Recently in Estate Administration Category

Not Allowed to Disinherit - Spousal Right of Election in New York

March 17, 2014,

New York residents are urged to craft an estate plan so that their assets are passed on per their own wishes--and not based on arbitrary state laws. Unless you explicitly make your desires known, then all decisions will be left up to others. However, there are actually a few rare instances when the law explicitly prohibits you from making certain planning choices. These situations are not common, but it is important to be aware of them in case they conflict with your plans

The most notable rule of that nature relates to disinheriting a spouse. In most cases, the law automatically allows a spouse to inherit certain assets if he or she chooses--regardless of the specific estate planning provisions.

Marriage is deemed a special legal relationship that is voluntarily entered into under the law. As a result, state statutes include default rules that protect the relationship. This is somewhat different from other close relationships--like parent-child. A resident can always end a marriage to legally break the spousal relationship. That is why it is usually possible to disinherit a child but not a spouse.

NY Spousal Right of Election Law
There are countless different scenarios where one may want to remain married to an individual but not leave them assets as an inheritance. This can be a strategic choice and not necessarily motivated by animus. An estate planning attorney can explain if a strategy that does not leave assets to a spouse makes sense.

However, it is important to understand that there is a NY law that allows a spouse who is disinherited to voluntarily choose to collect various assets--even if they were designated for others. Specifically, the spouse can choose to take either ⅓ of the deceased "net estate" or, alternatively, $50,000. Under the law, the net estate may include many different assets. Beyond those indicated in a will, it can include joint accounts, living trust assets, and some assets where a beneficiary is designated. In addition, that net estate may also include certain gifts given within the last year. In other words, giving away asset to others as a means to deplete an estate is not a viable alternative.

This spousal right of election does not happen automatically. The disinherited spouse has to affirmatively exercise their right to take advantage of the provisions. There are various time limits to doing so. In addition, the right may be curtailed in some instances based on a pre- or postnuptial agreement.

For help creating a tailored elder law estate plan to fit your needs, please contact our NY attorneys today .

Understanding Estate Sales - What Can You Sell?

March 14, 2014,

Most legal matters have built-in complexities. Anyone who has purchased a home, for example, can appreciate the mountain of paperwork will dense legalese that must be filled out . Things are only made more challenging where there are significant emotions tied up in the dealings--like when the home was owned by a loved one who just passed away.

One common example of a process that many New York residents face with a mix of intense emotions and legal complexities is an estate sale.

No two families are the same. Some wish to go through with a sale as soon as possible to settle the matter and move on. Others take more time to process the situation before handling matters like an estate sale. In all cases, however, it is critical to proceed with an understanding of the legal requirements.

The Basics
Most importantly, one must understand what can be sold, when, and by whom. It is not as simple as adult children automatically being able to do whatever they want with their parents possessions. Answers to these questions will hinge on what estate planning was done beforehand. Use of tools like a living trust, for example, would likely streamline the process. On the other hand, those without any planning at all will have to wait for court resolution before anything can be done.

In general, all property can be labeled either as a probate asset or non-probate asset. Probate assets are those that must be collected and distributed through the court. When a will is used to pass on assets, then virtually all property in the decedent's name (individual who passed away) will be required to go through probate. Alternatively, non-probate assets pass to another automatically, or at least outside of the court's purview. This may include property held jointly with a right of survivorship, certain insurance benefits, or assets held in trust.

Those assets that do not need to pass through probate can be dealt with almost immediately. There will be a new owner or trustee who can do whatever they wish with the items, including sell them in an estate sale. Alternatively, probate assets cannot be immediately handled. Instead, the family must go to court and either present the will or have the court deal with the resolution per state intestacy laws. The court will appoint a "fiduciary" whose job it is to collect the assets and distribute them as necessary. This may include arranging a sale of a home. In more complex cases, like when the home is part of a cooperative, the same formal requirements must be met, including approval by a Cooperative Board.

Estate planning attorneys appreciate that on top of all of these legal details are very real emotional pressures. When it comes to an estate sale it is common for disputes to arise between grieving family members regarding what to sell and when. The stress and confusion is far more likely the less preparation and professional support is available. Feel free to contact our NY estate planning professionals for guidance on streamlining this process for your family.

