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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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