LAST WILLS AND TESTAMENTS

 

Any individual 18 years of age or older who is of sound mind may make a Last Will and Testament, also known as a Will.  Your Will is a legal document that directs how you wish to dispose of your property after your death.  The Will generally includes directions regarding what will happen to your real property [ie: condominium, house, land, etc.], your personal property [ie: your personal effects, clothing, jewelry, furniture, furnishings, household goods, collections, photographs, memorabilia, automobiles, etc.], and your digital assets, after your death. The primary reason for making a Will is to leave your property to those you care about, in the proportions you choose.

 

If you do not have a Will, those assets which would otherwise pass under your Will instead will be distributed according to New York State’s Laws of Intestacy.  These laws determine how the property in your name, but without a joint owner, beneficiary or other designation, will be distributed among your family members, which often is not in the way you would prefer if given the choice. If you are survived by a spouse and descendants, your spouse would take the first $50,000 plus one-half of the balance of your intestate property, and your descendants would share the rest. If you are survived by a spouse but no descendants, your spouse would take all. If you are survived by descendants but no spouse, your descendants would take all. A Will is essential if you want to leave assets in any manner not consistent with the Laws of Intestacy. If you have a partner but are not legally married, your partner may inherit nothing without a properly drafted Will, and may even be forced from your shared home if proper protections have not been established in a carefully drawn Will or by testamentary substitutes.
 

A Will is tailored to your own particular needs and preferences. You will nominate as your Executor(s) the person(s) you want to direct and close out your affairs after your death. An Executor can be a relative, a friend, your lawyer, a bank, or a trust company that specializes in the handling of estates. If your estate includes a Trust, a testamentary Trustee(s) will also be designated in the Will. As the person directing the creation of the Will, the choice of Executor and testamentary Trustee is yours to make, and will not be left to the courts or others to decide. Successor Executors and Trustees can be named as well.
 

If you die without a Will and leave a minor child(ren), the Court may appoint a Guardian to manage any property your child(ren) inherits from you. The Court often appoints the child(ren)'s surviving parent as Property Guardian.  Depending on the amount inherited, a bond may have to be posted, and if the surviving parent has credit issues, he/she may not be appointed.  If any money would best be used to pay for your child(ren)’s education, clothing or living costs, the Property Guardian may need to obtain prior approval of the Court. The Court requires that the Guardian prepare Annual Accountings and will also require annual examinations of income and expenses. Investments of the guardianship funds may be limited or directed by the Court.  The requirements and limitations imposed under guardianship law can be avoided by executing a properly drafted and well thought out Will. If your child(ren) does not have a surviving parent upon your death, or if the surviving parent is absent, incapacitated, alienated from the child, or otherwise unavailable,  your child(ren)'s welfare will be protected if your Will identifies and nominates a trusted relative or friend to act as Guardian of your minor child(ren)'s property and personal needs.  The person(s) designated in your Will as Guardian(s) for your child(ren) would not automatically have legal authority to act as Guardian upon your death; they will have to petition the Court for approval. While a Will cannot fully implement your future plans for your child(ren), it is strong evidence of your wishes regarding this important decision and is generally given great weight by the Courts.
 

You should have a clear picture of the assets you own, how they are titled and if there are beneficiaries designated when reviewing your current Will or planning to make a new Will.
 

Property held jointly (with right of survivorship) with another ["JTWROS"], held in trust for another ["ITF"], for the benefit of another ["FBO"], payable on death to another ["POD"], transfer on death to another ["TOD"], or which names a beneficiary ["BEN'Y"], will not be distributed through your Will but according to the designation(s) stated.  Life insurance will be distributed to the policy holder’s beneficiary(ies), which may or may not be the estate. If the beneficiary is the policy holder’s estate, the policy will be distributed through the Will. The same process will apply to the distribution of individual retirement accounts, pension plans, jointly held accounts and other designated assets. It is important to understand that the Will is only part of the total plan for the distribution of your property, and is secondary to the designation(s) on your account(s) and holdings.
 

When you make a Will, you should also consider how estate taxes might affect you. The Federal estate tax exemption for persons dying in 2019 is $11.4 million.  This exemption is "portable" for a married couple if properly elected, therefore potentially qualifying a married couple for up to $22.8 million in Federal estate tax exemptions in 2019. The Federal estate tax and Federal gift tax exemptions are "unified"; the tax rate for taxes on estates and gifts above the unified exemption amount is 40% in 2019. This figure assumes U.S. citizenship and does not account for previous taxable gifts.
 

The 2019 New York State estate tax exemption is, by contrast, $5.74 million, with a "cliff" for estates exceeding this amount by 5%, meaning that New York estates exceeding $6,027,000 in 2019 will be taxed from the first dollar.  Unlike the Federal estate tax exemption, the New York State estate tax exemption is not portable.  New York State's estate tax rate is a maximum of 16%.  Recent changes to the New York State estate taxes significantly limited the testator's ability to make unlimited gifts in New York prior to death.  Non-exempt gifts made in the three years prior to death will be added back [“clawback”] to the date of death value of the estate.  The interplay between estate taxes and capital gains taxes should be evaluated before gifts are made.

 

Estate planning requires the knowledge and advice of an experienced professional. To create the best plan for yourself and for your beneficiaries, discuss your particular needs and planning objectives with an elder law attorney.  By doing so, you will have peace of mind that the proper documents for your living and after death planning are in place. You should never hesitate to discuss the attorney's fees in advance of your meeting.
 

If you have questions or wish to prepare or change your Last Will and Testament contact Fern J. Finkel or Julie Stoil Fernandez at Finkel & Fernandez, LLP 16 Court Street, Suite 1007, Brooklyn, New York 11241, 347-296-8200 (telephone), 718-965-3185 (fax), ffinkel@ffelderlaw.com, jstoilfernandez@ffelderlaw.com.

 

*Disclaimer: The information contained on this website is provided only as general information and is not intended as legal advice, nor should it be used as a substitute for a complete review of your case by an experienced elder law attorney.  All situations differ.  By visiting this website, there is no attorney-client relationship established between you and Fern J. Finkel, Julie Stoil Fernandez, or Finkel & Fernandez, LLP.