New York Probate Lawyer Blog

May 24, 2012

Government Urges Online Media Wills

According to a recent article in the New York Daily News, the modern New Yorker has one more thing to worry about when creating a Will. The proliferation of social media web sites like Facebook and Twitter, along with the abundance of e-mail and online transaction accounts, is creating a demand for will provisions tied to the administration of a deceased person’s web usage.

Even the federal government is acknowledging the phenomenon. As of April, the federal government’s official personal finance information page includes a recommendation that people leave detailed and specific instructions for the administrators of their Wills as to who will have access to their online accounts after they die. The federal government also urges people to update these Will instructions frequently so as to reflect changes in online usage. Many online accounts require users to change their passwords after a period of time. Other accounts are used less frequently, meaning their users are often forced to reset their passwords. Therefore, it is imperative to record these changes.

The need for such provisions in a Will may not be immediately apparent. However, if you are the type of person that utilizes online billing or online banking, you are typically the only person who can access these applications. Suppose you have opted to receive paperless billing via e-mail. If no one in your life is kept apprised of your e-mail password or billing account password, your executor or administrator may be unable to easily obtain information concerning something like the utilities in your home. Similarly, those who receive paperless credit card statements could accumulate significant interest charges on outstanding debts if their fiduciaries are unable to access the online account to obtain account information or pay the bill. Without a trusted individual empowered with the responsibility for these online accounts – and the login information to access them – a deceased person may unwittingly have imposed considerable confusion and financial strain on their estate.

On the social media front, accounts on sites like Facebook contain a wealth of personal information and private interactions that a deceased person may not want “floating” in cyberspace. Often without realizing it, living users employ a host of defensive measures to safeguard against other people’s access to this private information. However, a deceased’s unmaintained account can be significantly more susceptible to intrusion for identity fraud and other purposes. Modern Wills empower trusted individuals to access these accounts upon the user’s death and to either close the accounts or restrict them to memorial postings about the deceased. Facebook, for example, will deactivate the account of a deceased user upon request and replace it instead with a page to post memories.

If online accounts and social media are ingrained in your life to the point that the inability to access such accounts could potentially harm your beneficiaries, it may be prudent to consult a New York estate attorney. Your attorney can help determine whether such access could affect the administration of your estate, and can help craft and maintain a Will tailored to reflect these modern estate issues.

May 22, 2012

Last Wills in New York Express A Person’s Wishes

by Jules M. Haas

A New York Will is a means by which a person can express his or her desires regarding the final disposition of property and the management of the affairs of his estate. New York Estates, Powers and Trusts (EPTL) section 1-2.19 defines a “Will’ as “an oral declaration or written instrument. . . . whereby a person disposes of property or directs how it shall not be disposed of . . . .”

The New York Probate Lawyer Blog has discussed in previous posts that the execution of a Will must comply with a number of requirements such as the necessity for the testator to sign the Will at the end of the document and that there must be “at least two attesting witnesses”. (EPTL 3-2.1).

The reason for strict Will formalities is to protect the intention of the testator and to establish the sanctity of the document that expresses a person’s final desires. The Surrogate’s Court always wants to be certain that fraudulent or invalid papers are not given judicial validation. Obviously, once a person dies, a Will may be the controlling statement regarding a person’s personal affairs.

Preparing a Will requires a full consideration of a person’s property and beneficiaries so that the proper provisions and directions are clearly set forth. It is a testator’s expectations that his fiduciaries, such as his Executors and Trustees, carry out the terms of the bequests or other dispositions spelled out in the document.

As a New York Estate Lawyer I spend time speaking with clients to understand their desires so that these matters can be fully and accurately set forth in their Will provisions. Of course, it is common that there is Estate Litigation where controversies arise concerning the meaning or interpretation of certain aspects of a Last Will.

Recently, there have been a number of instances where beneficiaries of charitable provisions have sought to modify the terms of bequests and abrogate the expressed desires of the decedent. In 1964 Edward Carter, who had been a Board of Regents Chairman, bequeathed to UCLA, property which was a rare example of a Japanese private garden. The garden was intended to be maintained in perpetuity. As reported by Charles A. Birnbaum on May 25, 2012 in the Huffington Post Los Angeles, UCLA, without advising the decedent’s family, obtained Court approval to allow the University to sell the property.

