New York Probate Lawyer Blog

The New York Probate Lawyer Blog has had many posts regarding issues and requirements of an Article 81 Guardianship Proceeding. These proceedings involve a determination as to whether an individual is incapacitated and, if so, the appointment of an appropriate Guardian.

The determinations that are made by the Court involve many different persons which may include the alleged incapacitated person; a petitioner (usually a family member); and a Court Evaluator. In some cases third parties are involved such as a Nursing Home, Adult Protective Services, New York State Mental Hygiene Legal Service and Medicaid.

A Supplemental Needs Trust ("SNT") is often a critical component of the Guardianship process. In a typical situation a person who is incapacitated may be entitled to a large monetary award due to a personal injury action. Since the incapacitated person would also qualify for government benefits such as Medicaid and SSI, the SNT provides a means by which the monetary funds can be set aside for extra benefits without the loss of the governmental entitlements. In the Guardianship proceeding, the Court authorizes the Guardian to establish the SNT and to transfer the funds into the Trust thus avoiding any loss of benefits. The SNT trustees, who are also designated by the Court, then administer the trust for the benefit of the disabled person. The trustees selected are commonly the family members who are the Guardians.

Once the SNT is established, the trustees can make expenditures for such things as computers, vacations, extra care and other items which the governmental benefits do not pay for without losing the governmental coverage for other items such as medical care. A good explanation of this process is provided in a recent case decided by Justice Howard H. Sherman on April 19, 2012 and reported in the New York Law Journal on May 14, 2012 entitled Matter of Geraldine R. In this case the Department of Social Services (Medicaid) claimed that the Supplemental Needs Trust trustees did not need to obtain prior Court approval to pay for items such as a vacation, purchase of a computer, printer and television, and educational programs. The Court found that it had authority to approve these items prior to the expenditure.

In fact, it is the usual and appropriate manner for trustees of a SNT to obtain prior Court approval of their expenditures. The trustees can then avoid a later denial by the Court and the requirement that they reimburse the trust for improper expenses.

I have represented many clients in connection with Guardianship proceedings and the establishment of a Supplemental Needs Trust. These cases require a Court hearing and I work closely with my clients and their families to help them through what can be a complex court process.

Continue reading "New York Guardianship Proceedings Also Involve Payments from a Supplemental Needs Trust" »

New York Estate Lawyers assist their clients with many types of estate planning documents such as Last Wills, Living Wills, Health Care Proxy's, Living Trusts and Powers of Attorney.

All of these papers are generally created to work together so that a person's estate plan and lifetime directives are clear and can be followed without complication or estate litigation. A New York Statutory power of attorney empowers the appointed attorney-in-fact to make decisions regarding various types of matters such as business or real estate matters. A power of attorney is a lifetime directive and the authority granted by the power ends at the time of a person's death. However, decisions and actions made by the attorney-in-fact can have significant consequences after the death of the principal. For example, when an attorney-in-fact executes a deed transferring real estate, or transfers assets in various bank or brokerage accounts, during the lifetime of the principal, provisions that were made in Last Wills or Trusts may no longer be effective. This is because the assets that were meant to be transferred by such testamentary documents may not be owned by the testator in the manner anticipated when the estate plan was created.

Another potential problem is that the attorney-in-fact may use the power of attorney to amend or change some of the estate planning documents such as a Trust Agreement. This was the situation encountered by the Court in Perosi v. LiGreci, decided by the Appellate Division, Second Department on July 11, 2012. In Perosi, Mr. LiGreci had created, during his lifetime, an irrevocable trust and appointed his brother as trustee. LiGreci also created a power of attorney appointing his daughter as attorney-in-fact. Shortly before LiGreci died, his daughter used her authority under the power of attorney to amend the trust and designate the daughter's son as the new trustee.

The Court ultimately found that the attorney-in-fact had the authority, in this instance, to amend the trust.

In view of the Perosi case, it is clear that naming a person as attorney-in-fact in a power of attorney requires serious consideration. Estate settlement and administration can be compromised by the actions of an attorney-in-fact who has the authority to change estate planning documents. It is a good idea to put precise language into trusts and other agreements defining to what extent, if any, an attorney-in-fact can amend or change these papers.

Individuals expend a great deal of time and expense in planning their estates through the use of Wills and Trusts. It is unfortunate where the actions of a lifetime attorney-in-fact can result in Surrogate's Court litigation because these documents were changed without the testator or creator him or herself signing the amendatory papers.

A complete review by a qualified New York estate attorney is imperative so that a person's intentions regarding estate distribution is set forth and can be implemented without modification or confusion.

Continue reading "A New York Power of Attorney Can Be Used to Amend a Trust" »

Most New Yorkers spend a significant portion of their adult lives figuring out ways to accumulate wealth. At a certain age, the focus tends to shift from the accumulation of wealth to wealth protection. At a certain age beyond that, the focus shifts to how to utilize that wealth in order to ensure a secure retirement. Around the same time, the secondary focus is what will happen to any leftover assets once you are gone.

