Estate Planning for Blended Families

What are advanced directives? They are written legal documents that explain a person’s wishes about how they want medical decisions to be made when they are no longer able to speak for themselves. This can happen when they are terminally ill, in a coma, badly injured, or in later stages of dementia. Some of these situations are unexpected therefore everyone over the age of 18 should think about having advanced directives. Thanks to planning ahead you would be able to receive the care you want and also make it easier for your relatives in case of dispute. Examples of advanced directives are: Living will – it states what treatment you want and do not want to receive in order to keep you alive along with decisions on treatments, pain management or organ donations. It may include matters like tube feeding, resuscitation (CPR), mechanical ventilation, palliative care and other necessary medical care. Healthcare proxy – it designates another person (usually a family member) to make medical decisions on your behalf if you become unable to do so. It is important to designate someone to be able to make decisions for you even if you have other legal instruments regarding end-of-life care since there are things that cannot be foreseen and therefore your proxy will be able to make decisions for you. It should be someone you can trust, and you can discuss medical care wishes with. Can you create these documents on your own? Yes, but it is always better to have legal assistance from an attorney in creating these documents. An attorney licensed to practice law can provide you with the most up-to-date versions of these documents. At Maguire Tedrick, PLLC, our attorneys take the time to listen to you and your family to help draft the document that best protects your interests.

You might be wondering what happens if, after your passing, someone wants to contest your will. Let’s take a look at this matter. A will is a legal document that takes effect after person’s death. It is then submitted to the Surrogate’s Court to be determined if the will is valid (this process is called probate). If Court decides that the will is authentic and valid, then the terms of the document take effect. But before the will can be admitted to probate (which means that it is determined as valid) it could be contested. The only people who can contest a will are the ones who would be adversely affected by the admission of the will to probate. What grounds can someone contest the will on? Contesting the will means formally objecting to the validity of a will. There are four main grounds for will contest: 1. Improper execution/Revocation A will must be properly executed and then correctly maintained in accordance with New York laws in order to pass any objections. Additionally, a person may object to the probate of a will if the deceased individual had revoked the will prior to their death. 2. Lack of mental capacity at the time of signing To have a testamentary capacity a testator should have an understanding of his/her assets, family members and beneficiaries and what he or she is signing. If it appears that at the time of signing the testator lacked the capacity to sign a will it might become a ground for a will contest. 3. Fraud If a will is suspected to be created or signed as a result of fraud it might be a reason for will contest. It could be hard to prove because there are usually no witnesses to the fraud that affected the testator’s decisions. 4. Undue influence If the testator was unduly influenced at the time of signing or executing the will the document is invalid and it could be a ground for will contest. It could mean that the person creating the will distributed his or her property against their wishes based on influence of another person. The influence must have been strong enough to restrain a person’s free will and independence in creating and executing the will. How do you contest a will? The testator’s heirs, beneficiaries and other interested parties receive a notice of probate from the attorney that files the probate petition. Alternatively, an executor may ask them to sign a waiver to allow the estate to go into probate. You need to submit a claim to the probate court. An experienced attorney can help you with the required paperwork and prepare you for possible hearings, as well as prevent any attack on a properly executed will. You can contact Kate Maguire Tedrick to assist you with this process.

