Articles Tagged with staten island estate planning

If you have assets that will likely appreciate in value, including property that provides income or stocks that demonstrate growth potential, there are ways you can plan accordingly to help you avoid severe tax consequences that might otherwise be related to retaining these assets or allowing them to become part of your general estate.

Two potential vehicles for you to explore are grantor retained annuity trusts (GRATs) and grantor retained unitrusts (GRUTs). With both of these options, you retain an interest in the income from assets placed in the trust. While there are taxes associated with each of these, they may be less costly than other options depending on your individual circumstances.

The Basics

Inheriting physical real estate, such as a home or vacation cabin, can be tricky to navigate. You have to consider your desire for the property, potential expenses involved in ownership, and the process of transitioning ownership of the property to your name. These situations become more complicated when you add joint ownerships and partial interests.

People have been known to leave homes or vacation properties to their children to have in equal shares. This is common in cases where the property has been in the family for generations. Property left to multiple people is considered equally owned as “tenants-in-common” or “co-tenants”. All co-tenants have the right to use all of the property and share in any profits or liabilities from it.

“I don’t want a cabin in the woods if my brother’s there too.”

Few people think about what will happen to their business after they die and therefore rarely put together a plan. Fewer may even think that a family or closely held business should be considered a part of their estate plan. However, for many small business owners, their financial interest in their business may be the largest asset that they have and represent most of the wealth that they will transfer at the time of their death. When transferring a family or closely held business, a well-funded life insurance policy can play a very large role in a smooth transition.

Providing For Your Children

There are a number of contingencies that a business owner has to consider when transferring their interest in their family or closely held business. While family businesses may be a truly family affair, with children working, operating and managing the business as well as the parents, it is a fact of life that not all of the children may be interested or suited to taking ownership of the business. In some cases, there might not be any children that wish to take over.

You have finally done it; you took the necessary and important step to sit down and put together an estate plan with a qualified New York estate planning attorney. You have all of the necessary documents you need to move forward confident into the future about how your assets will be managed and distributed. You have gotten over the biggest hurdle that a majority of Americans never address but now you are faced with a trivial but important matter: where do I keep my estate plan?

Location, Location, Location

Where you store your estate plan matters. As we have written about before, failure to locate the documents in your estate plan at the necessary time could end up with them being treated as if they did not exist at all. Having your wishes written down somewhere that no one knows about does no one any good. Estate planning documents like wills serve an important evidentiary purpose for the courts as they are written proof of your final wishes. No court will probate a will that you cannot find and no hospital or financial institution is going to respect a Power of Attorney if they cannot see and examine the documents themselves.

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.

CHOOSING THE RIGHT PERSON AND STEPS TO TAKE

        As noted in a previous blog, being an executor of an estate can be a thankless job.  There are ways, however, that can allow you to make the job and life of an executor easier and less painful.  It is a job that carries with it much responsibility, so taking a few proactive steps may help to save the executor a lot of heartache.  One of the first steps you need to do, even before helping a named individual is to name the individual.  In other words, pick the right person; in fact it is even better to pick a few individuals as successors in the event that the executor passes away before you or is otherwise unable to serve as the executor of your estate.  Even better is to pick two people who will serve as co-executors; if you do this, you must make someone the primary person who shall serve and who has the final authority to make whatever decision needs to be made in the event that there is a disagreement.  

It is important to keep in mind that the person you chose is going to in charge of your assets that you amassed throughout your life.  All other things being equal, it is best to have someone who lives local and in the same state as you.  Few things in life provide such a stark choice.  It may be more important to you and the heirs, however, that you pick someone who is familiar with you, your wishes and your assets, even if they live further away or in a different jurisdiction.  If you choose a professional, such as an attorney, it is important to keep in mind that there will be costs associated with this.  If you permit and allocate a specific payment structure into the will or testamentary trust, it may not matter, since even a family friend or relative may also be entitled to a fee.  Finally, it is best to speak with that person in advance to ensure that they understand that they are being named as the executor of your estate and that they will do so.

As was outlined in the most recent blog posting, if you compare the costs and benefits of creating a will now versus passing away intestate, there is no doubt that the benefit is huge and the cost is small.  It is thus high time to explore New York’s intestacy laws in detail.  It is important to note that intestacy laws are important not only because they instruct a probate Judge on how the estate must be divided but it also tells the probate Court what is not permitted as well as what is neither required nor prohibited; in other words the parties can agree to certain final dispositions.  The specific statute that defines intestacy and the outlines the specific requirements that a Court must adhere to is found at New York Estates, Powers and Trusts Law (EPTL) Section 4-1.1.  

Family Law and intestacy laws are one of the few areas of the law that recognizes and codifies a different treatment of the sexes, insofar EPTL Section 4-1.2 requires that a child conceived outside of marriage (so called and grossly titled “illegitimate” children) must have an acknowledgement of paternity by their father or a finding by a Court that the children in issue are indeed the children of the deceased man before those children can inherit as a child of the deceased.  Not so with mothers, since, except in the case of children mistakenly switched following birth, there is no doubt that children are the issue of their mother.

The technical legal term when a person passes intestate is that their estate is administered and a person who passes with a will, called testate, has their will probated.  Within the universe of individuals who are material to the probate Court are children, spouses and siblings.  Adopted children at treated the same as biological children although unadopted stepchildren are not considered children as far as the intestacy law is concerned.  New York has adoption proceedings and recognizes adult adoptions to legally redefine this relationship.  Divorced spouses are immaterial, although separated spouse are still considered spouses as far as the law is concerned.  

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