Estate Planning

An Irrevocable Trust Is An Estate Planning Tool That Allows Assets To Be Shielded From Creditors

Before we can explore the advantages and disadvantages of an Irrevocable Trust we must first explore whether or not it will fit your goals. The main reason is that in the field of Elder Law, establishing an Irrevocable Trust is typically meant to preserve assets, like a home or money, against nursing homes and Medicaid recovery.

An Irrevocable Trust Is An Estate Planning Tool That Allows Assets To Be Shielded From Creditors

Craig Andreoli, Esq., Elder Law and Estate Planning Attorney
Does an Irrevocable Trust Meet Your Goals? Nursing homes are extraordinarily expensive. It is not uncommon to be charged anywhere from $9,000 to $22,000 a month for nursing home services. If you have to privately pay at those rates, you may not have the means to do so for very long. Therefore, many look to the government to pay the fees of such long term care services. The government program that pays for such services is Medicaid. Medicaid is not like most creditors, however, because they have their own recovery laws. The most notable is that they are a “Super Creditor”, meaning they have priority over other creditors. Also, they are entitled to be reimbursed from the Medicaid recipient’s probateable estate upon the recipient’s death for the long term care services they provided. A typical asset that is passed on in probate is the recipient’s primary residence. So, the fear that the government will “take” your home is actually quite founded. Medicaid Qualifications Before you even get to the Medicaid recovery stage you have to be eligible for the Medicaid program. Medicaid can be equated to a country club. You must be accepted as an eligible member before you are entitled to receive benefits, but not everyone qualifies. The first threshold, of course, is that you have enough of a medical need to warrant long term care. Most people looking into the program meet that threshold. The second threshold, as of 2015, is that you must have resources below $14,850.00. On first blush most people do not meet this threshold, but there are several options available to make the threshold attainable. One option is to give your money away. While this method is acceptable for Community Medicaid (where you receive long term care services by a personal care aide in your home), it is not acceptable for Chronic Care Medicaid (where you receive long term care services from a nursing home) unless the transfer was between spouses or to a disabled child. If the transfer was not to a spouse or a disabled child, Medicaid will reject your application because they will assume you gave away the money to become eligible for the Medicaid program. Medicaid is entitled to look back through 5 years of your financial records and if they see any transfers of assets in the amount of $2,500 or greater without consideration (receiving some value back for the transfers), they will penalize you. The penalty is they will refuse to pay for your nursing home care for approximately 1 month for every $12,000.00 of transfers made without consideration during the 5 year look back period. This is why it is extremely important to pre-plan to preserve assets at least 5 years in advance of ever needing nursing home care. The most risk free and tax advantageous place to park assets while you wait out the 5 year look back period is in an Irrevocable Trust. To obtain these advantages, you must “give up” ownership of the asset(s) you want to preserve. However, a properly designed estate plan will minimize any effects of giving up ownership. Advantages of Irrevocable Trusts One of the largest advantages of a properly drafted Irrevocable Trust is that it will preserve assets from creditors. Assets in the Trust will not be available to your creditors or the creditors of your Trustee. The Trustee of an Irrevocable Trust is typically your child. Your child is not the owner of the Trust assets and, therefore, even if your child-Trustee gets divorced, your Trust assets are not part of your child’s marital property. While giving up ownership may sound frightening to you, a properly drafted Irrevocable Trust will actually grant you certain rights that keep you in control of the assets put into the Trust. The way to maintain some decision making and control over your assets is to have the Trust drafted so that it grants you the ability to have control over your Trustee. In other words, if your child listens to what you ask of him, you will have some decision making and control. Even if he does not listen, however, the Trust should be drafted to grant you the right to remove him as Trustee and put a different Trustee in place that will do what you wish. Moreover, your Trustee will not have the right to kick you out of your home and you will still retain your Enhanced STAR real estate taxes. Another advantage of placing your home in an Irrevocable Trust, as opposed to gifting it outright to your children, is that upon your death your children will receive a step up in the basis of your home from the value you purchased it at to the value of the home on your date of death. What does that mean? It means your children will not have to pay capital gains tax if they sell the home soon after your passing. Finally, if you fund the Trust with money, you and your spouse will have the advantage of being entitled to withdraw the income that the money in the Trust generates. After 5 years has elapsed from the time the Trust was funded, anything the Trust holds will be unavailable to Medicaid recovery. Other advantages of the Irrevocable Trust are that it avoids probate and, consequently, probate attorney fees. Disadvantages of Irrevocable Trusts The main disadvantage of the Irrevocable Trust is that you cannot take any of the principal out of the Trust. That is why a lot of time should be spent discussing what exactly should be placed in the Trust in the first place. If you believe that you will never need the equity from your home, like a reverse mortgage or a line of credit, nor will you ever need to live on the sale proceeds from your home, your home is an excellent asset to place in the Irrevocable Trust. Conclusion While we cannot possibly cover all of the issues revolving around Irrevocable Trusts within the confines of this article, you should discuss your specific situation with an Estate Planning attorney and determine whether or not an Irrevocable Trust is right for you. CONTENT DISCLAIMER
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The Benefits of Using a Pooled Trust for a Special Needs Child

