Estate Planning Attorneys
Bronx, Westchester & Eastchester, NY

What is a Will?

Your will is your written declaration of your desires and wishes concerning the distribution of your property upon your death.

It is very important for you to have a will in order to be certain that your assets will be distributed as you wish. 

If you die “intestate” (without a will), your property will be distributed, not as you wish, but rather in accordance with a statutory structure set down by the legislature that has pre-determined the order of distribution of your property in the absence of a will.

The Intestate Rules are Set Forth by Statute

The intestate rules for the State of New York currently provide that your property will be distributed as follows:

  1. if you have a surviving spouse but no “issue” (meaning children, grandchildren, great-grandchildren and so on), your spouse will inherit all of your property;
  2. if you have a surviving spouse and issue, your spouse will inherit the first $50,000 plus ½ of the balance of your estate and the rest will be distributed amongst your issue;
  3. if you have issue, but no surviving spouse, all of your property will be divided  amongst your issue;
  4. if you have no spouse or issue, all of your property will go to your parents, if they are alive, or if not, to your grandparents or the other children of your grandparents with 1/2 of the estate going to your father’s side and the other 1/2 going to your mother’s side and if none, to the great-grandchildren of your grandparents.

Confused? Well you ought to be! But never fear, your will can help you avoid this convoluted distribution scheme, provided of course, that it is validly executed and properly admitted to probate (to be discussed later).*

*Note that this scheme of distribution is not applicable to assets that pass directly to a named beneficiary, such as life insurance.

Your Will Must be Executed Properly in Accordance with New York Laws

In order for your will to be valid, you must satisfy the following requirements:

  1.  you must be at least 18 years old and of sound mind, memory, and understanding,
  2.  your will must be written and signed by you at the end of the document,
  3. there must be at least two witnesses to your signature who must state, in the presence of one another, that:
    1. you have declared the document to be your last will and testament
    2. you have requested them to witness the signing of your will
    3. they have witnessed it and signed so stating, in your presence and in the presence of each other
    4. each witness must then sign his or her name and list her address below.

The Witnesses Sign a “Self-Proving” Affidavit

Generally speaking, your witnesses will simultaneously sign an affidavit setting forth the circumstances surrounding the execution of the will.

This allows your will to be “self-proving,” meaning your executor may submit the will to the court without first having to locate the witnesses. 

Of course, there are exceptions to this rule and there are times when it will be necessary to locate your witnesses, even with the self-proving affidavit.

Such circumstances include:

  1. where the testator (the maker of the will) has died within three months of signing the will;
  2. there have been alterations to the appearance of the will;
  3. the will was signed by a mark rather than a complete signature;
  4. or the will was not supervised by an attorney.

Importance of Using an Experienced Attorney

For these reasons, it is extremely important that your will be drafted by an experienced estate planning attorney and that it be executed in accordance with the strict requirements provided by statute.

If not, your will may fail when submitted to probate.

What is Probate and what Passes via the Probate Process?

Probate is the legal process by which your will is presented to the Surrogate’s Court (the particular court that has jurisdiction over all of estate related proceedings) and is proven to be valid by the submission of satisfactory documentation and evidence required by the court.

Probate is necessary to effectuate the transfer of all “probate assets,” which are those assets passing to a decedent’s estate and NOT assets that otherwise pass directly to a named beneficiary, such as life insurance or assets held jointly between the decedent and another individual with rights of survivorship.

These “non-probate” assets pass immediately upon the person’s death by operation of law and no probate is required. Indeed, if all of the assets owned by the decedent at the time of his or her death are non-probate assets, it is not necessary to probate that person’s will at all.

The Will is Presented to the Court

For probate assets, however, it is necessary to present the will to the court for approval.

Usually, your named “executor” (the person you have designated to carry out your wishes) with the help of an attorney hired to represent the estate, presents the ORIGINAL will to the court, along with a Probate Petition and various required supporting documents and affidavits.

Probate is an essential process because the individual nominated as executor in your will has NO legal right to act until she or his has been officially appointed by the court and it is this appointment which grants the executor the necessary authority to administer your probate assets.

