you pay an excise tax equivalent to 25% of the monies you failed to take out. That’s a hefty penalty.

RMDs have to be taken out before December 31 every year. The first RMD is the only exception, you can take that out up to April 1 of the following year.

There are a few strategies for taking RMDs, with benefits and drawbacks.

Those who own traditional retirement accounts have three options:

  • Take the money early in the year.
  • Make withdrawals as periodic installments.
  • Take lump sum at the end of the year before December 31.

It all depends on your personal circumstances and preferences. But there are pros and cons to each choice.

Take a lump sum early in the year and you don’t have to think about it again. But you miss out on any growth in a tax- deferred investment, and you’ll need to make an estimated tax payment for the quarter.

Take it out throughout the year and you’ll enjoy regular cash flow. This makes sense if you make quarterly tax payments, since you can time the RMD to cover the expense. There is a downside: you’ll have to make multiple estimated tax payments, one for each quarter when money was withdrawn. Miss a deadline and you’ll get hit with an interest charge.

Taking a lump sum late in the year allows you to skip having to make estimated quarterly tax payments and maximize the tax-deferred growth. If you don’t need the cash to pay expenses, this can be a good solution. But there’s a downside here too: if you forget to make the withdrawal in time, you’ll pay a penalty. And if the market dives during December, you may have to sell investments on the low side to gather cash for a withdrawal.

Which choice is best depends upon your personal situation, but most people don’t know about using RMDs to cover quarterly estimated tax payments. If you want to explore this, call me and I’ll be happy to discuss it in detail.

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Reference: yahoo! finance (September 21, 2025) “The 2025 Required Minimum Distribution (RMD) Deadline Draws Near. Should Retirees Make Withdrawals Now or Wait Until December”

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Why Do You Need an Elder Law Attorney?

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Elder law attorneys provide various legal services to help seniors and their families navigate the challenges accompanying the aging process. This includes asset protection but extends beyond applications for Medicaid. An Elder Law attorney will also help coordinate legal planning to address such matters as needing guardianship, help with obtaining Social Security and Veteran’s benefits and navigating various services providing care to the elderly. Many people associate Elder Law with applying for Medicaid or other long-term healthcare, which is correct. However, Elder Law includes many different aspects of aging.

Estate planning is more focused on implementing wishes about the distribution of property after a person has passed, while Elder Law protects your rights as you age.

Asset Protection, Long Term Care Costs, and Elder Financial Abuse

Protecting a lifetime of savings when a person is vulnerable is one of the important roles of the Elder Law attorney. Depending on the person’s financial situation, they might benefit from having assets moved into a trust. If the person is likely to need long-term care, the Elder Law attorney may recommend the use of a Medicaid Asset Protection Trust. An irrevocable trust will move the person’s assets out of their control, making them eligible for Medicaid five years after the trust is established and funded.

Trusts may also be a strategy used to protect elderly people from financial abuse. By placing assets into a trust managed by a trusted family member or another person, anyone preying upon the older adult will have a significant obstacle to overcome to gain access to assets.

Elder Law attorneys represent seniors who have been taken advantage of by a caregiver or family member. They focus on ensuring the senior can live securely, whether at home or in a nursing home setting.

Long-Term Care Planning with an Elder Law Attorney

The Elder Law attorney helps seniors plan to ensure they have food, rent, medical care, and transportation. For example, an elderly couple may wish to remain in their home but need certain services. The Elder Law attorney helps identify which agencies can provide the care they need at home, preventing them from moving into a nursing care facility.

The Elder Law attorney also creates estate plans, including end-of-life documents like a Living Will and Advance Health Care Directive. These documents are drafted to express the senior’s wishes for health care if they cannot express them if they are incapacitated. They are also used in the case of a dementia diagnosis. 

When someone is diagnosed with dementia, an Elder Law attorney should be contacted. First, the person’s will should be updated to be sure it reflects their wishes. Next, healthcare papers expressing their wishes for care should be documented while they still have legal capacity. Once a person reaches a certain point, they will be considered incapacitated and can no longer sign legal documents, so timing is essential. Elder law attorneys can also recommend that geriatric social workers help form a care plan. Some dementia patients live for decades after their diagnosis, so a long-range plan is essential.

Guardianship Planning

Having advanced directives and appointing a trusted person or people to serve as a healthcare representative for a senior is far better than needing to apply for guardianship through the courts. Guardianships are very restrictive and closely monitored by the courts, even for an older adult who doesn’t wish to travel or go out on the town. It’s better to have a trusted family member who can help the person when they need help rather than have the court appoint a stranger.

 Elder law attorneys have networks of caregivers, geriatric social workers, and others who help older adults with various services. Their clients rely on them for recommendations to trusted people who can help with the parts of day-to-day life that become more challenging as we age.