Loving parents will always have their children’s best interest at heart. Unfortunately, it is an often occurrence that siblings do not see eye to eye when comes to care for their elderly parents or distribution of their property upon death. Careful estate planning may give you some peace of mind when comes to sibling rivalry and potential conflict that your passing may create. Let’s see what are the ways that you can try to make sure that your children understand your wishes and to minimize potential conflict in the future. As you get older: 1. Power of Attorney a. You assign the person who will be able to make financial decisions when you are not able to do so. Having this document in place prevents siblings from fighting over the decisions being made since there is usually one person responsible. b. You can assign two individuals with power of attorney, or you can elect to have one individual be power of attorney, and another be listed as monitor, so they can monitor the activity conducted by your power of attorney. 2. Healthcare proxy a. This document designates a person to make medical decisions on your behalf (when you become unable to do it yourself). Similarly to Power of Attorney, healthcare proxy allows the person assigned to be responsible for decision making, thus it prevents multiple people from fighting over a decision to be made (which may require prompt actions). 3. Living will a. The document states your choices regarding treatments you receive in order to keep you alive. These decisions are very painful to make and having your wishes clearly stated resolves a lot of problems that could arise during a difficult time. Upon your death: 1. Last Will and Testament a. This is the first document that comes to mind, for good reasons. Clearly stating your wishes regarding distribution of your estate, as well as other wishes like your funeral arrangements, guardian for your minor children or setting up a trust, is definitely very helpful for the family members during the difficult time of their loved one’s passing. b. If you are single when you pass away and do not have a will, New York State law requires your property to be split evenly among your children. Even if this is how you wish your property to be transferred, you should still have a will which nominates one or more of your children to act as executor of the estate, which means that your children will have one less decision to make in terms of who has to administer the estate upon your passing. c. Equal distribution among siblings is not necessarily what would be considered “fair.” For example, the child that received tuition money from you or that you helped with their mortgage downpayment, may receive less than the siblings who did not get this type of help from you. Alternatively, one of your children may have special needs child themselves may receive more of your estate due to the specific needs family needs. Discussing such issues with your children may put the siblings at ease and make them understand your decisions better. 2. Trust a. There are various types of trusts (see more here LINK) and they are a great way to distribute parts of your estate, depending on your individual needs. They can be beneficial when you want the recipient of your property to receive it in installments or upon fulfillment of a specific requirement (ex. age, college graduation). Trusts also avoid probate, which can take months if not years to go through the Court system. Contact an experienced attorney to discuss your needs and draft the documents that will give you a peace of mind and will assure you that you minimize conflict between your children in the future.

Identity theft can be described as an unauthorized use of another person’s private identifying information (usually for purposes of financial profit). A situation in which a senior is a victim of identity theft is considered elder abuse in New York. The elderly are particularly vulnerable to identity theft, due to the fact that they are often believed to have accumulated substantial amount of assets and may be less tech savvy to check their accounts for possible fraud or to recognize scams. Their personal identification information (like name, Social Security Number, ID/driver’s license number, credit card information and others) could be stolen and used to commit fraud. There are different ways in which the seniors can fall victim to identify theft: 1. Hospital/nursing home: seniors may be “easy victims” to be take advantage of by caretakers who have access to their documents and belongings 2. Email/social media scams: seniors could not see the risk of opening suspicious emails, clicking on links or providing their personal information to scammers 3. Mail/documents: thrown out mail or documents might contain personal information that can be stolen by someone searching in garbage cans 4. Phone: this could be either the “grandchild scam” or other types of calls where someone says that they are calling from the bank, the insurance company, the doctor’s office etc. and unlawfully obtains personal information of the scam’s victim 5. Theft of physical item (wallet with documents, Social Security Cards, credit cards) You can inform and prepare your elderly loved ones about most types of identity theft scams so they can be more alert and less likely to fall victim to these types of situations. It is important to alert them about suspicious mail, links and invites on social media. You can help them check their accounts from time to time to monitor any suspicious activity and make sure that they have their documents in a safe place.

