Trusts and Estates

May 23, 2011

Celebrity No-Nos Help Average Joes in New York Estate Planning

An improperly planned estate in New York City can cause turmoil in a family that adds to the grief felt from the loss of a loved one. And it’s not just everyday citizens who deal with it. Many celebrities have made mistakes in their wills that cause problems.

That’s why consulting with an experienced New York trust and estate lawyer is crucial to avoiding the kind of problems that can cause harsh words, infighting and lawsuits. Many of these things can be avoided if the right attorney is hired.These are some tips from celebrities that may help if you or a loved one is taking the critical step of planning your estate, courtesy of AOL Real Estate:

Put it in writing

Singer Don Ho, according to his adult children, promised his estranged wife on her deathbed that he would let her six children inherit the family’s eight-bedroom beachfront home in Hawaii where his first wife had lived until her death. He later listed the house for sale and while it was on the market, he died of heart failure. The house sold in 2008, but the children are still fighting over it.

Fund the trust you create

Before death, Michael Jackson created a family trust, but he didn’t transfer any assets into it, which is fairly common. When dealing with a house and other assets, a new deed or other transfer documents must be prepared to transfer ownership into the trust’s name. If unfunded, the trust will not be effective and the survivors will have to go through probate court to effectuate the terms of a Last Will.

Question mental competency before death

A few years ago, heiress Gail Posner left $3 million in cash and an $8 million house to her three dogs and another $27 million to her household staff and caregivers. Her son got about $1 million. While the case is still being fought in court today, it’s unclear whether her son will be successful in claiming that his mother’s staff took advantage of her.

Anticipate disagreements and address them before death

Survivors will sometimes bicker about how much they receive from the death of a family member. But one way to help prevent those disagreements before death is to spell it out correctly in a New York will.

All of these tips apply to you and I — the first step is hiring a New York City estate and trust attorney who can guide you through all of these complex decisions. Whether it’s modifying trusts, choosing an executor for the estate or dealing with New York estate taxes, a solid attorney should be your first step.

May 17, 2011

New York Kinship Problems Arise When A Decedent Does Not Have A Last Will and Testament

by Jules M. Haas

The New York Probate Lawyer Blog has discussed on a number of occasions the many problems created when a person dies without a Last Will and Testament. One of the major issues faced in estate settlement and estate administration in such cases is determining the identity of the decedent’s distributees or next of kin. This determination is essential because the distributees are the individuals designated by law that will inherit the estate assets. As previously referred to in blog posts, New York Estates, Powers and Trusts Law section 4-1.1 provides a list of persons who have priority of inheritance.

It is quite common that a kinship hearing is required to determine the identity of distributees. Proof of kinship can be time-consuming, expensive and difficult. A recent example of the complexities of kinship determination was displayed in Matter of the Estate of Esther Onetha Springer, decided by Kings County Surrogate Margarita Lopez Torres on April 8, 2011. Esther Springer died in 1988 owning a one-half interest in her residence. Based upon investigation followed by testimony and other proof at Court hearings, it appeared that Esther had two children. One of those children, Clyde, had moved to California and died in 2001. Therefore, a determination needed to be made as to Clyde’s distributees. According to the Court decision, Clyde “had fathered a number of children from a number of relationships, marital and non-marital. . . .” It appears that Clyde had eight children and the New York Surrogate determined that it was necessary to use California law to establish Clyde’s distributees. The Court was ultimately able to determine kinship.

I have assisted clients throughout New York including Manhattan and Queens in kinship and intestate administration matters. As can be seen from the Esther decision, it is essential to prepare appropriate estate planning documents such as a Living Trust and Last Will and Testament to avoid the uncertainties of intestate proceedings. Additionally, in the event a person dies without proper planning, a good New York Trust and Estate attorney is important to help protect the rights of estate beneficiaries and to properly administer the decedent’s estate.

May 12, 2011

Large Inheritances Create the Need for Sound Fiscal Planning and Execution in New York

by Jules M. Haas

Imagine the emotion of having a parent or relative die and then deal with the shock of being left a large sum of money as an inheritance. Many would not consider it a burden. However, without the proper plan to handle that kind of change in your life, you could be left mismanaging the money, fighting with siblings and wasting away money your family worked hard to save.

