Articles Posted in Wills & Trusts

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.

disabledSome of our trust and estate clients  have adult children who are disabled.  The child may have been born with a disability, such as cerebral palsy, making the parents accustomed to allowing for the disability while knowing that such disability will never go away.  In the alternative, the disability may have occurred later in the child’s life, such as  drug or alcohol addiction or mental illness.  The parents of these children need to acknowledge the limited capabilities of their children while also providing for the possibility that the child could be self-sufficient if the underlying condition is abated.  In either case, parents need to provide for the possibility that the child could outlive both parents or the parents could become ill and unable to care for the child.  This post will address the legal issues to be considered for disabled children.

As discussed in our prior post pertaining to providing for pets in one’s estate plan , parents should write a detailed letter to caretakers and trustees specifying care for the child, such as favorite foods and activities, details of relationships with relatives and friends and medical care history and details.  Practical matters should be considered such as selecting housing, like a licensed group home or assisted living facility, for the disabled child.  This should be done prior to the decline of the parents.

It is crucial that potential access to government benefits be preserved for a disabled child. These government benefits may pay for health care and community services.  In order to preserve access to government benefits, refraining from titling assets in the child’s name outright is crucial.  As such, there should not be a bequest in the parent’s Will in the name of the child.  Instead, the Will should leave assets to the child by means of a Special Needs Trust .  The Special Needs trust needs to specifically state that it is not to be applied in such a fashion that access to government benefits would be denied.  As such, the government benefits will be used to pay for the child’s basic needs and the Special Needs Trust will be used to pay for the extras that would assist the child.

petwillSome of our trust and estate clients have asked us how to best protect their beloved pet in the event of their disability or demise.  Pets can be just as important as children when planning one’s estate.  These family members can be adequately provided for in a legal fashion.  Traditionally, pets have been considered to be personal property, being no different than a car, furniture and the like.  Our post addresses how personal property is typically distributed after someone dies.  Some pet owners consult us to have their pets treated in a more personal fashion in their legal documents.

Practical matters should be considered such as selecting a potential caretaker and confirming with such person that they are willing to serve.  The caretaker should be informed about the pet’s habits and preferences, such as how often and where the dog likes to be walked and pet food preferred.  Contact information for the veterinarian, medical conditions and medications taken should be indicated.  Funeral arrangements should also be made known, such as whether a cemetery plot has been purchased and whether funeral expenses have been prepaid.  These practical matters are particularly important because the pet is unable to communicate, as a child may.

From a legal perspective, persons interested in legally protecting their pets should consult the attorney who is drafting their overall estate plan.  Financial consideration to the caretaker needs to be arranged, while at the same time requiring the caretaker to perform certain duties on behalf of the pet in order to be compensated.  A pet trust is a legally appropriate means to accomplish this goal.  Such a document (or provision within a Will) would provide that a certain sum of money is to be set aside for the care of the pet by a particular person, which sum is to be released in particular intervals provided that the caretaker is assuming the duties expected or upon delivery of proof of payment of expenses on behalf of the pet.

dying.jpgThe New York Times recently published an article concerning the scenario that many New Yorkers fear. Having lost personal and professional connections to relatives and friends, some people unfortunately die alone. Since these people are not missed, days or weeks could go by before odors emanate from their home and uncollected mail piles up, resulting in a neighbor’s notification to the police about a suspected death. The police discover a corpse, which starts the legal matters to be addressed in this post.

These lonely people may very likely have mental issues such as compulsive hoarding. Perhaps the embarrassment of the condition of their home led these people to stop inviting people over, leading to additional isolation. The items will need to be removed in order to surrender an apartment to a landlord or to sell the home. Care is to be taken with respect to valuable items, being mindful of the need to deliver such items to the proper beneficiary, if such person is located.

It remains to be determined whether the deceased person had a Will, which may have been left in the personal possessions in the home. If there was a Will, the proposed fiduciaries need to be located so that a Probate Proceeding may be commenced in Surrogate’s Court. However, if a Will cannot be located, an estate Administration proceeding is to be conducted. We have indicated in a prior post tasks to be conducted by an estate administrator. Our readers may also wish to consult one of our prior posts concerning the mechanics of an Administration proceeding.

partition.jpgPrior posts on this blog have discussed the general aspects of property partition actions. A partition action arises when there are two or more owners of real property, and the co-owners cannot agree on the disposition of the property. The property may be residential or commercial in nature. This blog post will discuss possible out-of-court resolutions to a partition action.

