It is not unusual to postpone writing a will. After all, most of us do not relish thinking about our own mortality. However, a last will and testament is one of the most important legal documents that you will need to effectively plan for the futures of your loved ones. A will is an estate planning instrument in which you leave instructions as to what you want to happen to your property after your death. You can choose to leave each of your loved ones a particular gift based on your relationships with them and based on their particular needs. For example,, if you have a relative who is disabled or suffering from a serious illness, you could leave them property that will help provide for their medical and personal needs. You can even make provisions for who will get your pet cat or dog and instructions for its care. In addition, with a will you can name the person who you want to raise your minor children in the event that you pass away before they reach adulthood. Estate planning, however, is more than making a will. A trust, durable power of attorney, living will as well as other documents may also be important in helping your reach your estate planning goals. To create a last will and testament as well as other estate planning documents that are specifically tailored to accomplish your goals contact an experienced Bronx Wills Lawyer to guide you through the process.
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Why is it so important to have a will? A will is an essential estate planning instrument because it is an effective way to control what will happen with your property after you pass away. It will tell everyone what assets will go to whom so that there should be few, if any, disputes over your assets. Your last will and testament will also make it clear who you have selected to be your children's guardian should you pass away while they are still minors, and who should manage their property. However, the best reason for making a will is to make sure that New York State does not determine what happens to your property and what happens to your minor children upon your death. It is better that you make such decisions.
The legal term for dying without having made a valid will is called dying "intestate." If that happens, even if you have otherwise made your wishes widely known to family and friends, if your wishes are not stated in a properly executed will, then New York intestate succession rules will override your wishes. NY EPTL § 4-1.1. The result is that people who you wanted to receive a share of your estate may not receive anything. This is particularly true of they are not blood relatives. Furthermore, your children may end up being cared for by strangers.
For example, in the case of In the Matter of the Appointment of a Successor Guardian for Timothy R.R., 977 N.Y.S.2d 877 (2013), the testator passed away without having named a guardian for her disabled child. As a result a dispute developed among relatives as to who would care for the child. Ultimately the court had to intervene and settle the dispute by appointing a guardian.
New York law has rules as to which of your statutory heirs will inherit your property and in what order of priority. For instance, if you are survived by your spouse but you do not have surviving children your spouse will receive your entire estate. On the other hand if are survived by both a spouse and children then your spouse will receive the first $50,000 of your estate and the balance will be divided between your spouse and your children. This means that if your estate is worth less than $50,000, your children will receive nothing. Your surviving children will share in 100% of your estate if you pass away without and do not have a surviving spouse. If you do not leave a spouse or children, your entire estate will go to your parents. There are also provisions for when siblings, grandparents, aunts, uncles and cousins will inherit. NY EPTL § 4-1.1. New York intestacy laws do not allow friends or organizations to be your heirs. Thus, if you want to leave a gift to your best friend, a loyal employee, to a favorite charity or to your college, you would have to do so in your last will and testament. Otherwise, they will not inherit.Types of Wills
There are several different types of wills with unique features. The type of will that you would need to use depends on such factors as your personal situation, your goals, and your financial condition.
- Pour Over Will. A popular type of will is a pour over will. A pour over will is used in conjunction with a trust. It contains language that states that any asset that is subject to your will "pour over" into your trust. The property will be transferred to the trust's beneficiaries according to the terms of the trust agreement. Before the assets are transferred to your trust, your will must be probated.
- Holographic Will. A holographic will is handwritten by the testator and is not witnessed. NY EPTL § 3-2.2. Because of proof problems, in New York holographic wills are normally invalid. The exception is when one is made during a time of armed conflict by a member of the United States armed forces, by someone accompanying the armed forces during a time of armed conflict, or by a mariner who is at sea.
- Nuncupative Will. A nuncupative will is a will that is spoken and witnessed by at least 2 people. Because it is oral it is not signed. Like a holographic will, a nuncupative will is only valid if it is created by someone who is a member of the armed forces, someone accompanying the armed forces, or a mariner who is at sea. NY EPTL § 3-2.2.
- Reciprocal Wills. If you and another person such as your spouse, create 2 separate wills with complementary provisions that provide that each person leaves their entire estate to the other person, you have made reciprocal wills. Reciprocal wills typically also provide what happens to the estates if both people die at the same time. Reciprocal wills must be executed according to New York law in order to be valid.
- Joint Will. A joint will has a similar goal as reciprocal wills. It is a single will that is created by 2 testators. The will provides that each testator would get the survivor's estate.
- Codicil. A codicil is an amendment to an existing will. Codicils are used to add, change or revoke portions of a previously executed will. Codicils are generally only used to make minor or uncomplicated changes to a will. If the change is major or complicated, then it may be wise to execute a new will. Otherwise, the codicil may end up causing confusion and ultimately leading to probate litigation.
To make your will you should work closely with an experienced practitioner who will make sure that he or she has the necessary information to create a will that meets your goals.
Make a list of your property. At first you may think that your property is limited to your home, vehicle and the money in your bank account. However, your estate likely includes much more.
