New York Probate Lawyer Blog

October 12, 2011

Trusts In New York, Not Just Wills, Can Come Under Attack Without Strong Planning

Forbes is reporting on a lawsuit that alleges political figures in Panama, including three Supreme Court judges, have ripped off poor children who were entitled to millions of dollars. The money was in a trust that instead allegedly was turned over to a non-beneficiary after accepting bribes.

Although this is a case of an American whose trust is being questioned in Panama, this happens in the United States as well. While most people consider that only wills are contested, the same can go for the trusts that are established to shepherd assets.But there is a logical way to avoid postmortem legal challenges to your assets — by smart planning of a New York trust or estate. These situations usually go bad when drastic changes are made to a will in the person’s elder stages. Or when no will is present. Or when a trust is not updated for years or decades or old beneficiaries — such as former spouses — are not removed from accounts.

Employing an experienced New York City estate planning lawyer can provide you with peace of mind. Proper planning can help ensure that your wishes are followed after your death and that your estate doesn’t burden your heirs.

The situation in Panama is compelling. An American living in Panama died in June 2006 at age 88. A year before he died, the man signed a will that left the majority of his $50 million fortune to a trust fund that would benefit needy and poor children in that country. A large part of the trust includes ocean-front property that has tripled the value of the trust to more than $150 million.

But the man’s widow, a well-connected Panamanian, challenged the will despite receiving a $20,000 allowance, as well as the right to live in their home and having her children receive bequests.

She sued to challenge the will, claiming that her late husband’s Florida attorney coerced him into signing the will so that he could manage the charitable trust, which is the primary beneficiary of the estate.

A court removed the attorney as the executor, but found the will valid. A second court found the will valid. But the Supreme Court overturned the distribution of the fortune and naming the widow as “universal heir.”

The notary who signed the will and a prosecutor filed challenges to the decision by the three-judge panel, causing the entire Supreme Court of Panama to look at the case, and putting the funds in limbo.

The man’s attorney in Florida, in turn, filed a federal lawsuit, alleging the widow bribed the justices to the tune of $1.5 million each. He further alleges they violated racketeering charges and caused false criminal charges to be asserted against him, including murder, to strip him from acting as an estate executor.

In general, attempting to significantly disinherit a spouse or child can cause legal complications. Proper estate planning and engaging the services of an experienced law firm is your best bet when it comes to ensuring that your wishes are carried out after your death.

October 3, 2011

New York Probate and Administration Depend Upon the Domicile of a Decedent

by Jules M. Haas

The New York Probate Lawyer Blog has talked about many situations involving the probate of a decedent’s Last Will or the intestate administration of an estate where there is no Will. These proceedings comprise the most basic avenues for a decedent’s estate settlement.

However, even more fundamental, and as a preliminary step to commencing such proceedings, a determination needs to be made as to whether the New York Surrogate’s Court is the appropriate Court to initiate the case. If New York is not the proper forum, the Court will not allow the proceeding to be filed. It may be that another state (i.e., Florida, New Jersey), may be the proper place to file and administer the estate proceedings.

Choosing the proper forum or Court is not always an easy task. This choice of forum begins with a finding of the decedent’s “domicile”. Domicile is an extremely important issue since it will not only affect the location of the Court that is appropriate to process the decedent’s estate, it may very well determine the State law that controls the issues surrounding estate administration such as spousal and kinship rights. Domicile also affects many other issues such as taxation.

Domicile essentially refers to the place that is considered a person’s primary home. A person can have many different residences around the world but only one primary home or domicile. Domicile is defined in the New York Surrogate’s Court Procedure Act Section 103 (15) as “A fixed, permanent and principal home to which a person wherever temporarily located always intends to return.”

Domicile can be difficult to determine where a person has residences in more than one state or country and divides his or her time between these locations. Among the factors that a Court reviews in deciding an issue of domicile are where a person files state and local income taxes, and where a person has a driver’s license, voting registration, and other social and business connections.