When to Contact an Elder Law Attorney?

You need not call an Elder Law attorney when you spot your first grey hair, but it’s not a bad idea. The earlier you begin planning for your senior life, the more options will be available. If you have health concerns, for example, meet with an Elder Lawyer to be sure you have all the correct documents in place in case of incapacity. While we never know when we might be injured or ill and unable to speak for ourselves, seniors are more likely to need advance directives to express their wishes.

This includes a Healthcare Proxy or Power of Attorney for Healthcare, a HIPAA Release Form, and a Living Will. These documents are used while you are living to ensure your wishes are being followed and, for the HIPAA Release Form, to allow another person access to your medical and health insurance records. Without them, your loved ones cannot speak with your doctors and be involved with healthcare decisions.

If you expect to need long-term care benefits, you’ll want to put a Medicaid Asset Protection Trust in place early. Medicaid is a federal and state-funded, means-tested program; that is, the person applying for Medicaid must have only a minimal amount of assets. If you have over a certain amount of money, you won’t be eligible for Medicaid and must pay for nursing care out of your pocket.

Medicaid has a five-year lookback period, meaning that Medicaid looks at five years of financial transactions before deciding whether or not you are eligible. If assets have been moved to trusts or sold to a family member for a below-market price, Medicaid may refuse coverage.

If you have questions about Elder Law, we invite you to call the firm for a free consultation. It’s never too early to start planning for your future.

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When is the Best Time to Use a Medicaid Asset Protection Trust?

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Long-term care planning is a critical aspect of estate and financial planning, especially for individuals who may require Medicaid in the future. A Medicaid Asset Protection Trust (MAPT) is one of the most effective tools for protecting assets while ensuring Medicaid eligibility. If an individual owns substantial assets, setting up a MAPT early can prevent Medicaid spend-down requirements, ensuring more wealth is preserved for heirs.

But when is the best time to establish a MAPT? The answer depends on multiple legal and financial considerations, including Medicaid’s five-year look-back period, irrevocable trust laws, and estate recovery rules.

Legal Overview of a Medicaid Asset Protection Trust

A Medicaid Asset Protection Trust (MAPT) is a special type of irrevocable trust that lets individuals shield assets from Medicaid’s eligibility calculations while ensuring they qualify for long-term care benefits.

Legal Characteristics of a MAPT

Irrevocability—Once a MAPT is established, the grantor (the person creating the trust) cannot dissolve or modify it in most circumstances. This feature ensures that Medicaid cannot count the trust’s assets as part of the grantor’s resources.

Look-Back Rule – Federal law imposes a five-year look-back period on transfers into a MAPT. Any assets transferred within five years of applying for Medicaid may result in a penalty period during which the applicant must self-pay for long-term care.

Trustee  and Beneficiaries—The grantor cannot serve as the trustee but can designate beneficiaries (e.g., children or heirs) who will inherit the trust assets after their passing. The trust can provide that all income is paid to the grantor, but the trust cannot invade the grantor’s principal. However, the trust can distribute principal to the ultimate beneficiaries of the trust.

Exemption from Medicaid Estate Recovery – One of the leading legal advantages of a MAPT is that it prevents Medicaid estate recovery. This means that after the grantor’s death, Medicaid cannot reclaim funds from the trust to cover nursing home costs paid on the grantor’s behalf.

Best Time to Set Up a Medicaid Asset Protection Trust

From a legal standpoint, the five-year look-back period is the most critical consideration when determining the timing of a MAPT. Under 42 U.S.C. § 1396p(c) of the Social Security Act, Medicaid reviews financial transactions made within 60 months (5 years) before an application to determine if assets were transferred improperly.

  • If assets were transferred into a MAPT less than five years before applying for Medicaid, a penalty period is imposed.
  • The penalty period is calculated based on the total value of transferred assets divided by the average monthly cost of nursing home care in the applicant’s state.

Establishing a MAPT before major health issues arise ensures assets are protected when Medicaid is needed.

While the Grantor is in Good Health (Preventing Medicaid Penalty Exposure)

The best time to create a MAPT is while the grantor is still in good health and does not anticipate an immediate need for long-term care. Waiting until after a serious medical diagnosis (e.g., Alzheimer’s or Parkinson’s disease) could mean:

  • Ineligibility for Medicaid benefits due to the five-year look-back period.
  • Potential loss of assets to nursing home expenses while waiting for the penalty period to end.

Before Significant Asset Accumulation disqualifies you from Medicaid (Medicaid Eligibility Limits & Asset Spend-Down Rules)
Under federal and state Medicaid laws, an applicant’s countable assets must fall below a specific threshold to qualify for benefits. For example:

  • Single applicants – countable assets must be below $32,396 in New York. In most other states, the limit is $2,000.
  • Married applicants – The spouse staying in the community (community spouse) can typically keep part of the couple’s assets, known as the Community Spouse Resource Allowance (CSRA).