A similar scenario occurred in Ipswich, Massachusetts, as previously discussed in this Blog, where a colony of homes was the subject of a land trust established by a Last Will in 1660 for the benefit of the local schools with instructions that the property was not to be sold. As reported by Kathy McCabe on May 13, 2012 in the Boston Globe, the local voters appealed a Probate Court decision that allowed the sale despite the Will restrictions.

These two cases show that despite explicit directions and restrictions provided in a Will, beneficiaries and Courts may sometimes act contrary to a testator’s intent. Nevertheless, in most situations, the testator’s desires are followed. It is important to clearly spell out these desires so disputes can be avoided and, hopefully, a Court will abide by the specific terms of the testamentary instructions

May 18, 2012

The Commencement of a New York Guardianship Proceeding Can Present Difficult Decisions

by Jules M. Haas

Article 81 of the New York Mental Hygiene Law (MHL) provides the substantive and procedural statutes regarding New York Guardianships. As previously talked about in many past posts in the New York Probate Lawyer Blog, a Guardian can be appointed to handle a person’s property management and personal needs when the person is determined by the Court to be incapacitated. However, the determination of incapacity is not always easy. Certainly, when a person has suffered a severe illness or accident and is completely dependent upon others for assistance with activities of daily living (i.e., the person cannot walk, talk or feed him/herself), the need for a Guardian is clear.

On many occasions though a person may be living alone or have some type of part-time care but is exhibiting the effects and deterioration of daily functioning that puts into question their capacity to adequately handle their property or personal affairs without risk to their well-being.

In these situations difficult questions arise on many levels. The first major hurdle may be the emotional quandary of having to bring a Court proceeding against a parent or other close relative to impose a Guardianship. The alleged incapacitated person often has enough cognitive ability to oppose the appointment and may be offended by the introduction of control over their affairs even though such supervision is needed to prevent future harm that may occur without the appointment.

New York Guardianship Lawyers are frequently asked by family members to help them decide the best course of action to take in these situations. Guardianship attorneys know that there is never a simple or textbook answer to these questions since the individuals and circumstances are unique in every situation. Sometimes family members refuse to get involved. In such instances, Adult Protective Services may be contacted and Guardianship proceedings will be commenced by the New York City Department of Social Services.

Once a New York City Guardianship proceeding is started, the next concern may be to actually show by “clear and convincing evidence” (MHL Section 81.02) that the person is, in fact, incapacitated. This may require an actual hearing or trial during which witnesses can testify as to the alleged incapacitated person’s ability to handle activities of daily living and his or her recent actions that reflect capacity. For example, the fact that a person leaves home and gets lost or cannot recall the names of relatives or the location of the banks where his accounts are held all tend to indicate the level of a person’s cognitive abilities.

Manhattan Guardianship proceedings, like those in all other New York Counties, involve the story of an alleged incapacitated person and their ability to attend to their present life’s activities while confronting the possible effects of disease or injury. It is typically the final decision of the Guardianship Court as to what extent, if any, such person needs assistance and, if so, who should be appointed as Guardian to provide the proper supervision.

May 15, 2012

Estate Planning for Singles or the Widowed

by Jules M. Haas

How planning for one differs from planning for a couple

In some ways, estate planning for a single person can be more challenging for an estate planner than planning for a couple. When a couple formulates an estate plan, the easiest and most natural thing to do is to entrust one another with all of the responsibilities in the event of one spouse’s death. Among these responsibilities are the administration of the estate, execution of advance medical directives, power of attorney for financial decisions, and access to medical records in end-of-life scenarios.

The relative ease in dealing with these issues for couples is that the surviving spouse is most often within the closest emotional and geographic proximity to the deceased and their assets. Spouses are uniquely qualified to speak for one another, because they have likely had more occasions to discuss end-of-life scenarios with one another. Moreover, the surviving spouse is more likely to have been included in the financial decision making throughout the marriage, making the surviving spouse the utmost authority in the financial decision making beyond the marriage.