That’s why as previously discussed on New York Probate Lawyer Blog, it is imperative you select a proper executor or trustee in dealing with estate planning. A well-qualified New York Probate Attorney can help plan and manage an estate, including life insurance, stock options and real estate.For example, consider the trouble this Illinois woman had when her mother died of cancer in June 2007. She and her four siblings inherited their parents’ $1 million house, according to CNN Money.

While all siblings agreed to sell the house, it became a hassle because some believed the house was overpriced and others thought it was priced correctly. Eventually, the house sold, though for 9 percent less than their initial estimate. But in the meantime, the siblings had to pay utility bills, landscaping costs and deal with a house that was nearby to no one.

AS CNN Money points out, there are challenges to being a beneficiary. While it is comforting to be remembered and while there is likely a material benefit, there are challenges, including tax laws, family drama and complexity surrounding business dealings.

New York probate law requires court intervention, affidavits, petitions and notice to family members, all of which can be daunting for someone to do on their own. And, if done incorrectly, it can become an ongoing financial burden that relatives never intended it to be.

When dealing with an inheritance or a will, consider how an experienced New York City probate attorney can assist you in either planning your estate or executing the will of a loved one:

Planning your trusts and estates: You should start by taking inventory of your assets and deciding who should execute your will and to whom you want to leave your assets. An attorney is best able to assist you in making and executing a plan.
Choosing an executor: A New York State executor may be appointed when someone leaves assets after death. If you are chosen as an executor, you may need sound legal advice on how best to execute the will.
Dealing with contested wills: In New York, wills can be contested in court. These are often done by heirs who were left little in a will from a relative. There must be a valid legal ground for objecting to a will, but the process can be emotionally and financially exhausting. Consult a probate lawyer who can work to minimize the damage.

May 10, 2011

New York Among States With Highest Density of Millionaire Households — Estate Planning Critical

by Jules M. Haas

It’s possible that the number of millionaires in the United States will double over the next decade as numbers reach and exceed pre-recession levels, CNN Money reports.

The wealthy tend to their money like one might tend to a garden: thoughtfully, frequently and with great care. A New York probate law attorney can help you plan for the future, deal with changing tax laws and maximize your financial potential.According to the article, overall, the United States and Europe have the greatest concentration of millionaires, while China, Brazil and Russia will grow at the greatest rate in the next decade.

In the U.S., California will have the greatest number of wealthy households in 2020, while New Jersey will have the highest density of millionaires. The study predicts New York will have the fourth-highest density of millionaire households in 2020, while Connecticut had the highest in 2010.

The study defined wealth as financial assets, such as stocks, bonds and other investments and non-financial assets such as real estate, automobiles and art.

Consult an experienced New York trust and estates lawyer who can guide you through the process of protecting your assets. For instance, New York state estate taxes are some of the highest and most complicated of anywhere in the United States. There are ways to save on taxes, but it will be difficult to navigate the law alone.

As the study suggests, more than three million millionaire families were knocked off the map between 2006 and 2008 during the country’s recession. Taking the steps to properly protect your money, whether through securing correct Manhattan real estate contracts or finding the right executor for your will in Brooklyn, choosing the right lawyer may be the most important thing you do.

May 5, 2011

New York Estate Planning Has Benefits and Pitfalls From Life Insurance

by Jules M. Haas

New York estate planning requires the consideration of many different facts and circumstances. Paramount in importance is a person’s planning desires which require identifying the beneficiaries, such as relatives, friends and charities, who are to share in the plan. Also, the various types of assets such as real estate , securities, retirement funds and bank accounts must be examined. One such asset that is very popular and helpful in planning is life insurance.

Life insurance is a contract between the owner or person who buys the policy and the insurance company. The contract or policy obligates the company to pay a certain amount of money upon the occurrence of a certain event such as the death of the person who is insured. Depending upon factors such as age, health and type of policy, the ultimate insurance pay-out may be many times greater than the premiums paid to purchase the insurance. Therefore, when contemplating the use of life insurance as part of an estate plan, an individual should consult with experienced professionals such as a New York estate planning attorney and a qualified insurance agent or financial planner.

In addition to determining the appropriate type and amount of insurance to purchase, close attention should be given to the naming of primary and alternate beneficiaries. Designated beneficiaries of insurance receive these benefits outside of a probate estate. Thus, the provisions of a Last Will must be coordinated with the naming of the insurance beneficiaries to preserve the intentions of the estate plan pay-out.