Parents who have a child with special needs face the challenge of deciding how to leave an inheritance to their child. A sensible way of providing an inheritance for a special needs child is to set up a special needs trust.

The Benefits of Using a Pooled Trust for a Special Needs Child

By Michael L. Pfeifer, Esq., Partner, Pfeifer & Choi, PLLC

A Special Needs Trust will allow the disabled child to enjoy the benefits of her inheritance while protecting their access to government programs such as SSI and Medicaid.

Rather than setting up a special needs trust with an individual trustee, the parents might consider protecting their child by using a pooled trust. A pooled trust is a special needs trust that is operated by a not-for-profit (charitable) organization. Each beneficiary has his or her own account but all of the assets in the trust are “pooled” for investment purposes. The purpose of this article is to discuss some of the advantages of choosing this option.

Making Sure Your Trustee Remains Available to Manage the Trust

When parents set up a special needs trust, they will have to appoint a trustee to manage the trust. The trustee may be a sibling or other relative of the disabled child.

No trustee can avoid becoming old. If a trustee becomes sick or dies, the trust beneficiary may have a trustee who is unable to perform their duties.

Pooled trusts are operated by not-for-profit organizations and are not dependent upon the health or other circumstances of an individual trustee. An organization is managing the trust: if one person is not available; another person can take over. The needs of the disabled person are not dependent upon any one individual.

The Burdens of Being a Trustee

Being a trustee is not easy. There are many responsibilities: properly investing the assets; protecting the receipt of governmental benefit programs; using the assets of the trust efficiently; and determining the disabled beneficiary’s needs. By placing an inheritance in a pooled trust, you take the burdens away from family members who have other life responsibilities demanding their time.


There are four areas of expertise a trustee must have:

  1. Legal
  2. Financial/Investment
  3. Tax
  4. Personal

Legal Expertise

Can the trustee pay for the beneficiary’s rent if she is receiving SSI? Can the trust own a home on behalf of the trust beneficiary? Can the trust pay a companion to accompany the beneficiary on vacation?

A trustee must answer many legal questions. A private trustee will have to pay for legal advice. A pooled trust has attorneys available who guide the trustees in making the appropriate legal decisions.


A Trustee must “exercise reasonable care, skill and caution to make and implement investment and management decisions as a prudent investor would for the entire portfolio, taking into account the purposes and terms and provisions of the governing instrument.” EPTL, § 11-2.3 (b)(2).

Investing assets over a long period is a hazardous undertaking - especially in uncertain times. A private trustee will almost certainly have to hire a financial planner. A pooled trust has professional investment advisors who have the expertise to invest the trust assets appropriately.


Taxes have to be paid on behalf of the trust and the trustee can be held personally liable for taxes that are not paid. Trustees of pooled trusts have experience with this issue.


What type of wheel chair is most appropriate? What is the best supplemental medical insurance policy? What is the best computer program for someone who is sight impaired? What type of vocational program is appropriate?

Answering these questions requires expertise that pooled trust trustees have.

Conflict of Interest of Family Members

Upon the death of the disabled beneficiary, a special needs trust that is funded with the assets of a third party usually gives the balance of the trust assets to surviving family members. A trustee who knows that he will receive the remaining trust estate has a conflict of interest when he decides whether to distribute assets on behalf of the trust beneficiary. The trustee of a pooled trust will not benefit personally from such decisions.


Being a trustee is hard work and complicated. Not everyone has the skills, knowledge, time, health or temperament to be an effective trustee. Sometimes choosing an individual trustee is the appropriate choice for the family. However, in the appropriate case, using a pooled trust can give disabled beneficiaries the advantage of having their assets administered by caring and expert professionals.

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Getting Your Elderly Parents Ready to Relocate

It’s getting to be that time. Your elderly parents live in the same house that they’ve lived in for endless years. It’s big and requires lots of upkeep, not to mention the many stairs that have to be navigated each and every day.