As noted, domicile is important because it may determine various rights. For example, a decedent who is a domiciliary of New York will be subject to New York statutes for the purposes of determining the decedent’s distributees or next of kin. Statutes of a different state, for example, New Jersey, may differ from those in New York and specify different individuals or interests in a decedent’s estate. The result may cause variations in amounts inherited or even rights to an inheritance.

A recent example of the importance of determining domicile was seen in Matter of Ranftle, decided by New York County Surrogate Kristin Booth Glen on September 14, 2011 and reported in the New York Law Journal on September 23, 2011. In Ranftle a question arose concerning whether a decedent was domiciled in New York or Florida. The importance of this question centered around the fact that unlike New York, Florida would not have recognized the decedent’s same-sex marriage that took place in Montreal, Canada. Therefore, if Florida law controlled, the decedent’s spouse may have lost inheritance rights in the Court proceedings. After an extensive review of the numerous factual contacts the decedent had both in New York and Florida, Surrogate Glen determined that the decedent was a New York domiciliary.

As a New York Probate attorney I have reviewed many cases with clients where an initial determination must be made as to the proper Court in which to commence a probate or intestate administration proceeding. Additionally, a thorough review of a client’s domicile is imperative when preparing an estate plan so that the provisions of a Last Will or Trust will be in accordance with the relevant State laws.

September 29, 2011

AARP: Dads Have Fewer Heart Problems, But Still Must Plan Estate in New York

by Jules M. Haas

A new study by AARP, university research and the government shows that fathers are less likely to die of heart-related illnesses than men without children, the Associated Press reports. The study is considered the largest ever to look at fertility and mortality and involved 138,000 men nationwide.While this may be good news for dads, genetics and lifestyle must also be factored into studies about heart health. This study may present a good time for fathers to discuss heart health, it also can be used as an opportunity to talk about New York estate planning.

New York probate lawyers have seen many older New Yorkers struggle at the end of their lives, perhaps after diagnosis of an illness or disease or following an unexpected accident. Too often, seniors may wait until dementia or other illness robs them of their ability to plan. .

Men in America suffer from heart problems. Long hours earning a living and raising a family can take a toll. Taking the time to ensure loved ones are protected can bring peace of mind. Thus, men in their 30s, 40s and 50s should have plans in place. The process does not have to be complicated. And not just those with significant assets need estate plans.

The large-scale study found that marriage, having many friends and even having a dog as a companion, can lower the chances of heart problems and cardiac-related deaths. And the study shows that having children may be motivation for fathers to take care of themselves physically.

Researchers found a link between infertility and later health problems. Testosterone levels can affect good cholesterol, the article reports.

But the study also had some caveats:

Researchers couldn’t calculate how many in the study were childless by choice and not because of infertility.
They didn’t study the men’s partners’ infertility problems.
They didn’t calculate blood pressure or cholesterol numbers.
Fewer than five percent of participants were minorities.

While it is an interesting topic and certainly one to consider, it may not necessarily apply to everyone. But what does apply to everyone is proper estate planning — for both those with children and those without.

For the fathers, New York estate planning is critical in order to ensure their children are properly taken care of when they pass on. When a person is nearing death, they don’t want the added stress of worrying about where their money will go or if their children will be left with valuable or sentimental heirlooms.

For the childless, the need is no less important. Even if there aren’t children to leave assets to a spouse, siblings, other family members, friends or even a trust established to support philanthropic desires can result from careful planning.

Don’t wait until major health problems have struck to take the initiative and plan out your will or estate in New York. Have peace of mind and focus on more important things in your time of need.

September 27, 2011

World Alzheimer’s Month Good Time to Plan for Comprehensive New York Estate Planning

by Jules M. Haas

September is World Alzheimer’s Month, calling attention and awareness to this devastating disease. It is also a time to reflect on how we should all be planning to help older family members and friends who have yet to get a handle on their estate plans.

In some cases, a Manhattan guardianship attorney must be called on to help ensure that an elderly relative who has dementia is properly cared for. Mental Hygiene Law Article 81 in New York allows for the court to appoint a guardian to assist a person who is incapacitated.In an emergency, the court can appoint a temporary guardian to manage the loved one’s affairs while the court reviews the matter.

