Articles Posted in Wills & Trusts

210deathThe timing of death is never particularly welcome.  Some families are prepared, in that the deceased was elderly, maybe ill, and living in a nursing home.  Perhaps such a person also had the foresight to have their attorney prepare her Will and other estate documents.   Others may pass away at a relatively young age, in the prime of life, with ongoing financial and personal activities.  This post will examine the legal ramifications of passing away while a legal matter is pending.

Imagine that the deceased was a party to a contract concerning the sale of a house which has not yet closed.  The first step that the survivors would need to undertake is to review the contract and determine if it addresses the potential death of one of the parties before the closing.  In most cases, the seller is bound to the terms of the contract through her successors.  This means that the survivors cannot decide to nullify the contract and move into the house.  However, the seller is not available to conclude the transaction.  The attorney for the seller  would need to apply to the Surrogate’s Court  to apply for Letters Testamentary or Letters of Administration , which appoints the appropriate fiduciary to act for the Estate in order to complete the closing.  Should circumstances warrant, it may be prudent to apply for Preliminary Letters Testamentary or Preliminary Letters of Administration, to permit the sale to conclude if it is jeopardized by a continued delay.

If the deceased was the potential purchaser of the house, the contract is likely to allow the purchaser’s survivors to cancel the contract.  This is a logical result, as the transaction is inherently dependent upon the purchaser maintaining a job in order to pay the mortgage and other carrying costs of the house.  Forcing this transaction to conclusion is a cruel result.  In most cases, the downpayment is refundable.  However, some contracts only provide that half or none of the downpayment would be refunded.  It is advisable to have your attorney negotiate a favorable disposition for the downpayment in this instance when representing a purchaser, even if he is a young person.

starwarsMovie fans recently learned of the deaths of Carrie Fisher and her mother Debbie Reynolds, which occurred within one day of each other.  Those with symbiotic relationships, such as spouses married for more than fifty years, sometimes die within a close timeframe from one another.  This phenomenon is known as dying of a broken heart.  This post will discuss the legal ramifications of deaths occurring within close proximity.  This author will assume that the persons are husband and wife.

Spouses can pass away in close succession as a result of a sudden event such as an airplane crash or due to natural causes such as failing health in old age.  New York State has adopted its own version of the Uniform Simultaneous Death Act.  This statute provides that if two or more persons who are heirs to one another die within one hundred twenty hours of each other, that they are deemed to predecease the other.  Their estates would then be treated in accordance with the intestate provisions of New York’s Estate Powers and Trusts Law , with their property eventually being inherited by those individuals surviving them in the order as designated by the statute.

There are exceptions to the simultaneous death statute.  Such provisions do not take effect if the result would be that the person’s estate escheats to the state.  Escheat means that when there are no surviving relatives who may inherit, the state receives the property.  In addition, the beneficiary designations in a person’s life insurance policies or specifications contained in legal documents such as a will or trust take precedence over the statute’s simultaneous death provisions.  Your attorney  may advise a couple to include “mirror image” clauses in their wills wherein the wife is deemed to survive the husband in the event of deaths occurring within a certain period of time from one another, preferably in the range of sixty to ninety days.  There may be estate tax concerns that determine which spouse should “survive” the other.  Also, a person may wish to include a provision stating that a particular person should be considered to have predeceased her if she has personal reasons to disinherit a particular person.

thanks2016The upcoming Thanksgiving holiday requires quite a bit of planning.  We are not speaking merely about creating the menu, shopping for the required ingredients and preparing the delicious food.  Rather, we wish to call attention to those who will be sharing the holiday with you and the legal issues that may arise.

Our readers should consider those people who will be at the dinner table with them.  These people are likely to be relatives, some of whom may be able to inherit your estate from you if you die without a Will.  Should this result be inconsistent with your wishes, we suggest that you contact a qualified attorney and arrange for your wishes to be documented in a Will and other associated estate documents.  Also, consider the legal issues that arise should you be sharing the holiday with a step-parent.  In addition, it may be prudent to think about those from whom you may inherit, such as your parents, to address whether they have made the proper estate plans to legally include you.