Due diligence in investigating the bona-fides of the insurance company is also advisable. In a recent post by Philip Moeller on May 2, 2011 in The Best Life, it was reported that many insurance company practices are being investigated relating to life insurance policies. The article noted an audit by the California State controller that showed “an industry-wide practice of companies failing to pay death benefits to the beneficiaries of life insurance policies.”

The article also provided a number of suggestions that one should follow regarding their life insurance policies, which are summarized as follows: (i) clearly identify your beneficiaries; (ii) maintain good records of the insurance; (iii) advise your beneficiary concerning the insurance; and (iv) use the assistance of an attorney or financial planner who can assist with the collection of insurance proceeds.

May 2, 2011

Selecting New York Beneficiaries and Executors or Trustees in Important in Estate Planning

by Jules M. Haas

New York Estate Planning requires the consideration of many different topics. To begin with, knowing the nature and value of one’s assets is imperative. Some assets such as joint bank accounts will pass to the joint owner by operation of law. Assets held in the name of the decedent or creator of a trust may be available for distribution pursuant to the terms of the Will or Trust instrument.

Great consideration should also be given to the beneficiaries who are to benefit from the estate plan. Not only is the identity of the primary beneficiaries important, the allocation of shares among the beneficiaries, as well as the selection of alternate beneficiaries, should be reviewed.

The New York Probate Lawyer Blog has previously discussed that a spouse cannot be disinherited and is entitled to obtain a share of the other spouse’s estate. However, there is no prohibition in New York law from disinheriting any other family member, such as children. It was recently reported in Entertainment News that film star Jackie Chan intends to disinherit his son and donate his assets to charity.

Another consideration is the selection of a fiduciary such as an Executor or Trustee. The selection of a fiduciary involves placing long-term confidence in someone who is expected to carry out a person’s wishes and intentions. Alternative or successor fiduciaries should also be designated. The selection of fiduciaries who are not trustworthy can ruin the best estate plan. As recently reported by Paul Lamoureux in The Docket on March 28, 2011, trust funds donated by founding father John Adams were negligently managed by the city of Quincy, Massachusetts.

April 27, 2011

A New York Will Contest May be Based Upon The Duress Of The Testator

by Jules M. Haas

The New York probate of a Last Will essentially requires the determination by the Surrogate’s Court that the Will is a valid document to provide for the transfer of the decedent’s estate. When a Will is admitted to probate, the Will becomes effective and estate assets are distributed as specified by the Will provisions.

The New York Probate Lawyer Blog has discussed that the decedent’s distributees or next of kin have the right to object to the probate of the Will. The common grounds relied upon in contests are: (i) lack of proper execution of the Will; (ii) lack of testamentary capacity; (iii) undue influence; and (iv) fraud. Each of these grounds has its particular requirements of proof.

In a recent case concerning the Estate of Mildred Rosasco, decided by Manhattan Surrogate Kristin Booth Glen on April 5, 2011 and reported in the New York Law Journal on April 14, 2011, the Court recognized that an additional ground for a Will contest can be based upon “duress”. Duress differs from undue influence in that duress involves more of a threat or performance of a wrongful act that coerced the testator. In Rosasco the Court found that the basis for a finding of duress was present due primarily to physical violence that the estate beneficiary had displayed and the possible fear by the decedent that such violence would re-occur if she changed her Will. Therefore, the Court allowed the case to move forward toward a trial.

Instances of Will contests based upon more typical acts of undue influence are frequently presented to the Court. I have represented clients in these New York City probate matters in counties such as Brooklyn and the Bronx. In another recent case, Brooklyn Surrogate Diane A. Johnson allowed the proceedings to move toward trial where a 92-year old decedent had left his substantial estate to two administrators of the assisted living facility where he had lived during the final years of his life. The case of Estate of Ralph Besdansky, decided on April 12, 2011 and reported in the New York Law Journal on April 15, 2011, seems to present a more classic example of a Will procured through undue influence and abuse of a confidential relationship.

April 25, 2011

Divorce Complicates Estate Planning in New York

by Jules M. Haas

As Forbes reports this week, nothing can turn your New York estate plans upside down like divorce.

