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20200522-Estate-Planning-300x200Estate planning in New York involves the preparation of different documents.  These include a Last Will and Testament, Living Will, Living Trust, Power of Attorney and Health Care Proxy.  All of these papers have terms and language which should be clear and specific so that the writer’s intentions are precisely spelled out.

In particular, a Will can have numerous provisions that involve descriptions of property being disposed of and identification of beneficiaries who are to receive benefits pursuant to the document.  The New York Probate Lawyer Blog has published many posts regarding Wills and estate planning and the need for proper drafting.

Some of the considerations that need to be taken into account include the recognition that a Will may describe property that is being disposed of.  Such property may be tangible items like pieces of jewelry or furniture.  Other types of assets may include real estate or business interests.  In all these situations it is important to take extra care to describe the gift with precision.  The last thing a testator should want is for beneficiaries to engage in post-death Surrogate’s Court litigation as to which item owned by the testator was given to them.  For example, a bequest of my “gold watch” is not helpful if the testator owned multiple gold watches.

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There are a number of different types of fiduciaries.  These include Executors, Administrators, Trustees and Guardians.  Even an agent under a Power of Attorney stands in a fiduciary relationship to his principal.  One common aspect relating to all fiduciaries is that they are required to provide a complete accounting of their conduct and activities to beneficiaries.

In most cases, accountings in estates and trusts are done voluntarily.  These are informal procedures.  After a beneficiary has had an opportunity to review the accounting, they can provide an acceptance and release to the fiduciary acknowledging that there are no objections or concerns as to the acts of the fiduciary.  Sometimes the parties cannot engage in this procedure either because the Executor or Trustee refuses to provide a full account or the objections by the beneficiaries cannot be informally resolved.  When this occurs, a formal accounting proceeding must be filed in the Surrogate’s Court or other Court that has jurisdiction over the case.

A recent Queens trust case was the subject of a judicial settlement of a final account by the trustee.  The case is entitled In Re Baron and was decided by Queens Surrogate Peter Kelly on July 7, 2020.  The Court was asked to consider an application by the trustee to dismiss various objections to the account that had been filed by the trust beneficiaries.  The objections encompassed various assertions of breach of fiduciary duty and wrongdoing by the trustee.  These centered around insurance policies held by the trust which had been allowed to lapse.  Thus, there was no value in the trust at the time of the grantor’s or insured’s death.

stock-vector-blue-kinship-distress-rubber-stamp-1662322042-281x300All proceedings regarding an inheritance from a decedent require that interested parties receive proper notice to protect their interests.  Whether an estate involves the probate of a Last Will and Testament or administration where there is intestacy, it is essential to determine the identity of a decedent’s heirs or distributees.  The New York Probate Lawyer Blog has published many articles regarding proof of kinship.

In both probate and intestate cases, estate lawyers may need to present evidence establishing that an individual is a distributee of a decedent or eliminating the possibility that any unknown heirs exist.  This evidence may need to be presented in an Affidavit of Due Diligence or at a formal Kinship Hearing in the Surrogate’s Court.  The manner by which kinship can be provided is through documents such as birth, death, and marriage records.  Also, testimony from disinterested parties who knew a decedent can establish such facts as marriages and the existence of children and other relatives.  The use of professional genealogical search firms can prove to be invaluable in difficult cases.

One area in estate settlement that is important in establishing potential kinship is where a claimant’s father was not married to the claimant’s mother.  Proof of kinship in these non-marital child cases is provided by Estates, Powers and Trusts Law Section 4-1.2 entitled “Inheritance by non-marital children.”  The statute provides that potential non-marital kinship can be demonstrated by various means including where there is an order of filiation showing paternity; a signed acknowledgement regarding paternity; proof that the father “openly and notoriously acknowledged the child as his own”; or through blood genetic marker testing.  Proof of paternal kinship in a New York estate case can be difficult.  An interesting example of the issues that can arise in such matters was recently shown in a Pennsylvania estate case entitled In Re Estate of David W. Ackley, Sr.  As reported by Max Mitchell in the Legal Intelligencer on August 12, 2020, an administrator of an estate sought to compel an alleged heir to take a DNA test.  The Court recognized that the alleged heir had the burden to prove kinship.  However, it refused to grant the Administrator’s request to force the claimant to take a DNA test.

rendered-300x107A person who is planning the disposition of estate assets needs to make a number of decisions.  Among these is the identity of intended beneficiaries and the value or amount of the interest to be provided.  These determinations can occur in different forms.  Where someone prepares a Last Will and Testament the document is going to include various dispositions.  Additionally, with regard to assets that pass outside of the administration estate, such as joint accounts or assets that have designated beneficiaries, the name of the intended payee must be provided.