Observe the items that are on the Thanksgiving table and throughout the home.  Is the valuable sterling silver flatware being used in the celebration?  Personal property also needs to be addressed in estate documents and should be safeguarded, so as to prevent it from landing into the wrong hands.   Should a family member’s estate already be in the administration or probate process, you may need to be prepared to sort through family items and manage who should take such items with them.  Perhaps you may want to encourage your relatives to part with some of their valuable personal property now, so as to potentially save on gift and estate taxes at a later time.

reliestphotoMany of our readers are about to celebrate Rosh Hashanah.  We wish those who observe a happy and healthy new year.  At this time of year, those of the Jewish faith tend to reflect upon their acts during the past year and to set goals for improvements in the following year.  Attorneys can provide the opportunity for one’s religious, moral and ethical values to be reflected in a final legacy, such as a Will or Trust.   This post will discuss the means by which your attorney will insure that your values are properly contained within your estate documents.

Primarily, we suggest that you meet with a skilled professional , who is prepared to discuss your ethical values.  The meeting should not only address the standard discussion of who should serve as fiduciaries (those named in the Will to act on behalf of the estate such as executors, trustees and guardians) and who should inherit your assets.  For instance, a couple with minor children typically needs to determine who will serve as guardians to raise their children if they pass away.  If religion is important to such a couple, they may want to appoint someone of the same religious background who will be instructed to continue the religious instruction and ritual observance to which the children have been accustomed.  It is possible that a separate fiduciary may need to be named to handle financial matters for the children when a religiously sensitive guardian has been selected.

Discussions should be undertaken as to the distribution of assets.  Authorizing a trust to distribute assets for religious education and travel, in addition to the standard education expenses, may be appropriate.  Charitable matters should also be considered.  If charitable giving is an important value to the client, we discuss the means by which charitable giving can be accomplished.  Gifts made during lifetime typically have less significant tax consequences and the donor may be recognized personally for the contribution.  However, the donor may need the assets during her lifetime and would rather part with them at a later time.  Charitable trusts can also be established if appropriate.  Our firm commonly coordinates with various organizations that are prepared to assist in the establishment of such charitable trusts.

prince2In a prior post , we  discussed the death of the musician Prince and speculated about matters pertaining to his estate.  Since that time, the public has become aware of the tragic circumstances of his death and that he did indeed die without a Will.

In New York, person dying without a Will is deemed “intestate”.  The proceeding held in Surrogate’s Court  is then called an Administration Proceeding.  In such a proceeding, those persons inherit depending upon their proximity in relationship to the deceased.  For instance, if the deceased died without a spouse or children, then his parents would inherit from the deceased.  With the estimated $300,000,000 estate at stake in the Prince case, random people may have an interest in claiming to be “related”.

Recent news reports have indicated that the Judge in the Prince case has limited those who claim to be Prince’s “relatives”.  Even a person serving time in prison made such a claim.  A DNA test was administered to the inmate to eliminate his claim in the estate.  Others were not offered blood testing.  While we can debate which persons should have been more thoroughly considered through DNA and blood testing, the mechanism shows that the Court will look at scientific evidence when necessary to determine whether a claimant is indeed related.

militaryMany of our readers are looking forward to the upcoming Memorial Day holiday weekend.  Most of us are thinking of spending time at a backyard barbeque or taking advantage of a sale at a department store.  Memorial Day also has a more somber connotation, thanking our military for the ultimate sacrifice that they have made for our country.  As attorneys, we wish to bring to your attention particular legal matters with which we can assist should your loved one make such a sacrifice for our country.

We think of our military as young and not wealthy as yet.  Saving estate taxes is not the concern of this population.  However, estate and financial planning is still needed due to the inherent danger in their profession and their age.  For instance, an accident could result in permanent disability or death.  The service member may get married.  These changes could have significant consequences if the proper legal documents are not drafted by a skilled professional.

In the absence of a Will , the service member would be deemed to die intestate and an Administration proceeding would be required to manage the person’s assets and liabilities.  Concerns with the disposition of personal property need to be addressed, preferably in a Will.

princeFans of the musician Prince were distressed to learn of his untimely passing last week.  News reports now circulating have noted that Prince died without a Will.  This post will address the implications of dying without a Will.  As this firm is located in New York State, this post will address this issue from the standpoint of the law in New York.

When a person dies without a Will, an Administration proceeding is conducted.  Such a proceeding is undertaken in Surrogate’s Court.  The attorney for the surviving relative files a Petition in the proceeding.  The surviving relative of the closest relationship will apply to be Administrator of the estate.  In Prince’s case, we have heard that he was not survived by a spouse, children, or parents, making his sister the first person to be qualified to be Administrator of the estate.  Both New York and Minnesota provide that half-siblings are ranked in a similar fashion, so that half-siblings may potentially share in the administration duties of the sister who filed the Petition.  When significant sums of money are at stake, a kinship proceeding may also be filed to determine whether other relatives should be given the opportunity to share in the estate.  Once the proper fiduciary is appointed by the Court, particular duties need to be undertaken.