Forbes.com reports that someone develops Alzheimer’s disease every 69 seconds in the United States. By 2050, more than 13 million Americans are expected to have the disease, spending $1 trillion on medical and long-term care costs. The September awareness campaign calls attention to find a cure and better ways of treating the illness.

Typically, medical treatments and care plans are likely a family’s most pressing issues for their loved ones with Alzheimer’s. Also important to consider is how well the family members are progressing as caregivers, and possibly setting up in-home or assisted living care for the person. A living will may also be necessary to allow for the care of a loved one who becomes incapacitated. End-of-life decisions can be laid out.

Active planning brings peace of mind that everything will be taken care of as the needs arise. Dissension among family members after your passing can be minimized and the process can reduce stress for all involved.

In still other cases, a will is contested in New York. Protecting the integrity of a will or challenging the disbursement of an estate requires an experienced law firm.

As we recognize the need for research, and the need for improved treatment and care options for those stricken with Alzheimer’s, getting serious about estate planning is a proactive step we can all take.

September 22, 2011

Queens Estate Probate May Involve The Turnover of Property Wrongfully Transferred

by Jules M. Haas

New York estate probate cases in Queens and Brooklyn, as well as other counties throughout New York State, can become very complicated due to improper pre-death transfer of assets.

In what has become a familiar occurrence, a close family member or confidant such as a health care aide, arranges for the ownership of assets belonging to another to be transferred to the name of the family member or confident. These transfers often occur only a short time before the death of the individual owning the assets who is making the transfer. The transfers can take many forms such as an outright change of title on a deed or the mere addition of a name as a joint owner or beneficiary on a bank account or retirement fund or insurance. The result of such transfers is that once the transferring person dies, his or her estate has already been stripped of the property due to the pre-death transfer. When the person’s Last Will is probated, the estate plan and beneficiary designations that are set forth in the Will cannot be effectuated since there are no assets to implement the plan.

I have represented many clients in situations where such transfers have occurred. The unfortunate and distressing reality is that the client’s recently deceased parent or other loved one would never have transferred all of their assets prior to death and, in effect, disinherited their close family members. Demonstrating that the pre-death transfers were improper and wrongful can be difficult.

At this juncture, Court intervention becomes imperative. The Surrogate’s Court Procedure Act [SCPA] provides for proceedings by which wrongfully transferred assets of a decedent may be recovered by an estate. These proceedings are commonly referred to as Turnover Proceedings. The most common form of such legal action is found in SCPA Section 2103 entitled “Proceeding by fiduciary to discover property withheld or obtain information”.

Both intestate and probate estate settlement can benefit from utilizing the statutory process of SCPA 2103 to recover estate assets. A recent example of the use of this law was seen in the case of the Estate of Hill, Surrogate’s Court, Queens County as reported in the New York Law Journal on August 19, 2011. In Hill a Preliminary Executor sought to recover the decedent’s real estate that one of the decedent’s daughters had transferred to herself prior to the decedent’s death using a power of attorney that authorized the making of gifts. The Preliminary Executor also sought to recover bank account transfers, as well. While Hill involved procedural motions prior to a final determination of the merits, the scenario of possible wrongful pre-death transfers using a power of attorney illustrates the problems facing many estates and family members. Although the preparation of a Last Will and New York estate plan are essential, very often a watchful eye and general oversight of an older family member’s affairs is equally important and can protect them from exploitation.

September 20, 2011

Smart New York Estate Planning Leaves Millions to Michael Jackson’s Family

by Jules M. Haas

The Associated Press is reporting that Michael Jackson’s estate has generated $310 million since he died two years ago mired in debt, enough to allow officials to make a $30 million payment to his mother and three children.

