HoganWillig

“Everybody has a Will. But, perhaps you don’t know what yours says?”

In New York State, everybody has a plan to distribute assets after death. Without a written Will Last Will and Testament, your assets will pass-on by what is commonly referred to as “intestate distribution” or “intestacy.”

There are four ways to pass on property when you die:

1. by operation of law – joint tenancy;
2. by contract – beneficiary designation;
3. by Last Will and Testament – written instructions; or
4. by intestacy – statute determines how assets are distributed following death.

Intestate distribution is made to distributees, i.e. the nearest level of blood (including half-blood) relatives. Unless you change that distribution by leaving a valid Last Will and Testament document, your estate will pass as follows:

1. Survived by spouse and issue (“issue” means children or next lineal descendents)
   • Spouse gets first $50,000 and ½ of the residue of the estate
   • Issue equally share the rest;
2. Survived by spouse and no issue, then the spouse inherits all;
3. Survived by issue but no spouse, the issue equally share the estate;
4. No spouse or issue, then to your parents, then to siblings, then to nieces/nephews, etc… , and so on, all the way to first cousins once removed;
5. If there are no family members beyond that, your estate will pass to the State of New York.

There are many other rules and nuances to intestate distribution that are beyond the scope of this short article, but, remember, if you do not leave a Last Will and Testament for yourself, total strangers could inherit your life’s savings.

With a Will, YOU decide who receives your property and in what proportions. Your may create a trust for children or family members with special needs. You may nominate guardians for your minor children. If you don’t make this decision for yourself, New York State law will make those decisions for you.

Wills are not costly or complicated if you have relatively simple needs and the cost is an investment that is well-worth the effort to ensure your wishes are honored. If you have any questions about this article, or wish to speak to an attorney, please contact HoganWillig at 716-636-7600. HoganWillig is located at 2410 North Forest Road in Amherst, New York 14068, with additional offices in Buffalo, Lancaster and Lockport.

Tags: elder law month, last will and testament, living, will

May is National Elder Law month!  Throughout the month of May, please check our website for informative articles on Estate Planning and Elder Law topics.

HoganWillig will be hosting an Elder Law Day on Monday, May 13, 2013 at our Amherst, NY location (2410 North Forest Road, Suite 301).  We are offering FREE 20-minute private consultations with one of our attorneys for review of basic estate planning documents and elder law issues.  These FREE consultations will be by appointment only.  Appointment slots will fill-up quickly, so, please call for an appointment today:  (716) 636-7600.

Tags: elder law, elder law day, Estate Planning, free consultation

Join me at the Adam’s Mark Hotel, 120 Church St., Buffalo, NY 14202, for Elder Law Day 2013.

Free seminars on legal issues of interest to older adults and their families.

• Grandparents’ Rights
• Avoiding Financials Scams
• Wills, Trusts, and Small Estate Planning
• Medicare, Medicaid & Long Term Care
• LGBT Legal Issues
• Veterans’ Benefits
• Elder Abuse & Mistreatment

Tags: Avoiding Financials Scams, Elder Abuse, elder law, elder law day 2013, Grandparents' Rights, LGBT Legal Issues, Long Term Care, medicaid, medicare, Small Estate Planning, Trusts, Veterans' Benefits, Wills

For many divorcing persons one of their most important assets, oftentimes the most significant one, is their house. Significant not only financially, but frequently emotionally as well.

When I first meet with a client about a divorce, one of the questions I am almost always asked is what is going to happen with my house? As with many questions in divorce, the answer is complicated and depends on many factors.

One possibility is that a party may be granted what is known as exclusive use and occupancy for a specified period of time. This usually occurs when the parties have children under the age of 18. Courts now express a preference for allowing a custodial parent to remain in the marital residence until the youngest child becomes 18 unless such parent can obtain comparable housing at a lower cost or is financially incapable of maintaining the marital residence, or either spouse is in immediate need of his or her share of the sale. In actual practice this occurs more frequently where the children are in their teens than when they are younger. At the conclusion of the specified period the house is usually sold.

The person having such exclusive occupancy is generally also entirely responsible for paying all of the carrying costs of the house, such as mortgage, taxes, and utilities, and for keeping it maintained. So while exclusive use may seem the way to go, you need to ask yourself if you will be able to afford it given your own income and what amount of child and spousal support you may receive.