A partition action may be brought by any of the co-owners to force a sale of the property, with the proceeds being divided among the owners according to their percentage of ownership. However, it is a fact that most lawsuits are settled prior to trial or another resolution by a Court. In a partition action, there are several alternatives to explore when deciding to resolve a case without the need for further Court intervention.

The first alternative would be for the parties to agree to sell the property to a third party who is not one of the current co-owners. In such a situation, the co-owners should agree on sale terms, and, in most situations, hire a professional real estate broker to list and show the property in question. The parties would also agree to share the costs of the broker, which is usually a set percentage of the sales price. It is advisable at this stage that a formal written agreement, usually called a “Stipulation of Settlement,” be entered into between the parties. Such an agreement should contain an initial listing price for the property. It should also state that any offer at or above the listing price will be accepted by all of the owners. In the event that the property cannot be sold at or above the listing price, the agreement should also delineate a set period of time in which the parties will attempt to sell the property at the initial listing price, such as three months. After this time period expires, the agreement should state that the listing price will be reduced by a set percentage, such as five percent. This will allow the property to be sold at a price acceptable to all parties, and will prevent any co-owner from refusing to sell the property. Our firm has handled many partition actions and has a standard Stipulation of Settlement that contains the necessary clauses for an effective resolution.

stock.jpgIt is not unusual for the estate of a deceased person to hold stock as an asset. Stock can take the form of shares held in a publically traded company, such as Target, or shares in a cooperative corporation. Clients often ask us how such shares can be transferred after a person passes away. This post will answer the question.

First, it needs to be determined whether the person had a Will. If there was a Will, there may have been a specific bequest of the stock. This takes the form as follows: “I give all shares that I may hold at the time of my death in Target to my daughter.” If the stock is not addressed specifically, then the residuary clause of the Will manages its disposition. Anything not specifically addressed is left to the party receiving the residuary.

If the person did not have a Will, then the rules of intestacy would dictate who would receive the stock. In New York, Section 4-1.1 of the Estates Trust and Powers Law governs the situation. For instance, if the closest surviving person to the deceased is a child, then the child would inherit the stock under New York law.

cartrip.jpgAfter another harsh winter in New York, many of us are looking forward to getting away this Memorial Day weekend. Those of us who are driving may have acquired the vehicle from an estate. This post will address estate issues as they pertain to cars and other vehicles.

As many of us know, cars in New York involve title, registration, and insurance. They may also involve a lease or a loan. We have written another post concerning how to manage debts of the deceased. The first step is that the Surrogate’s Court of the County in which the deceased resided needs to appoint an executor (if there was a will) or an administrator (if there was not a will). The executor or administrator needs to act on behalf of the estate to manage all relevant aspects of this matter.

Every car must be insured. The executor or administrator should employ his best efforts to maintain the insurance policy on the vehicle. Certainly, the car should not be driven if insurance has lapsed, because this could result in a ticket from the police if one happens to be stopped for another violation.

estatesale.jpgMany people who pass away also leave behind the place in which they resided. The housing could be a rental apartment, a cooperative or condominium unit, or a house. The deceased may not necessarily have resided in the property immediately before death if they went to assisted living or a nursing home. This blog post will address the legal and practical matters arising from housing of the deceased.

If the person lived in a rental apartment, it remains to be determined whether the rental was rent-regulated or not. A rent-regulated apartment could be either rent controlled or rent stabilized and is generally found in New York City. If a surviving family member wants to continue residing in the rent-regulated apartment, he may wish to allege that he has succession rights and has the legal right to continue to live in the apartment. When the unit is not rent-regulated, the surviving family member may wish to negotiate a surrender of lease and return of any security deposit, in exchange for the prompt removal of the possessions of the deceased. Most landlords do not aggressively pursue eviction in this scenario, if the surviving family member in good faith is acting reasonably efficiently in clearing out the apartment. However, if the death occurred in the apartment and was under gruesome circumstances, the landlord may seek to have out-of-the-ordinary cleaning expenses paid by the family.