It must have taken an astounding amount of work to generate $310 million in two years. But because the King of Pop has such a fan base, it is apparently very possible especially considering a new album release and the selling off of memorabilia and personal possessions that likely have fetched high-dollar amounts at auction.Yet most of us don’t have millions of fans and the assets to sell to make those types of strides financially after death. That’s why being smart now is so important. Effective New York estate planning is crucial because without properly considering your assets, debts and what you will leave behind, your surviving family members could end up paying the price. That’s why it is prudent to consult with an experienced New York City Probate Attorney before it is too late.

Jackson’s case shows why choosing an executor for a New York City estate can make all the difference in the world. Two men were appointed executors of Jackson’s estate and, according to the news article, they have generated $310 in gross revenues. Additionally, they have refinanced and secured the estate’s interest in the Michael Jackson music catalog, MiJac and the Sony/ATV publishing catalog. The executors have reduced debt obligations by more than $90 million, and refinanced loans Jackson had taken out at far lower interest rates to save money.

Creditors have been paid off and taxes paid. While some creditor claims are open, the deadline for collecting has passed. A hearing to approve the plan is set for Sept. 28.

An executor is a person named in the person’s will and is appointed by the court when the will is admitted to probate in New York. The executor is responsible for distributing assets after paying taxes, debts, claims and other financial matters.

While it may seem simple, it is a very complex job and one that should be entrusted only to the most qualified and trusted person in your life. Look at Jackson’s case — he left mounds of debt from reckless spending before he died and left his executors with quite a task. But with smart financial moves and advice from well-informed probate lawyers, they have been able to erase or pay down debt and produce money for his family members.

As mentioned before, the average citizen doesn’t have the fame or assets to pull this off, so planning now for assets to be distributed and how you want your affairs handled upon death should be a priority, regardless of your age or financial situation.

September 13, 2011

Do Women Care Less About Estate Planning in New York?

by Jules M. Haas

As the New York Probate Lawyer Blog recently reported, women in New York and elsewhere are resistant to planning their estate. A recent Forbes article encourages women to take the necessary steps.

While women aren’t alone in their procrastination of estate planning in New York, they seem to take an approach more lax than their male counterparts. While no one likes to plan their death and what will happen to their assets after, it is a critical aspect of adulthood. Many women take to the task once they realize its importance as, in many ways, they are more organized and more conscientious — particularly when it comes to providing for children.No one really wants their assets dealt with by a judge and other strangers. And if you have children, they must be taken care of, with specific plans to help them live their lives without the aid of parents. Yet a recent survey found that 47 percent of women were concerned with their weight, compared to 43 percent who care about protecting their assets and contacting an experienced New York City Probate Lawyer to help them get their affairs in order.

A new Forbes article, by the same author, looks at the topic again, questioning why woman are so resistant to taking the matter into their own hands. To be fair, men are not exactly lining up at the doors of estate planners. It’s a problem for both sexes. A reluctance to deal with death is just part of it. Another is the mistaken belief that only the rich need such services. In reality, proper estate planning and making the most out of your legacy is even more important for those middle class families of moderate means.

By most accounts, the average person believes death is a far-off event that can be addressed at a later time. But the reality is that these estate matters must be handled now, with sound mind and with the best interests of the person and their loved ones in mind.

As the author of the article states, women with children are unlikely to plan their estates. Yet the 10-year anniversary of the Sept. 11 attacks should remind us all that planning is essential, even when chances of death seem remote. And older women are even more behind in their estate planning. Because they tend to live longer and marry older spouses, they are more likely to be widowed and must make decisions on what will be left to survivors.

Here are a few estate-related questions for women to consider:

What’s the difference between a will and a living trust? Both a will and living trust are documents able to transfer assets, but only a will can be used to appoint a child’s guardian. A living trust can hold assets while you are alive, which can have a number of benefits.

Whom to trust? The power of attorney is critical and should appoint a person you trust, like a family member or close friend.

Who will take care of the kids? Without proper planning, children can be thrust into a custody battle or maybe no family members will be willing to step up and take care of your child. That’s why filing formalized documents can clear the air and decide who will care for the children subject to Court oversight.