If exclusive use and occupancy is not indicated or economically practical, frequently one spouse will want to buy out the other spouse’s interest in the house, either in exchange for other assets or for cash. This requires an agreement as to the value of the house or obtaining an appraisal. Affordability is again frequently a problem. Your spouse will justifiably want you to refinance the existing mortgage into your own name, which is not as easily done today as it was just a few years ago. And usually you have to refinance for more than the existing mortgage to raise the funds to pay your spouse his or her share of the home’s equity, so now you’ve taken on the existing expenses of the house and even more debt than there was before! Or if you’ve traded other assets to pay same, you may have left yourself financially vulnerable in other regards.

Last, the house can be sold and the proceeds divided. This is what a court will usually order if exclusive use is not awarded to one of the parties and they cannot otherwise agree on what should be done with the house. Even where parties agree without a court order to sell, any number of matters have to be discussed and agreed upon such as choice of realtor, sale price, payment of expenses pending sale, and how the proceeds are to be used, such as paying debt, and then divided.

I’ve touched on only a few of the issues and considerations involved in making a decision about what happens to a house in a divorce. The experienced family law attorneys at HoganWillig can provide you with informed guidance as to both the applicable law and in assessing your financial outlook going forward in order to help you make the smartest and most beneficial decision.

Tags: divorce

April 16, 2013 is “National Healthcare Decisions Day.” It is a day set aside to educate the public about the importance of health care planning. This is to encourage people to express their personal wishes regarding healthcare, in writing, before a health care crisis occurs.

Although it is a difficult issue to address, it is important for all adults to consider who is best-suited to make medical decisions for them in the event they become too ill speak for themselves and convey their own wishes.

Health Care Proxy: A Health Care Proxy is a document which allows you to designate an agent to make health care decisions in the event you are unable to do so. Your health care agent should be a person you trust to carry-out your wishes and deal with your physicians.

Living Will: A Living Will supplements the Health Care Proxy by allowing you to document your wishes concerning treatment during a terminal illness or in the event you are in a vegetative state where there is no reasonable likelihood of recovery.

Appointing a health care agent is a good idea even if you are not terminally ill. A health care agent can act on your behalf should you ever become temporarily impaired. For instance, if you are unconscious as a result of a general anesthesia or have become comatose because of an accident, your health care agent would be able to make medical decisions on your behalf.

Family Health Care Decisions Act: On March 16, 2010, NYS Governor David Paterson signed the Family Health Care Decisions Act (“FHCDA”) into law. The FHCDA may permit family members to make medical decisions, including decisions about the withholding or withdrawal of life-sustaining treatment, for patients who have lost their ability to make medical decisions and who had not previously prepared a Health Care Proxy or Living Will. However, the law may give some a false sense of security and belief that written a Health Care Proxy or Living Will is not needed. That is not the case.

The law established a protocol for doctors to determine whether a patient has decision-making capacity. When it is determined that a patient does not have decision-making capacity, the law requires the selection of a ‘surrogate’ from a list of individuals ranked in order of priority, including family members, domestic partners and close friends.

The FHCDA does not solve problems where individuals desire to make very specific medical decisions for themselves based upon their own personal, religious or moral beliefs. Additionally, in family disputes, there will still be issues. For example, if several siblings have differing opinions regarding medical care for a parent, there will be problems to address.

Without advanced written directives for medical care, family members are left in the precarious situation of trying to figure out what to do. The FHCDA clarifies a decision-making hierarchy that may be helpful in emergency situations, but, it does not obviate the need for a Health Care Proxy and/or Living Will. Also, under the FHCDA statute, the health care surrogate is obligated to make decisions based on clear and convincing evidence of the patient’s wishes. The best way for a patient to express his/her own wishes, avoid family conflicts and select one’s own health care agent is to have a written Health Care Proxy and/or Living Will.

If you have any questions about this information, or wish to speak to an Elder Law/Estate Planning attorney, please contact HoganWillig, Attorneys at Law at 716-636-7600 or visit www.hoganwillig.com. HoganWillig’s main office is located at 2410 North Forest Road in Amherst, New York with additional offices in Lockport, Lancaster and Buffalo.

Tags: Family Health Care Decisions Act, FHCDA, hcp, health care proxy, living will, National Healthcare Decisions Day

In the course of my practice, when clients are starting a business or changing their current business structure, they ask which entity is better for their needs, an S-Corporation or an LLC. While both entities share similar qualities, they also have distinct differences. A client should review the pros and cons of each entity prior to deciding.

Pros and Cons of an LLC

The most attractive feature of an LLC is its operational ease. There are fewer initial registration requirements and no requirement to have formal meetings or maintain minutes.