Those who never married and those who have been widowed do not have the luxury of entrusting emergency or end-of-life responsibilities to their spouse. These responsibilities typically fall to other members of the immediate family, like siblings. Siblings and other family members are often naturally less in-tune with one’s financial and medical wishes than a spouse might be. Therefore, a single person who is planning for his/her estate should make sure that any responsibilities entrusted to a relative are clearly spelled out in the appropriate documentation. Medical emergencies and end-of-life scenarios are emotional times in which the appropriate people must often be quick and decisive. Quick and decisive action is most easily achieved by a clear delegation of authority backed by legally sound paperwork. The appropriate people should have copies of this paperwork in a safe yet available place.

On that note, single people should bear in mind that the best people to entrust with these responsibilities are often within relative geographic proximity. It makes little sense for a New Yorker to entrust the authority of advance medical directives to a relative living in Seattle, for example.

Single people have even more estate planning considerations to think about. One such consideration is the unavailability of supplemental sources of income in case of disease, disablement, or incapacitation. Single New Yorkers should consider these possibilities in their estate planning efforts. Those who still work should ensure that they are covered by sufficient disability insurance, either privately or through their work. As single people get older, they should also consider purchasing long term care insurance to supplement any health insurance they may have. Long term care insurance typically covers expenses incurred in things like nursing home or hospice care that could be denied by normal health insurance coverage.

No matter which category you fall under, a New York estate planning attorney is the best resource to consult on these matters. Your estate lawyer understands the difference between planning for a couple and planning for the single or the widowed, and can help you craft the appropriate emergency and end-of-life directives, including to whom they will be entrusted.

May 9, 2012

Intestate New York Estates Can Cause Problems

by Jules M. Haas

The New York Probate Lawyer Blog has discussed many issues that arise in connection with intestacy. When a person is said to have died intestate it means that his or her estate is to be distributed without the benefit of a Last Will. The relevant local laws of intestacy determine which persons (i.e., next of kin) are to inherit the decedent’s estate.

An intestate estate can arise when a person does not execute a Last Will prior to death. It can also occur when a person purportedly signs a Will but the Will is lost or there is a Will Contest litigation and the document is not admitted to probate.

The recent untimely death of Amy Winehouse is a typical example of someone who did not prepare a Last Will. When there is no Will, the intestacy laws of a person’s domicile or primary home determine who is to inherit. In Ms. Winehouse’s case, the laws of Great Britain provided that her parents were to inherit her estate. Ms. Winehouse was not married and had no children at the time of her death.

Without having a Last Will, a person cannot control who is to inherit estate assets. Although creating joint accounts and naming beneficiaries for retirement funds, life insurance and other assets can help avoid the effect of intestacy laws, any assets held by a decedent in his or her own name alone are subject to the statutes. Unfortunately, the beneficiaries selected by the controlling laws may not be the persons the decedent wanted to receive their estate.

Not only do intestacy laws dictate who is to receive estate assets, the decedent is forced to forego any possibility of estate planning for tax savings. Ms. Winehouse’s estate value was in excess of $6 million and may have benefited from estate planning. Without pre-planning by a Last Will or Trust documents valuable credits for estate tax protection may be lost that can benefit younger generations. Additionally, a person who does not have a Last Will cannot select Executors, Trustees and Guardians. Once again, the local laws governing intestacy determine the persons who can hold estate positions such as an Estate Administrator.

Preparing a Last Will and other estate planning papers such as a Living Will and Health Care Proxy are important. Statutes controlling intestate estates should be avoided along with their unintended results.

May 7, 2012

Choosing a Trustee For Your New York City Trust

by Jules M. Haas

Those seeking to set up a trust in New York have many more options than their nationwide peers when it comes to choosing a trustee. New York offers a unique and varied concentration of financial service institutions that is unlike anywhere else in the world.

However, your trustee need not be a powerful financial services company. Trustees can range from a close family member, friend, a multinational bank, New York City estate planning lawyer or anything in between. Each type of trustee has potential advantages and disadvantages. The following are considerations to keep in mind when selecting a trustee.

First and foremost, a trustee must be able to competently handle the duties of the trusteeship. This is not to say that a corporate trustee is automatically more competent, because the corporate trustee typically lacks the personal knowledge about the person who set up the trust. The private trustee, having been a close friend or a member of the family, is often more informed about the trust owner’s personal preferences.