Rock N' Roll Estate Fight - Decades After Death

December 16, 2013,

One of the biggest misconceptions about settling an estate is that all of the loose ends will be handled within weeks or months of the passing. In reality, it often takes years or more before all of the details are finalized. In cases of sizeable wealth, unique assets, or complex administration arrangements, the estate details may linger for decades.

Consider a story in last week's New York Post regarding the estate of former New York Dolls guitarist Johnny Thunders. Thunders was only thirty eight years old when he died in 1991. Yet, even though the death occurred more than 23 years ago, there is a legal estate planning battle brewing over control of his assets.

Thunders Estate Fight
Thunders had little to his name when he died--with an estate valued only at $4,000. Not having a Will, the singer's assets were set to go to his estranged wife, their two children, and a third child from a second mother from Sweden. The singer's sister was named Executor of the estate and she worked on its administration.

Over the years, the sister was quite savvy with the estate management, taking advantage of some re-birth in popularity of New York Dolls songs to generate significant income for the estate. As part of her role as administrator of the estate, the sister made twice yearly payments to the singer's children and wife. These payments lasted for decades until the sister's death in 2009.

It was at that point that another estate battle was put into motion. Originally, the singer's Swedish daughter from outside of his marriage was set to take control of the estate. Yet, the daughter, now 26 years old, could not afford the sizeable bond payment needed to oversee the fund. These bond payments are often required by the court to ensure that the administrator does not abuse their discretion and control of the funds.

Yet, even though the daughter could not afford the bond, no one else was named administrator. The estate funds--around $160,000--have set unused without payment to any of the children. All of this means that no one is around to take advantage of the continued interest in the New York Dolls legacy to capitalize on royalty and licensing funds.

To make matters worse, Thunder's other two children with his wife recently filed a suit seeking to bar their half-sister from ever taking control of the estate. Both sides are set for a court date in January but are hoping to reach a settlement beforehand.

Later-Life Marriages and Prenuptial Agreements

December 8, 2013,

The "Golden Years" - that peaceful time of life after retirement; a time to watch the grandchildren grow up, to take that long-awaited vacation and to....get married? Statistics indicate that both men and women are getting married later in life, and although the rate of marriage and remarriage significantly declines with age, an estimated 500,000 Americans 65 and older get married (or remarried) every year.

While marriage at any age raises a number of legal and financial concerns, individuals 65 and older who marry later in life tend to bring significantly more assets to a marriage than individuals who marry earlier in life. In addition, those entering into in these later-life marriages are more likely to have adult children, and even grandchildren. For these reasons, it is critical that those who rediscover love during their "Golden Years" be mindful that the failure of these types of marriages can create complex estate planning legal issues.

A unique problem for later-life marriages involves potential disputes between a surviving spouse and the adult children from a previous marriage. Most states require that a portion of the deceased spouse's estate pass to the surviving spouse. This portion is known as the elective share. In New York, that share is equal to 1/3 of the deceased spouse's estate. New York, like most states, does not allow the disinheriting of a spouse to his elective share unless the spouse to be disinherited legally consents. Consequently, spouses who want to determine the terms of possession of their assets upon their death should consider creating a prenuptial agreement, one made by the spouses prior to marriage that concerns the ownership of their respective assets in the event of divorce. Without a prenuptial agreement, a "Golden Years" divorce has the potential to lead to a disastrous, and often disheartening, outcome.

Take the hypothetical later-life marriage of John and Nancy. John took the steps to create a new will once he married Nancy, generously leaving her $75,000 and the rest of his million dollar estate in equal shares to his three daughters from his previous marriage. John and Nancy did not, however, create a prenuptial agreement. Upon John's death, Nancy could, under New York law, claim her elective share of John's estate if she so desired, leaving her with far more than the $75,000 designated by the will...and leaving his three daughters with far less. One can only imagine the nightmare this could create where the relationship between Nancy and John's three daughters was already contentious. A well-drafted prenuptial agreement between John and Nancy would have allowed each of them to structure his estate as he desired, thereby avoiding a distribution that may have John rolling in his grave.

Indeed, marriage at any age can be exciting and fulfilling, yet newlyweds in their "Golden Years" must be sure not to let their love blind them to the critical role a prenuptial agreement can play in later-life marriages where one or both spouses has children and grandchildren and/or substantial assets that were acquired before the marriage.

