New York Probate Lawyer Blog

July 14, 2010

New York Surrogate’s Courts Require A Due Diligence Search For Distributees

In New York the persons who are entitled to share a decedent’s property are called distributees. These persons are more commonly known as heirs or next of kin.
A determination of distributees or kinship is essential in Surrogate’s Court proceedings and the Court rules and procedures require that due diligence be demonstrated in asserting the family tree. In probate proceedings, distributees must be identified so that they can receive notice of the probate proceedings and afforded the opportunity to review and contest the decedent’s Last Will. This notice is called a Citation which is similar to a summons.
Although the terms of a Last Will may be clear and unambiguous, the probate or validation of the Will cannot be accomplished without first identifying the distributees who are to be given notice of the proceedings. Many decedents are survived by only distant relatives such as great nieces, nephews, cousins or more distant next of kin who have had little or no contact with the decedent and whose whereabouts are unknown. A great deal of time and expense may be incurred in searching for these individuals who may be scattered around the globe. The services of a professional genealogist may be needed to reconstruct the family tree.
Similar kinship problems arise in Administration proceedings where the decedent died without leaving a Last Will. Again, the determination of the decedent’s next of kin is essential in order to identify the persons who are to receive notice of the Administration proceeding and, ultimately, a share of the decedent’s estate. Believe it or not, many persons die leaving no Last Will and little trace or information regarding their relatives who may have been estranged or who live in another state or country. In these cases, their assets may escheat to New York State.
The New York Surrogate’s Courts are very strict regarding kinship matters. The Court needs to be certain that proper proof such as birth and death records and affidavits documenting diligent searches are available so that estate assets are not distributed to non-family members or without proper notice.

July 11, 2010

New York City Estate Planning Vital To Peace Of Mind

by Jules M. Haas

The Times Herald-Record of Middletown, New York, recently published an informative piece about the need for comprehensive estate planning.

Perhaps it is the discomfort often associated with contemplating our mortality, but far too many of us pass without ever leaving a basic Will. Far fewer of us take the time to engage in the kind of comprehensive estate planning that can help shield our assets from estate taxes and ensure our directions are carried out upon our death.

An experienced New York City estate planning lawyer can take the stress out of such planning. In retrospect, clients wonder why they waited so long. With a plan in place, they can enjoy their lives with the confidence that comes from knowing their affairs are in order. And loved ones will not be burdened with the hassle after their death. Kinship proceedings, contested Wills and a spousal right of election are just some of the circumstances that can turn a smooth administration of an estate into a complicated proceeding in the Surrogate’s Court.

A comprehensive estate plan is much more than a plan for death — it is a plan for life. An estate plan can provide for your care in the event that you become disabled or incapacitated.

Living trusts are one tool that can be utilized to ensure your estate is distributed in accordance with your wishes, without ever having to enter what can be a long, expensive and public probate court process. One example is a case in which someone leaves a Will but wishes to leave nothing to a child. The child must receive notice that the Will is being probated, which is frequently nothing more than an invitation to a courtroom fight.

A trust not only avoids the need for a public probate process, it bypasses the need to notify those left without an inheritance. Out-of-state property is another example of why trusts make sense. With a Will, such property would be subjected to probate proceedings in both states. The out-of-state proceeding is called an Ancillary Proceeding.

With a living trust, you move your assets into the trust, which you may control during your lifetime or you may name an independent or co-trustee. One word of caution: Living trusts that are not maintained, or are allowed to become dated, can complicate the distribution of assets after your death. For instance, if you have bought another home, and the property is not owned by the trust, it would have to go through the probate process at the time of your death.

Speaking with an experienced New York City estate planning attorney can be a wonderful step toward the security that comes with knowing you have prepared for whatever life brings your way.

July 7, 2010

New York Court Appoints A Guardian And Annuls Marriage And Voids Deed

by Jules M. Haas

New York Mental Hygiene Law Article 81 provides the guidelines and the procedure to appoint a Guardian for Personal Needs and Property Management for persons with incapacities. Provisions of the law also provide the Court with the power to modify, amend or revoke different types of transactions or documents entered into while a person was incapacitated such as a contract, power of attorney or health care proxy. New York Mental Hygiene Law Section 81.29(d).

In many instances the incapacitated person is elderly. The transfer of property by means of a power of attorney or the conveyance of real estate by deed where the power or deed was executed while the person was incapacitated may not reflect the incapacitated person’s estate plan. In fact, such transfers may result in giving assets to individuals that would otherwise not be beneficiaries of choice.

A recent example of a Court exercising its authority to void certain transactions entered into by an incapacitated person is found in Matter of Jerry M. v. Geraldine P., decided by Justice Wilma Guzman on June 15, 2010 (Bronx Supreme Court), as reported in The New York Law Journal on June 18, 2010, p. 18. In her decision, Judge Guzman found that Geraldine P. was incapacitated and appointed a Guardian for personal needs and property management. In addition, the Judge annulled a marriage that Geraldine P. had entered into and voided a deed she had signed transferring her home. The Court found that Geraldine did not understand the nature and consequences of either the marriage or the deed transfer.

Improper control over the affairs of an incapacitated person is often the setting for what later turns out to be a Will contest or estate dispute when assets intended to be bequeathed or otherwise transferred upon death to loved ones are directed to other parties prior to death. An interesting aspect of the Court’s powers relating to the revocation of documents concerns a person’s Last Will and Testament. In the past there had been occasions where the Guardianship Court invalidated a Last Will and Testament that the Court had found to be executed while a person was incapacitated. However, a recent amendment to Section 81.29 (d) of the New York Mental Hygiene Law prohibits the revocation or invalidation of a Last Will or Codicil during the lifetime of the incapacitated person. Thus, the validity of a Last Will must be challenged after the person’s death during the probate proceeding after the Will is filed in the Surrogate’s Court.

