June 23, 2010
Wills, revocable trusts, and irrevocable trusts are all estate planning devices. Revocable trusts are a type of trust that can be changed, modified, or revoked at anytime. This type of trust allows you to change your mind with regard to all aspects of the terms of the trust. These trusts are very flexible.
Uses of a revocable trust:
1. Revocable living trusts avoid probate. The assets in the trust at the time of the death of the individual who made the trust pass directly to the beneficiary. The trust does not have to be probated.
2. It is private document. Wills need to be probated. This opens up the terms of the will to review by a court. Once the will is filed with the courts it becomes a public document and other individuals can obtain copies of the will. An example is Jacqueline Kennedy Onassis’s will in Manhattan. So many people wanted to see it that it was displayed to the public mounted it under plexiglass. The details of your assets and the individuals who receive your assets remain a private matter.
3. It establishes a plan that deals with mental disabilities such as Alzheimer’s disease and other mental illnesses that effect seniors. When you place assets in a revocable trust and the person who created the trust becomes disabled, the trustee or alternate trustee supervises the trust and distribution of the assets therein. If you do not have this type of trust or a power of attorney, it becomes necessary for your loved ones or next of kin to bring a guardianship proceeding under article 81 of the New York Mental Hygiene Law to appoint a guardian for you.
March 30, 2009
Spurred on by financial abuse of the elderly, New York will change its laws with regard to executing a valid “Power of Attorney” (“POA”) document. The new law will be effective September 1, 2009, although POAs executed before that date in compliance with the old law will still be valid.
This development makes it especially important to use an attorney who activly practices Wills, Trusts and Estate law and is familiar with these significant changes in the law.
The following are some of the changes that attorneys must now consider when drafting and handling executions of General POA documents starting Sept. 1st, pursuant to the new New York General Obligations Law §5-1501:
- The principal’s signature of the POA document must be both notarized and witnessed by two disinterested witnesses.
- The agent must also sign the power of attorney and his/her signature must be notarized (although the signature does not have to take place at the same time as the principal’s signature).
- If a principal intends to give the agent power to make gifts on his behalf to anyone he has not been accustomed to giving to or which exceed $500 per beneficiary per year, he must simultaneously execute a Statutory Major Gifts Rider (“SMGR”).
- The statutory “Caution to the Principal” and “Important Information for the Agent” sections must be included.
These changes were originally set to become effective March 1, 2009, but Gov. Patterson agreed to sign off on an extension to September 1st, 2009 in order to allow attorneys to fully familiarize themselves with these sweeping changes. So give us a call if you are planning to execute a Will, Power of Attorney, Health Care Proxy, or other estate planning document.
Picture courtesy of sayrelaw.com.