The Huguette Clark Drama Continues--Possible Settlement?

September 27, 2013,

The New York estate feud that dominated headlines for months may finally be nearing an end. Mysterious New York heiress Huguette Clark died in 2011 at the ripe old age of 104. For several decades before her death, Clark lived inside a hospital room--even though she was healthy enough to live elsewhere. Her several mansions remained empty for years. In fact, a documentary film based on Clark's life and death is currently in creation--several books have already been published.

Because of her unique lifestyle and secretive existence, many were intensely interested in her estate plan--curious as to how her $300 million fortune would be passed on. So began a complex back-and-forth between dozens of different parties who apparently had a stake in the estate--including Clark's doctor, lawyer, nurse, the hospital where she stayed, her distant relative, named charities, and more.

Clark's estate planning was relatively bare considering the size of the assets. Essentially two wills were produced. The two wills were both created in 2005. The terms of those two wills could not be more different. The first will gave most of her assets to her distant relatives. The second will cut the family out entirely and instead sprinkled money to her doctor, nurse, lawyer, accountant, and arts-related charities.

It was not long before the different parties at stake were locked in a legal battles. As a substantive matter, the main issues was which of the two wills should be followed. Last week, we explained how negotiations had broken down and the matter was set for trial.

Apparent Settlement
But on the eve of jury selection in the case, the New York Post is reporting that a settlement may have been reached. Per the terms of the possible agreement, a group of 20 relatives will split $34.5 million from that estate. Another major beneficiary would be the new foundation created and set up at Clark's California estate. The Corcoran Gallery will receive $10 million, the hospital where she lived would get $1 million, and a loyal doctor-friend would receive $100,000.

Interestingly, not everyone involved with walk away with some piece of the estate. For example, her attorney and accountant will not receive anything. In addition, Clark's nurse will not receive the nearly $7 million she would have per the terms of the second will.

The next step is for the settlement to be put before the judge. So long as he approves it, the matter may finally be settled.

IRS Valuation & Taxes - The Michael Jackson Examples

August 23, 2013,

Death and taxes; the two constants in life. There has been significant discussion in the past few years over the one tax that is itself most closely tied to death: the estate tax. At the federal level, the President and Congress have debated the exact rate of the the tax and at one point it should kick in.

But once those details are set, it is still not entirely easy to determine what one's total estate tax bill is. That is because most individuals have assets whose value is hard to gauge. It would be straightforward if all of one's wealth was in a bank account with a set balance or stocks with a clear value.

That's not how it works in the real world, however. Instead, many have assets that must be "valued" before added to a tax bill. Who does the valuing and what decisions they reach may ultimately have significant effects on how much of an estate goes to Uncle Sam. As you might imagine there is frequently considerable disagreement regarding this matters.

The MJ Example
For example, Bloomberg News is reporting that Michael Jackson's estate is challenging the estate tax bill which the IRS calculated. The estate claims that some assets were overvalued, leading to a requested payment in excess of what should have been owed.

The process has included some back-and-forth. First, the estate hired its own appraisers to value everything in the estate. Then, based on those appraisals, the estate paid the estate taxes that were due. Later, the IRS issued a "notice of deficiency." This is the government's way of claiming that the estate didn't pay enough and owes more. In response, attorneys for the estate have fired back, filing their own suit challenging the notice of deficiency.

The court filing lists many different assets that the estate claims were overvalued by the IRS. This includes real estate, automobiles, Jackson's share of a business, items in two trusts, and smaller personal property. In addition, there are disagreements about how much the singer's "image and likeness" are worth as well as the value in a "contingency non-appearance and cancellation" policy which was part of a scheduled concert series.

In short, there is a lot of room for conflict here, and with so much money ultimately at stake, this estate tax dispute will likely rage on for some time. It is yet another reminder of the critical need for experienced estate planning help both before and, sometimes, after a passing.

Michael Jackson Estate Saga Continues -- $500 Million in Debt Paid Off

July 2, 2013,

When someone passes away, the basic principles of settling the estate seem straightforward: collect assets, pay off debts, and distribute what is remaining per the deceased's wishes. While that cursory sketch appears easy enough, in practice, dealing with these matters can take years, have a significant cost, and result in prolonged disagreement, destroyed relationships, and even legal battles.