The main advantage of a corporate trustee is the likelihood that the corporate trustee has the resources to specialize in many of the fiduciary responsibilities incumbent of trustees. Corporate trustees typically have particular knowledge in areas such as investment, taxes, record keeping, and regulatory compliance, which make their service appealing to many who are establishing a trust. Corporate trustees are not subject to family biases or prejudices and have little incentive to engage in practices that would favor one trust beneficiary over another.

Some of the main drawbacks to corporate trusteeship are the impersonal nature of the relationship and the potential inflexibility of the corporate trustee in distributing assets to the trust beneficiaries. Corporate trustees may interpret the provisions of the trust more strictly, potentially denying the distribution of assets to beneficiaries in cases of emergency. By contrast, private trustees typically have more reliable and personal contact with living trust owners, and are able to draw on this personal contact in their administration of the trust. If the trust owner happens to be deceased, the private trustee is more capable of anticipating the attitudes that should govern the administration of the trust, drawing on their previous personal interactions with the deceased. Private trustees are, therefore, more flexible as the needs of the beneficiaries arise.

Some of those who establish trusts elect to appoint a group of trustees and to delegate authority amongst them according to their particular strengths. In such an arrangement, the corporate co-trustee may be entrusted with some of the more technical aspects of the administration of the trust, while the private trustee may handle some of the more ambiguous decision-making duties. An advantage of a co-trustee arrangement is the inability of any of the trustees to act unilaterally, ensuring that the possibility of theft, fraud, or mistake is dramatically reduced.

A New York trust and estate attorney can help guide your decision in this important endeavor. The considerations in the appointment of a trustee can often be much more complex than listed here. The right legal professional can help you navigate this difficult decision.

May 3, 2012

New York Guardianship Proceedings Protect the Assets of the Incapacitated Person

by Jules M. Haas

A New York Guardianship Lawyer can advise a client with regard to the Guardian’s duties to protect the assets of the incapacitated person. Mental Hygiene Law (MHL) Section 81.21 is entitled “Powers of guardian; property management” and provides the various property management powers that are given to the Guardian. These powers are to be used to collect, preserve and apply the Guardianship property for the benefit of the person who is incapacitated.

The Mental Hygiene Law provides that the Guardian must file an Annual Report with the Court (MHL Section 81.31). The filing of the Report provides a means by which the Court can review whether the Guardian is acting in a proper manner on a year to year basis. These Annual Reports are typically reviewed by a Court appointed Court Examiner who provides a report to the Judge who is supervising the Guardianship case. The Judge then reviews the report and if the account is satisfactory, signs an Order approving the Report.

The Guardianship accounting process is somewhat different than the Accounting Proceedings that occur in the Surrogate’s Court regarding a decedent’s estate. It is very common that when settling an estate the final Estate Accounting is approved informally by the interested parties. In other words, the parties simply review the Executor’s Accounting or the Administrator’s Accounting and sign a Release form. There are no formal proceedings or accounting that is filed with the Surrogate’s Court. The process of probating a New York Will and settling a New York Estate does not require that an annual or a final account be approved by the Court. However, formal accounting proceedings requiring the Surrogate’s Court approval are sometimes required. In a Guardianship matter such as a Manhattan Guardianship, Nassau Guardianship, Queens Guardianship or other Court proceedings, annual and final Accountings must be filed and approved by the Court.

Probate and Guardianship Attorneys in New York can assist their clients when preparing the accounts that are needed to report the actions taken by them as fiduciaries. The best advise is to maintain complete records and copies of all papers showing all the financial transactions that were entered into. Also, hiring a fiduciary accountant can simplify the preparation of the accounting schedules that are required by the Court for reporting all information. Acting as a fiduciary such as a Guardian, Executor, Administrator or Trustee involves accepting the responsibility to protect and manage someone else’s assets. Proper guidance from a good Estate lawyer or Guardianship lawyer is essential to performing fiduciary duties properly and having the Court approve of the actions taken. Legal representation and diligence regarding property management is especially important where family members are fighting amongst themselves concerning the affairs of the person who is incapacitated. As recently reported in the Beverly Hills Courier on May 2, 2012, there is an ongoing dispute between Zsa Zsa Gabor’s husband and daughter concerning the management of her affairs. Although the article reports that the parties are attempting to settle the matter, each side will need to have a complete record of financial transactions concerning Ms. Gabor in order to fully access the situation and to present their case to the Court, if necessary.