Filial responsibility is a legal concept of an adult child being responsible to support their parents, if they cannot do that themselves. The support could be anything from food, shelter and other basic needs to various medical bills. The part that may be overwhelming is the financial responsibility for parents’ healthcare bills. Some of them may be a simple medicine prescription or a copayment at the doctor’s office, but many times the costs could be enormous – for example for a nursing home stay. If the person has financial means and their parent has unpaid medical care bills (and is not covered by Medicaid) then they might be responsible for taking care of these costs. The extent of responsibility will depend on specific state’s law and the individual situation, but it is something to be aware of if you live or plan to move to a state where these laws are enforced. 29 of the 50 states have filial responsibility laws: • Alaska • Arkansas • California • Connecticut • Delaware • Georgia • Idaho • Indiana • Iowa • Kentucky • Louisiana • Massachusetts • Mississippi • Montana • Nevada • New Hampshire • New Jersey • North Carolina • North Dakota • Ohio • Oregon • Pennsylvania • Rhode Island • South Dakota • Tennessee • Utah • Vermont • Virginia • West Virginia The laws in different states vary too so it is crucial to learn if a specific guideline applies to your situation. Although New York State does not have the filial responsibility law, it is very interesting to know, especially given the fact that many people move or have family members in other states. Most common factors in determining the application of the filial responsibility laws to an individual’s situation are: 1. The financial situation of the parent 2. Whether the parents qualify for Medicaid 3. Whether there are healthcare costs that the parent cannot pay 4. The adult child’s financial situation (the ability to pay these costs) How exactly does this responsibility apply to an individual? The healthcare providers can sue the adult child in order to recover the costs incurred by the parent. Failure to comply may result in garnishment actions, bank account seizures or liens. If you have elder parents and are located in one of the above-mentioned states, you may want to learn more about the filial responsibility to avoid issues in the future.

It is often believed that estate planning is not for everyone, that only the rich people and the elderly would benefit from it and actually need it. It could not be further from the truth. Check out the common myths and errors of estate planning and see for yourself that it – literally – is for everyone. 1. Estate Planning is only for the rich It may be because of some well-known estate disputes and stories of the rich and famous, that make people believe that estate planning is only a concern for those who have accumulated a substantial amount of assets. It is not true. As long as you have any assets, you and your family would benefit from proper estate planning. Some of the aspects of estate plan do not even concern money and tangible assets but are about decision-making process, health, death and funeral and so on. You do not have to be very rich to want to protect yourself, your family, and your life estate. 2. Estate Planning is for seniors only Some may believe that estate planning is for those who are older and plan for their passing only. This is also not true as it is never too early to start planning and protecting your assets. Some aspects of estate plan are about the age and death (last will and testament, funeral arrangements, Medicaid planning), but there is more to it. There are unexpected events in life, and it is always best to be prepared and protected. You may want to think about your assets, about your minor children, about possible conflicts in the family upon your passing, even about what happens to your pet. 3. An estate plan only concerns property While a big part of the estate planning is about distribution of your assets (real estate, money, family heirlooms etc.) upon death, there are other aspects to be considered. Some documents (for example the advanced directives) are about assigning someone you trust to make decisions (whether financial or medical) on your behalf when you are not capable to do so. Estate planning may also include appointing guardians for minor children (usually in the will), or even creating a pet trust. 4. You only need to draft your will Most people are familiar with the concept of the Last Will and Testament, but estate planning involves more documents than just the will. There are different types of trusts, advanced directives, business succession planning, Medicaid planning, tax issues, and many more aspects to be considered, depending on everyone’s individual situation. 5. You only need to draft your documents once While your initial estate plan could cover most of the things you want to be taken care of, a proper estate plan should be revisited and revised as many times as needed. If you get married or divorced, you welcome a new child in the family (also by adoption), you lose a family member, you start making more money, open a business, acquire new property or make any other substantial change to your assets, you should meet your attorney and see what changes have to be made in your documents to address your new situation.