As always, a high-profile celebrity example offers a helpful look at how it plays out in the real world.

The Las Vegas Sun recently reported on the latest in the prolonged battle related to famed pop star Michael Jackson's estate. The singer died over four year ago, but from most reports the matter is nowhere near being resolved. For one there, there is still pending litigation related to the billion-dollar tour production Jackson was set to complete just before his passing.

One positive sign is that it appears all of Jackson's sizeable debts, nearly half a billion dollars at the time of his death, have now been paid. This marks an important step, and will hopefully signal a turning point leading to final resolution of all loose ends.

Prudent Estate Administration
Interestingly, many are pointing to the competent management of the estate as an example of the immense value one receives from professional support with these issues. The Sun articles notes that in the four years since his passing Jackson's estate has made a staggering $1.1 billion as a result of savvy financial moves and business decisions related to using his high profile image and continued celebrity.

According to one report, Jackson's estate made more money in the four years since his death than the entire time time that he was alive. He sold 50 million albums in that time and Michael Jackson shows have been licensed by many different groups.

While no else has a life or legacy like Michael Jackson, the principle of immense value from professional aid with settling an estate should be noted by all. When a loved one passes away there will not be a tidy list of debts, contact numbers to cancel accounts, instructions on filing taxes, or any other easy-to-follow guides to handling all of the administrative odds and ends. Instead, months of confusion, frustration, paperwork headaches and more can await a family trying to handle these affairs in the midst of grief.

Local residents are well advised to visit with estate planning lawyers ahead of time so that steps are already in place to handle these matters efficiently no matter what the future holds.

Estate Planning Becoming Reality Show?

June 5, 2013,

Epic estate planning battles--particularly involving the wealthy and famous--have long been fodder for newspapers. There have even been a few high-profile movies touching on the topic, like the recent George Clooney film, "The Descendants." But now it appears that the sagas may make their way into yet another medium: television.

Reality TV continues to captivate audiences, and now some are looking to cast a new television show based on unique, intense, and interesting inheritance fights. The Trust Advisor recently shared information on the project which, if it becomes popular, is sure to raise awareness of common estate planning issues even more.

The show is still in the early stages of development, but it is clear that a large TV production team is looking for families to be filmed as their inheritance issues and planning details are sorted out. These early reports suggest that the show will center on inheritance and trust disputes among wealthy families. The purpose, one presumes, is to find families with the most unique issues, including family businesses, generations-long dynasties, and large personalities. The filming (and packaging as a television show) will likely highlight both the characters themselves as well as the unique processes involved in settling estate fights. While it may seem common knowledge to those of us working on these affairs, it is easy to forget that for most community matters, estate planning issues are foreign.

The article notes that "the goal is to get everyone to work out their grudges and actually resolve their issues without getting the litigators involved." Considering that this is the same goal shared by many who are beginning the estate planning process when not being filmed, it will be interesting to see if the show mirrors how the process actually works.

The producers explain that while the goal is to find situations where families can work out their disagreement, examples of "clients gone bad" may also be involved. This refers to situations where clear planning advice is ignored or obvious mistakes (perhaps intentional) were made which lead to hurt feeling, arguments, and broken relationships.

Of course, estate planning attorneys, financial advisors, and others working in these area will undoubtedly be a natural audience for this show. But perhaps beyond mere entertainment something like this will spawn into an important, educational tool for all community members. There remains a need for more families to seriously consider their legacies, and watching examples of feuding unfold on their television may be just the spur some need to stop delaying and make a call.

Trying to "Woo" Inclusion Into The Will of Heiress Huguette Clark

June 3, 2013,

The New York Times shared a story late last week on developments in the settling of the estate of copper heiress Huguette Clark. It is a reminder of the sensitive nature of estate planning, particularly for those with wealth, and the lengths that all involved parties may go to influence one's decisions regarding inheritance.

As many know, Ms. Clark was very reclusive, living the final two decades of her life at the Beth Israel Medical Center, even though for most of that time she did not actually need hospital care. According to new reports (and allegations from family members), almost as soon as she arrived the hospital engaged in a complex campaign to receive donations from the heiress. Apparently the facility had administrative officials sent to her frequently to build trust. After some time the officials, including the hospital's CEO allegedly, began talking with her about creating a will. All of this was after officials researched the family history in the hopes of making a more personalized connection with Ms. Clark. It goes without saying that this sort of treatment is not provided to all patients at the facility.