LLC’s have fewer restrictions on sharing profits. Members may have contributed more money than others or worked more hours; the profit allocation may be altered to reflect this.

A negative aspect of an LLC is it has a limited life. A specific date is chosen when it terminates upon filing with the state. Additionally, when Member dies or goes bankrupt, the LLC will be dissolved.

The biggest drawback of an LLC is that the owner(s) of an LLC are considered to be self employed and must pay the self employment tax contributions towards social security and Medicare. The entire net income of an LLC is subject to this tax.

Pros and Cons of an S-Corporation

The most attractive feature of an S-Corporation is the tax savings. Only the wages of a shareholder are subject to employment tax. The remaining distribution is taxed at a lower rate, if at all. Compensation to shareholder must be reasonable or the IRS may reclassify. This is a red flag and you do not want this attention from the IRS.
An S-Corporation has independent life separate from its shareholders. If a shareholder dies or leaves, the S-Corporation can continue doing business.

The biggest drawback of an S-Corporation is that it has structural requirements such as director and shareholder meetings, minutes from those meetings, adoption and updates to by-laws, stock transfers and records maintenance.

Typically with both entities, owners are not personally responsible for business debts and liabilities. Both entities have pass-through taxation (taxed at the individual level). Both are subject to state-mandated formalities and fees. I personally prefer the flexibility and lack of formal requirements of an LLC.

Tags: limited liability company, llc, s corp, s-corporation

An interesting occurrence took place this week with both the President and Vice-President of the United States absent from American soil for a brief period of time. On March 19, President Obama was aboard Air Force One over the Atlantic Ocean on his way to Israel for a trip to the Middle East while Vice-President Biden was returning from Rome where he had attended the inaugural Mass of the new Pope, Pope Francis, at the Vatican.

This left, for approximately 15 to 20 minutes, Speaker of the House John Boehner, not a member of the President and Vice-President’s political party, the top governmental official on American soil.

Speaker Boehner’s place as the number 3 man in American government is the result of current law. The Presidential Succession Act of 1947 establishes the line of succession to the powers and duties of the office of President of the United States in the event that neither a President nor Vice-President is able to “discharge the powers and duties of the office.” The Act places the Speaker of the House as the first successor. The Act reads, in part:

…[i]f, by reason of death, resignation, removal from office, inability, or failure to qualify, there is neither a President nor Vice President to discharge the powers and duties of the office of President, then the Speaker of the House of Representatives shall…act as President…

Now pair this rare event with the release of a new movie this past week, Olympus Has Fallen, about an attack on the White House that results in the President of the United States being taken hostage by terrorists, and some might be wondering: “who is in charge if the President is out of communication or incapacitated?”
Now, I haven’t seen the new movie but I can guess, much like the late-1990’s tour de force Air Force One starring American treasure Harrison Ford, there is a scene where the nation’s national security team debates who is in charge with the President in a position where he is incapable of giving directives to his government and military.

The Constitution of the United States offers some guidance. Section 4 of the Twenty-Fifth Amendment to the United States Constitution states:

Section 4. Whenever the Vice President and a majority of either the principal officers of the executive departments or of such other body as Congress may by law provide, transmit to the President pro tempore of the Senate and the Speaker of the House of Representatives their written declaration that the President is unable to discharge the powers and duties of his office, the Vice President shall immediately assume the powers and duties of the office as Acting President.

Thereafter, when the President transmits to the President pro tempore of the Senate and the Speaker of the House of Representatives his written declaration that no inability exists, he shall resume the powers and duties of his office unless the Vice President and a majority of either the principal officers of the executive department or of such other body as Congress may by law provide, transmit within four days to the President pro tempore of the Senate and the Speaker of the House of Representatives their written declaration that the President is unable to discharge the powers and duties of his office. Thereupon Congress shall decide the issue, assembling within forty-eight hours for that purpose if not in session. If the Congress, within twenty-one days after receipt of the latter written declaration, or, if Congress is not in session, within twenty-one days after Congress is required to assemble, determines by two-thirds vote of both Houses that the President is unable to discharge the powers and duties of his office, the Vice President shall continue to discharge the same as Acting President; otherwise, the President shall resume the powers and duties of his office.

So before anyone starts to wonder why Speaker Boehner didn’t take his 15-20 minute window to repeal Obamacare or implement his solutions to the debt-crisis, the fact is that to have actually been cloaked with any of the powers of the Office of President of the United States, there would have to have been an invocation, twice, of Section 4 of the Twenty-Fifth Amendment.