Asset Protection

July 18, 2016

Disinheriting Your Spouse? Not So Under New York Law

You are always told that you can leave whatever assets you want in your will to whomever you want. After all it is your last will and testament. Your will represents your final wishes and they are to be carried out to the letter. You may be shocked to learn that in some cases under New York law that your will can actually be disregarded almost in its entirety, and that special case comes into play if you do not leave anything to your spouse.

Sacred Institution, Sacred Inheritance Rights

Marriage holds a special place in society and the laws of New York not only reflect that distinctive position but also protects the institution of marriage. Under New York’s Estate Powers and Trusts law section 5-1.1, a surviving spouse has the right to collect assets from a deceased spouse’s estate if the deceased spouse’s will either does not provide for the surviving spouse or does not give enough to the surviving spouse. It does not matter if the will has bequeathed those assets to someone else; the surviving spouse’s rights to the property trumps all others.

July 16, 2016

Understanding Joint Ownership with Rights of Survivorship

by Ettinger Law Firm

There are many ways to pass on your assets without having to go through probate. Any account or policy with a beneficiary designation, payable on death clauses or joint ownership with rights of survivorship will not be considered to be a part of a probate estate. Those assets will pass to the person designated or the other joint owner at the time of your death. Despite being handy estate planning tools that help assure that the assets in question are never out of reach or frozen, many people fail to understand the nuances and rights associated with such designations and it is this failure that can frustrate and cause unintended consequences when dealing with a person’s estate.

Only After You Pass

Many people are familiar with a beneficiary designation on a life insurance policy. After you pass, the insurance company gives the money from the policy directly to your beneficiary avoiding probate. Similar to a beneficiary designation is what is called the payable on death clause (POD). At the time of your death, your designated beneficiary can claim the assets in the account by showing a death certificate, similar to claiming a life insurance policy. The designated beneficiary has no claim to the assets in the account while you are alive and cannot withdraw or otherwise dispose of them.

July 14, 2016

Revoking Your New York Will

by Ettinger Law Firm

People are taught to hang onto important documents. Every person is instructed to hold onto deeds, mortgages, bank records and tax returns in a safe place where no one else can access them lest important information fall into the wrong hands. But wills, which might be the most important document a person can have, should not be held onto after a new one has been executed, and while it may be a good idea to keep it in a safe place, hiding it like the other documents may have unintended consequences.

Written Revocation

There are many ways to revoke an old will and it is always a good idea to do so if you have drafted a new one. The easiest and most common way to revoke a will is to draft a new one and have an explicit clause that revokes any previous wills and codicils that you have executed. Because your new will is dated later than the previous wills, the revocation will be effective.

July 12, 2016

Prince’s Estate Slowly Rolls Forward

by Ettinger Law Firm

Minnesota Judge Shows No Urgency To The Detriment Of The Estate

Carver County District Judge Kevin Eide has announced that there will be no quick decisions in who will be inheriting from the late superstar according to USA Today. The probate judge in charge of the legal proceedings surrounding Prince’s estate has further indicated that due to the complexity of the case, the multiple claims and questions of parentage, the judge may forward his eventual decision to an appellate court of immediate review, a process that will only drag out the proceedings even longer.

The judge’s decision to take it slow comes despite urgings by the claimants to come to a speedy resolution. The claimants have good reason for hoping to close out the probate estate and settling matters: every day that the estate is in probate, the estate is losing money. While the probate proceedings are going on, Prince’s assets are effectively frozen. For an estate as big as Prince’s that includes quite a lot.

July 10, 2016

Back to Basics: Funeral Instructions as Part of Your Estate Plan

by Ettinger Law Firm

The Benefits of Planning

The loss of a loved one is difficult enough without having to plan and pay for a funeral. With a little foresight, you can save your loved ones from unnecessary stress. While death is an eventuality, few people seem to want to plan for it. Everyday 7,195 Americans die leaving family and loved ones to pick up the pieces. One of the easiest ways to reduce the stress on your loved ones is to provide funeral instructions.These instructions may include: how you would like your remains to be treated (cremation or traditional burial), how you would like your organs to be treated (medical donation, scientific donation or traditional burial), what type of memorial service you would like, and what type of grave marker you would like.

By planning now, you can help to reduce some of the pain and stress associated with the loss of a loved one. Your family will be able to mourn without having to worry about making important funeral plans.

July 2, 2016

Float like a Butterfly, Sting like a Contested Estate: Muhammad Ali’s Unhappy Heirs

by Ettinger Law Firm

It seems that Muhammad Ali’s estate is destined for trouble, similar to other celebrity estates that we have covered on this blog recently. It is unknown if the boxing legend died with a will, but even if he did, a will contest may be likely. Forbes reports that Mr. Ali died with an estate worth in between $50 and $80 million, had nine recognized children, four different marriages, and struggled with a debilitating disease that affects the mind. These are the circumstances that set the stage for a drawn out estate contest.

