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Articles Posted in Estate Planning

shutterstock_96626974-300x225Estate planning in New York is important for many reasons.  Primarily, when a person plans their estate, they are ultimately creating documents and situating assets to reflect their intentions regarding the ultimate disposition of these items.  Nowadays, estate planning is often viewed as a broader topic and includes papers that are referred to as advance directives.  These would include a Power of Attorney, Living Will and Health Care Proxy.  The more traditional estate planning papers include a Last Will and Testament, and possibly a living revocable trust or even an irrevocable trust.  The New York Probate Lawyer Blog has published many articles relating to the various documents identified above.

Any type of planning document requires that the person creating the paper consider the selection of various types of fiduciaries.  These fiduciaries include executors, trustees and agents acting pursuant to a power of attorney or health care proxy.  It may also include the nomination of a guardian for a minor child.  In most cases, the appointment of a fiduciary is simple and the choice is typically a spouse or child or other close relative or friend.  However, there are many situations where the selection is not as clear cut and various considerations need to be taken into account.

One issue which should be analyzed is whether the proposed appointee is willing to accept the appointment.  Not everyone wants to accept the responsibility of being an estate executor or trustee of a trust.  It is always a good idea to ask the proposed fiduciary if they would accept the appointment.  This avoids having to find a replacement once a document comes into effect.  While a substitute appointment in the document is always advisable, there is no assurance the substitute would be available or want to accept the task.

shutterstock_1372939091-300x200Many articles have been written about New York estate planning when a couple is considering or entering into a divorce.  The New York Probate Lawyer Blog has published a number of articles on this topic in the past.  However, it is important from time to time to review this information.

Spousal rights are a very special area when considering estate issues.  This is due to the fact that New York estate laws provide a surviving spouse with certain rights, most importantly a spousal right of election.  This prevents a surviving spouse from being disinherited.  Estates, Powers and Trusts Law Section 5-1.1A entitled “Right of election by surviving spouse” essentially provides that a surviving spouse is entitled to receive at least one-third of a deceased spouse’s estate.  So, even when spouses are engaged in actual or possible divorce proceedings, the death of one may still result in an inheritance by another.  Until there is a final divorce or a waiver of spousal rights, a feuding husband and wife may be subjected to inheritance rights.  I have seen many cases where parties have been separated for many years, even decades, but a spousal right of election might still apply.

As can be imagined, even though parties may change their Last Wills and Trusts and other asset dispositions, inheritance by a surviving spouse prior to a divorce may not be avoided.  However, once parties do officially become divorced, there are still many items to be taken into consideration.  While a divorce may nullify preexisting provisions in Wills or other post-death beneficiary designations, these documents should not be left to chance.

shutterstock_1123004039-300x199One of the benefits from implementing a New York estate plan and preparing a Last Will and Testament is the ability of a testator to select an executor.  This option does not exist when a person dies intestate without a Will.  In such a situation, the estate administrator is determined pursuant to the estate laws contained in Surrogate’s Court Procedure Act Section 1001 entitled “Order of priority for granting letters of administrations”.

The selection or nomination of an executor, as well as a substitute executor, is a very important aspect of Will preparation.  Such person, once appointed by the Surrogate’s Court, is in charge of handling all estate affairs.  This includes determining and collecting estate assets, paying expenses, resolving estate claims and liabilities, and ultimately, making distributions to the estate beneficiaries.

An executor is essentially the chief operating officer regarding all aspects of the estate.  He must deal with lawsuits concerning the decedent’s affairs and select and interact with accountants and attorneys needed to perform services in furtherance of estate settlement.  The New York Probate Lawyer Blog has published many articles regarding estate fiduciaries and administration issues.

20200522-Estate-Planning-300x200Estate planning in New York encompasses many types of considerations.  The most common way to plan an estate is to prepare a Last Will and Testament.  When a person dies, a Will must be filed with the Surrogate’s Court to be validated.  This is known as the probate process.  Probating a Will involves filing a petition with the Court.  All of the decedent’s next of kin must be given notice of the proceeding.  Most probate matters are rather routine, and the Will is admitted to probate, and letters testamentary are issued to the nominated executor.  The New York Probate Lawyer Blog contains many posts dealing with estate administrators and estate settlement.