Also, during the probate process, the court can officially appoint any named trustees and/or guardians for your minor children, where applicable.

Your Will Must be Valid

Of course, your will can only be admitted to probate if it has been properly executed in accordance with the legal requirements set down by statute, and it has not been successfully “contested” (legally challenged by someone who, in the absence of the will, would have inherited under the law).

On What Grounds Might Your Will be Contested?

Simply speaking, a will contest may come into play where one or more of the heirs at law argue that your will is somehow invalid for one of many possible legal reasons:

  1. the opponent of your will might allege that the document was not properly executed and that the formal rules (discussed above) were not followed;
  2. they could argue that your will was somehow revoked by you prior to your death;
  3. they could argue that when signing your will you were not of sound mind and, therefore, lacked the capacity to properly make a will;
  4. or they could allege that there was some kind of overreaching or undue influence that took place which caused you to distribute your property in a manner inconsistent with your true wishes (in other words you were coerced into leaving your property to person “x” rather than to person “y”).

Will Contests are to be Avoided Whenever Possible.

While generally speaking a will contest is difficult to win, it can still be an enormous burden upon your estate and upon your executor, both financially and emotionally.

Remember it is your chosen executor who has been left to take on the burden of the will contest. 

Often your executor is a member of your immediate family who finds himself or herself in a position where he or she must fight with other family members, even their very own siblings.

It is never a pleasant experience and can tear your family apart!

This is why you need an experienced attorney to properly advise you when drafting and executing your will with a specific eye toward you avoiding these types of challenges down the road.

Your Executor Gathers and Administers Your Probate Assets.

The most important part of your executor’s responsibilities is the gathering and administering of your probate assets after he or she has been appointed by the court.

Your executor will liquidate your assets, pay all of the debts and expenses of the estate and then distribute what is left to all of the beneficiaries under the will.

Your executor is a “fiduciary” and has a “fiduciary relationship” with your beneficiaries.

What does this mean?

It means that your executor has been legally appointed and authorized to hold and or manage your property for the benefit of another, rather than for the benefit of himself.

Your executor will be called upon to use his best judgment and best efforts to act on behalf of your beneficiaries and, if he or she violates this duty, he or she may be personally liable for any losses sustained by the estate.

For this reason, your choice of executor is critical. Your executor must be trustworthy, smart and willing to take on this challenge. 

If you have doubts as to whether the executor you have selected is up to the task, trust your instincts and name another. Do not worry about hurting anyone’s feelings!

Your Executor is Entitled to Compensation.

Because the job of executor is difficult (to say the least), the State of New York has provided for statutory compensation to be paid to an individual as commissions for serving.

The amount of the commission is determined by the amount of the estate as follows:

  1. 5% of the first $100,000 in assets;
  2. 4% of the amount between $100,000 and $200,000;
  3. 3% of the amount between $200,000 and $700,000;
  4. 2 1/2% of the amount between $700,000 and $4,000,000; and
  5. 2% for amounts above $5 million.

These commissions are taxable to the executor as income and must be reflected in their individual tax returns. Commissions for corporate executors vary.

Your Executor Must File Tax Returns for the Estate

Your executor must file the decedent’s personal income tax returns (for the year of death and for any years where returns should have been, but were not filed) as well as Federal and State Fiduciary Income Tax Returns for the Estate when there is income generated on the deceased’s assets.

In other words, if dividends are paid, interest is earned, rents are received etc., the executor must report that on such a return, when applicable. 

Furthermore, an executor must also file, when required, Federal and New York Estate tax returns for the estate of every United States Citizen and resident of New York State.

The specific requirements for filing or not filing may change from time to time when the laws change. It is important, therefore, to have an attorney who understands these tax laws and works in conjunction with a competent estate accountant (when necessary) to make certain that you do not run afoul of the applicable laws.

These rules are quite complicated and apply to both probate and non-probate assets and also include gifts made by the decedent during their lifetime.

Costs Associated with Probate

Upon submission of a Probate Petition, the Surrogate’s Court will charge your estate a filing fee which is determined by the total amount of your probate assets.