All of this is only recently being made public as part of a high-profile legal challenge filed by some of Clark's relatives angling for a larger share of her $300 million estate. The legal challenges began almost immediately after her death in 2011, and they are still raging. A trial in the matter is scheduled for September.

The crux of the legal case are claims of undue influence. Beyond trying to get into her will, the family claims that the facility used its position to convince Clark to stay in the hospital for decades (and pay millions to do so), even though she didn't need medical care. In addition to medical fees, Clark gave the non-profit hospital $4 million in donations, left them $1 million in her will, and donated a painting that sold at auction for $3.5 million.

Criticism of the facility is not limited to relatives. A Manhattan public administrator previously issued critiques of the handling of the estate by many, including the hospital as well as those closest to Clark in the last years of her life.

Two will were drafted in 2005, and the second will is hotly disputed. The first will includes relatives while the second mostly cuts them out. The family argues that a doctor involved in Clark's care influenced her to made the changes in the second will. Claims about this sort of conduct, particularly with will changes so close together, are not uncommon.

Siblings Inheritance Feud Turns Criminal

May 14, 2013,

Estate planning attorneys frequently urge residents to be careful about creating long-term plans to avoid family feuding. Careful consideration of inheritances, open communication between families, and prudent use of tools like trusts are usually the best way to ensure that families are not torn apart after a passing.

Some seniors appreciate certain inherent conflicts within the family and work to counter those risks. However, many others assume that such feuding only affects "others" and their family members would never fall into arguments and ruin relationships over property or other end-of-life matters. The reality is that no one knows for sure how things might play out. Reactions to the loss of a relative often spur deep psychological impulses with emotions askew. That can spur problems for even the most stable families.

Estate Planning Murder Plot
The extreme lengths that some go in the heat of an inheritance feud were demonstrated in a sad case reported this week in The Chronicle. The bizarre case involved the Wolf family of two sisters and brother fighting over an inheritance. The feud began in 2006 following the death of the adult-children's parents. An estate valued at about $3 million was at stake.

Reports indicate that fighting broke out immediately as the children sought to maximize their inheritance. The brother, in particular, seemed willing to do anything to increase his share of the family fortune. All told, more than six different criminal charges were filed, several civil lawsuits were pursued, and hundreds of thousands of dollars in legal fees were racked up.

All of that peaked in 2010, when one of the sisters was seriously injured when out of nowhere a box of candy blew up in her face as she opened it. The box was filled with pieces of pipe,glass, tacks, and other explosives. The second sister was also targeted for murder. It was only later that the brother was connected to the plot. He apparently tried to hire a ex-convict to kill his sisters to secure as much of the inheritance as possible.

This week he was officially sentenced to life in prison for his actions.

In summarizing the case, an observer noted, "Just a tragic situation coming out of probate. People get so wrapped up in those things, they lose sight of what's important."

Few cases of probate feuding will end with an attempted murder conviction. However, far too many families will find relationships destroyed following disagreement spurred by the process. That is why it is critical for families to use trusts and other planning measure to avoid probate and pass on assets in a seamless process void of opportunity to spur fighting.

Washington Post Article on Family Struggles in Dividing Up Assets

April 5, 2013,

A recent Washington Post article discussed the lethal combination of family and finances. The author recounts how even the most close-knit families can be torn apart by disagreements about money matters. The article included one reader to wrote a letter offering an example of how his parent's will is causing tension and turmoil.

The letter was written by an adult son who was asked by his parents to assist with their estate planning. He was named executor and helped with locating financial documents. The son saw a copy of the will after it was completed, noting that it left assets to a few charities and then split the remaining estate between himself and his one sibling--a sister. This represents a pretty common situation, with families assuming that such a simple estate plan and division will not come with any disagreement.

But then a few years later the parents updated their will. Instead of splitting the assets between their two children, they decided to split it in thirds. Their two teenage grandchildren (from their daughter) will receive a third, and the two adult children will each receive a third. The son noted with shock that his share suddenly went from one half to one third.

The son noted that he is confused and frustrated by the development. As a gay man with a long-term partner, he does not intend to have children. He noted that he was financially secure, and so the frustration is not bore by a need for the inheritance. However, he can't help but feel penalized for his situation for no reason.