Everybody should have an estate plan in place, but it’s also important to have it updated every few years and revisited in case of major life events like birth or death in the family, change of marital status or the sale/purchase of assets. The stories below are cautionary tales for why you should plan ahead: Michael Jackson Jackson died in 2009, leaving behind three minor children. His will was signed in 2002 and was rather short, considering the size of his estate. This was because of how the estate was arranged – it was trust-based, as opposed to a will-based estate. He had a trust agreement called The Michael Jackson Family Trust Agreement, signed in 2002, that stated his wishes regarding the distribution of his estate. The estate continues to earn money for Jackson’s beneficiaries, and in 2016 Jackson’s estate earned a staggering $825 million, which included the sale of Jackson’s share of Sony/ATV music catalogue for $750 million. Whitney Houston When Whitney Houston died in 2012 she left a will that named her only child, a 19-year-old Bobbi Kristina Brown, as her sole beneficiary. The terms of her last will stated that her estate was to be paid to her daughter in installments. In case of Bobbi’s death, if she did not leave a spouse or children behind, Houston’s estate was to be distributed between her living relatives. Whitney’s will also listed her husband, Bobbi’s father, but due to their divorce in 2007 he couldn’t claim the estate. Bobbi passed away in 2015, leaving no will, which entitled her father to claim some of her estate. There are two lessons in this story: even young people should have their wishes written down and every estate planning document should be regularly updated, reflecting major life events. John Seward Johnson I The Johnson & Johnson heir married his third wife, Barbara Piasecka, in 1971, at the age of 76. She was initially hired by his then wife as a maid and was 42 years younger than Johnson. The age difference was controversial enough, but the real battle started when Johnson died in 1983. His estate was estimated to be worth approximately $500 million dollars at the time. The legal dispute involved his six children and his wife, Barbara. Johnson’s kids accused Barbara of abuse and manipulation, that caused their father to change his will in her favor. The battle ended up in settlement, that let her keep most of her late husband’s fortune (that included a New Jersey estate Jasna Polana, that is now a country club, the shares in Johnson & Johnson company, worth $18 million and Johnson’s art collection). It is important to remember in New York State you cannot disinherit your spouse entirely, as your spouse is entitled to 1/3 of your estate, at the very least. Thus estate planning is something to consider before entering into a marriage late in life. These stories are obviously about very rich and famous but could be used as examples of poor estate planning (or lack thereof) that leads to lengthy court battles and family disputes. It is never too early (or too late) to start estate planning, that can give you peace of mind and secure your assets for the future. It is also important to update your estate plans regularly and make them as detailed as possible to avoid future disputes. Contact Kate Maguire Tedrick to schedule a consultation regarding your estate.

Have you ever heard a story of someone being scammed by another person pretending to be their grandchild (or other relative)? These situations happen more often than we think. It is good to be aware of the most common scams and to inform your loved ones about the risks and how to avoid getting scammed. The scenario in these cases can look like this: 1. A person gets a call from someone impersonating their relative (most commonly the grandchild) 2. The “grandchild” seems to be in distress, mentions that they are in trouble (health issue, accident, jail), often in a foreign country 3. They insists that no one else is contacted regarding this issue (so they cannot be potentially verified), and that it is urgent 4. They ask for money to be used to cover medical bills, post bail, pay for a flight home, etc. (usually through a wire transfer) People who impersonate others for financial gain are usually very convincing and do their research before they call, so they might know some details about your relative and may sound just like them. It is very important to verify callers’ identity (for example through other family members or by asking specific questions) before making any payments or transfers. A good tip to prevent such a scam is to discuss a “secret” phrase with your grandchildren. It can be as simple as a song lyric, like “The sun will come out tomorrow” or your favorite restaurant, or a movie quote. When the call comes, you can ask the caller what your phrase is. If they do not know what you are talking about, or answer wrong, hang up and rest easy that you did not get defrauded!

1. Not having proper witnesses When you sign a will, you need to have two witnesses. They have to be over 18 years old and must see you sign your will. They also have to sign the document. 2. Creating a holographic will In New York State a holographic will (handwritten with no witnesses) is only legal when created by members of armed forces at the time of an armed conflict. In other cases it won’t be recognized by law. 3. Lack of testamentary capacity You need to have mental capacity to understand what decisions you are making 4. Fraud and/or undue influence Your will may be deemed invalid if it is proven that you were forced to sign it or make certain provisions, that someone else signed your will, that you were tricked into signing it and other cases that you can read about here (link) The best way to make sure your will is valid, and all state requirements are met is to work with an attorney who can guide you through the process. Contact Kate Maguire Tedrick to schedule a consultation.