May 1, 2012

New York Trust and Estate Lawyers Can Explain Living Trust

by Jules M. Haas

As a way for an individual to avoid burdening his or her surviving family members with the task of probating a Will and probate fees after death, New York law allows the creation of the inter vivos trust, also called the living trust. A living trust is an arrangement under which one person, called a trustee, holds legal title to property for another person, called a beneficiary. This estate planning option essentially allows surviving family members to avoid probate court to disperse the decedent’s assets to the appropriate heirs. New York has not adopted the Uniform Probate Code, which simplifies the probate process. Therefore, creating a living trust is an appealing estate planning method in order to avoid the complexities of the probate process in New York.

Perhaps this was the objective of 98-year-old Mary Kantorowski when she signed a deed transferring her home into a trust. As reported by The Connecticut Post, Probate Court records reveal that in 1996, Mary and her husband, John Kantorowski, agreed to transfer the house to a trust administered by their son, Peter Kantorowski, with the condition that Mary would live there until her death, and that upon her death the house would go to Peter and his younger brother, Jack. Despite the provisions of the trust, Peter quitclaimed the house to another trust under his control, ultimately giving him ownership of the house. As a result of her failure to fully understand the contents of the deed that had transferred her home into a trust, Mary was served with papers to evict her from her home by her own son in 2011.

In relation to the duties of a trustee, New York has adopted the Prudent Investor Act, provided in Estates, Powers and Trusts Law section 11-2.3. Pursuant to this act, the trustee is obligated to “exercise reasonable care, skill, and caution” in making investment decisions on behalf of the trust. NY EPTL § 11-2.3 (b)(2). The “exercise of reasonable care, skill, and caution” will be defined in light of the circumstances at the time the decision was made or action was taken by the trustee. NY EPTL § 11-2.3 (b)(1).

In applying New York’s Prudent Investor Act to this particular case, the issue is whether Peter Kantorowoski, the trustee, did in fact act in the best interest of his mother when he put the home up for sale. In his defense, Peter argues that attempting to evict his mother and putting the home up for sale was in the best interest of his mother due to her old age. He claimed it would be best for her to live in a nursing home. The sequence of events demonstrates that there was nothing to prevent Peter from transferring the home out of the trust. Of course, Ms. Kantorowski disagreed and argued that the move was simply an attempt by her son to take advantage of the situation. Unfortunately, many local seniors continue to be taken advantage of in this way on a seemingly daily basis.

In order to invoke the benefits of a living trust as a method of estate planning and to avoid unfortunate situations such as the one depicted in this particular case, it is imperative for the individual creating the living trust to understand all the provisions of the trust. Therefore, due to the intricacies of New York estate planning, it is in an individual’s best interest to seek the advice of an experienced estate planning attorney in order to ensure that his or her rights are being optimally protected.

April 25, 2012

New York Estate Planning Provides Protection Both Before and After Death

by Jules M. Haas

A New York Estate Planning Attorney can advise a client regarding the preparation of documents such as a Last Will, Living Will, Health Care Proxy, Power of Attorney and Living Trust. By preparing these documents an individual can provide protection to him or herself and their family during life and after death and avoid protracted Guardianship proceedings and Estate Litigation.

The New York Probate Lawyer Blog has discussed many issues regarding Article 81 Guardianship Proceedings. New York Guardianship proceedings are usually necessary when a person becomes incapacitated and does not have a Living Will, Health Care Proxy, Power of Attorney or Living Trust. These documents are advance directives that allow designated agents to make health care, end of life and property management decisions without the delay and complications of seeking court appointments. Unfortunately, in many instances such directives are not prepared and the assistance of a New York Guardianship Attorney will be required to prepare the Court petition and process the Guardianship proceeding. Guardianship proceedings are filed in the County where the incapacitated person resides or is physically present (MHL §81.05) I have represented many clients in Queens Guardianships, Manhattan Guardianships, Brooklyn Guardianships and proceedings in other counties as well.