These sorts of tensions occur all the time. At times, the frustrated parties may not speak up when first learning about the situation, because they may not want to seem greedy or motivated by a desire to get a larger share. But the frustration can boil over after a passing, leading to will contests and permanent family drama.

There is no right or wrong answer to the decisions made in situations like the one described here. However, there are prudent steps that can be taken--no matter what the terms of the will--to lessen the chance of ruined relationships. For one thing, it may be worthwhile to bring in a neutral third party to manage the estate. Having a son act as executor in a situation where he feels resentful about the will is a recipe for disaster. Inviting a professional, perhaps an estate planning attorney, to handle the situation will ensure that even accusations of impropriety are nipped early on.

Dying Intestate--The Documents that Later Emerge

February 15, 2013,

If you pass away without a will designating how you'd like your affairs to be handled, you are deemed to have died "intestate." Some of the most significant legal battles and family feuding occurs in those situation because it is essentially a free-for-all. Generic legal rules apply, but without any indication of how to handle property distribution and other matters, all interested parties may decide to pursue different legal avenues to maximize their own interests. Legal fights can still occur when a will exists (often referred to a "will contests"), but the possibility of one's wishes being completely upended are far lower when at least some documentation exists.

Interestingly, it is not uncommon for various documents purporting to explain one's wishes to pop up later on--in the midst of a legal dispute. For obvious reasons, these documents should be examined with much scrutiny, but they still may influence a legal case.

New Document in Lottery Winner's Estate Feud
For example, ABC News recently reported on a new document that was shared with the court in the well-known case involving a poisoned lottery winner. The estate battle gained national attention last year when a lottery winner died suddenly after being given cyanide. Authorities have yet to make any arrests, but various parties (including the man's wife and father-in-law) have been under suspicion for involvement in the matter.

The lottery winner (who also owned a small business) died intestate. Since his passing, various family members have been fighting over the remains of his estate. Most prominently the man's widow and his siblings have spent significant time in court in an attempt to argue why they should receive the bulk of his wealth.

Recently, the widow came forward claiming that she found a new document signed by her husband which purports to leave all of his assets to his wife. Mysteriously, the letter was signed only two months before his untimely death. The document was allegedly an "operating agreement" that was drafted with his business partner. The agreement was submitted to the probate court last week. The man's brother questioned the timing of the find and argued that it was illogical for the agreement to be signed only two months before his death, as if he had any idea that he would ultimately be murdered.

Adding to the complexity are the possible inheritance rights of the man's child from a previous marriage and allegations that the man did not legally marry the widow. Considering all of the complications, this situation is the prototypical example of lack of estate planning gone awry. Accusations of murder, blended families, feuding in-laws, newly discovered documents, and lottery winnings all combined without use of trusts or a will.

Estate Battles More Common Than Ever

February 13, 2013,

Feuding after a death has been common for centuries. However, observers point out that in recent years estate battles have actually grown and more frequent. The trend is noted for all families, both those with sizeable wealth and those of much smaller estates. It is a crucial reminder for residents to take action now to eliminate uncertainty and confusion and ensure in-fighting doesn't tear a family apart following a passing.

Last week the Telegraph published a story on the topic, pointing to data showing an uptick in legal battles over inheritance disputes. The most common explanation for the change is the recession which devastated many families over the past seven to eight years. One observer explained that in tough economic times, "more people are hoping to receive an inheritance and there can be a great deal of trouble if their hopes are disappointed. People are more litigious in general and more willing to assert their rights."

Undoubtedly, the recession acted as a spur, influencing some to start a legal fight in order to secure funds that they desperately needed and might assume are owed to them. However, money troubles aren't the only cause in the change. After all, financial incentives exist even in relatively prosperous times.

Alternatively, the increase in complex family structures may also be at the heart of the rise in will fights. In "traditional" families, there is more obvious expectations about an inheritance, with spouses and children receiving most or all of the property. However, with second marriages, adoptions, and other relationships, those rules do not fit. Without clear estate planning documents in place (wills and use of trusts), then the state is often set for future court battles.