A spouse of a decedent stands in a preferred position regarding the disposition of a decedent’s assets.  This is because a spouse, unlike any other family member including children, cannot be entirely disinherited.  Estates, Powers and Trusts Law Section 5-1.1.A entitled “Right of election by surviving spouse,” provides that the spouse is entitled to receive the greater of $50,000.00 or one-third of the decedent’s net estate.

The interesting and complicating aspect of EPTL 5-1.1.A is that it includes as part of the value of asset calculation items identified as “testamentary substitutes.”  These items include assets that pass to third parties upon death such as bank accounts that are payable upon death either in a joint account or as a pay on death account or retirement or death benefit funds.  The intention of the statute is to prevent a decedent from diverting assets for which a surviving spouse would have a right to receive a share of.  The New York Probate Lawyer Blog has posted numerous articles regarding estate settlement and spousal rights.

shutterstock_96626983-300x300It is not uncommon for a person who is domiciled in New York to have the persons who are interested in his estate residing outside of New York.  This situation can occur in a number of contexts.

In the event a decedent created a Last Will and Testament, the document may have designated an out-of-state individual to serve as Executor.  Contrary to some misinformation, there is no prohibition for a person who resides in another state or even another country to serve as a New York estate executor.  Reference should be made to Surrogate’s Court Procedure Act (SCPA) Section 707, entitled “Eligibility to receive letters.”  The statute provides that a non-domiciliary alien is not eligible to serve as a fiduciary.  Thus, if a person resides in New York and is a qualified resident, or is a U.S. citizen and lives anywhere in the world, he would qualify to serve as an executor.  The statute also allows a non-domiciliary alien to serve as a fiduciary as long as they serve with a New York resident co-fiduciary.

The above rules apply equally in the case where a decedent dies intestate.  An out-of-state distributee (next of kin) can qualify as the administrator.  SCPA Section 1001 entitled “Order of priority for granting letters of administration” identifies the persons who can become administrators based upon their relation to the decedent.

In order for a Last Will and Testament to be valid, it must be admitted to probate.  Probating a Will in New York requires following all the procedures in the Surrogate’s Court.  Many times a person who is disinherited or does not receive what he expects in the Will provisions feels that the Will must be invalid.  The conclusion reached is that the document must have been procured through fraud, undue influence or other wrongdoing.

The reality of these cases is that most Wills that are prepared by an attorney and executed under an attorney’s supervision are found to be valid.  When the statutory formalities provided by Estates, Powers and Trusts law section 3-2.1 entitled “Execution and attestation of wills; formal requirements” are followed, a contest of a Will is usually dismissed.  While undue influence and other grounds may result in a denial of probate, such an outcome is difficult to achieve.  The Courts typically prefer to see that a testator’s intentions are carried out through the terms of a Will rather than left to the uncertainly of intestate distribution.  The New York Probate Lawyer Blog has posted many articles regarding probate.

A Manhattan estate case entitled Estate of Menchini demonstrates that the Courts tend to favor admitting a Will to probate.  Menchini was decided on March 18, 2019 by Manhattan Surrogate Rita Mella.  The decedent had left most of his estate to a friend who was also named as an alternate executor.  The decedent’s brother challenged the Will based upon lack of due execution and fraud.  It appears that the Will was not prepared by an attorney, nor did an attorney supervise the execution ceremony.  The Will was signed in the office of a Reverend of a local church.  There were two witnesses, although one witness predeceased the decedent and was not available to testify.  Also, a notary was present to notarize the witness affidavits.

shutterstock_330039464-300x200A person who dies without a Last Will and Testament is said to have died intestate.  According to Estates, Powers and Trusts Law (EPTL) Section 4-1.1, entitled “Descent and distribution of a decedent’s estate,” there is a statutory priority as to the identity of the individuals who are entitled to inherit a decedent’s estate.  The statute provides, for example, that a surviving spouse is to receive $50,000.00 and one-half of the rest of the estate with the balance to be shared by the decedent’s issue (i.e., children and descendants).