- Cash such as a checking account, savings account, money market account, as well as cash that you might have digital accounts
- Investments such as stocks and bonds managed through a brokerage account
- Real estate such as your house, condo or coop, as well as out-of-state vacation property, rental property
- Personal property such as furniture, vehicles, clothing and jewelry
- Collectibles such as art
- Life insurance including proceeds of life insurance policies on your own life
- Retirement plans such as employer pension plans, 401(k) plans, profit sharing plans and IRAs
- Business interests such as the assets of a small business that you own
- Joint property including your interest in property you co-own with others such as real estate or a business
- Money owed to you. Significant loans that are outstanding and memorialized in a note or contract, as well as money owed to you for services rendered under a contract such as royalties
- Property held by others include property that is loaned to, stored, or in some way held other people
Guardian for minors. If you have minor children you should figure out who will take care of them in case neither you nor the other parent survives them. You should select a person who will raise your children as well as a person who will manage any property they inherit from you or otherwise own. You can name different people to fill the roles, or one person to fill both roles. In selecting the person who will raise your children if you cannot, issues to consider include the potential guardian's age, maturity, where that person lives (do you want your children to have to move), parenting style, religious affiliation, moral values, financial situation, attitude about education and health. In selecting a guardian for your children's estate you should select someone who has proven financial knowledge and money-management skills.
Once you make a decision discuss it with the prospective guardians. Make sure that they are willing and able to accept the job. You should also name successor guardians in the event that your first choices are unable to serve.
Distribute your property. Decide who will get your possessions. You can be very specific about your bequests or you can be general. For example, you can simply leave your spouse your entire estate. Or you can leave your 2 children your entire estate with each receiving 50% of it. A second option is to be very specific with your bequests. For example, you could leave all of your books to the local public library, while giving your nephew your baseball card collection. However, it is not a good idea to include a long, long list of each and every piece of property you own such as listing each individual article of clothing you own.
Special Situations. If you have a special situation that will need attention after you pass away, you can mention that in your will. For example, through your will you can set up a special needs trust for a loved one who is disabled. If you want to make sure your cousin has funds for college, you can set up an education trust. You can even make sure your poodle, Max, is well-cared for by setting up an honorary pet trust through your will.
Choose an executor. A critical part of the will-making process is to identify the person who will be responsible for winding up your estate and eventually distributing your assets to your loved ones. This person is called the executor of your estate. To wind up your estate your executor will have to collect your assets, pay your estate debts, resolve any claims against your estate and see to the distribution of your estate. While much of what executors will do to settle your estate will be routine activities performed by all executors, your executor will have some discretion as to how to carry out his or her duties. Because of this the decision as to who is to be your executor is an important one. Your executor should be someone you trust completely such as spouse, adult child, sibling, or close friend. However, you may also choose to appoint a bank, attorney, or professional executor.
Put it altogether. Once you have a good idea of the details you want included in your will, or what your estate planning goals are, you need to work closely with an experienced practitioner to memorialize your will on paper. Under New York law, except under very narrow circumstances for your will to be valid it cannot be oral, it must be written.
Execute your will. If your will is not properly executed, the Surrogate's Court judge may not allow it to be admitted to probate. Under New York law you must sign your will at the end in the presence of a least 2 witnesses.
Store it in a safe place. Keep the original in a safe, yet accessible place and let your executor know where it is. Also make sure that your executor has the names and addresses of your beneficiaries, heirs and other interested parties so that he or she can contact them as part of the process of settling your affairs.
Review it and update it. It is important to regularly revisit your will. Over time your family will change, your relationships will evolve, your financial situation may change, and federal and state laws change. As result, you may need to make changes to your will. While it is a good idea to review your will every 2-5 years, you should also review it when there are changes in your family such as a birth, death, marriage or divorce. In addition, if you make a significant purchase such a second home, you should make sure that it is properly accounted for in your will.
Your executor is the person who will be responsible for managing your estate after you pass away. He or she will be responsible for completing such tasks as paying your estate's debts, filing your final tax return, responding to claims from creditors, and distributing your property according to the terms of your will. Upon your death, your executor may be the one who approaches the New York Surrogate's Court to request that your will be admitted to probate, although another person such as spouse or other beneficiary may do this. Once a will is permitted to go to probate the steps to administering the estate are as follows:
- Inventory the Estate. Inventorying your estate involves collecting and appraising your assets. This may involve collecting any money owed to your estate, taking control of bank accounts, and taking control of personal and real property that are part of your estate. Some property may be in the possession of another person. It will be up to the executor to retrieve it. This may result in a dispute as who is the true owner of such property.
- Pay Estate Bills. The executor will notify your creditors of your death and pay all final bills. Creditors and other claimants will have 7 months after the executor is appointed to file claims against your estate. Your executor will pay your final bills, and pay any valid claims. The executor must file your final federal, state, and local income tax returns, and pay any property taxes that are due. If you are audited after your death, then the executor must respond to the audit and resolve it. Estate bills will also include costs related to administering your estate such court costs, attorney fees and accountant fees, if any.
- Distribute Estate Property. Once all valid claims and debts are paid and all disputes settled, the executor will issue a report to the Surrogate's Court. The court will then give the executor permission to distribute the remaining estate property to your beneficiaries according to the terms of your will.
Probate can be a long and expensive process. At a minimum probate will take 9 months. Circumstances such as a will contest or other estate litigation, estate tax issues, or heirs who are difficult to locate can significantly extend probate and negatively impact the value of the estate. Nonetheless, there are estate planning strategies that can positively impact the amount of time that it will take for your beneficiaries to receive property that you leave them such as transferring property to a living trust or adding a payable on death designation on a bank account.
Making a will is an important step in making sure that your last wishes are fulfilled. However, in order for your will to be probated, it must be drafted clearly and executed according to the requirements of New York State. The experienced staff at Stephen Bilkis and Associates will not only help you draft a last will and testament, but we will also explain to you about additional estate planning documents that you may need to reach your specific goals. Contact us at 1-800-NY-NY-LAW (1-800-696-9529) to schedule a free, no obligation consultation regarding your estate plan.