Those filing fees are fixed by statute and currently range from $45.00 for a small estate with probate assets less than $10,000 to a maximum of $1,250.00 for an estate where the probate assets are $500,000 or more. 

There are also several miscellaneous fees which may be charged for certain other proceedings, such as the appointment of a trustee as well as legal fees to be paid to the estate attorney which, of course, will be negotiated on a case by case basis.

Small Estate

There is a simplified “small estate” process which can be available when an individual dies leaving property (other than real estate) with a combined total of less than $30,000.00.

In a small estate, an individual can be appointed to administer the assets. Usually this is either the named executor, if there is a will, or a family member who steps in to be the voluntary administrator in the absence of a will. 

In this type of situation, the named executor or voluntary administrator does not have total control of the property but can only liquidate it to pay expenses or distribute the funds to the decedent’s heirs or pursuant to the terms of the will. A voluntary administrator may not collect commissions.

What is a Trust?

A trust is a legal instrument that gives over control of property to someone else known as a trustee.

Trustees can be individuals or corporations and they are held to a very high standard of care. 

The person making the trust is called the “settlor” and the settlor not only designates the trustee but also the beneficiaries of the trust.

Executor vs. Trustee

As previously explained, an executor is appointed under your will to carry out the provisions of your will and winds up your estate after distributing your property to your stated beneficiaries.

Your trustee, on the other hand, can be appointed in your will or otherwise, to hold onto assets for the benefit of your beneficiaries for a stated period of time either after your estate has been administered or pursuant to a trust you created during your lifetime.

Your trustee has various responsibilities and must act, like an executor, as a fiduciary for the benefit of the trust and not himself. Your trustee is also responsible to act prudently and responsibility in the investment of your assets.

Similar to choosing an executor, the choice of trustee can be a difficult one and should be made in consultation with your estate planning attorney who can assist you in deciding who will be the best person or entity to serve.

Different Types of Trusts

There are several different types of trusts and each is designed to accomplish various goals.

One type of trust is known as “intervivos” trusts. An intervivos trust is one which you create during your lifetime. The trust can end on your death or at some time during your life.

An intervivos trust created can also “pour over” into another trust created in your will so that it can continue on after your death. Intervivos trusts are both revocable (can be ended or stopped by the settlor) or irrevocable, (cannot be ended by the settlor and continues without the control of the settlor once it is established).

Revocable Trusts

Revocable living trusts can be useful for those whose estate plans might be improved or enhanced by avoiding probate.

In this type of trust, it is common for the settlor to retain control of the assets and the trust will distribute them upon the settlor’s death.

This allows your beneficiaries, who are named in the trust, to take title to the property without the costs, problems or delays that often come with the probate process.

However, with that said, there are also costs associated with transferring your assets into a living trust, and not all types of property lend themselves to being held by a trust.

Testamentary Trusts

Testamentary trusts are created by your will and take effect upon your death.

Because of this, they can, of course, be revoked or changed so long as you are alive and the property intended to fund these trusts remains yours.

Testamentary trusts can be very useful, especially in the situation where your intended beneficiary is a minor or is disabled and there is a need to control the distribution of the assets to those individuals after your death.

Irrevocable Trusts

Irrevocable intervivos trusts can sometimes save you estate taxes or protect your assets in the face of a catastrophic illness, provided the trust document complies with the State and Federal Medicaid requirements.

Since the objectives of this type of trust can vary greatly, and there are risks inherent with setting up any type of legal arrangement that cannot be revoked, it is essential that the terms of the trust document be drafted by an experienced estate planning attorney so that it properly achieves your stated objectives without running afoul of the many statutory requirements specific to your particular type of trust.

Experienced Legal Representation in Preparing a Trust is Essential

The decision of whether or not to place property in a trust is a complex one and should only be made in consultation with an attorney who is both skilled in estate planning law and tax law, since the tax consequences associated with leaving property in trust (or not) require serious consideration.

Living Wills

Living wills are legal documents used to declare your wishes regarding matters of life and death in the face of a terminal illness.

