Linda L. Kordes, Attorney At Law Official Newsletter
January 2011
Inside This Issue
Legal Needs of Children

Winter 2010 Newsletter

Legal Needs of Children

Elder law attorneys often muse that we should be called "children of the elderly" attorneys because, for the most part, it is the children of the elderly who contact us. But what about the children of those children? What about their legal needs? Why focus solely on the baby boomers and their parents? What about the boomer's children? Those children are in the work force, getting married, and having children of their own.

Chris Lee, of Rikter Corp., (www.rikter.com) the wonderful website designer who designed and manages www.kordeslaw.com has two very young children, a wife, a home and a growing business. Certainly, he has legal considerations that might go ignored by the business of elder law, as a whole, because both he and his parents may be deemed not elderly. And, that's probably true.

But life is a "funny old dog," and has a way of shocking us into a reality that we do not even contemplate remotely when we are only thirty years old. This Newsletter shall focus on some considerations for Chris and his generation.

General Planning

Of course, it is never too soon for an adult to retain the services of an attorney to review that adult's over-all estate plan. Someone like Chris (and his wife, of course!) should have a health care proxy, power of attorney and basic will or living trust. While Congress has not seen fit to address the sunsetting of the estate tax laws for the long term, as yet, I believe that it is safe to say that, at some point, that issue will be addressed and decided permanently.

For now, it appears that we are looking at a $5 million individual unified credit, at least through 2012. This means that all married people should have a credit shelter - or disclaimer - trust incorporated in their wills so as to preserve the unified credit of each married individual for the benefit of his or her children. For more detailed information on these types of trusts, please see our Summer 2010 Newsletter.

Choosing Executors and Guardians

In preparing a will, your attorney will ask who you would like to serve as executor for your estate. Basically, that is the person who will collect all of your assets, pay your bills, and distribute the remainder of your assets to your beneficiaries after you are gone. More often that not, a young person will appoint a spouse, or the parent of his or her minor child, as the case may be. Of course, a surviving parent would be the logical guardian under those circumstances.

Consider the unlikely event where both parents die. It is unusual, but it does happen. If no one has been nominated pursuant to the terms of a will, then the court would have to step in and appoint someone, perhaps, a person that the decedent-parents would never want.

My cousin, Caitlin, has a very strained relationship with her brother, James, and cannot stand her sister-in-law, Elena. If Caitlin and her husband were killed in an accident, Caitlin's brother would be the logical applicant to be appointed guardian of Caitlin's minor sons, Alexander and Michael. Without any writing to the contrary, the court might grant James' application, and appoint James and Elena as guardians of Alexander and Michael, contrary to Caitlin's wishes. In addition, James and Elena live in Miami, while Caitlin lives with her family in Seattle.

To avoid such a contingency, Caitlin could direct in her will that she, in the event of her death, would like her children to remain in Seattle and keep their lives as normal as possible under what would be very difficult circumstances. She could nominate her best friends and neighbors, Laura and Ned, as proposed guardians and explain why she chose them in her will. While no guarantee, that sort of nomination holds great weight with judges, and would serve as a safeguard against her brother stepping in, and obtaining guardianship of Caitlin's children.

In addition, Caitlin could set up testamentary trusts in her will for her children's benefit, with the nomination of trustees, as well. This would assure that the remaining assets in the parent's estates would be preserved for the benefit of Caitlin's children until such time as Caitlin deemed her children mature enough to manage money.

Living Trusts

Living trusts, are frequently created as substitutes for wills. This type of trust allows an individual to manage her assets before she dies, and directs what will happen to those assets after she dies. It replaces the need for probate of a will, if structured properly. In addition, it can be revoked or modified or terminated entirely, at the whim of the individual creating it during that person's lifetime.

Unfortunately, it is of no use to those interested in tax or Medicaid planning, by virtue of the fact that it is, by definition, revocable. They are not inexpensive, and a well-drafted power of attorney may serve the exact same purpose with a fraction of the up-front expense. Interestingly, living trusts have caught on in California and are a much more frequently utilized estate planning tool, there, than they are here in New York.

Also, they are useful where an individual would prefer to avoid probate. One can direct how his or her assets are to be managed if and when she becomes incapacitated, and how they must be distributed after she dies.

The above list is for general information purposes only. It is not intended to constitute individual legal advice or a specific recommendation to any particular client.

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