Estate planning is one of the most important steps a person can take to make sure that their final property and health care wishes are honored, and that loved ones are provided for in their absence. Though often overlooked or put off in favor of more immediate concerns, a comprehensive estate plan can resolve a number of legal questions that arise whenever anyone dies.

Trusts have become an integral part in estate planning. A trust is a fiduciary arrangement that allows a third party (a “trustee”) to hold and manage the assets of the creator of the trust (the “grantor”) on behalf of the grantor’s beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries. Trusts are used for minimizing estate taxes and can offer other benefits as part of a well-crafted estate plan. Some of those other benefits include:

• Controlling Wealth. With a trust, a grantor can specify the terms of the trust and control when and to whom distributions may be made. A trust can also be set up as a revocable trust so that the trust assets remain accessible to the grantor during his or her lifetime while designating to whom the remaining assets will pass thereafter.

• Wealth Protection. A properly constructed trust can help protect an estate from creditors of the estate’s heirs or from beneficiaries who are not able to manage money responsibly.

• Privacy. A person’s last will and testament is a public document (after filing with the courts) and a matter of public record. However, a trust is a private document and may allow assets to pass outside of the court system and remain private.

Special Trust for the Elderly

Estate planners and elder law attorneys are often faced with the challenge of protecting the assets of an aging client that is vulnerable to dishonest relatives, friends and caregivers.

Clients typically want to maintain control of their assets as long as practically possible, but also want to protect those assets from the undue influence when the client is vulnerable, either due to age, health or other reasons. These two goals conflict with each other because if a person retains the power to change his estate plan, that person is susceptible to be influenced by outsiders. On the other hand, taking away the power to change the client’s estate plan, the client may feel that he or she has been “handcuffed” from doing as he or she pleases.

Forming a special estate planning trust for the elderly resolves these problems in a way that many clients feel comfortable with.

Example:   Jacob and Rachel have been happily married for 52 years, and were living well into their seventies. They had three adult children and many grandchildren. Jacob and Rachel were always accustomed to having complete control of their assets, but their ultimate goal was to divide their assets evenly among their three children. Unfortunately, Rachel passed away, and Jacob became depressed. One day, Jacob befriended Marilyn, who has been struggling financially.  Over the next ten years, Jacob mortgaged his house and spent upwards of $800,000 on Marilyn, and was eventually forced to sell his house and move in with his kids.

Had Jacob and Rachel planned ahead and created a special trust designed for the elderly, Jacob and Rachel would have been free to control their assets as they wish, including buying, selling, giving away and spending any money or property. However, when either Jacob or Rachel would have died or become disabled, the trust would have become irrevocable and no longer changeable.  As a result, when Rachel passed away and Jacob became depressed, he would no longer have had the ability by himself to mortgage his house, sell his house, or spend considerable amounts of money on Marilyn, or anyone else for that matter.

Forming a special estate planning trust for the elderly would have assisted Jacob and Rachel in protecting their hard earned wealth from being negligently squandered away, and would have allowed the wealth to remain intact to be passed down to Jacob and Rachel’s children.

Not many clients will walk into a professional advisor’s office and identify their need for asset protection during a future period of vulnerability. The Trusts & Estates Practice Group at Yedid & Zeitoune, PLLC collectively work together with each client to ultimately put together the best asset protection model for each client’s needs, taking into account the need to balance control with protection. May Hashem bless us all with long, happy and healthy lives – amen!

The attorneys in the Trusts & Estates Practice Group at Yedid & Zeitoune have a combined 16 years of legal experience and are ready to assist you with all your estate planning needs.

Isaac Yedid, Esq. and Raymond Zeitoune, Esq.

Yedid & Zeitoune, PLLC

1172 Coney Island Avenue Brooklyn, New York 11230

Phone: (347) 461-9800    Fax: (718) 421-1695               Email: [email protected]

NYC Office – By Appointment Only: