Transcript - Retire Well, Retire Happy

MALE SPEAKER: People can own things in different ways, different manners. So you can own let’s say a bank account that’s in your name along, or a house or anything like that, but you can also own that type of an asset in your name with somebody else. And you can own it with somebody else many times as let’s say a joint ownership. And that’s very important because the way you own things is going to affect the way those things are transferred if you pass away.

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INTRODUCTION: Welcome to this edition of Retire Well, Retire Happy with your host, Anne Nelson, an Australian look at reinventing yourself for retirement and getting yourself retirement ready. It’s always fascinating getting to know what people are getting up to in retirement, how they are supplementing their incomes, pensions, where they have chosen to live, how they are filling their time, what charities they are supporting and what adventures they are having. And we’ll also talk to experts in their fields, including investing, health, estate planning, financial advisors and seniors health care.

ANNE NELSON: Some problems are easy to solve, others however require lawyers. It’s always best if you have or think you might have a legal problem to at least consult with a lawyer to decide if you need one. Hi, I’m Ann Nelson, your host for today’s show. My guest today is Jules Haas, a New York based attorney with over 30 years of experience. His areas of practice include real estate, estate planning, probate and elder law. Jules has participated in numerous podcasts in the past. Today Jules is going to be tackling some common questions he gets asked about, mainly to do with estate planning and asset planning, and also a little bit about elder law.

Hi, welcome back to the Retire Well, Retire Happy show. And today I’m very privileged to welcome on the line Jules Haas, an attorney based in New York City. Welcome.

JULES HAAS: Yes, hi Anne, and how are you today? Thank you for inviting me.

ANNE: I’m great thanks. And you play a very important role in our world, being an attorney. Would you like to give the listeners a bit of a background on yourself before we get into some legal stuff?

JULES: Sure, I’d be happy to. So I’m an attorney. My office is in midtown Manhattan in New York. My practice really expands throughout the New York metropolitan area, and as a New York attorney, what I speak about is really based primarily on New York law. A lot of the principles I talk about really relate to people in general. I’ve been practicing for 35-odd years and most of the areas that I work in relate to estates which include wills, estate planning, probate, estate administration, guardianship and also a fair amount of real estate transactions. And really, a lot of those things sort of go hand in hand. So I’m sort of familiar with a lot of the different issues that probably face many of your listeners.

ANNE: Thank you. I heard that you’ve spoken before publicly on podcast shows and I was intrigued to know what the common questions that you get asked?

JULES: Okay, well, you know I think that whenever I speak either on a podcast or in person, one of the things that folks really need to just sit back and think about is okay, I have certain assets, I have certain things constituting my estate, what do I do, how do I deal with this. And the most important thing from starting (at) square one is to really understand what you own and how you own it. And like I said, what I talk about really emanates out of New York law but I think the principles really relate to most jurisdictions. So I’m going to just give you an example. People can own things in different ways, different manners. So you can own let’s say a bank account that’s in your name alone. Or a house or anything like that. But you can also own that type of an asset in your name with somebody else. And you can own it with somebody else many times as, let’s say, a joint ownership. And that’s very important because the way you own things are going to affect the way those things are transferred if you pass away. So if you pass away and you own something in your name alone, that asset is going to be a part of your estate, and it’s going to be controlled by your will if you do a will, or it’s going to be controlled as an administration asset if you don’t do a will. However, if you have an asset let’s say jointly owned, it’s automatically going to go to the person you jointly own it with, regardless of what you say in your will. So it’s very important to understand that and the next part of that principle is if you own various things, like life insurance, retirement funds where you name a beneficiary, again, those assets automatically go to those folks. So it’s really important to start right at the core and understand what you own. So if you're sitting down and thinking about doing an estate plan, you're let’s say writing a will, you should you know understand it. Okay, I’m writing a will but this will is not going to cover my house because my house is jointly owned with somebody else. So even if the will says it goes to one party, the house may really end up going somewhere else. You know, when I speak to folks, whether it’s in a podcast, whether it’s in person, and I talk about that principle, that’s usually the first thing I usually get, you know, 50 people raising their hands saying, Oh, really? How does this all work. So that’s sort of like basic principle number one. So I hope that is helpful to your audience.

And then once you do that you can sort of think about well, how do I want to prepare my will, how do I want my assets to be situated. Do I want to put somebody on a bank account. Do I want to name so and so as a beneficiary of my life insurance policy. You know so it really lends itself to getting into other thought processes of how you're going to handle your estate.

ANNE: Well thanks for explaining that. That was very helpful. So you really need to think about all this when you buy something I suppose. If you perhaps went into buying a house with your sibling, then being a joint owner may not be the best (if) a few years down the track you marry and you want YOUR share to go somewhere else. Is there another way you can buy it?

JULES: Well again, this goes towards property ownership. So I’ll use the example that you gave. Here in New York if you own that property with your sibling, as a joint owner, joint tenants with rights of survivorship, and you die, your sibling then would own the whole property. However, if you put down on the deed that you own it as what we call “tenants in common” then each of you would own half. So if you die, your half interest in that property would then go to your estate. So it would go, assuming you leave your estate to your spouse, your half would go. So your spouse would end up owning that property with that sibling. Now, whether or not that’s a good, you know, the way you would want it planned given the choice at the beginning is a different story. But these things all lend themselves to understanding what you're doing. I’ve seen a lot of cases where clients come to me and they'll say – you know, let’s say a young husband and wife or whatever, and they’ll say oh yeah, I want to leave everything to my wife or my husband and I have a retirement fund or I’ve got life insurance or whatever, and then I’ll say well who’s the beneficiary, and they’ll say oh, you know what, I haven’t thought about this because I bought this let’s say 10 years ago before I got married and I put down my parents as the beneficiary. Well that’s really not what they want today because now they’re married or they have children. But they never thought about dealing with this because it was something that was done a long time ago. So this situation also lends itself to problems when folks get divorced because they have an ex-spouse on various things and things you know sort of get very complicated when all of that happens. So again, it’s the basic principle, understand what you own so you understand where it’s going to go and how you want to deal with it in dealing with an estate plan.

ANNE: Thanks for explaining that. And what happens when we have our retirement savings from I think you call them 401Ks, and they’re still in process. You haven’t retired, you haven’t transferred them into something else. Is that again whoever you put down as the beneficiary?

JULES: That’s right. What’s going to happen is, usually when folks start a retirement fund, usually there’s a form, like life insurance policy, and you name, there’s usually a place where you name a beneficiary. So you have to see, well 10 years ago or 15 or 25 years ago who did I name as the beneficiary. Most people may forget this. And you know, you can go back and change it. It’s simple, you just have to speak to the plan administrator. So that’s very important. Sometimes people may not have put a beneficiary on. And in that case then it would probably be payable to their estate. But again, you’ve got to check to see how the plan works, because the plan may have rules and other parts of the agreement that say, well, if there’s no beneficiary then it goes to the next of kin or whatever. So again, you’ve got to go back to the plan administrator and check the original documents and see what happens, where that asset goes when you pass away and it’s paid out. And then of course there are other issues after that because once it’s paid out, at least here in New York in the United States, most of (those) retirement funds are going to come out as income, so you need to be aware of those rules and you know spouses can roll it over and people can defer the income and it’s just a lot of stuff that you just need to sort of have some basic thought about so you understand what’s going on.

ANNE: And I suppose when we take them out when we’re really young, we probably don’t put a lot of thought into it. We’ve probably got our parent’s names as the beneficiary when we first start out working.

JULES: Right, it may be. Or you might have somebody that you don’t want now to be the beneficiary, like an ex wife or someone like that, or a friend or an ex close friend, you know, who you had a relationship with but now you no longer have a relationship with. So there’s a lot to consider. You know when you think about it, it’s really not that hard. But given the fast pace of everyone’s lives these days, you know, with the Internet and email and everything and everything gets done in 5 seconds, it takes just a little bit of patience and time to kind of take a deep breath, sit back, spend an hour or two, think about what you're doing so you get it right.

ANNE: And getting it right is getting it drawn up by a lawyer. I’ve heard of people that have had wills that they’ve done themselves and they could have been legal but they don’t because they haven’t had enough witnesses or something like that. So, yeah, in this do it yourself world, some people are going down that track but they can come unstuck.

JULES: The answer to that is yes. You know there’s a lot of avenues that people follow nowadays to sort of do it yourself in a way. You know you can go on the Internet and there’s a lot of information about doing your own will or whatever and I can’t comment on whether that’s good or bad, if it works for you fine. But there are certain cautions because when you prepare a will, for instance, again, in New York, it has to be executed, in other words signed in a certain way. There’s a procedure that the statute requires. So it has to be signed and you need two witnesses. And then the witnesses have to say you sign and the witnesses have to sign in each other’s presence and all of that goes towards the validity of the will. So just to give you one example of one case I was involved with. There was an estate where there was a will and as it turned out once he died there was a will that we looked at and the decedents signature was on the will. And then there was a notary public, it was notarized, which is not technically proper way to witness a will, and then below that there were two other witnesses. Well, I represented people in the family who were not part of the will who wanted to contest it. And as it turned out what we found out was that the witnesses actually did not sign the will in the presence of the decedent, nor did the decedent sign it when the witnesses were there. As it turned out, all that happened was that the decedent signed his will, took it to a notary and had it notarized which would make the will invalid. Lo and behold we found out that the witnesses witnessed the will (or?) put their signatures on the will after the fellow died, which obviously is not a good thing to do. And so we ultimately had that will invalidated. So again, these are various things that turn up or people don’t have the witnesses sign in the proper manner. You can’t have one witness sign in one place and then take it down the block and have another witness sign in another. So these are all the things that when you have it done professionally, it’s less likely to occur that these variations happen and wills can be subject to a will contest. And many wills ARE subject to contest, even when attorneys do them for various reasons, for instance undue influence and fraud and all of that. But those are all different types of problems unto themselves.

ANNE: Sounds like it’s a real mine field out there. What are the basic things that anyone should have in place legally to protect their estate and to protect their wishes I suppose of what they want to happen?

JULES: So the first thing is as we said, or as I said, we should look at your property. It’s obviously a good idea to have a plan and to formulate it in a will because if you don’t have a will, again this is New York law and it’s probably true most places, if you don’t have a will and you have assets that are in your name alone, if the will is not going to control where the – then they’re’ going to be controlled by the law of the state where you live, your domicile. So in New York law is going to say who’s going to inherit your property. So for instance if you don’t have a will and you die in New York, your estate is going to go to your spouse and your children if you have a spouse and children. If you don’t have a spouse and children, it’s going to your parents. If you don’t have parents that survive you it’s going to your siblings, or your nieces and nephews. The real problems arise that a lot of people who are older don’t even have those next of kin. They have cousins, first cousins, second cousins and sometimes it becomes almost impossible to figure out who the next of kin are. And so you have kinship issues about who’s inheriting an estate. So just to go back and summarize, know your assets, think about a plan, effectuate the plan the way you want in a will or even a living trust, or something so your desires are clearly set forth.

ANNE: These modern times people aren’t necessarily getting married anymore so how long is it, a relationship recognized under law how long do you have to be together before the partner gets recognized above any other family members?

JULES: Okay, well in New York the partner will never be recognized. There’s no such thing as a common law marriage in New York. I can’t speak to other jurisdictions. So if you're not legally married, then you're not going to have a right to inherit. You could be the best of friends for 100 years, but that’s not going to do you any good. So the best way to deal with that is to write a will and say leave my friend my estate. And so a lot of those issues have been resolved in a way because of you know, New York recognizes gay marriage, has a lot of jurisdictions whereas in the past those problems existed when there was no recognition of that marriage. So that takes that problem out. But if you have a good friend, regardless of how long you know that friend, in New York, just being good friends is not going to help.

ANNE: I see. Now elder law is something that we’re hearing a lot more about these days. Can you help me understand about elder law?

JULES: Sure. Now a lot of these things have very broad definitions. What is typically or commonly referred to as elder law is really more in the way of what we call Medicaid type of planning. I’m not sure if your entire audience is familiar with what we call Medicaid here in New York or in the United States. But Medicaid is basically government paid health care. So let’s say somebody is in a nursing home or some other type of situation and they have no assets, then Medicaid which is the government provision for this care, is going to pay for it. In order for Medicaid to pay, you basically have to have no assets. So elder law really involves a lot of things, but one of the mainstays is to plan someone’s estate so they basically diminish their assets in a proper way that the law allows by transfers and trusts and whatever so their long term care can be paid for through government assistance, and their assets won’t be eaten up by the extreme cost of let’s say nursing home care or whatever, which can cost $15,000 a month. So that’s Medicaid. So that’s really one of the primary goals in elder law, so to speak. There’s a lot of other things. You could say elder law encompasses regular estate planning and some of the stuff we already spoke about but that’s one of the main aspects to it.

ANNE: Thank you for explaining that too. With transferring your assets to other people, to diminishing your assets, is there any rules about how much you can give away in any year or any time period to be still eligible for this Medicaid?

JULES; Okay, yes there is. I mean Medicaid has very specific rules. There’s a look back period of 5 years, so basically Medicaid can look back and see what assets you owned during the last 5 years in order to qualify. So you know you have to sort of qualify the transfers that you make so that you would qualify for Medicaid. So there are a whole host of very complicated rules that you really just need to be aware of. And it just goes into whatever kind of plan someone is sitting down and doing. I personally in my practice, I have folks that I know that deal with the Medicaid rules all the time. I typically don’t deal with the Medicaid transfers so much, and the Medicaid applications which can be quite complicated. But I do have folks that I work with that do these all the time.

ANNE: Yes, it can be tricky when we get to the end of our life. And that’s the problem, we don’t know how long we’re going to live, and not everyone ends up in a nursing home needing that extra care either.

JULES: Right. Exactly. Exactly.

ANNE: So I see you say that some problems are easy to solve and others don’t, they require lawyers. So in summary can you tell us what the bare basics that we need to have. We need a will. Are there other things that we need to have as well.

JULES: Sure. Sure. A will is a good thing. A living will which is also a document that states that you don’t want life support. That’s an expression of intent. Health care proxy here in New York, it’s called that, and it’s basically a document whereby you can name someone or some other folks to make health care decisions for you if you're unable to do that. And the power of attorney which again gives somebody else the authority to make decisions about your assets if you are not able to do that. Living trusts that some people do when they transfer their assets into trusts and appoint other folks as trustees to help them make decisions if they’re unable to do so. The thing about all of these things and whatever you're doing is that everybody’s situation is different and so you really need to sit down and understand what you're doing and sit down with some folks that you can talk to about what you're doing so you can make decisions that really relate specifically to what your goals and intentions are so it comes out the way you want it to be. So there’s no cookie cutter so to speak perfect solution for everyone because everybody has got different lives. You know, some people have multiple marriages, some people have children from different marriages, some people don’t have any close relatives, some people have close relatives that they don’t like and they don’t want to have anything to do with. You can just go on and on and think about all the different relationships that people can have and the different assets that they have, real estate, businesses, bank accounts, financial accounts, you know, so it goes on and on. So you basically just have to look at everything and try to assess it all and then make the best decisions that you can after you look at all the information.

ANNE: Now before we finish up can I just ask you about executors? How important is it who we pick as our executors. Should they be family members or would it be better off not being a family member? And how many is too many executors.

JULES; Okay, so an executor is someone you name in your will to handle your estate. And also in a will or trust or whatever you can name a trustee, and the executor and trustee are really people that you trust to administer your assets and deal with the property that you leave according to the directions and instructions in your will or trust. So it’s important for that person to be someone who has common sense, they don’t necessarily need to be an expert because they can hire attorneys and financial advisors, and all of that, but they just need to have common sense and they need to be trustworthy and you need to have confidence they’re going to do what you want them to do. Ninety nine percent of the time obviously they’re family members and it’s always good to have a family member, particularly if you trust them and the family member is going to have the most emotional feeling towards you and want to do the right thing. So family members are fine. Usually, who do you name? You name a wife, or a spouse. You name a child, you name somebody else that’s close to you, or even a friend. So that’s fine. Most people will do that and that’s an important thing and it’s not really that difficult for most people to pick the people that they trust the most.

ANNE: And the number of executors?

JULES: Oh, the number? You know, you can name one, you can name two, you should always name alternates. When you name more than one or two, even when you name two you run into the problem of what happens if these folks disagree. So you know about what to do about something. So it’s always good that when you pick people together that you know that they’re going to work together as opposed to having disputes among them. So that’s usually, it’s either one or two and some alternates, that’s usually the best way to go.

ANNE: Well thank you very much. It’s been really interesting, and informative. So if anyone wanted to contact you what’s the best way to get on to you, Jules?

JULES; Sure no problem. So you can always Google me which is easy. You just type in my name, Jules Haas in Google and it’ll come right up, you’ll see my website, JulesHaasattorney.com My phone number here in New York City is 212-355-2575 and I also write. If you go to my website and you’ll see I write a blog and I publish an article every week about you know some aspect of probate or estates or guardianship here in New York. So it’s always easy to find me.

ANNE: Thank you. I’ve had a look at the website and you’ve got some very handy videos on there as well. Thank you very much.

JULES: Okay, you're very welcome, it’s a pleasure.

You’ve been listening to the podcast show of Retire Well, Retire Happy with your host, Annie Nelson. For more information on the show’s guests and being retirement ready, pop on over to my website www.annenelson.com.au. On twitter, Instagram and Facebook. Until next time, be happy, stay healthy and help somebody.