What is in savings? Make sure there is money set aside to pay for funeral costs, burial and other short-term related costs because often, joint money or retirement accounts can be frozen for some time.

September 8, 2011

New York Executors Use Their Powers to Collect Assets For Estate Settlement

by Jules M. Haas

Executors and other fiduciaries in New York, such as Administrators, are given numerous powers to help them handle estate settlement including the collection of estate assets. A fundamental job of a fiduciary such as an Executor in Manhattan or Westchester or other New York locality, is to protect and collect estate assets.

Estates, Powers and Trusts Law section 11-1.1 is entitled “Fiduciaries’ Powers “and sets forth many of the powers that a fiduciary can exercise. For example, paragraph (b)(3) of the statute authorizes a fiduciary “To invest and reinvest property of the estate or trust under the provisions of the Will, deed or other instrument or as otherwise provided by law.”

Estate assets can be varied and range from common items such as bank accounts, stock portfolios, and residential real estate to more less common interests such as royalty earnings relating to publications, inventions or compositions or oil, gas or mining, or various types of business entities such as limited liability companies or family business corporations. Estate assets may also be in the form of life insurance, annuities and retirement funds.

In each instance, it is necessary that the estate fiduciary identify all of the estate assets, collect the assets and distribute the assets to the estate beneficiaries in accordance with the terms of the Last Will or the laws of intestacy, as the case may be.

In many instances, estate assets may not be readily identified. For example, an article by Eric Gardner that appeared in the Hollywood Reporter on August 31, 2011 “Elvis Presley Estate Sues to Recover Ringtone Revenue” talks about a lawsuit recently filed in Germany by Elvis Presley’s estate which seeks payment for “new media income such as ringtones, downloads and entertainment apps.”

Another type of estate asset that is more common is a recovery due to the wrongful death of the decedent. However, the damages that the estate may be entitled to due to the decedent’s death may not always be apparent. As was recently reported in the Beverly Hills Courier on August 17, 2011 in a report entitled “Wrongful Death Lawsuit Over Christian Brando’s Death Settled” the ex-wife of the late actor, Marlon Brando, had commenced a lawsuit against a doctor due to the death of her son, Christian. As reported, the lawsuit alleged that due to the doctor’s negligence, Christian’s estate was “harmed because when he [Christian] died, he lost the benefit of an inheritance from his father’s [Marlon Brando] estate.”

I have acted as the attorney for Executors and Administrators on many occasions and helped my clients identify, protect and collect estate assets.

September 1, 2011

New York Power of Attorney Issues Overlap Guardianship and Estate Matters

by Jules M. Haas

Brooklyn and Nassau estate attorneys, as well as those assisting their clients throughout all parts of New York State, are often confronted with a myriad of issues relating to Powers of Attorney, Health Care Proxies, Article 81 Guardianship and estate settlement.

In a typical situation, an individual may have prepared a Last Will while at the same time preparing a New York Power of Attorney and a Health Care Proxy. The New York Probate Lawyer Blog has previously discussed the importance of preparing advance directives such as a Power of Attorney and Health Care Proxy by which others can be appointed to handle a person’s property and health care issues in case of illness or incapacity.

All parties involved in these matters should be particularly aware that agents appointed in a Power of Attorney and Health Care Proxy have similar fiduciary duties to act appropriately as do Court appointed fiduciaries such as Article 81 Guardians and Executors and Administrators. In many instances, questionable conduct by these lifetime agents may end up being reviewed by a Court in a Guardianship Proceeding or in proceedings in the New York Surrogate’s Court after the appointing person dies. Issues regarding property transfers, expenditure of funds, and the change of names or beneficiaries on bank accounts, life insurance and retirement funds can result in disputes that overlap lifetime and post death periods.

A recent lawsuit entitled Kaufman v. Kaufman, in New York State Supreme Court, New York County, provides an excellent example of the problems and issues that can arise in these situations. Kaufman involved two brothers, Allen and Kenneth, both of whom were appointed as agents in a Power of Attorney by their father, Hyman. Allen and Kenneth were also Co-Trustees under family trusts. Hyman, who had suffered a brain injury, had been in a nursing home for a number of years.

