Estate Planning

While having beneficiary designations on all assets is a common “quick fix” to avoid probate and allows funds to pass to a beneficiary upon death, it sometimes can cause more harm than good. Important New York and federal estate tax planning techniques can be lost if funds are passed directly to a beneficiary spouse. Additionally, if a beneficiary is a minor and receives the assets, a Guardian of Property must be appointed by the Court before the funds are released from the financial institution to said Guardian. These funds would then be held in Joint Control with the Court until the minor beneficiary reaches age of majority. A trust for a minor child could avoid this outcome. Having named beneficiaries and alternate beneficiaries is also important in the event your named beneficiary does not survive you.

Another issue arises if you appoint a beneficiary(ies) for a bank, brokerage or retirement account and that beneficiary is not surviving upon your demise. If there is no surviving named beneficiary, then said account will become part of your probate estate; and if you have received Medicaid benefits (home care and/or nursing home care), it will be subject to any claims made by Medicaid and/or your creditors.

Lastly, funds left directly to named beneficiaries are not necessarily available to pay expenses that might need to be paid after your passing. For example, if one sibling is the beneficiary on your brokerage account, those funds would go to that sibling at your death. But if another sibling paid the funeral and/or other expenses that arose, technically the beneficiary sibling has no obligation to use the funds he/she received to reimburse your other sibling.

While convenient and cost effective, online forms can lead to mistakes and/or omissions that cannot be corrected once an individual becomes incapacitated or deceased. These forms may be outdated or may not comply with New York laws and/or estate and long-term care planning concerns.

Having open communication with those you trust and advising them what assets you have and the plans you have put in place, and who they should contact in the event of incapacity/death (doctors, financial advisors, accountants, attorneys) is instrumental to ensuring your goals are met and wishes followed. Equally important is discussing your end-of-life wishes, including burial arrangements, location, etc.

Given the complexity of all these issues, working with an Elder Law and Estate Planning attorney can ensure you create a plan that is customized to your needs and reflects your wishes and goals. n n n

Lauren C. Enea, Esq. is a Senior Associate at Enea, Scanlan & Sirignano, LLP. She concentrates her practice on Wills, Trusts and Estates, Medicaid Planning, Special Needs Planning and Probate/Estate Administration. She believes that it is never too early or too late to start planning for your future and she enjoys working with individuals to ensure that their plan best suits their needs. Ms. Enea received a B.S. in Business Management from Quinnipiac University graduating Magna Cum Laude and a J.D. from the Pace University School of Law graduating Summa Cum Laude. She is admitted to practice law in New York and Florida. She can be contacted at (914) 948-1500 or www.esslawfirm.com