What if Prince’s doves continue to cry after his death?  If he had a Will, his pets could have been provided for in his estate plan.   Absent such provisions, any pets would become the property of the person(s) appointed administrators.  For pet lovers, this disposition could become a major problem if the person receiving the pets has no interest in taking care of beloved animals.  Prince’s Little Red Corvette must also be considered.  In New York, personal property could be specifically identified in a Will as a specific bequest, left in the residuary clause for the person intended to inherit all unspecified property or will be left to the person qualifying as Administrator if there is no Will.

artworkGiven that the 2015 tax filing deadline is imminent, taxes and the potential reduction of tax liability are on the minds of many of our clients.  Some of our clients are fortunate enough to own collections of valuable personal property, such as artwork, cars and the like.  Our estate attorneys are in the position of advising clients how to dispose of such personal property and how to reduce potential tax liability.

For purposes of this post, let us assume that the valuable collection contains artwork.  It is prudent for the owner of such a collection to make a detailed catalog of the individual components of the collection.  That way, it may be easier to keep track of the possessions.  Gift and estate taxes could be due to the extent that an event of a public nature occurs, such as a sale or auction, or museum loan of the artwork.  If the owner of the artwork merely decides to give a work of art to his daughter, who will privately display it in her home, then such an act may be unlikely to trigger the interaction of the tax authorities.

If the artwork is given to an institution during one’s lifetime, then the value of such item can be deducted from the donor’s taxes.  Should the artwork be given to an individual and be valued at less than $14,000, then the annual gift tax exclusion will apply to make this event not taxable.  Once a person passes away, estate taxes may be due, depending on the value of the estate.

promiseFrom time to time our firm is asked if a promise to make a Will leaving one’s inheritance to a particular person is enforceable.  Such promises occur in the following situations.  A relative spends a lot of time with another, perhaps even doing substantial favors for the person, who repeatedly says “I won’t forget about you in my Will.”  A person may have intended to revise his Will to include someone, told that person of such intent, but never got around to making the revision.  Such a suggestion may also be part of a resolution of a marital dispute wherein the spouse agrees to provide for a child in his Will.  Our basic answer is that such promises are not enforceable in New York.

Even if a particular disposition is made in a Will favoring a particular person, such a provision could be removed upon the execution of a Codicil (amendment to a Will) or in an entirely new Will.  Since Wills are organic documents that can be changed as the Testator (the legal term for the person who makes a Will) desires, obtaining assets through a lifetime gift or having a dispute settled by the payment of funds during lifetime is the only way to make sure that such assets are left as desired by the recipient.  The testator can leave his assets to any person or charity that he wishes.

Our readers may have heard of the term intestacy, which is the legal term for passing away without a Will.  In such a situation, New York State’s statute  determines who will inherit a person’s assets, which is dependent upon such person’s relationship to the deceased.  If the closest surviving person to the deceased is his daughter, then she would inherit the assets.  Should the deceased have a surviving spouse and children, then spouse receives $50,000.00 plus half of the assets and the children divide the other half of the assets.

valentinesAre you planning to get engaged this Valentine’s Day?  While legal concerns may not be particularly romantic, our firm offers the following legal advice pertaining to issues that arise upon marriage in this post.  Legal issues arise whether it is a first or second marriage and may become more complicated if there are children from a prior marriage.

Estate planning matters should be considered.  If you do not have Wills, it is prudent to consult an estate attorney  to develop the appropriate estate planning documents.  Wills, trusts, and health care directive documents may be drafted on your behalf.    Even if you already have estate documents in place, the beneficiaries and fiduciaries could be different now that you’re engaged.  The persons that you select to make health care decisions for you are also likely to change.

If you have children from a prior marriage, provisions should be included in your Will to include a testamentary trust .  Your new spouse would be afforded the opportunity to use some of the assets during her life, with the balance left to your children from your prior marriage.  Without such a trust, your spouse could remarry and leave monies that you intended for your children to someone else.  Also, consider how your estate plan should address personal property.   If there are family heirlooms that you would want your children to inherit, rather than your spouse, you should have your attorney specify the particular items in your Will.