New York Probate Lawyer Blog

March 26, 2021

How Life Insurance can Affect an Estate Plan

Estate 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life policies not only provide a pay-out of funds but also have an accumulated value over time which may be able to be withdrawn or even used as security for a loan.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.

March 19, 2021

Planning the New York Estate – Here We Go Again

by Jules M. Haas

Estate planning in New York has always been important. The New York Probate Lawyer Blog has published numerous articles over the years discussing the need for, and issues involved with, a Last Will, Living Will, Health Care Proxy, Power of Attorney and Living Trust.

However, as estate planning lawyers are aware, concerns about estate taxes have largely taken a back seat. This is because during recent years, the exemption levels for incurring estate tax liability have been quite high. Thus, most estates do not need to worry about New York State and Federal estate tax. During 2021 the Federal estate and gift tax exclusion is $11.7 Million per individual. As a result, a married couple could pass $23.4 Million without fear of any tax. On the State level, New York provides an exemption of $5,930,000.00 per individual. Also, there is no New York gift tax. When these amounts are coupled with an unlimited deduction for transfers between spouses, there are relatively few estates where estate tax issues may be encountered.

With the advent of the new administration in Washington, D.C., there is renewed consideration by some lawmakers of overall tax increases. This includes reducing the Federal exemption limits and raising taxable estate rates. While the specifics of what new laws will be enacted are unknown, the imposition of increased taxes typically results in new models for planning to diminish the effect of potential tax increases. The use of marital deduction trusts, insurance trusts, transfers of interests in small businesses and other gift structures all may gain renewed popularity.

March 12, 2021

What is the Surrogate’s Court in New York?

by Jules M. Haas

Any discussion regarding estates and trusts in New York invariably involves the Surrogate’s Court. To most individuals not involved with the settlement of a decedent’s estate or other Court matters, proceedings in a Court named Surrogate’s Court may seem mysterious and sometimes ominous. However, this Court and the nature of the matters it handles makes it one of the most people-oriented forums in the judicial system. After all, most of the proceedings concern the affairs of decedents which affect the humanity at some level of all the participants.

The history of the Court dates back to colonial times. According to an article written by Dennis Wiley entitled “What’s in a Name? That Which We Call Surrogate’s Court” which appeared in the New York State Bar Association Journal July/August 2016 publication, the title of Surrogate was first used in New York in 1702. According to the article, New York and New Jersey are the only two systems of probate in the United States which use this term. Most other places refer to probate courts.

The New York Probate Lawyer Blog refers to the Surrogate’s Court all the time. The judge in the Surrogate’s Court is known as the Surrogate. The primary laws that control the functioning of the Court are contained in the Surrogate’s Court Procedure Act or SCPA. There is an official website for the New York Court System at www.nycourts.gov . This site contains a lot of information regarding the New York Surrogate’s Court. It is pointed out that each county in the state has such a court which handles cases regarding decedents. In addition, the site is a valuable resource since it lists some of the numerous types of cases which come before the Court. These include the following:

March 3, 2021

New York Estate Planning Considerations – The Obvious Should Not be Overlooked

by Jules M. Haas

Everyone talks about preparing a Last Will or engaging in estate planning. Particularly now, with the advent of the pandemic, there is the reality of facing the need for post-death and advance directive documents. It is easy for an individual to view planning as the simple function of disposing of assets to named individuals. However, the actual process and considerations needed encompass much more thought and preparation. Estate lawyers in New York City are familiar with this more rigorous examination.

Some of the more fundamental, yet highly important, considerations are listed below:

Designating Beneficiaries: While identifying beneficiaries in a Will or Trust is important, it is equally necessary to consider alternate or contingent designations in the event the primary persons are pre-deceased or even renounce their bequest. As a Will lawyer, I am constantly surprised when clients have not even considered alternate beneficiaries. Another aspect of selecting beneficiaries concerns assets that pass outside of the administration estate such as pay on death accounts or life insurance or retirement funds where a beneficiary is named as the pay on death recipient. The estate planning process necessitates that all of these types of assets must be considered so that there is no conflict with Will provisions or the goal of the plan as to the values each person is to receive.

February 25, 2021

Probating a New York Will Requires Notice to Distributees

by Jules M. Haas

It is well known that writing an estate plan is essential to have an effectual distribution of assets at death. A lot of time and effort can be expended creating a Last Will, Living Will, Health Care Proxy and Power of Attorney that reflect a person’s desires and intentions. The New York Probate Lawyer Blog has published numerous articles examining the planning of estates.

