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A New York Estate Plan Should Include Alternate Beneficiary Designations

The creation and implementation of an estate plan requires the consideration of many factors. Reference is made to the New York Probate Lawyer Blog which contains many articles regarding the planning of an estate.

One of the essential elements in the planning process is obtaining a full understanding and inventory of assets. The reason such an examination is needed is to ensure that assets are transferred in a manner according to a person’s intentions. The primary function of a plan is to be certain that post-death dispositions to beneficiaries occur according to an individual’s desires. New York City Estate Lawyers are familiar with the rules and requirements regarding property dispositions. For example, a Last Will is going to control the disposition of assets that are owned by a decedent in his name alone. However, other assets such as jointly owned accounts or assets that have a designated beneficiary, are going to be paid directly to the joint owner or designee outside of the terms of a Last Will.Another significant consideration in any plan is the naming of beneficiaries. In a Last Will, a person can identify a beneficiary to receive specific property or a definite amount of money. Beneficiaries can also be named to receive a percentage share of estate property. It is very important that in all cases where a beneficiary is named to receive a share of an estate, that alternate beneficiaries be named to cover the contingency where a primary beneficiary is not able to receive a bequest due to death or other specified event.

When a Will is lacking alternate provisions that direct the transfer of assets where payment is not possible to a named primary beneficiary, the settlement of the estate becomes confused and complicated. More importantly, the intentions of the creator cannot be properly carried out. In these cases the property may end up having to be given to a decedent’s next of kin according to the laws of intestacy rather than to persons whom the creator would have selected. Typically, as an example, a Last Will can provide a bequest to someone and then state that if the named person is not alive, then the bequest would go to another named individual.

A recent case decided by Manhattan Surrogate Rita Mella on April 13, 2017 entitled Matter of Hunnings demonstrates the problems created when there are incomplete dispositions in a Will. In Hunnings the decedent left a charitable bequest of a collection of memorabilia of the late singer and entertainer Josephine Baker to the Smithsonian National Museum of African Art. Unfortunately, the museum would only accept a portion of the items and the Will did not have any alternates or contingent provisions as to the distribution of the unwanted items. This situation was remedied by reference to Estates, Powers and Trusts Law (EPTL) Section 8-1.1 entitled “Disposition of property for charitable purposes”, which provides that the Court may direct an alternate disposition under certain circumstances. In Hunnings, the Surrogate allowed the unwanted items to be distributed to the New York Public Library for the Performing Arts.

Unlike the Hunnings case, there are many instances where the lack of a named alternate or contingent beneficiary may result in extensive Estate Litigation regarding the intention or construction of a Will or the actual payment of estate assets to persons unintended by the creator.

Call me now for a free review if you have any questions or issues regarding an estate plan or an Estate Litigation matter. I have represented many clients in these types of matters throughout New York.

An experienced New York trusts and estates lawyer can assist with guidance for proper Will preparation and execution and Will contests. New York Probate Attorney Jules Martin Haas, Esq. has been representing clients in New York in Trusts and Estates matters and Surrogate’s Court proceedings throughout the past 30 years in Suffolk and Nassau and other counties. If you or someone you know is involved with or has questions about a New York estate matter, please contact me at (212) 355-2575 or email: jules.haas@verizon.net, for an initial consultation.

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