Avoiding Probate Fights
Sadly, in their quest to secure what they believe is owed or protect an inheritance from another, many families find that an estate is exhausted to pay for the legal fight itself. In this way, laying out one's wishes clearly may not only ensure the right person receives the right inheritance but that there is any inheritance at all. Court costs, attorneys fees, and miscellaneous expenses in litigation is substantial, and most estates cannot afford to bear that expense.

All New Yorkers should be aware of this reality and act now to spare their family the cost and stress of a possible feud. Experienced professionals working on these matters can explain the many different options that exist to secure inheritance wishes and protect it against potential legal challenges.

Passing on Digital Passwords After Death

February 1, 2013,

Over the past few years more and more attention has been paid to the value of "digital" assets and the need to account for them in estate planning. Yet, for all the increased awareness, there is still a long way to go before all families properly plan for handing online access and property issues. A Private Wealth story recently highlighted one of the main problems: failing to provide others with access to crucial username and password details.

Extra Burden on the Family
Many of us have a myriad of usernames and passwords that we use to control our online lives. These include social media accounts (Facebook, Twitter, blogs), email addresses, online banking data, and more. Many families are plagued with administrative nightmares when a loved one dies without providing a way to access these accounts.

Those families who do not have access to digital assets are often faced with two options. On one hand they can try to guess the information, but this is often a frustrating and unsuccessful chore. On top of that, it may actually violate privacy laws.

Alternatively, the family can contact the service provider themselves (i.e Google, Yahoo, Facebook, Instagram, Blogger, Wordpress) and try to get them to provide access. Unfortunately, there is no uniform process by which these companies provide information. Their own "Terms of Service" vary significantly regarding what hoops have to be jumped through and what information will be released. After all, there are some who might want to keep information private, even after death, and so the companies are careful in what information they provide to others.

For this reason, it is important to think through exactly what you want to provide digital access to others and put plans in place to make the transition easy. This might including written information on those usernames and passwords with other testamentary documents. It could also mean using certain online tools (i.e. Legacy Locker) to safeguard the information and release it appropriately.

More Than Just Paperwork
Providing access to online accounts is about much more than allowing family members to close accounts and handle administrative details. It is also about providing them access to important assets that may have immense sentimental value. Photos, videos, blog entries, emails, and other correspondence may prove to be a critical heirloom that family members use to remember their loved one. For example, nowadays traditional photo albums are becoming obsolete and replaced with online albums. It is critical to ensure loved ones have access to things items.

For help with these and many other estate planning concerns in Manhattan, Albany, White Plains, and throughout the state, please contact our NY estate planning lawyers for help.

"Portability" for Married Couples

January 18, 2013,

Estate planning is a personalized affair. While there are general rules and principles that apply in all cases, at the end of the day each plan is tailored for an individual's exact situation. A one-size-fits-all approach to this work is misguided and often leads to problems down the road. For one thing, there is a world of difference between planning for married couples and singles. Failing to take those differences into account may be problematic. A recent article provides a helpful background on which to discuss those issues.

Portability Now Permanent
For example, married couples are able to take advantage of an option known as "portability." Seemingly made permanent in the law thanks to the fiscal cliff compromise bill, portability refers to one spouse's ability to use to use the other's unused estate and gift tax exemption. Essentially, this allows a spouse to transfer up to $10.5 million tax free. In the past, bypass trusts were use in order to preserve exemptions. However, with this new law, those trusts may not be necessary for that exact tax-saving feature--though they still could prove useful for other purposes.

A few caveats on portability. First, as of right now, same sex couples do not receive this benefit. Even though these couples are afforded the same protections under New York law, the same is not true according to federal law. That all may change this summer when the United States Supreme Court hears arguments in a case challenging the constitutionality of the Defense of Marriage Act. However, until that time, same sex couples need to be mindful of how the rules affect them differently. More complex estate planning is still necessary to provide full protection.

Second, portability only applies to spouses who are U.S. citizens. If the surviving spouse is not a citizen, then that spouse cannot take advantage of their spouse's remaining exemption.

Third, it is critical not to assume that portability works automatically. It doesn't. Spouses who want to take advantage of this benefit must be proactive in their efforts. Specifically, an estate tax form must be filed after the first spouse's passing--even if no tax was due. This seem like a simple affair, but without proper professional help, it is easy to forget this step and lose the ability to apply the spouse's exemption later on. Literally millions of dollars may be lost in taxes by failing to file this simple tax form.