Sometimes a person desires to avoid probate.  There can be many reasons for avoiding a Court proceeding.  One of the main goals is to avoid a possible Will contest.  Another reason may be to prevent a search for next of kin who may need to receive notice in the probate case.

The creation of a Living Trust or a Revocable Trust is a means by which assets can be transferred without the need to probate a Will.  In order for a Living Trust to be effective, all of the grantor’s assets must be transferred into trust ownership.  This transfer is easy for financial accounts where the title of the account can be changed into the name of the grantor as trustee of the trust.  Other assets, such as real estate or the ownership of a cooperative apartment, may be more complicated.  As to real estate, a deed and other transfer documents must be prepared and filed with the appropriate county office to show the transfer of the ownership into the trust.  Tax forms and other recording papers and fees need to be properly accounted for.

shutterstock_571088005-300x200It is apparent that the preparation of New York estate planning documents is important.  A lot of time and effort can be expected in connection with reviewing assets and financial interests, figuring out the manner in which dispositions are to be made to beneficiaries and implementing the papers and documents to formalize the plan.  In view of the commitment to start and finish this procedure, it is equally important to make certain that the documents that are prepared are correctly and properly created and also executed.

While there are many considerations involved in the above process, these three (3) areas should be at the top of the list.

Expressing Creator’s Intentions:  The whole point of planning an estate is to insure that a testator or creator of a document can memorialize his intentions regarding the disposition of assets.  Thus, the papers that are prepared, whether a Last Will and Testament or Living Trust or even advance directives, such as a power of attorney or health care proxy, should contain clear and unambiguous provisions and directions.  It makes sense to consult with an estate lawyer who is familiar with drafting clauses which effectuate intentions regarding bequests and contain appropriate dispositive language.  Even the simplest of documents may require clauses dealing with alternative or contingency dispositions.  Also, it may be necessary to include specialized language concerning estate tax matters or the payment of estate debts or expenses.  A well drafted, unambiguous Will or Trust is essential for the creator’s intentions to be accomplished.

shutterstock_571088005-300x200Estate planning is very important and may be accomplished by the creation of a number of documents.  These papers include a Last Will and Testament and a lifetime trust which may be revocable or irrevocable.  Advance directives in the nature of a Living Will, Power of Attorney and Health Care Proxy may also be considered as part of an overall plan.  The New York Probate Lawyer Blog contains numerous posts dealing with planning an estate in New York.

Due to changing circumstances, a Will or a trust may need to be modified.  Such circumstances may include the death or incapacity of either a beneficiary or a nominated fiduciary such as an Executor or Trustee.  Additionally, a person’s intentions regarding beneficiaries may require a change in dispositions or a person’s assets may have declined, increased or changed requiring new Will or trust provisions.

In any event, when the time comes to revise a document, there are a few important points to consider.  To begin with, a Will can be modified simply by preparing a new Will and having it executed and witnessed in accordance with the New York laws contained in Estates, Powers and Trusts Law Section 3-2.1 entitled “Execution and attestation of wills;  formal requirements.”  It is generally insufficient to just place corrections, markings or cross-outs on the original.  The Courts most likely are going to ignore these attempted corrections on the face of a Will unless they happen to be done in accordance with the above statute; i.e., duly executed and witnessed.  Therefore, it is best to have an experienced estate lawyer assist with any contemplated revisions.

shutterstock_330039464-300x200The settlement of an estate in New York involves many facets.  Of course, in its initial phase, the appointment of a fiduciary such as an executor or administrator needs to occur.  Thereafter, the fiduciary engages in the process of identifying and collecting assets, paying or resolving claims, debts or other estate obligations, and then, ultimately, making distributions to the estate beneficiaries.  If a decedent had a Last Will and Testament, then the distribution of estate assets is made according to the terms of the Will.  When there is no Will and a decedent dies intestate, distribution is made in accordance with Estates, Powers and Trusts Law Section 4-1.1 entitled “Descent and distribution of a decedent’s estate.”  The New York Probate Lawyer Blog contains many articles regarding the settlement of a decedent’s estate.

One type of asset which is sometimes overlooked in the estate planning process is tangible personal property.  This asset can be comprised of all sorts of items such as furniture, jewelry, artwork and similar items.  When preparing an estate plan, an estate planning attorney can include provisions in a Will whereby items of property can be specifically bequeathed to named individuals.  For example, a diamond ring can be given to a named child or friend.