Additionally, it should be recognized that in order for a Last Will to be put into effect, the Will must be validated through the probate process. This process requires that the Will be filed with the Surrogate’s Court and subjected to the review and procedures mandated by the Surrogate’s Court Procedure Act and the Estates, Powers and Trusts Law. One of the most essential aspects involved with probating a Will is the necessity to provide the proper notice to a decedent’s next of kin or distributees. This requirement has been reviewed on many occasions in this blog and it is important to bear in mind. A decedent’s next of kin must be given notice because they have a right to contest the Will. In many cases if the purported Will is found to be invalid, the distributees are entitled to receive an intestate share of the estate which may be much greater than their interest under the Will.

The usual course of a probate case involves the issuance of a Citation by the Surrogate’s Court. A Citation is like a Summons and informs the parties to whom it is directed to appear in Court on a date certain and provide any Objections to the Will. The Citation must be served on the distributees in a manner provided by the statutes and Court directions. Once proper service of the Citation occurs, the Court has jurisdiction to hear and rule regarding probate.

February 16, 2021

A New York Estate is Not a Legal Entity and Cannot Be Sued

by Jules M. Haas

After the death of an individual, the usual course is to proceed to have a fiduciary appointed to represent the decedent’s estate. This is necessary in order to have someone who has the legal authority to collect the decedent’s assets, pay estate expenses and obligations and ultimately, distribute the net estate to beneficiaries.

In some cases the individual would have left a Last Will and Testament, which must be probated. This results in the appointment of an executor. If there is no Will, a proceeding needs to be commenced to have an administrator appointed. Whether an executor or administrator is given authority by the Surrogate’s Court, someone receives the right to act on behalf of the estate.

It is not always known that a decedent’s estate, at least in New York, is not recognized as a separate legal entity. The nature of a decedent’s post-death proceedings flow from the existence and authority given to the appointed fiduciaries. Without the appointment of a representative for the estate, there is no one to act for the decedent and no one against which actions can be taken regarding the decedent’s affairs.

February 9, 2021

A New York Trustee’s Obligation to Further Account Ended After Trust Revocation

by Jules M. Haas

Fiduciaries in New York such as executors, administrators and trustees are obligated to account to the beneficiaries. This means that estate and trust beneficiaries can request that they be provided with a financial accounting of the fiduciary’s activities. An account typically has specific information contained in various schedules showing the assets and income received, the investments made, the expenses and debts that are charged against the assets and the balance of funds or assets remaining on hand.

Depending upon the nature of the trust or estate, the accounting may be simple or complicated and encompass dozens or more pages. Most often, a beneficiary will receive an informal accounting meaning that the accounting will not be part of a formal accounting proceeding in the Surrogate’s Court. In this context, the fiduciary and beneficiary can discuss the issues and information presented in the account and reach an accommodation and settlement which approves the account.

In other situations, a formal accounting proceeding may be needed. These matters involve extensive estate litigation such as discovery in the form of document production and witness testimony. Objections to the account must be filed by the beneficiary. These can be based upon breach of fiduciary duty such as misappropriation of assets or other improper acts.

February 2, 2021

Two Issues to Know Regarding a New York Last Will

by Jules M. Haas

Preparing and probating a New York Will is important in order for a testator to effectuate an estate plan. There are many considerations that an individual needs to consider when planning an estate such as how assets are to be distributed and the identity of the beneficiaries who are to receive dispositions under the Will. Guidance from an experienced estate lawyer regarding these matters should be sought.

There are many subtle and not generally thought-of issues which may have some impact on a plan and the ultimate probate of a Will. A few of these matters are discussed in this blog post. One such issue concerns the proper execution of a Last Will. Estates, Powers and Trusts Law Section 3-2.1, entitled “Execution and attestation of wills; formal requirements,” provides the basic rules regarding execution. Among these guidelines is that there must be at least two (2) attesting witnesses. Nowadays many people prepare a Will from online forms and without the assistance of legal counsel. An important rule to know is that if an attesting witness receives a disposition in the Will, he may need to forfeit his inheritance unless there are two other witnesses who do not receive a benefit under the Will. This rule is provided in EPTL 3-3.2 entitled “Competence of attesting witness who is beneficiary; application to nuncupative will.” The statute provides a number of additional rules and exceptions. However, in view of the general prohibition, it is always best to have completely disinterested persons act as attesting witnesses so as to avoid any possible problems when it comes time to probate the Will. The New York Probate Lawyer blog has many articles dealing with probate issues.