The creation and signing of other types of documents are also important in both the pre and post death setting. For example, individuals who own businesses should prepare documents such as Shareholder and Partnership Agreements that define the rights and interests of the respective owners and provide specific instructions regarding the transfer of an owner’s interest upon death or disability. The failure to seek guidance from a New York Estate Planning Attorney with regard to succession planning can result in disputes and litigation after the death of one or more of the business owners. Such was the case with regard to the founders of the company that created the Archie comics book character. As reported in Estate of Denial on April 26, 2012 the disputes that arise between successors can transform a once peaceful company setting into disarray.

Certainly, having a Last Will which provides for a clear disposition of assets and takes into account those assets that pass by operation of law such as joint accounts, is a fundamental necessity for post death security.

A recent article by Rob Clarfield in Forbes on April 25, 2012 entitled, “7 Major Errors in Estate Planning” provides a short-hand guide to some current considerations. The 7 “errors” discussed in the article are:

1. Not having a plan
2. Online or DIY rather than professionals
3. Failure to Review Beneficiary Designations and Titling of Assets
4. Failure to Consider the Estate and Gift Tax Consequences of Life Insurance
5. Maximizing annual gifts
6. Failure to Take Advantage of the Estate Tax Exemption in 2012
7. Leaving assets outright to Adult Children
As is true in every estate plan, a comprehensive analysis of a person’s desires and intentions and family and assets is needed to determine the proper course to follow for their personal plan. Putting the proper documents into place not only provides lifetime stability and protection, but also prevents Estate Litigation in Probate Courts that be destructive to family harmony and costly to the estate beneficiaries.

April 18, 2012

New York Estate Cannot Be Paid To a Beneficiary Who Murdered the Decedent

by Jules M. Haas

Estate Administration in New York involves the determination of the persons who are the estate beneficiaries. The New York Probate Lawyer Blog has discussed in many posts that when a person dies without a Last Will his or her distributees inherit the estate. Where a Last Will has been prepared, the beneficiaries named in the Will are entitled to receive their designated shares of the estate once the Will is admitted to Probate.

An interesting question arises, however, when an estate beneficiary murders the decedent and thereby benefits from the result of a wrongful act. New York Trusts and Estates Lawyers are aware of the decisions by the New York Courts which provide that a person who murders another cannot profit from such wrongdoing and is disqualified from receiving his or her share of the decedent’s estate. Recently, the Suffolk County Surrogate’s Court was asked to decide a case that involved the above principal of disqualification with an interesting twist. In Estate of Dianne Edwards, decided by Surrogate John M. Czygier on March 28, 2012, and reported in the New York Law Journal on April 13, 2012, the decedent, Dianne Edwards (“Dianne”) was murdered by her son-in-law, Brandon. Brandon’s wife, Deanna, was the surviving daughter of Dianne, and the sole beneficiary under Dianne’s Last Will. Since Deanna was not involved in any wrongdoing, she was not disqualified from receiving her interest under Dianne’s Will. However, before the estate funds were distributed, Deanna died intestate and her sole heir and distributee was her husband, Brandon. Therefore, the issue before the Court was whether Brandon forfeited his right to inherit the funds from Dianne’s estate that would pass to him through his deceased wife’s estate. New York estate attorneys representing Dianne’s sister, Donna, claimed that Brandon was disqualified and that Dianne’s estate should be paid to Donna as Dianne’s sole surviving heir. Essentially, the Court was asked to pass over Deanna’s estate interest since such interest was subject to disqualification due to Brandon’s wrongful conduct.
The Court decided that Brandon was disqualified to receive the inheritance and that he should not profit from his wrongdoing even if the payment would have been indirectly made through his wife’s estate. It is important to recognize from the Court’s decision that New York Estate Administration often involves a complex analysis and determination regarding the identity of estate beneficiaries and their respective interests. Previous blog posts have discussed aspects of New York Estate and Trust laws that require proof of kinship or that may result in disqualification due to conduct such as the abandonment of the decedent by a surviving spouse (EPTL § 5-1.2).

Probate Lawyers throughout the state in localities such as Manhattan, Queens and Brooklyn assist their clients who are Executors, Administrators and beneficiaries when confronted by these issues. Estate litigation is often required to resolve these disputes as was the case in Dianne Edwards‘ estate. Since the Surrogate’s Courts are the forum where estate proceedings occur, these Courts are very familiar with these issues and attempt to resolve them through settlement or trials.