Tag Archives: estate planning

Losing Parents: When Children Need Legal Protections

As parents, our biggest responsibility is to support and care for our children, but we don’t always think about planning for a future where a child is left without both parents. It’s a distressing topic, but one that’s important to consider and plan for because we cannot assume that family will automatically be able to take care of our children.  

I strongly recommend consulting an attorney who specializes in wills, trusts and estate planning for specific advice.  Norms and laws about insurance and guardianship differ greatly between different places, and also change periodically. Here are some questions to think about.

Should I get Life Insurance?

  • Life insurance is an effective way to ensure that your child is provided for financially in the event of one or both parents passing away.  
  • Consider whether the beneficiary should be the child (or children) directly or the other parent (with the children being secondary beneficiaries).  
  • Consult a lawyer who specializes in wills, trusts and estate planning, for advice about possibly creating a trust to look after the children’s interests and manage tax implications efficiently. 
  • Specific complications can arise if the parents are separated so seek guidance from an attorney on what steps to follow.

Should I Appoint Guardians and Custodians?

  • It is critical to appoint guardians to care for minor children in your absence.  
  • Guardianship and overseeing children’s assets are separate functions that can be performed by the same person or by different people.  
  • You can appoint guardians in your wills or through separate legal documentation. Ideally, both parents should appoint the same guardians. It’s a good idea to also name individuals who could serve as guardians if their appointed guardians cannot.  
  • Parents can appoint separate custodians for managing children’s assets, but It’s important that custodians and guardians work efficiently together. 

What can I do if my child’s guardian lives abroad?

  • It’s simpler to appoint someone locally; if the guardian lives far away or is based abroad, It could delay them getting custody of the child; in some situations, the child may be sent temporarily into a government-run program.  
  • If the guardian is abroad, plan where the children should go immediately until their international guardian can take over. 
  • With an international guardianship, consider whether  your child will be comfortable living and studying in a different country- an issue the US courts may examine.
Appoint a guardian your child trusts

What will a  Guardian do?

  • Choose guardians who would provide an environment and upbringing that would be consistent with what you envision for your child. 
  • Consider someone who is familiar  to the child and who can provide stability and emotional support as they adjust to trauma and change. 

Should I Create a Will?

  • Create a will which specifies who would manage the child’s assets in your absence. Consider whether the person is likely to have a conflict of interest and whether they can be fully trusted to prioritize your child’s welfare.
  • The will should consider scenarios where one or both parents are no longer alive. Ideally, both parents’ wills should be such that the management of the children’s assets is consistent and smooth.  

Should I Create A Trust?

  • While a will can ensure the inheritance directly goes to the child, a parent may also want to consider whether the child gets control over the inheritance on attaining majority, or, whether you want another person to manage their assets for a longer period.  
  • Some parents give children a percentage of their inheritance when they attain certain age-based landmarks (for example, 50% at age 30 and 50% at age 35).  
  • It may be advisable to create some sort of trust for the  child’s benefit – from the perspective of tax implications or better management of funds. 
  • If you have assets in India, carefully consider the ability of the person appointed to manage the child’s assets to handle legal and practical issues in India. You may wish to create a different structure for managing your assets abroad.

This article is intended for informational purposes only. Individual circumstances differ for everyone. It is always advisable to get professional advice specifically suited to your circumstances.

Svati Kania Shashank is a lawyer practicing in New York for over 20 years. 

Edited by India Currents Contributing Editor, Meera Kymal

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Ask a Lawyer – When Aging Parents Need Help With Legal Affairs

If you immigrated to America and have aging parents in India, you are facing a common dilemma – how to help parents who are increasingly unable to manage their own affairs. These complicated situations could happen unexpectedly, so be prepared in advance to face questions like these:

How do I manage the property or assets of an elderly parent impaired by illness, typically, stroke or dementia?

How do I arrange funds for healthcare? I find it difficult to transfer money between India and the U.S.

What do I do about making critical healthcare decisions like putting my parents on a ventilator or proceeding with surgery ?

What You Need to Do in India

Create a Joint Account

  •  Ensure that all bank accounts and other property holdings of your parents are joint, with the ability to sign in a “either or survivor” capacity. This also applies to safety deposit boxes. 
  • Frequently, these are held jointly by two parents to begin with, and then become singly-held upon one of them passing. It is helpful to have an additional holder who is fully functional at all times.

Establish Nominees and Power of Attorney

  • Appoint a nominee for each account, so that someone can access the accounts if the main account holder passes away.
  • Prepare a power of attorney and if possible submit it with the bank. This will allow the person with the power of attorney to operate the accounts, investments or safety deposit boxes.
  • Check with the bank to find out if they accept a power of attorney for the account in question what language needs to be used.
  • Ensure that there is a general power of attorney allowing someone to handle the parent’s affairs, including matters relating to real estate (which may require specific power of attorney – please check with a lawyer).  This way, sales of houses and other property are easier to manage.
  • Banks in India have their own rules and restrictions about who can be a signatory, or nominee or a power of attorney holder on an account, so consult with senior bankers or finance planners.

Prepare a ‘Valid’ Will and a Living Will

  • Make sure that there is a valid will which clarifies the property division. Also, investigate the possibility of having a “living will” which specifies the person’s wishes in terms of their health care.

Keep Visas Current

  • Ensure that the parent living in India has a valid visa to travel to the United States should the need arise.  
  • More importantly, make sure that you, a US resident, who might have to travel to India suddenly, have a valid visa at all times. 
  • If you have recently obtained US citizenship, please apply for an Indian visa on an expedited basis.

Access to Cash Flow

  • Ensure that there is access to cash flow, since Indian hospitals often need significant advance payments. 
  • Check with your banks here in the US and in India about money transfers and ensure you have processes in place should the need arise. 

Tax Implications

  • There may be tax implications in the US with having your name on bank accounts or other investments in India. You may be required to file tax returns in India. Please talk to a tax advisor or accountant in both places.
  • It’s good practice to consult with a lawyer, especially with respect to estate planning and wills.
  • In certain circumstances, it may make sense to get advice from estate planning experts, both in India and in the US. Tax considerations and implications on cross border assets can be complex and extensive.

 

What You Need to Do in the U.S.

Bank Accounts

  •  Ensure that there are multiple signatories on bank accounts, investments accounts, safety deposit boxes etc. who can sign individually (not jointly). 
  •  If, for any reason, this is not possible, provide a power of attorney to a trustworthy person, who can operate accounts and manage assets should the person become incapacitated.

Prepare the following Wills and Establish Power of Attorney

  • A will (which provides for a division of assets upon passing) 
  • A living will, which specifies who is in charge of medical care and decision making should the patient be incapable of making decisions and also provides guidance on the patient’s care preferences, such as the extent to which life support can be used 
  • Seek advice from asset planning professionals, accountants and attorneys, both, for the parent as well as the child/caregiver. The will and other documents may need to be structured in very specific ways.
  • Power of attorney, which provides power to another person to manage the affairs even within their lifetime, should they become incapacitated).  
  • File the power of attorney with a bank so that there are no complications at the time of usage.  

Tax Implications

  • There are several tax disclosure and payment requirements in the US. The US taxes its residents on their worldwide income and needs declarations of their assets worldwide. Please take this into consideration and consult a tax professional for advice.

 

This article is intended for informational purposes only. Individual circumstances differ for everyone. It is always advisable to get professional advice specifically suited to your circumstances.

Svati Kania Shashank is a lawyer practicing in New York for over 20 years. 

Edited by India Currents Contributing Editor, Meera Kymal