Another matter that should be recognized is that sometimes a Will contains what is known as a No Contest Clause or in terrorem clause. This language in a Will provides that a beneficiary forfeits his disposition if he contests the Will. Many individuals include this type of provision in a Will in the hope that it would discourage a discontented party from filing a Will Contest due to the prospect of forfeiting their inheritance if they lose the Court case. The use of a no contest clause is controlled by EPTL 3-3.5 entitled “Conditions qualifying dispositions; conditions against contest; limitations thereon.” However, the statute provides certain exceptions to the general rule of forfeiture. For example, if there is probable cause, the condition does not apply if there is a contest based upon forgery or to show that a decedent left a later Will. Also, a no contest clause does not prevent the initial discovery allowed by Surrogate’s Court Procedure Act Section 1404 which permits the examination of the Will witnesses, the Will draftsperson and the nominated executor and Will proponent. In view of these and other exceptions to a no contest clause, a testator may want to consider other alternatives to avoid a Will challenge such as setting up asset beneficiary designations or a Living Trust.

January 25, 2021

What Happens to a Decedent’s Residence Upon Death

by Jules M. Haas

In New York there are many different types of residences that may have been occupied by a decedent. The settlement of an estate may be impacted by the nature of such home. For instance, a person may have been living in a rental apartment, or in a cooperative or condominium unit. Another possibility is that a decedent owned and resided in a single or multi-family home.

An estate attorney in New York who is also experienced with landlord-tenant and real estate issues can assist with administrating such properties. Where a decedent lived in a rental apartment, the estate does not own any equity in the apartment and it does not have any value that can be sold or collected. However, some apartments, such as rent-stabilized or rent controlled units, are given certain rights which allow designated family members to continue to live there. Such rights are called succession rights and these can be very valuable especially where the rent is low.

The protection of residence rights can be complicated. In a recent Brooklyn case entitled College Apartments, LLC v. Gedeon decided by Civil Court Judge Hannah Cohen on December 18, 2020, a landlord had commenced a non-payment of rent eviction case against the tenant. As it turned out, the tenant had died before the case was commenced. The son of the decedent tried to settle the case with the landlord and alleged that he was entitled to succession rights. After reviewing the case following a settlement, the Court dismissed the proceeding since the death of a defendant prior to the commencement of an action results in the action being a nullity. Fortunately for the son, he was able to retain counsel who sought to dismiss the case even after the settlement.

January 15, 2021

New York Executors and Administrators Can be Removed for Failing to Protect Estate Assets

by Jules M. Haas

The appointment of a fiduciary is essential for the administration of a decedent’s estate. Assets that were owned solely in a decedent’s name at death are not accessible unless the Court appoints a duly authorized representative. Such representative can be an administrator if the person dies intestate or an executor if there is a Last Will and Testament.

Both executors and administrators have duties and responsibilities. Their primary job is to identify, protect and collect estate assets. They must also determine the existence of any claims or debts and, ultimately, distribute the net estate to the estate beneficiaries. The New York Probate Lawyer Blog contains many articles discussing the administration of estates.

Upon receiving a Court appointment, the fiduciary is held responsible for carrying out the above duties. If he fails to do so, the Surrogate’s Court has the power to remove him from office and revoke the letters testamentary or letters of administration which were issued to him. Such was the outcome in a case entitled Matter of the Estate of Lewner which was decided by Manhattan Surrogate Nora Anderson on December 16, 2020. In Lewner, a son of the decedent had been appointed Preliminary Executor of the decedent’s estate. A petition to remove the son was filed due to the son’s failure to properly perform his fiduciary duties. Among other improprieties, the Court found that the son did not file estate and income tax returns relating to the decedent resulting in liability to the estate for interest and penalty charges. It was also reported that the probate proceeding was not prosecuted for years which delayed the settlement of the estate. Based upon the above, the Court revoked the son’s Preliminary Letters Testamentary and appointed the Public Administrator as Temporary Administrator. The son was also directed to file an account of his activities as fiduciary.