A New York Estate Planning Lawyer is aware that it is of utmost importance to review a person’s assets when formulating an estate plan. Initially, it may seem that determining the value of assets is a primary concern so that estate taxes can be estimated and planned for and appropriate provisions can be made to afford varying estate shares to beneficiaries.
While estimated estate valuations should be known, it is equally important to obtain detailed information regarding the manner in which various estate assets are owned. For example, the title on a deed should be examined to determine whether the testator’s name actually appears on the deed. Sometimes, a testator will have inherited the property from a parent or another relative or friend under a Last Will. However, the actual transfer of title into the beneficiary’s name may not have been completed by the Executor. Also, title to the property may be held jointly with another person or as a tenant in common with each person having a separate share or interest in the asset.
These ownership interests are important since a Last Will is generally going to control the disposition of assets held in the decedent’s name alone. If the property is held with another as joint tenants with a right of survivorship, upon the death of a joint tenant the asset will automatically become owned in its entirety by the surviving joint tenant. This automatic ownership will occur notwithstanding provisions in a Last Will that attempt to give the same property to a different person.
Controversies created by estate property ownership cause major problems for Estate Settlement and often result in Estate Litigation. A recent example of such litigation appeared in the case Herskovitz v. Steinmetz, decided by Justice Richard F. Brown (Supreme Court, New York County) on May 16, 2013 and reported in the New York Law Journal on May 29, 2013. In Herskovitz, a decedent owned a cooperative apartment along with his wife. However, the cooperative stock certificate simply had both their names on the certificate without indicating whether the married parties intended a joint ownership or tenancy in common. Since the decedent’s Last Will left his residuary estate to his daughters, if the cooperative apartment was owned by the decedent as a tenant in common the decedent’s share would have gone to the daughters under his Last Will. However, a joint tenancy with the wife with a right of survivorship would result in the wife automatically owning the apartment upon the decedent’s death and the daughters receiving no interest in the apartment under the Will.
After reviewing the various evidence, which included joint tenancy language in the decedent’s cooperative Proprietary Lease, the Court found that the cooperative apartment was owned by the decedent and his wife as joint tenants with survivorship rights. It should be noted that the facts of this case involved the ownership of a cooperative apartment by a husband and wife where ownership began before a 1996 amendment to New York Estates, Powers and Trusts Law Section 6-2.2. Under paragraph (c) of the amended law, stock of a cooperative apartment issued to a husband and wife creates a tenancy by the entirety unless expressly declared otherwise. A tenancy by the entirety results in the surviving spouse automatically owning the entire asset upon the death of the other spouse.
Therefore, when planning an estate and preparing for the proper disposition of assets a good starting point is to review the title and official or registered ownership of the assets whether they be a bank account, real estate or securities so that the Last Will, Trust and the entire plan accurately provides for the disposition of estate assets.