To Protect the Family Home from Medicaid Recovery (Legal Strategies for Homeowners)

Under federal law (42 U.S.C. § 1396p(b)), Medicaid can recover costs from a recipient’s estate after death. This means that if a home is still in the individual’s name at the time of death, Medicaid may place a lien on it and force its sale to recover expenses.

A MAPT can prevent this because the trust legally owns the home, not the Medicaid recipient. Medicaid cannot place a lien on an irrevocable trust’s assets, protecting the home for heirs. Homeowners who wish to keep their property in the family should place it into a MAPT well before applying for Medicaid.

What Happens If You Wait Too Long? (Legal Consequences of Late Planning)

If you delay setting up a MAPT and need Medicaid within five years, several legal challenges arise:

  • Medicaid Penalty Period—Transfers within five years lead to a period of ineligibility, which requires private payment for care.
  • Forced Asset Spend-Down – Without a MAPT, applicants may have to liquidate assets (such as selling a home) to qualify.
  • Risk of Medicaid Estate Recovery—Medicaid can claim Assets left outside a MAPT after death.

The best time to establish a Medicaid Asset Protection Trust is at least five years before applying for Medicaid while the grantor is still in good health. This approach ensures:

  •  Full compliance with Medicaid’s five-year look-back rule.
  • Preservation of assets for heirs.
  • Avoidance of Medicaid spend-down requirements
  • Protection of the family home from estate recovery.

Need Help with Medicaid Planning?
If you’re considering a Medicaid Asset Protection Trust, schedule a free consultation with our office to discuss your options. Early planning is the key to protecting your assets and securing Medicaid eligibility when you need it most.

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Washington Abandons Beneficial Ownership Reporting for U.S. Nationals and Companies

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In a dramatic policy reversal, the U.S. Treasury has permanently suspended the Corporate Transparency Act (CTA) beneficial ownership reporting requirements for all U.S. citizens and domestic businesses. This decision significantly shifts corporate compliance regulations, impacting businesses nationwide.

The CTA, enacted to enhance financial transparency and combat illicit finance, required most U.S. entities to report their beneficial ownership to a national registry managed by the Financial Crimes Enforcement Network (FinCEN).

  • New entities (established since January 1, 2024) had to file within weeks of formation.
  • Existing entities were required to submit reports by January 1, 2025.

However, multiple lawsuits challenged the Act on constitutional grounds, leading to legal uncertainty and enforcement delays throughout 2024. In December 2024, a Texas court issued an injunction against the enforcement of the CTA. Several reversals and reinstatements of the reporting provisions followed this. By February 2025, the compliance deadline was pushed to March 21, 2025, while the Treasury signaled a potential reconsideration of the rules.

The U.S. Treasury has permanently stopped enforcing CTA reporting obligations for U.S. entities. This means no penalties or fines will be imposed on domestic businesses or their beneficial owners—not now or in the future. The Treasury plans to revise the rule to focus only on foreign-owned entities. A public consultation will be held before new regulations take effect.

Treasury Secretary Scott Bessent described the decision as supporting American taxpayers and small businesses, ensuring financial regulations remain practical and non-burdensome. He framed the decision as part of President Trump’s broader agenda to eliminate excessive regulatory hurdles for businesses.

The Financial Action Task Force (FATF), which last year deemed the U.S. “largely compliant” with corporate transparency rules due to the CTA, may reassess the country’s standing following this policy reversal.

While the future shape of beneficial ownership regulations remains uncertain, one thing is clear: U.S. businesses will no longer need to comply with the CTA’s reporting requirements. Those preparing for compliance can now put those plans on hold until further guidance emerges.

Stay tuned for updates as the Treasury progresses with its proposed rulemaking process.

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New York State Changes the Laws for Transfer on Death Deeds for Real Property

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New York State laws about transferring property have changed. Previously, if you wanted to bequeath property to a beneficiary upon your death, you could make the beneficiary a co-owner, make a bequest of the property to the beneficiary in your will, or create a trust, then transfer the title of ownership to the trust and name the intended recipient the beneficiary of the trust. However, these options may restrict your ability to sell the property and cause the forfeiture of real estate tax exemptions, among other issues.

There may still be reasons to place real estate property into a trust, but the option now exists to convey property through a Transfer on Death deed. This lets the property pass directly to the new owner upon the original owner’s death, and the property is not subject to probate.

Is a Transfer on Death Deed Right for Your Estate?

A Transfer on Death (TOD) deed lets you designate one or more beneficiaries to receive the property upon your death. It doesn’t impact your ownership rights while you live, and you can revoke it.