When the departed individual lived in a cooperative or condominium apartment, monthly maintenance or common charges will continue to accrue. The representative of the estate should request a delay in the submission of any default notices, pending the representative’s access to assets as needed to make such payments. So long as the cooperative or condominium board is convinced that the representative has duly and promptly applied for Letters Testamentary or Letters of Administration, additional time to obtain access to assets will usually be granted. In no event do we recommend that the estate representative pay such charges from her own personal account.

deceaseddebt.jpgEvery person who dies, whether wealthy or not, will owe money. Whether there is a credit card balance outstanding or estate taxes due to the State of New York, most people will leave this world with a financial obligation of some type. The questions to be addressed in this blog post involve how the fiduciary of the estate should address such debts and whether the fiduciary is personally responsible for the debts. Also, should debts of the deceased be deducted from estate proceeds before distribution to beneficiaries?

The first step is to analyze the types of potential debts. There are secured and unsecured debts. Secured debts are collateralized, such as a mortgage recorded against the house in which the deceased lived, or a car lease. An example of an unsecured debt would be a credit card balance with Visa, Mastercard and the like. Other common unsecured financial obligations include funeral expenses, administration expenses of the estate, estate taxes due to the state or federal government and real estate taxes on property owned by the deceased. Of course, ordinary bills from utilities and doctors will most likely be received.

The fiduciary of an estate in New York is called an Executor if there was a Will, or an Administrator if there was not a Will. Such a fiduciary is charged with collecting all assets of the estate, paying all legitimate obligations, and distributing the balance, if any, to the beneficiaries of the estate. Being a fiduciary is a significant responsibility. Provided that the fiduciary acts ethically and in good faith, he will have no personal obligation for financial obligations of the estate.

sendak.jpgMaurice Sendak was a beloved children’s book author and illustrator whose death two years ago has raised multiple issues to be discussed in this blog post. During his life, he had a close professional affiliation with the Rosenbach Museum and Library in Philadelphia, whereby he lent a vast majority of his books and illustrations for viewing by the general public. He also had a caretaker who managed his personal affairs for decades and was very knowledgeable about his preferences. Mr. Sendak’s Will provided that his caretaker would be one of three executors. It also left some valuable original book manuscripts to the Rosenbach and established a foundation. It was his expressed wish in the Will that the foundation retrieve the works that were on loan to the Rosenbach and display them in the house in which he lived for many decades. The house was to be developed as a study center. We have written another blog post concerning stipulations on bequests that is reminiscent of this situation. After his death, the three executors sought to retrieve the works on loan to the Rosenbach in accordance with Mr. Sendak’s wishes. The Rosenbach objected and commenced litigation against the estate on several grounds to be discussed.

The Rosenbach’s attorneys objected to the caretaker serving as executor. Mr. Sendak had the foresight to appoint two other people to serve jointly as executor, although this was not legally necessary. Testators have wide latitude in the appointment of executors. Generally, even an estate beneficiary does not have cause to object to the testator’s designation of executor. Although some executors may have had a “confidential relationship” with the deceased, such as a clergyman or doctor, a confidential relationship does not on its own disqualify an executor. In this instance, the caretaker had a long standing relationship with the deceased, making her a natural choice to serve. Another objection was that she was unsophisticated in business matters and not suited to her position. In having two other individuals serve jointly, Mr. Sendak may have considered that the caretaker was best to dispose of works due to her personal knowledge while the other executors may have been better suited to the business matters to be confronted by the estate.

Although these factors do not seem to be present in this case, executors can be disqualified for particular reasons. Executors are fiduciaries who owe a duty to preserve estate assets and not engage in self-dealing. For instance, if the caretaker was found to have taken the artwork for her own use and sale for her own benefit, estate beneficiaries could approach the Court and make a formal legal request for her removal as executor. Further, an accounting procedure could be commenced to require the executor to demonstrate the proper collection and disbursement of estate assets.