Douglas Goldstein: Ely Rosenzveig has been a lawyer for 30 years.
He specializes in elder law and he helps clients also with tax issues like dealing with
the FBAR.
We talk a lot about the financial issues of retirement but there are a lot of legal pitfalls
that people come across when planning for retirement.
What’s the worst thing you’ve seen happen that maybe we could tell people not to do
today?
Ely Rosenzveig: I suppose that people just don’t plan and part of it I suppose is dealing
or living in the present in the moment, part of it is that in doing retirement planning
you have to deal with the eventuality of death and as you plan for yourself and for your
heirs, and that’s an uncomfortable subject that people subconsciously avoid, you have
to get over that emotional hurdle and confront the issue constructively because failing to
do so hurts you and also your heirers.
I suppose another common pitfall is that people do not do advance directives.
That’s fancy legalese for documents like the financial affairs proxy what we call in
the U.S. the power of attorney or a proxy for healthcare decision making, what we call
a healthcare proxy.
In Israel, of course, the equivalent is the and I’ve dealt with so many situations over
the years where people have failed to make or execute these relatively simple and inexpensive
advance directive documents, designating individuals to stand in their status, their proxies or
agents for healthcare and financial decision making and when that happens, when they don’t
do this and health issues intervene that render the person unable to make on their own financial
or healthcare decisions and there is no advance directive in place so guardianship would likely
have to be authorized by a court of law and that’s an awfully expensive and emotionally
draining experience to go through in the courts.
Douglas Goldstein: Can you give me a real-life example of maybe you saw where someone didn’t
plan ahead and what was the downfall?
Ely Rosenzveig: The downfall was that a guardianship had to the what we call in New York in article
81, a guardianship had to be prosecuted, had to be forwarded in that person’s behalf
and it was contested by an heirer by a child, a daughter in Florida, and because it was
contested, you had a mini war in the court room and when all was said and done, we prevailed
and got the guardianship in place but after all was said and done it cost every bit of
$100,000 and legal fees.
That’s a pretty bad and yet good example of what can happen if you don’t do the proper
planning.
Douglas Goldstein: One of the other areas that we see a lot in terms of financial planning
for people is that because women often outlive their husband, they have special needs in
terms of finances.
Is it similar in terms of planning on the legal side for women who statistically will
live longer than men?
Ely Rosenzveig: They certainly do.
The social security administration put out statistics just recently suggesting that women
who turns 65 today is expected to live to nearly 87, I think 86.6 years and a man until
84.3 so that’s a difference of a little more than two years between man and woman.
A woman does typically outlive a man as we all know and what that means as a practical
matter, from a legal perspective is that a woman must make sure that she has alternatives
to her husband on these advance directive instruments that we mentioned so she needs
to have power of attorney agent or proxy, a healthcare proxy and a state executor, mentioned
as an alternative to her husband in these documents so that in the event that she does
outlive her husband there is someone in place who can help care for her needs.
She must also have and this sounds simple and easy but it is and as a practical manner
and most people don’t do it but should really and that is a woman should have the right
financial advisory and legal professionals in place to help her navigate the morass of
issues that may arise when she finds herself, breadth of her spouse and must move forward
on her own.
Douglas Goldstein: Americans who
are moving to Israel, are there different legal concerns that these people have like
do they have to have a different will or have two wills, are there other worries that they
have regarding asset transfer and investing?
Ely Rosenzveig: I think asset transfer is a big issue, it’s an issue that I’m asked
quite literally daily and a person has U.S. assets, assets stateside and assets in Israel,
assets that are dollar-denominated in the states and that are in the shekels here and
they want to transfer or convert dollars to shekels and they don’t want to have to deal
with all the and other hoops although the expenses, fees and charges and conversion
percentages the banks charge.
How do you navigate that?
Well one thing to do as a practical matter, if the need is not large, nowadays you can
actually use a credit card through your bank ATM, we do that.
At Bank Leumi, ATM in the center of Beit Shemesh where we live and you could take this credit
card and chase through Citibank, both have these features and you can draw from the ATM
a sum from a U.S. based account, a dollar denominated account, have it converted into
shekels without any fees, charges or conversion percentages, you get the Shar Hayatzig, the
actual up to the minute official conversation rate between the dollar and the shekel reflected
in the transaction without any fees whatsoever.
That’s for small transactions.
If you have larger transactions supposing you are buying a home or have to make a down
payment on a home or a car, that’s a large transaction, that’s for sure and you need
to convert $25,000 or $100,000, whatever the sum, a larger sum than the $2500 to $5000
a day that you can do by credit card at the ATM.
In that event, what I recommend just for my experience and it’s pretty substantial is
that you work through a legitimate forex, transfer agency and there are many in Israel.
Douglas Goldstein: And you feel comfortable with working with them even though they are
not banks?
Ely Rosenzveig: The legitimate forex transfer agencies are just that.
They’re legitimate, they’re credible, they’re as credible as banks in my judgment
and you can transfer or convert dollars, large sums of dollars to shekels, there is a fee
involved but it is a fraction of what you will incur at any bank and that certainly
is a very good option for asset transfers.
Douglas Goldstein: Let’s wrap up by talking about the question of wills, because this
is something that comes across my desk a lot, people say “Doug I have a U.S. brokerage
account or IRA account that you deal with and I also have my home in Israel as well
as some accounts here, do I need to have two wills?”
What do you answer when people ask you that question?
Ely Rosenzveig: I know this sounds Doug like a roundabout answer, but if you will allow
me a moment I’ll just leave the ground work because it’s not a simple question.
A key issue that bears on the answer to your question of whether one should have a U.S.
will and alongside than an Israel will has to do with what types of accounts one has,
how their assets are structured both in Israel and abroad.
So for example and most specifically joint tenancy rules, as you well know we talked
about it when I had the privilege of meeting you recently, joint tenancy rules work very
differently here in Israel than in the states.
For example, a bank account or a house joint ownership, it usually works in the U.S. by
operation of law as what we call a joint tenancy with right of survivorship which means that
the survivor keeps the account or the house after the other joint holder passes.
In Israel, joint tenancy does not work that way.
Joint tenancy means that upon death of the one joint holder, the account or house held
jointly is divided as follows.
The surviving joint holder keeps one half and the children get the other.
That may not be the way that the joint holders really want the asset to pass and in the event
that there are assets held jointly in Israel and in the U.S. and you have dollar denominated
assets in the states, shekel denominated assets here again where you’re holding assets jointly
in both here and abroad, I would recommend that there be a U.S. will and an Israel will,
the U.S. will addressing itself to U.S. based assets and the Israel will addressing itself
to Israel based assets and alongside that advanced directives as well in both jurisdictions.
Douglas Goldstein: How can people learn more about your work and follow you?
Ely Rosenzveig: My website is www.ejrosenlaw.com.
I can be reached by phone in Beit Shemesh and I have offices in Jerusalem and Tel Aviv
as well.
My Beit Shemesh number is 02-645-7067.
I’ll be heading stateside this coming Saturday evening and my direct line is 914-816-2901.
We have offices in downtown White Plains at 50 Main Street.