Specific requirements make the TOD legally binding. The language of the deed must conform to New York State Law, which requires that the transfer to the beneficiary occur at the transferor’s death. The law requires the deed to be signed like a will; it requires a notary and two witnesses. Here are the details we are concerned about people neglecting to do if they decide to take this on as a DIY project: to be valid, the deed must be recorded with the county clerk before the owner dies. If the deed is not recorded correctly, the TOD is invalid if this step is missed.

How Does a Transfer on Death Impact Applying for Medicaid?

The TOD does not affect Medicaid eligibility because property ownership is not transferred until the owner’s death. However, if the owner of a property is eligible for Medicaid, then Medicaid may pursue the cost of care by going after the decedent’s estate. If there is a TOD in place, it can stop Medicaid from going after the home, as Medicaid can only recoup the amounts paid from the probate estate of the Medicaid recipient.

The primary home is an excludable resource for a Community Medicaid applicant if a spouse or minor child is living there or if there is no spouse or minor child if the equity interest does not exceed $1,071,000. On Long Island, it is common for seniors who bought their homes decades ago to have substantial home equity.

How is a TOD different than a life estate?

A Life estate deed gives the life tenant immediate possession and all rights. This means the prior owner no longer controls the home. If the preceding owner wants to take possession of their home, they will need the approval and signatures of the people who have received the property.

Are there downsides to a TOD?

A TOD is not right for every family. For example, if there are multiple beneficiaries and the TOD names two or more of them, if one dies, that person’s share is transferred automatically to the other beneficiaries. The children of the deceased beneficiary don’t inherit their parent’s share.

If there are joint owners, things will get complicated. A deed of joint owners can only be revoked if the joint owners agree to the revocation. It takes only one person to make the revocation stall. The deed isn’t executed until the original joint owners die, so the joint owners can make all the changes they want, including revoking the TOD.

The TOD cannot pass property to a minor, as minor children may not own real property. If the family includes minor children, a trust is a better option.

A TOD Offers Many Benefits.

It removes the property from the probate estate, which transfers directly to the beneficiary upon the owner’s death. It also gives the owner complete control of the property while they are alive. They have full control and can manage or dispose of the property without needing the approval of the beneficiaries. If you are living, you can revoke the TOD, change the beneficiaries, or make any other changes you want.

Conclusion

TODs for real property are new to New York State but have been in use in other states for many years. Significant case law exists about TODs and the complications that can follow settling an estate. Before going ahead with a TOD, call us to discuss your situation. There are other options for transferring property, and the TOD might be the solution you are looking for.

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Elder Lawyer Stephen J. Silverberg Speaks on Income-Only Trusts for Medicaid Eligibility

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On Wednesday, December 4, Elder Law attorney Stephen J. Silverberg will speak before an audience of Elder Law and estate planning attorneys for a Continuing Legal Education program on the topic of drafting income-only trusts for Medicaid eligibility. Mr. Silverberg was invited to speak based on his extensive knowledge of Medicaid planning, the use of trusts and tax planning by Strafford, a nationally recognized CLE company,

The 90 minute course, designed for Elder Law attorneys who work with clients in Medicaid planning, will expand on the use of the income-only trust, how to ensure planning occurs without violating any look-back requirements and coordinate with gift tax rules and more.

“Many families find themselves in a terrible spot where they have saved up enough for retirement but not enough for long term care for one or both of the spouses,” observed Mr. Silverberg. “By using an income-only trust, assets can be protected, the family can have access to the income generated by the trust and the well spouse does not have to become impoverished.”

Planning for Medicaid requires careful balancing of meeting the Medicaid requirements and aligning those with tax and estate planning.

Mr. Silverberg and his co-presenter, attorney Esther Zelmanovitz, will provide attorneys with practical information and insights into how income-only trusts can work for their clients.

Attorneys are invited to register here: htthttps://www.straffordpub.com/products/tfkednhcraps://www.sp-04.com/r/products/tfkednhcra

If your family is concerned about applying for Medicaid in the future, we invite you to call the office and make an appointment to discuss your situation.

About Stephen J. Silverberg: Mr. Silverberg is nationally recognized as a leader in the areas of estate planning, estate administration, asset preservation planning, and elder law. He is a past president of the prestigious National Academy of Elder Law Attorneys (NAELA), and a founding member and past president of the New York State chapter of NAELA. Mr. Silverberg was awarded the credential of NAELA Fellow, the highest honor bestowed by NAELA to “attorneys… whose careers concentrate on elder law, and who have distinguished themselves both by making exceptional contributions to meeting the needs of older Americans and by demonstrating a commitment to the Academy.” He is also a founding member of the New York State chapter of NAELA. Mr. Silverberg holds the designation of a Certified Elder Law Attorney (CELA), awarded by the National Elder Law Foundation. There are fewer than 520 CELAs throughout the United States. Learn more at www.sjslawpc.com.