In most cases, determining the identity and location of the next of kin or distributees, as referred to in the statutes, is not a problem.  Not only do these individuals receive a share of the estate, they may be entitled to serve as the estate Administrator.

In addition, since such persons must be given notice of the Surrogate’s Court proceedings, the Court requires that they be fully identified in the Court filings.  There are many circumstances that may be present when identifying a decedent’s next of kin which can delay and complicate estate settlement.  Here are a few of the more common problems.

original_1074565532-300x107During the course of preparing a New York estate plan, many different issues must be considered.  Initially, the basic plan must identify beneficiaries and the property or amounts each is to receive.  A thorough review and understanding of the creator’s assets and the ownership interests are essential.  As extensively discussed in the New York Probate Lawyer Blog, a Will only controls assets that are held in the decedent’s name alone.  Joint assets and assets with designated beneficiaries pass to the named parties automatically upon death.

Still another concern is whether to create a Living Trust as a primary vehicle for post-death transfers or to rely primarily upon a Last Will.

Regardless of the type of estate plan created, some consideration should be given to any possible effect of estate taxes.  In recent years, estate taxes have received less of a review because the exemption amounts have generally increased.  For the year 2020, the Federal estate tax exemption protects assets up to $11.58 Million.  A husband and wife combined can protect double this amount.  Also, all assets passing between a husband and wife are fully deductible and are not subject to estate tax.

shutterstock_571088005-2-300x200Estate planning in New York, and probating a Last Will in Surrogate’s Court, go hand in hand.  When a person engages in preparing and executing a Last Will, attention must be given to the eventuality of submitting the document to the probate process.  As discussed in many posts in the New York Probate Lawyer Blog, a Will must be executed in accordance with the statutory requirements set forth in Estates, Powers and Trusts Law Section 3-2.1 entitled “Execution and attestation of wills; formal requirements.”

It has become more common that individuals prepare their own Will documents.  Many forms of Wills are available on the internet.  These can be found in legal document catalogues or through various legal document drafting services.  When it comes to a Will, not only does the document need to contain specific and properly worded and organized information, the execution and signing process needs to meet statutory requirements.  Thus, when self-help methods are utilized without the assistance of an attorney, the prospects for estate litigation and confusion can increase dramatically.  Such was the situation in a recent Rockland County estate case entitled Matter of Estate of Tsinopoulos, which was decided by Rockland Surrogate Keith Cornell on July 17, 2020.

In Tsinopoulos, the decedent used a Will form which she completed herself without the assistance of an attorney.  She then had the Will executed in her local bank, again, without the assistance of counsel.  While there is no prohibition against preparing and executing a Will without an attorney, the involvement of an estate lawyer gives the execution of the document a presumption of validity.  In this case, the Will left virtually all of the decedent’s assets to her daughter, which prompted the decedent’s son to file objections to the Will and engage in a Will contest.

Probate-300x201A person may prepare and execute a number of Last Wills during the course of a lifetime.  It is not unusual to find that a testator signed a new Will only a few years after having created the earlier document.

In these situations, the provisions in the Wills may be drastically different which may lead to questions regarding the validity of the later document.  The New York Probate Lawyer Blog has recently published articles concerning Will contests and the standing or right of an individual to file objections to a Will.  In essence, a person must have a pecuniary or financial interest in defeating the Will being offered for probate in order to object to its validity.  The statute that provides the rule in this regard is Surrogate’s Court Procedure Act Section 1410 entitled “Who may file objections to probate of an alleged will.”

One common situation is that the individual nominated as executor in a later Will is different from the person named in an earlier Will.  As a result, the earlier named executor may feel that he would want to object to the later Will, which deprived him of his potential executorship.  Executors like all fiduciaries are entitled to receive statutory commissions which may be tens of thousands of dollars in larger estates.

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