Without a will, New York State law will dictate how assets will be distributed. The only way to ensure wishes are honored is to create a Will.
A Last Will & Testament is a legal document which provides instructions to be carried out after death. Wills typically address the distribution of assets, allows the naming of beneficiaries, specific gifts, appointments of guardians for minor children, naming an executor of the estate and other important elections regarding the distribution of your assets. Without a will, New York state law shall direct how assets will be distributed. A Last Will and Testament s may also incorporate a number of testamentary trusts— trusts that are set up after your death.
Upon death, a Last Will & Testament will be admitted to Surrogate’s Court whereupon a judge will appoint an Executor of your Estate. The Executor is then responsible for collecting all of the decedent’s assets and distributing them in accordance with the decedent’s wishes and court oversight
USING TRUSTS TO PROTECT AND MANAGE YOUR ASSETS
Finding the precise trust or combination of trusts for your needs requires the assistance of an experienced estate planning attorney. Trusts also offer a high degree of control over the management and disposal of assets.
Trusts are vital tools in estate planning as well as asset protection.
Examples of commonly used trusts include:
- Irrevocable Trust: can be used to avoid costly, lengthy and public court proceedings whilst providing asset protection and is used in Medicaid planning.
- Revocable Trust: allows you to manage your money while you are still able, and to have a trustee manage your money if you become unable to do so. Trust assets pass to beneficiaries without probate.
- Insurance Trust: removes the proceeds of a life insurance policy from your taxable estate, thereby increasing your beneficiaries’ inheritance.
- Special Needs Trust: an essential part of special needs planning, this provides long-term support for a child or adult with special needs, by making payments that supplement the care that a child is getting under government entitlement programs such as Medicaid and SSI. Special needs trusts also provide money management tools for an individual with special needs.
- Testamentary Trust: can be used to protect a disabled child, to protect spendthrift children and may include tax planning trusts, including credit shelter trust, also known as bypass trusts, A/B trusts and disclaimer trusts.
Health Care Proxy is a document that appoints an agent to make health care decisions in the event that one is incapable of making such decisions.
There are essentially two situations in which a health care proxy is needed. The first exists when there will be a temporary inability to make health care decisions. For example, when having an outpatient surgical procedure and under general anesthesia. Should something unexpected happen, and a health care decision needs to be made, a Health Care Proxy agent may make health decisions.
The second exists when there will be a permanent inability to make health care decisions. Under these circumstances if a health care proxy agent is not appointed, all appropriate medical treatments will be provided. A health care agent can ensure that wishes are being met and a patient’s best interests are served.
A Living Will, also sometimes referred to as an Advanced Health Care Directive, is a document that articulates wishes with regard to health care treatment if one becomes incapable of verbally expressing those desires.
There is no customary form of Living Will in New York, nor is there a statute that governs them. The highest court in New York has held that a Living Will is valid as long as it constitutes “clear and convincing evidence” of one’s wishes.
A personalized Living Will prepared for you by The Trataros Law Firm will reflect personal preferences for a future that hopefully will never have to be faced. While it is unpleasant to contemplate the need for such a document, it is far preferable to plan ahead than to suffer the difficult and anguishing issues that will arise if no advance directives about one’s care and treatment have been given.
A Power of Attorney is a document that is used to appoint someone to make real estate, financial, and other legal decisions for another. The person who signs a Power of Attorney is referred to as the Principal, and the person who acts on behalf of the Principle is referred to as the Agent.
A Principal may give an Agent either extensive legal authority or very limited authority. The Power of Attorney is frequently used to assist in the event of a Principal’s illness or unavailability in legal transaction whereas the Principal cannot be present to sign necessary legal documents.
- A “Nondurable” Power of Attorney takes effect immediately. It will remain in effect until it is revoked by the Principal, or until the Principal becomes mentally incompetent or dies.
- A “Durable” Power of Attorney also takes effect immediately and enables the Agent to act for the Principal even after the Principal is not mentally competent or physically able to make decisions and is effective until revocation by the Principal, or the Principal’s death.
- A “Springing” Power of Attorney becomes effective at a future time. That is, it “springs up” upon the happening of a specific event chosen by the Principal and spelled out in the Power of Attorney. Often that “springing” event is the illness or disability of the Principal.
When one passes away, the estate often goes through a court-managed process called probate or estate administration where the assets of the deceased are managed and distributed. Being the executor of an estate is a solemn duty and privilege.
EVERY PROBATE ESTATE IS UNIQUE, BUT MOST INVOLVE THE FOLLOWING STEPS:
- Locating, gathering, and liquidating assets: All of the decedent’s assets are collected into estate assets. A valid death certificate and letters testamentary (proof of the executor’s authority to act on behalf of the estate) will be necessary to change the title of the assets from the decedent to the estate. Some assets may be necessary to liquidate in order to pay debts of the decedents.
- Notifying creditors and paying debts: All known creditors are notified of the administration of the decedent’s estate. Additional publications and notification requirements must be met to provide opportunity for unknown creditors to make claims against the estate. Any claim against the estate must be made within seven months of the end of probate (when the executor is given authority to commence with estate administration). The executor is responsible for reviewing claims and paying legitimate debts. Acting in the interests of the estate, the executor may need to dispute certain creditor claims in estate litigation.
- Paying estate taxes and preparing estate tax returns: The final income tax return of the decedent is filed, and applicable taxes are paid. If the value of the estate exceeds a certain amount, state or federal estate tax returns may also be required.
- Distributing assets to the proper beneficiaries: Once all debts and taxes are paid, the remaining assets are distributed to the beneficiaries in accordance with the will or New York Intestate Laws (which name beneficiaries when there is not a will or when a will was rejected by the court).
- Preparing for estate accountings and Releases to beneficiaries: Before the estate is closed, the executor prepares a final accounting of the estate. The final accounting informs the court and beneficiaries of all estate transactions, including assets collected, estate administration expenses, and distributions made. At the close of the estate, the executor requests relief from duties as the executor and the estate is closed.