Getting Your Elderly Parents Ready to Relocate

By Lewis I Knopf, Certified Senior Advisor (CSA)® & Daily Money Manager at LK Daily Money Management

Perhaps their health or memory is failing or they are far away from you or any other close relatives.

Just thinking about it causes you to worry and it appears that relocation to a more suitable residence might be the best thing for everyone. But change is hard and even more so when you are talking about leaving a place in which you have lived for a very long time.

Chances are that your parents are starting to feel the burden of taking care of the house, not to mention the outside spaces as well. But even though they are tired of the upkeep they still might not be ready to throw in the towel and admit it.

Here are some things that you can do to make this all-important life change go as smoothly as possible:

For starters, sensitivity and patience are paramount to making this a smooth transition. Moving is not something that should be taken lightly or done abruptly. With calm, well-intentioned and open dialogue you can help your parents see the benefits of relocation whether it is to an assisted living facility, a smaller home or to another state closer to where you or your relatives live.

As much as possible include your parents in the decision-making. The more involved they are and the more they buy into the process, the easier it will be.

Make certain that you and all of the other relatives involved in this decision (siblings, aunts and uncles) are in agreement and that you don’t engage in familial arguments in front of your parents. There must be harmony in the family ranks.

Help your parents to sort through and organize their belongings. Most seniors are either highly sentimental or simply don’t see why they can’t take everything to their new residence because they just don’t want to invest in buying it again. A senior move manager can also provide you and your family with the necessary guidance and assistance.

When approached slowly and with compassion most seniors will warm to the idea of relocation especially when they start to see the over-arching benefits of their move. Let them take their time and it will be a smoother transition for everyone.

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The Holistic Approach to Estate Planning

As an estate planning and elder law attorney, I strive to find solutions to my clients’ needs and goals. When it comes to elder law issues, my clients typically rely on me for more than traditional legal advice.

The Holistic Approach to Estate Planning

By Wendy K. Goidel, Esq, Founding + Managing Member, Estate Planning & Elder Law Center, A Division of Goidel Law Group PLLC

I have always tried to help my clients navigate the complexities of the aging process. This includes myriad issues relating to health, disability, caregiving, finances, family relationships, estate planning, quality of life and end-of-life decision making. All of these issues relating to life care planning are much more complicated than merely discussing the legal options regarding asset protection and obtaining eligibility for government benefits.

Supplementing my experience as an attorney, I have joined forces with a dedicated, compassionate licensed clinical social worker with a wealth of experience in life care planning. Together, we have developed and implemented an exciting and innovative holistic, concierge approach to planning. This new approach to the coordination of care with legal solutions and strategies is unparalleled in the practice of estate planning and elder law. To fully appreciate the value of this approach, it must be compared to traditional estate planning.

Traditionally, the avoidance or minimization of estate taxes was the biggest factor motivating people to engage in estate planning. However, the rising federal and New York State estate tax thresholds have eliminated the need for such planning for 99% of the population. As many people equate estate planning with tax planning, they understandably overlook other more compelling reasons to plan which include providing the legal framework necessary to protect loved ones and spare them the anxiety and frustrations that can come from pre-death guardianship and post-death probate court proceedings.

Traditional estate planning involves the preparation of wills and/or trusts, powers of attorney, health care proxies and living wills. Though traditional estate planning includes advance directives for end-of-life planning, it fails to address your daily living preferences and quality of life if you have a chronic or terminal illness. It does not provide education, training, advocacy and monitoring to ensure that your agents are supported and that you do not suffer from gaps in your care. And if a care crisis hits, the planning becomes reactive, causing undue stress and anxiety for you, your loved ones and your agents.

These issues are resolved and avoided through proactive Concierge Care Planning™. Although the estate planning we provide has always been comprehensive, any form of estate planning is inadequate for families facing or anticipating chronic or long-term health or care issues. Those families require a proactive coordinated approach which seamlessly integrates care needs with legal planning. On the care side, our families have a dedicated care coordinator as their personal advocate, supporting them as they navigate the aging process, manage a disability or cope with a chronic illness. This enables families to maximize the independence of loved ones, and when necessary, ease the transition to supportive care services while minimizing stress and frustration. On the legal side, we partner with family members and other professionals to engage in estate and long-term care planning designed to protect clients, their loved ones and their hard-earned assets. Many customized options and strategies are available making our model more affordable, adaptable, accessible and absolutely unique.

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Why You May Need an Elder Law Attorney

Who hasn’t heard the old cliché, getting old isn’t for sissies. The truth is that as you age, the cliché becomes more and more accurate.

Why You May Need an Elder Law Attorney

By Lewis I Knopf, Certified Senior Advisor (CSA)® & Daily Money Manager at LK Daily Money Management

We all know that “stuff” happens as we become older and at some point, some or all of these issues will probably come knocking on the door of everyone who has reached a “certain” age.