Allen petitioned the Court for an accounting and requested among other things, that Kenneth be removed as attorney-in-fact under the power of attorney and as a trustee for violating his fiduciary duties. As recounted by the Court, Allen claimed that Kenneth was “refusing to share financial information, failing to provide a complete record of financial transactions, and using Hyman’s assets for personal and business purposes.”

Following a review of the parties assertions, Justice Donna Mills in a decision dated August 4, 2011, directed Kenneth to provide an accounting of his activities pursuant to New York General Obligations Law Section 5-1505. This Statute, entitled “Standard of Care: fiduciary duties; compelling disclosure of record”, requires in paragraph 2(3) an agent under a power of attorney “to keep a record of all receipts, disbursements, and transactions entered into by the agent on behalf of the principal and to make such record and power of attorney available to the principal or to third parties at the request of the principal”
It is apparent that issues involving fiduciary duties and the safeguarding or misuse of assets can overlap from the lifetime stage to a post death estate settlement controversy. Suppose Hyman had died prior to the resolution of the Supreme Court case. In such event, questions regarding the propriety of Kenneth’s acts might need to be resolved in the Manhattan Surrogate’s Court as part of the administration of Hyman’s estate.

I have counseled clients, both fiduciaries and beneficiaries, in many situations similar to those raised in Kaufman. The appointment of lifetime agents, as well as executors and trustees, requires thorough consideration and the problems faced by the fiduciaries and those whose interests they are protecting can arise and require resolution in many different forums.

August 25, 2011

New York Women Must Plan Out Their Estates

by Jules M. Haas

A recent Forbes.com article by a Forbes Senior Editor makes the case for why women should be taking a more thorough approach to wills and estate planning in New York and throughout the country.

The article leans on a recent survey by EZLaw, which the New York Probate Lawyer Blog commented on recently. According to the survey, which was conducted with a random sampling of Americans about the importance of wills and estate planning, women were more concerned with their weight (47 percent) than with the protection of their assets (43 percent). All told, the majority of those surveyed believe that having a will is important, but few have the documents in place.In the last half a century, women have made many positive strides in gaining rights, working toward equality in the workforce and in their ability to join the hierarchy of many of the country’s Fortune 500 companies. For this reason and for many others, women, just like men, must take an interest in protecting their assets. But this is best done with the knowledge and experience of a New York City Estate Planning Attorney, who can guide clients through the complex area of estate planning, wills and trusts.

“Does this mean women have more will power when it comes to their waistlines, than when it comes to estate planning?” the Forbes article’s author asks. “If so, it’s a shame, because estate planning affects women profoundly.”

According to the article, among Americans 65 and older, 42 percent of women, compared to 14 percent of men, are widowed. Women are expected to live longer. This longevity combined with a woman’s tendency to marry older spouses and earn less over the span of their lifetime, means they could suffer the consequences if their estate isn’t planned properly.

“Perhaps worst of all is how a lack of planning can affect families of young children,” the author writes. “Without a will, if your children are minors and you were a single or surviving parent, a court will appoint a guardian for them.”

The author implores women to have the talk about estate planning not only with their spouses, but also with their adult children and their own parents.

With spouses: Relating the end of life to current events, a person they know who’s sick or even wanting to provide for the kids may be ways to bring up this less-than-attractive topic of conversation. But either way, it needs to be done. Estate planning isn’t just a when-I-die necessity, it should be done so that the individual will be taken care of if their health fails at any stage of life.

With adult children: While a parent to an adult child has no obligation to change their plans based on their kids’ preferences, talking it over can help. Explaining the decision rather than making it a surprise upon death can save lots of frustration and sibling rivalry down the road.

With your parents: This can be difficult because some people would view this as being greedy, but it is important to talk with your parents if you notice a decline in mental capacity later in their life. Once they lose competence, they can’t make binding commitments, so estate-planning documents must be handled before that happens.