New York City trust attorneys understand divorce can be an emotional time. Unfortunately, a lack of planning means some will never regain the financial ground and standard of living lost in a divorce. For others, who ignore the need to update an estate plan, outdated beneficiaries can cause a real headache for heirs and can even result in assets being transferred to a former spouse.Changing the beneficiaries on life insurance, 401k plans and IRAs is just the beginning, and even that is often overlooked. Failure to make the proper changes — whether to your Will or to the designation on various accounts — can result in leaving an inheritance to your former spouse, particularly if a death occurs before a divorce is final. For long, contested divorces, a separation agreement may be considered, one of the benefits of which is to keep such an inheritance from occurring.

In most states, you cannot completely disinherit your spouse until the divorce is final — just as you cannot use various trusts and other investment vehicles to withhold a spouse’s rightful share of inheritance while you are married. In New York, the spouse is presumed to get at least one-third of an estate with children and one half of an estate without children.

Once a divorce is finalized, you should immediately update your Will and other estate plans if you have not already done so. In fact, in an ideal world, you should update such documents before even filing for divorce. This includes updating medical directives and a financial power of attorney. Selecting new beneficiaries for life insurance policies and retirement accounts can also be done at this time — though some require the consent of a spouse and will have to wait until after a divorce is finalized.

After divorce proceedings have begun, it may be impossible to make such changes. Restraining Orders may be in place to make sure both parties assets and ownership interests don’t change until the final divorce decree.

April 15, 2011

Joint Tenancy an Option for Disposing of Real Estate without Probate

by Jules M. Haas

We recently reported on our New York Probate Lawyer Blog about the need for ancillary estates to dispose of out-of-state real estate in cases that go through probate court.

Estate planning lawyers in New York City understand there are many options for avoiding probate. In some cases trusts or other options can be a desirable alternative. As part of our ongoing series on Avoiding Probate in New York, we will take a look at the options to transfer real estate.In general, those estates governed by a Last Will (or Intestate estates without a Will) will enter the probate court process. Probate court is a state process however, and as such it typically will not dispose of real estate or other hard assets owned in another state. It can be necessary to enter the probate process in that state as well, unless you own those assets in trust or other arrangements for avoiding probate have been made.

Some states allow automatic transfer of ownership of the property to your chosen heir. You may hold the property in joint ownership. Joint tenancy with right of survivorship will permit your spouse (or chosen heir) to assume ownership and continue living in the house after your passing.

Probate is not avoided if both owners die at the same time and the last surviving owner must make other arrangements to dispose of the property. In some cases, naming a joint tenancy may also trigger gift taxes. And it can create several headaches that can make it a poor choice for an older person who is seeking to transfer ownership after his or passing.

Joint tenancy involving other assets, such as bank accounts, can also create disputes after your death. In cases, for example, where joint tenancy on a bank account is granted to assist with bills, the person may claim those funds automatically, which may not be in keeping with the original intent of the account owner.

Consulting an estate planning lawyer in New York is the best way to make sure your affairs are in order and that your estate passes to your chosen heirs in the manner of your choosing.

April 13, 2011

New York Trusts can Alleviate need for Ancillary Estate to Handle Out-of-State Property

by Jules M. Haas

The NWI Times recently published an article explaining the complexities and expenses associated with ancillary estates, which can be necessary to dispose of real property located in another state.

Proper estate planning in New York can alleviate the need to go through the probate process in multiple states, which can be expensive, time consuming and public. An experienced New York City probate attorney can assist a client in establishing a trust or otherwise working to bypass the probate court process.As we discussed on our New York Probate Lawyer Blog, there are a number of advantages to bypassing the probate court process. One of those is to circumvent the need for ancillary estates. Probate is a state process. And as such, it does not cross state lines. A resident who lives and died in one state, and has real property in another, must enter the probate process in both states. Unless he or she invests in the proper estate planning.

By putting out-of-state property into a trust, you will be able to transfer it upon your death without the need to go through the probate process in either state. The savings of time and money can be quite substantial and you will also enjoy the privacy that comes with property and asset transfers outside probate.

There are a number of issues to consider, not the least of which is taxes. And, in states like Florida where homestead exemptions and property appreciation caps are in place, there may be significant tax implications to making a property transfer.

By planning ahead, you can be assured that your wishes will be carried out at the time of your passing, and that your heirs will not be saddled with unnecessary court proceedings, taxes or estate headaches.