Often the confusion and stress associated with age-related issues can be best ameliorated with the help of a trained and experienced professional.

Consider turning to an experienced Elder Law Attorney for assistance with the following situations:

  • Preservation/transfer of assets
  • Medicaid applications
  • Medicare claims and appeals
  • Social security and disability claims and appeals
  • Supplemental and long-term health insurance issues
  • Disability planning, durable powers of attorney, living trusts, “living wills”
  • Guardianships
  • Estate planning
  • Probate Administration and management of trusts and estates
  • Long-term care placements in nursing home and life care communities
  • Nursing home issues
  • Elder abuse and fraud recovery cases
  • Housing issues

Remember that you don’t have to go it alone, and in many situations contacting an Elder Law Attorney will save you stress, confusion and potentially significant sums of money.

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An Education on Pension Maximization

Pension maximization is a financial planning technique that can provide the most amount of pension income while a retiree is alive and assures the income need of the spouse & family are met.

An Education on Pension Maximization

By Anthony B. Soldano

It is a great retirement and income planning tool that needs to be explored if you have a Defined-Benefit Pension Plan. It is common for most of these types of pension plans to offer multiple options upon retirement. The most common options offered are the Single-Life or Joint-Life payout option.

Should the retiree choose the Single-Life option, the monthly pension check amount they receive will be much higher during their life. The problem that arises is that it will end upon the death of the retiree leaving no income to the surviving spouse.

The Joint-Life payout option will provide lower monthly income while the retiree is living but will allow for some of the income (Full, 75% or 50%) of the pension to continue to their spouse upon their passing. If the spouse outlives the retiree, he/she will continue to receive the pension benefit until their death. Once the spousal beneficiary passes away the pension is forfeited and lost forever. It cannot be passed to children or loved ones.

At this point in the article you are most likely thinking the joint-life option looks more attractive. The answer is that there is no right or wrong answer. It really comes down to the individual needs of the family and other components to their current financial plan. Here is an example of the different pension payout options for the retiree.

Pension Option Examples: Retiree age 65

Single-Life payout: Retiree gets $100,000 year of income but the pension will end upon their death and no benefit will continue to their spouse.

Joint-Life Full: Retiree gets $75,000 a year of income and upon their passing the spouse would continue to receive the $75,000 year until their death. (Costs the retiree $25,000 a year for life)

Joint-Life 75%: Retiree gets $85,000 a year of income and upon their passing the spouse would get 75% of the $85,000 or $63,750 a year until their death. (Costs the retiree $15,000 a year for life)

Joint-Life 50%: Retiree gets $90,000 a year of income and upon their passing the spouse gets 50% of the $90,000 or $45,000 a year until their death. (Costs the retiree $10,000 a year for life)

Note: As illustrated under the joint-life options the amount of income forfeited annually is very substantial. The funding of the life insurance for the Single-Life option would come from the difference being given up if the retiree were to choose a joint life option. Often than not the insurance costs less than what is being given up by electing a Joint-life option.

The Benefits of the Single Life Option:

The retiree would choose to take the single-life option rather than a reduced joint and survivor benefit. The couple would use all or some of the difference between the amount of the single option versus the joint and survivor benefit to purchase life insurance. The goal is to put in place the right amount of permanent insurance coverage to replace the lost pension benefit if the retiree dies first.

  • The retiree receives the maximum pension benefits to which he or she is entitled. The spouse shares in the benefits of having more money while they are both alive.
  • Should the retiree pass away, the pension will stop, but the spouse’s income continues via the insurance proceeds similar to the joint-life option. The life insurance can be paid to a beneficiary in a lump sum which will allow for more flexibility should the spouse need to liquidate a mortgage or other debt items.
  • The insurance benefit can also be set up as an annuity with income benefits that are guaranteed for the life of the beneficiary.
  • The life insurance death benefit is received income tax free.
  • Should the spouse pre decease the retiree, the life insurance may no longer be needed and can be surrendered which would increase of income for the retiree.
  • Should you choose to keep the life insurance, the beneficiaries can be changed at any time. If the spouse pre deceases the retiree they could choose to elect their children, other loved ones or a favorite charity.
  • Your pension can be passed on to other generations. If you chooses the Joint-life option it will end with the passing of the retiree & spouse.

Good Candidates for Pension Maximization:

  • Participates in a defined-benefit pension plan. Government or state employees, teacher, police officers, firemen etc…
  • Getting ready to plan for retirement & income.
  • Married, with a desire to protect their spouse and family.
  • Healthy enough to get life insurance coverage or convert existing coverage.