You may not wish to be kept alive by extraordinary measures, even if that means the withdrawal of those measures will result in your imminent death; in such a scenario, you may wish to document your feelings on this issue before it is too late. 

These documents typically direct the withdrawal of nutrition and hydration unless required or necessary to keep you comfortable and pain free.

Generally speaking, the living will will establish your wishes when you are unable to communicate with your doctor due to physical or mental incapacity.

This document is usually used in conjunction with your Health Care Proxy, which gives a named individual the power to make decisions in your place. Your health care agent can be guided by your desires expressed in your living will.

Health Care Proxy

An experienced estate planning attorney will often advise you to sign your Health Care Proxy at the same time you sign your living will.

In this document, you will name an individual who will make your medical decisions and it will take effect when your doctor declares that you lack the capacity to make these decisions for yourself. 

Your health care agent will be given the full authority to make health care decisions on your behalf and will be responsible to act in accordance with your best interests.

The person you name to be your health care agent should be someone you trust who is capable of carrying out your wishes. It can be particularly difficult when a close friend of family member is called upon to make end of life decisions.

Know who you are designating, speak with them about your wishes, and ask them if they feel confident that they can do what you desire?  Not everyone is cut out for this type of responsibility which may conflict from time to time with a person’s particular religious convictions.

Power of Attorney

Along with your Health Care Proxy and living will, you should execute a durable power of attorney, whereby you appoint one or more persons to act on your behalf as your “agent(s).”

Your agent is sometimes referred to as you “attorney-in-fact,” but this does not mean that your agent must be an attorney. This individual can be appointed to carry out a vast number of tasks or a just one specific transaction, depending upon how this document has been drafted and its intended purpose. 

When drafting your POA in conjunction with your will and other ancillary documents, it is common for your attorney to create a broad document which enables a trusted individual to step into your financial shoes if you are unable to handle your finances due to reasons such as age or infirmity.

A power of attorney is an extremely powerful and important document, and it is critical that it be executed with the assistance of your attorney. 

Although it is important to have someone who is competent to act prudently on your behalf, it is just as important to make sure that the designated individual is someone you can trust, without hesitation, since he or she will have an enormous amount of power over your assets.

This decision should be discussed carefully with your estate planning attorney.

Lawyer as Executor of Trustee

Can I appoint my lawyer to serve as my executor? 

We are asked this question quite often, and although the answer is yes, you should first give this very careful thought and ask yourself if there isn’t anyone else in your life (family or friend) who could capably act on your behalf. 

Remember, your attorney should NEVER attempt to solicit an appointment as your executor, trustee or agent and he or she should always encourage you to consider other options before he or she accepts such an appointment.

Right of Election

We are frequently asked if it is required that an individual leave his or her property to their relatives.

In general, the answer is no, except that in the State of New York you may NOT completely disinherit your spouse. A surviving spouse has a right to inherit at least 1/3 of your estate, unless he or she has explicitly waived what is referred to as her “right of election.” 

With this exception in mind, you are free to leave your property to anyone you choose, but you should understand that by so doing you may leave some family members quite disgruntled and thereby increase the chances that one or more of them will contest your will.

Upon submission of your will to probate all of your legal heirs must be notified and given an opportunity to come to court to challenge your will. 

If you anticipate that a will contest is likely, you may wish to consider the use of a revocable living trust which will allow your assets to pass to your stated beneficiaries without having to go through the probate process.

Consult with an Experienced NY Estate Planning Attorney

Before making any decisions relating to your estate plan, it is crucial to consult with an experienced estate planning attorney who can guide you through the process.

In addition to the many topics addressed above, there are so many other issues that remain, such as whether to:

  1. hold title jointly with rights or survivorship or as tenants in   common,
  2. purchase property in joint or individual names,
  3. add your spouse, significant other or child to a deed.

All this and more must be discussed with an experienced New York estate planning attorney before you make any moves.

These are major decisions that can have serious consequences. You need to make sure that your estate plan is personal to you and that you have been adequately and properly advised by experienced counsel to avoid unintended tax, legal and financial consequences.