It should be noted that EPTL Section 5-3.1 entitled “Exemption for benefit of family,” provides that some of these property items are set aside for a surviving spouse or children under age 21 such as household furniture, musical instruments and appliances, as well as a motor vehicle having a value not exceeding $25,000.00.  These items are not considered to be estate assets.

shutterstock_74680495-2-300x200Disputes regarding estates occur all the time.  These matters play out in the New York Surrogate’s Courts which is the primary forum where a decedent’s estate issues are determined.  Estate lawyers in New York are familiar with all types of cases ranging from Will contests to the appointment of an administrator in the event of intestacy.  A recent internet search disclosed that a prevalent area of dispute involves siblings.  In fact, according to a reference to research performed by Ameriprise, 70% of the conflicts between siblings are related to their parents.

When it comes to estates, siblings may have conflicts over many things.  For example, a brother or sister may feel that they were treated unfairly in a parent’s Last Will especially if their bequest was small or they were disinherited.  In these types of cases a parent may have had good reasons to treat their children differently – one child may be well-off and another may need the extra support to survive.  It is not uncommon for a child to be estranged.  I represented a named executor in upholding the validity of a Will where a disinherited child filed objections to probate even though the child had virtually no contact with the decedent for decades.

On the other hand, a sibling may have very legitimate complaints where another sibling appears to have taken advantage of an older and ill parent to unduly influence the creation of a new estate plan in his favor.  Undue influence is always difficult to prove but facts which show a decedent’s susceptibility and opportunity for wrongdoing often lead to estate litigation.  Sometimes a sibling may arrange for a transfer of a parent’s assets even before death.  These situations often result in the commencement of an Article 81 Guardianship proceeding to have a Court supervise the parent’s assets during his lifetime and prevent improper transfers or dissipation.  The New York Probate Lawyer Blog contains many articles discussing Guardianships.

shutterstock_96626983-300x300Estate and gift taxes have effects that may vary widely depending on the value of an estate and the place where you live.  When a person engages in estate planning, the tax consequences are always considered.  Like most taxes, estate and gift taxes are imposed by various states and by the Federal government.  Estate lawyers in New York can assist their clients with these matters.

During recent years, most individuals have not had to worry about paying estate or gift taxes.  At present the exemption for Federal estate tax is $11.7 million per individual.  Even in a highly taxed state like New York, the individual exemption is presently $5,930,000.00.  There are various strategies to diminish the impact of these taxes.  Provisions in Last Wills can utilize trusts and other methods to defray taxes.

What is important to realize is that the step-up in basis is really an income tax concept.  Basis, from an accounting standpoint, is the cost of an item.  This cost or basis is used to determine the taxable gain, typically a capital gain, which is incurred when an asset is sold.  As an example, if you purchased a house for $1,000.00 (the basis) (ignoring any additional costs or depreciation), and then sold the house for $2,000.00, the gain would be $1,000.00.  This gain would be the amount subject to tax.

shutterstock_204507106-300x254Estate planning in New York is important.  It provides an individual with the opportunity to memorialize the manner by which assets can be disposed of upon death.  The creation of a Last Will and sometimes a revocable or irrevocable trust develops provisions designating beneficiaries and the portion of assets they are intended to receive.  The New York Probate Lawyer Blog has published numerous articles regarding estates and trusts.  Estate lawyers are aware of the value of creating appropriate documents.

One aspect of planning often involves life insurance.  This blog post cannot discuss all of the considerations and issues regarding life insurance in such a brief space.  However, a few aspects are worthy of mention.  Life insurance typically takes the form of one of two types.  There is term insurance, which provides only an insurance payment on death without there being any accumulated value to the policy.  Whole life policies not only provide a pay-out of funds but also have an accumulated value over time which may be able to be withdrawn or even used as security for a loan.

Probably the most important item to bear in mind is the designation of beneficiaries.  When a beneficiary is designated (other than a person’s estate), the insurance proceeds are going to be paid directly to such beneficiary.  Since these funds are not paid to the decedent’s estate, the provisions of a Last Will are not going to control the disposition of this asset.  The asset is not included in the probate estate.  Thus, when planning an estate it is important to know which assets are controlled by a Will and which assets pass outside of the testamentary document.  An individual wants to be certain that certain beneficiaries receive only the assets and values intended.

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