In Summary:

The pension option you choose has a tremendous impact on the income & quality of life you have while you’re alive as well as the legacy you leave for your spouse and family. There are many other planning factors that should be considered before choosing your pension option. You should consult with an insurance & financial services firm who has knowledge in this area to decide which option makes the most sense for you and the goals and dreams you have for your family.

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Beyond the Will: Why Having An Up to Date Power of Attorney and Health Care Proxy Is Essential

Often times, the motivation to establish an estate plan centers around the desire to put a Last Will & Testament in place, or create a Trust Agreement. Once an estate plan is finalized, many people do not review their planning documents, even if many years have gone by or their circumstances change. But what about planning for the present?

Beyond the Will: Why Having An Up to Date Power of Attorney and Health Care Proxy Is Essential

By Laura Burns
Regardless of age, all adults should have a cohesive legal plan in place to ensure that they are protected. It is essential that a Power of Attorney and Health Care Proxy are part of this plan. Why? Because a Power of Attorney and Health Care Proxy enable you to appoint specific people (“agents”), who will be able to assist you with your finances and / or medical decisions, if needed. Absent these documents, significant complications may arise.

Protection via Power of Attorney (“POA”)

In the event that you require assistance with the handling of your financial affairs, the absence of a Power of Attorney can result in undue delay or the complete inability to accomplish certain tasks. Banking institutions have become very aggressive in the protection of their client’s accounts, and often scrutinize the involvement of a third party in someone’s finances. Similarly, many insurance companies, financial institutions, and even utility companies will not discuss the status of one’s account absent a “POA”. In the event that a person becomes unable (whether temporarily or permanently) to manage their own affairs, a POA becomes an indispensable tool. Even married couples with jointly held assets need to have POAs in place, as your marital status will not allow you to transfer jointly held property or even request insurance information regarding your spouse. In order to sign a Power of Attorney, the principal must have capacity, which is defined by New York General Obligations Law as the “ability to comprehend the nature and consequences of the act of executing and granting, revoking, amending or modifying a power of attorney, any provision in a power of attorney, or the authority of any person to act as agent under a power of attorney”. The execution of a POA can provide significant protections, should an accident or health event cause the loss of capacity. DURABLE is the key word here – a Durable Power of Attorney means that even if you lose your capacity at a later time, your POA remains in effect, and your agent will be able to continue to act on your behalf. So, who should you select as your agent? The short answer is someone who you trust, explicitly. Your agent can be, but is not required to be, your spouse, adult children, siblings, other family members, or a close friend. An accountant, financial planner or even a professional fiduciary can also serve as a POA agent. The appointment of at least one alternate or “back-up” agent is also recommended, to ensure that you are properly protected.

The Health Care Proxy (HCP)

If you have ever been admitted to the hospital, it is likely that someone asked you if you have a Health Care Proxy. A Health Care Proxy applies only to medical decisions, and your agent will be charged with the authority to act only if you are unable to make your own decisions. Absent a HCP, the Family Health Care Decisions Act (FHCDA) of June 1, 2010 provides a list of surrogates who have the legal right to make your medical decisions in the event that you are unable to do so. This law designates that a Court Appointed Guardian has the primary authority, followed by a Spouse / Domestic Partner, Adult Child or Children, Parents, Adult Siblings, and finally, a close friend. Absent a HCP, there is a possibility that one of your family members or friends may end up making serious medical decisions for you – decisions that may be contrary to your wishes. Generally, a HCP will come into effect during a serious medical event. Therefore, the selection of your agent is extremely important. Your agent may find themselves determining whether to authorize surgery, administer life support, or place / withdraw artificial nutrition and hydration. The purpose of a HCP is to allow you to choose who you would like to make these decisions for you, if you are unable to. Absent a HCP and pursuant to the FHCDA, there may be instances where more than one person has the authority to decide, and this could lead to conflict or indecision. Thus, your appointment of HCP agents should be made with ample time to consider your options, and ideally, not during a medical event. Your agent should be someone who is able to navigate difficult situations and who is willing to follow your instructions, even if those instructions are different from their own personal opinions. Although having a Last Will & Testament or a Trust Agreement is an important aspect of protecting your family and your assets, the execution of current POAs and HCPs should not be overlooked. Having these documents in place, in addition to a Will or Trust, can ensure that you are protected now, and well into the future. After all, even though we plan for tomorrow, we must live for today. *** This article should not be construed to offer legal advice and is written solely for the purpose of providing information. CONTENT DISCLAIMER
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