As complicated as this process is for any New Yorker, the process can be even more complicated for a New Yorker who operates his or her own small business. The primary trouble for an aging New York business owner is that his or her wealth is much harder to calculate, as much of his or her assets are likely tied up in the operation of the business.

As a result, aging business owners have two primary choices when it comes to estate planning. On one hand, they can plan to sell the business for its fair market value. This option puts the full value of the business assets in the owner's proverbial pocket, from which he or she can set aside retirement money and carve out a plan for what happens to any leftovers at death.

In many cases, however, the state of affairs is not as cut-and-dry. Small businesses in New York are very often family affairs, passed down among multiple generations in some cases. A long-time pizzeria owner may employ some of his own children and even grandchildren, for example. When family livelihoods revolve around the family business, an estate plan that would sell the business for its proceeds just would not make much sense.

Instead, many New York small business owners choose to craft estate plans that transfer ownership interests in the business rather than a defined monetary value. After all, an ownership interest in a business can have a potentially unlimited value, even if its present interest is difficult to calculate. Additionally, the preservation of your business amongst your family members can give you the flexibility to transfer ownership subject to as many or as few conditions as you wish. Hands-on owners may wish to set out long term plans for the business even after they are gone, while others may wish to entrust the direction of the business wholly to a son or daughter.

These cases may be further complicated if some, but not all, of the business owner's family members intend to carry on the business. For those that do, an interest in the business may be an appropriate testamentary gift. For those who wish to pursue careers outside the family business, other gifts may be appropriate. No two estate plans are exactly the same, especially ones involving the transfer of a business.

For these reasons, an experienced New York estate planning attorney can be an essential ally. Don't entrust your personal and business assets to the laws of New York when your time comes. Make sure your assets pass precisely how you intended.
Business owners and their New York estate lawyers must be fully familiar with all of the documents and agreements that can effect an estate plan. These items include, shareholder agreements, partnership agreements, real estate deeds, commercial leases, life insurance policies and various types of retirement and pension plans. All of these papers must be fully understood so that their provisions and beneficiaries can be incorporated into the overall estate and lifetime gifting plan that is being developed.

In many instances estate administration and estate settlement can be disrupted where the terms of an estate planning document such as a trust or Last Will contradicts or is not otherwise in harmony with provisions in business papers such as shareholder agreements. A shareholder agreement may provide for the transfer of a business interest upon the death of a shareholder that is contrary to provisions put into a Last Will. Provisions in these documents that contradict one another can ultimately lead to Surrogate's Court litigation such as Will contests or construction proceedings. Not only can a lack of good planning result in estate litigation, the operation of a profitable family business may be disrupted where there is uncertainty as to whom the new owners will be and who has the present right to make crucial business decisions.

Continue reading "New York Business Owners Need Special Estate Advice" »

These days, New York estate planning attorneys are finding it far more common for New Yorkers to give a portion of their estate to charity. They can do this because the law recognizes charitable organizations as legal entities in the same category as ordinary persons. As a result of this characterization, a charitable organization is free to receive testamentary gifts - i.e. gifts from a person's estate - as if it were merely a transfer from one person to another.

Unlike gifts to ordinary persons though, lawmakers typically want to encourage charitable giving. Charitable giving tends to distribute the wealth across a broader spectrum of people or causes, rather than keeping assets tied up within a single family. As a result of these public policy theories, lawmakers have created tax incentives designed to encourage people to write charitable gifts into their wills.

A typical testamentary gift to charity can be achieved in several different ways. One of the most common ways to do it is to leave the charity a percentage of one's estate. A gift of this sort would read something to the effect of: "I give ___% of my estate to X Charity." The only trouble with this kind of gift is that its value is uncertain. The value of one's estate is a function of how much of one's assets remain at the end of one's life. Therefore, it is not until one dies that the charity will learn of the value of its gift.

Another common way to leave a gift to charity is to give a fixed amount or a particular piece of property. A gift of this sort would read: "I give $____ to X Charity" or "I give my property located at [address] to X Charity." This kind of gift is far more certain because in the first instance a fixed dollar amount is gifted. In the second instance, a property of a certain current value is promised, and the charity can reasonably predict its future value.

Another way is to grant the charity a remainder of one's estate once other beneficiaries are gone. Charities are potentially infinite in duration, unlike people. It is possible to leave certain loved ones your assets once you are gone, and for the charity to take the remainder of those assets (if any) once your loved ones are deceased.

Still another common way to leave a charitable gift is by making a charity the beneficiary of a life insurance policy. Because charities are "people" in the eyes of the law, a charity can be designated as a beneficiary to be paid upon the death of the policyholder, just like any ordinary person can. Similarly, charities can be named the beneficiaries of any retirement plan.
This is by no means an exhaustive list. A New York estate lawyer is best equipped to explain the nuances of each of these variations and to explain the other variations of charitable giving. In cases where the client wants to bequeath some or all of his or her assets to charity, there is no one-size-fits-all solution.

Continue reading "Giving Estate Assets to Charity" »

Contesting a will in New York is an uphill battle. After all, the purpose of a will is to commemorate the wishes of a person after they are deceased. Since the person in question is no longer alive to clear up any potential conflicts, courts tend to give tremendous weight to the provisions contained in the will.