Troublesome Children

The large amount of children Mr. Ali had, as well as his four marriages, makes the number of people who may have an interest in contesting Mr. Ali’s estate quite high. One child in particular, Muhammad Ali Jr., has been estranged from his father since Mr. Ali’s fourth and final marriage in 1986 and has been cut off from the family fortune ever since. Ali Jr. in particular blames Mr. Ali’s fourth wife for driving him and his father apart.

June 19, 2016

Family Feud Forever: Dr. King’s Family Squabbles Continue

by Ettinger Law Firm

Dr. Martin Luther King Jr. left behind a legacy of peace and understanding, but he may have been surprised by the legacy that his estate is forging. Last Friday, a Fulton County Superior Court Judge declined to make a ruling in a dispute over two items left behind by Dr. Martin Luther King Jr, his Bible and his Nobel Peace Prize. Fox News reports that the case over these two items is likely to go to trial, with King’s estate, controlled by his two sons, against their sister, Bernice. This is only one of many lawsuits that have crept up in years past over the legacy of Dr. King.

Managing Estate Assets and Legacies

Dr. Martin Luther King Jr’s estate is not technically what many would consider an estate in the traditional sense. It is not a probate estate, with his assets being liquidated according to his will. Rather, Dr. King’s estate is the for-profit Martin Luther King Jr. Estate Inc. with his three surviving children being the sole shareholders and directors. As the sole shareholders and directors, his three children control Dr. King’s name, image, likeness and his possessions.

May 30, 2016

BACK TO THE BASICS – HOW TO BE AN EXECUTOR

by Ettinger Law Firm

AN IMPORTANT AND SOMETIMES THANKLESS JOB

There are times in life when we all will have to do or engage in a thankless job. One such time is when a close friend or a family member asks you to be the executor of their estate. The difference between an executor and an administrator of an estate is small but noteworthy. An executor is someone who is appointed by the terms of the will itself to administer the estate. If there is a trust document to convey property to heirs, they are then known as trustee.

An administrator is the title for the person who appointed to administer the estate by the Court when someone dies intestate, or without a will, or when the appointed executor refuses or cannot complete the task. In either event the probate Court Judge must approve of the selection. A recent survey by U.S. Trust found that three-quarters of high net worth individuals choose a family member or close and trusted friend to be the executor of their estate and two-thirds of the same people chose a friend to be the trustee for their testamentary trust. The process is started when the executor presents the will and a death certificate to the Surrogate Court in the County in which the deceased resided. The Court then issues letters testamentary to the executor, which is when the hard work begins.

May 21, 2016

DYNASTY TRUST REEXAMINED

by Ettinger Law Firm

VERY SIMPLE CONCEPT

This blog examined the dynasty trust in the past but it is time to reexamine certain aspects of the dynasty trust. The dynasty trust is a trust designed primarily to avoid the generation skipping transfer tax when a person wants to leave money to their grandchildren or great grandchildren (or even generations beyond that). Before getting into the nuts and bolts of what a dynasty trust is, it is best to outline some of the basic tax issues inherent in the generation skipping transfer tax.

Grandfather wants to leave an asset to his son, with the intention that he will leave it to his son and for him to leave it to his son and so on. Just to make the dollar figures simple, let us assume that it worth $10 million. For further simplicity, let us also assume that grandfather’s estate already went through the federal (and state) estate tax exemption. That means that son has to pay the current top estate tax rate of 40%, which means that the asset is no longer worth $10 million. Instead it is only worth $6 million. For further simplicity, father’s estate also passed through all of his estate tax exemption, so instead of the asset being worth $6 million when it passes to the grandson, it is now worth $3.6 million in light of the 40% estate tax. And the process goes on and on.

May 5, 2016

CREDITORS OF AN ESTATE

by Ettinger Law Firm

ORDER OF PAYMENT

It should not be a surprise to anyone that when someone passes away, their estate must pay for all legally binding outstanding debt owed by the decedent just prior to passing. New York as well as just about every other jurisdiction has laws that address how the estate puts creditors on notice that they must file a claim, but how the creditor must go about making a claim and getting paid from the estate. As in other areas of the law, there is an order and priority to the claims that can be paid. The administrator has a fiduciary obligation to the heirs to distribute the estate to the terms of the will. That fiduciary obligation also extends to creditors of the estate. The payment of expenses, ensuring that all disbursements are properly documented and all taxes and fees are paid are core responsibilities of the estate administrator.

To do this, the estate administrator must first understand what assets the deceased owned, the value of those assets, which in and of itself costs money. When an estate is insolvent, the creditors will surely examine every expenditure by the administrator to determine if they acted appropriately. On the other side of the ledger, the administrator must determine if the claims are valid or overpriced and inflated. The estate administrator has an obligation to dispute all claims, except properly owed, legally enforceable obligations. Since the final accounting by the estate administrator presupposes that all parties are already involved in litigation and there is a Court already scrutinizing all credits and debits, the likelihood that a party will enforce their rights, or, more specifically, object to the final accounting, is all the much greater. The balancing act that the estate administrator must engage in can be a complicated endeavor.