June 28, 2010

New York City Estate Planning can Minimize Exposure to Estate Tax

by Jules M. Haas

The number of estates subjected to federal estate taxes will skyrocket next year to an estimated 44,200, compared to just 5,500 estates that were subjected to the estate tax in 2009, The New York Times reported.

The estate tax can have an enormous impact and can even force the sale of a farm or family business. Some studies have even suggested that substantial changes to the estate tax can impact death rates — increasing the number of deaths that occur right before an increase and decreasing deaths in the weeks leading up to the enactment of a tax break.

The federal estate tax — or death tax as it is sometimes called — was eliminated for 2010. It returns next year with a tax rate of up to 55 percent on estates worth more than $1 million. It applied only to estates valued at more than $3.5 million in 2009 and the maximum rate was 45 percent. Hiring a New York City estate planning attorney is critical to minimizing your exposure to estate tax while ensuring that your estate is distributed to heirs in accordance with your wishes.

The Wall Street Journal reports that a new proposal on the table would hit wealthy taxpayers harder than anything yet suggested. It would return the exemption threshold to $3.5 million, or as much as $7 million per couple, while reducing the maximum tax rate to 45 percent. But estates valued at between $10 and $50 million would be taxed at a rate of 50 percent. Estates valued at more than $50 million would pay 55 percent and those worth more than $500 million would pay 65 percent.

One thing might be as certain as death and taxes and that is that Congress will never be done playing with the estate tax rate. But, with proper estate planning, you can focus on minimizing your exposure to estate taxes, at whatever rate happens to be in place at the time of your death.

With advanced planning, many families can legally shelter significant portions of an estate from taxation. Living trusts, tax advantages associated with passing gifts to your heirs while you are alive, and other tax and estate-planning options can help protect a family business from taxation and will ensure that more of your estate passes to your chosen heirs.

June 24, 2010

New York Article 81 Guardian Is Directed To Pay Fee Of Court Evaluator From Guardian’s Commission

by Jules M. Haas

In a New York Mental Hygiene Law Article 81 Guardianship proceeding, the Court typically appoints a Court Evaluator. The Court Evaluator performs an independent investigation and assists the Court in determining whether a person is incapacitated and who should be appointed as Guardian. The Court Evaluator’s fee is often paid from the funds of the Incapacitated Person, although the fee may be paid by the petitioner.

In a recent decision, Matter of A.M., dated 6/1/10 reported in the New York Law Journal, on Friday, June 11, 2010, p. 27, Justice Alexander W. Hunter, Jr. directed that a successor Guardian pay the fee of a Court Evaluator from funds the Guardian had collected on behalf of the Incapacitated Person. The Guardian had previously collected sufficient funds to pay the Court Evaluator’s fee but had spent the funds by making payments which included paying itself fees on account of the Guardian’s statutory commission. In effect, the Court ruled that the Court Evaluator’s court awarded fee took priority over the subsequently earned commission.

Judge Hunter’s decision shows that a Court Evaluator serves an important role in Guardianship proceedings. The information presented to the Court by the Court Evaluator is vital for a full determination.

The duties of the Court Evaluator include interviewing the Alleged Incapacitated Person, explaining the proceeding to the Alleged Incapacitated Person, determining whether the Alleged Incapacitated Person wants legal counsel, interviewing the petitioner and preparing a report and recommendations for the Court.

The Article 81 Guardianship statutes establish a procedure for the appointment of a property and/or personal needs Guardian that is beneficial and protective of the Incapacitated Person. These proceedings require a hearing in front of the Court and testimony from witnesses. Many times the hearings are contested and deal with disputes regarding incapacity, competing family members or others who desire to be appointed as Guardian, and issues concerning the misappropriation of the Alleged Incapacitated Person’s assets.

June 18, 2010

Irish Sisters Leave Millions in New York Estate to Animal Rights Organizations

by Jules M. Haas

The Irish Times recently reported the case of two sisters who donated their multi-million estate to charity, while leaving nothing to their relatives.

Proper estate planning in New York is vital to ensuring that your wishes are carried out upon your death.

The two sisters were born in Ireland and moved to the Upper East Side of Manhattan. One died in 1998; the surviving sister passed away in 2006, leaving behind an estate worth millions. The Times reports that lawyers are looking for relatives of the sisters in Ireland, not to notify them of an inheritance, but to inform them that the sisters have left their fortune to animal charities. An attorney in Ireland has been enlisted to help with the effort and has taken out an ad in national newspapers looking for surviving relatives.

The attorney in Ireland said the amount donated to animal charities is somewhere between $3 and $4 million but said it was unlikely that any distant relatives could challenge the Will.

Well, not exactly. Turns out at least 30 people have come forward claiming to be relatives, Irish Central reported.

It’s always a good idea to consult a New York City probate attorney when establishing a Will or administering an estate. But it can be especially critical in cases where a large sum of money is donated to charity or when possible heirs are either omitted from a Will or intentionally left without an inheritance.

However, issues relating to kinship matters, such as ascertaining and locating distant relatives, can transform the probate proceeding into a long and costly process. Additional life-time considerations such as a Living Trust or gifts may eliminate some of the post-death complications.