The presumption, however, that wills are impenetrable documents is not absolute. On occasion, a dead person's decedents are able to convince a court that the will should not be enforced as written, or that it should be thrown out entirely. The reasons why someone might want a will overturned are numerous. Perhaps you have been excluded from a will when you don't believe the deceased would have wanted you to be. Perhaps you were included, but you feel that someone else should not have been included. Whatever the case, the following common grounds can potentially lead to a successful New York will contest:

The will was not properly executed

New York state law requires that the deceased must have signed the document with a declaration that the document is to be considered his or her will. Two witnesses must have been present during the execution of a will, and both must have signed their names to the document to certify their understanding of the deceased's intent. If any one of these standards is not met, a will contest action is likely to succeed.

The testator lacked testamentary capacity

In a will, the term "testator" is synonymous with the deceased: the person whose wishes are to be carried out. When the testator executes the document, he or she must generally be of sound mind, demonstrating adequate comprehension of what he or she is doing. In particular, the testator must understand (1) the nature and value of his or her assets, (2) the nature of the people who are to receive his or her assets, and (3) the legal effect of signing a will. If, once the testator is dead, someone contesting the will can demonstrate evidence that the testator was incapable of meeting any of these legal standards, the will contest may succeed. However, lack of testamentary capacity is a very difficult standard to prove.

The testator signed the will because of undue influence

As people age, they can naturally become physically and mentally weakened. In this weakened state, a person can become susceptible to the influence of others who have designs for the testator's assets. Often, the line is blurry between those who seek to influence a testator for legitimate purposes and those who seek to profit from the testator's weakened state. The standard for undue influence is one of extreme pressure that causes severe duress. The duress must be so severe as to cause the testator to lose free will in the distribution of their assets. Not surprisingly, this is a difficult standard to prove, as the testator's stand of mind is impossible to access once they are dead, and much of the evidence of the undue influence may be one person's word against another's.

If you believe you have sufficient grounds to contest a will, consider consulting a New York estate lawyer, who can help evaluate the strengths and potential weaknesses of your argument. New York will contests are difficult battles, but worth fighting if you have the proper evidence and a skilled attorney.

Continue reading "New York Will Contest Grounds" »

New York Estate Administration Attorneys are often confronted with questions as to whether a decedent was married at the time of death. The issue of marital status is important since a surviving spouse is a distributee (next of kin) under New York Estate Laws and is afforded certain rights in a decedent's estate. These rights have been discussed in previous posts in the New York Probate Lawyer Blog including a spousal right of election (Estates, Powers and Trusts Law [EPTL] Section 5-1.1 A) and a spousal right to an intestate share of the estate (EPTL Section 4-1.1).

The determination as to a person being married at the time of death involves investigation as to whether there was a valid marriage and, if so, was the marriage terminated by a valid divorce.

New York Estate Litigation may be necessary to provide an answer to these inquiries. As a New York Trust and Estate Lawyer, I often need to investigate such issues by obtaining and examining relevant documents such as marriage certificates and divorce settlements and divorce decrees to advise clients as to the decedent's marital status so that proper estate settlement can occur.

A recent case in the Richmond County Surrogate's Court provides an example of the complicated facts that can be involved in determining marital status. In Estate of Daniel Kelly, decided by Surrogate Robert Gigante on June 18, 2012 and reported in the New York Law Journal on June 29, 2012, the decedent and his spouse entered into a divorce Separation and Settlement Agreement on October 16, 2008. On that same date they appeared in Court and the divorce judge granted the divorce. However, the decedent died on January 7, 2009 and the actual divorce judgment was not signed until March 25, 2009 relating back to the October 16, 2008 Court divorce decision. Based upon the above events, the Surrogate in Kelly found that the decedent was divorced at the time of his death.

As is common in many divorce situations, divorcing parties provide in their settlement or separation Agreements that each waives or relinquishes rights in the others' assets and property including insurance policies and retirement benefits. Problems arise where, despite the waiver of rights, the name of the divorced spouse is not changed or deleted as a beneficiary on the insurance policy or retirement account. Surrogate's Court litigation then becomes necessary to determine the rightful payee of the decedent's benefits.

In Kelly, the decedent's former spouse remained named as a beneficiary of his federal retirement benefits. However, the parties' Separation and Settlement Agreement specifically provided that the divorced spouse waived all rights to these benefits. The Court, after reviewing the parties' divorce agreement and their apparent intentions, determined that the surviving divorced spouse waived all interest in these benefits and that the retirement funds should be paid to the decedent's estate.

Estate Administration can be very complex and involve the review and analysis of many types of papers concerning the decedent's affairs such as deeds, business agreements and divorce papers. All of these documents can impact estate settlement, estate taxes and distribution of assets to estate beneficiaries. I have assisted executors and administrators for over 30 years with all aspects of estate administration and the review of various documents required for successful and efficient estate processing.

Continue reading "New York Estates Are Impacted By Marital Status As of a Decedent's Date of Death" »