New York Estate Planning & Elder Law

Act Quickly to Protect an Estate / White Plains, NY & New York, NY

“When dealing with the emotional pain of the loss of a loved one, family members also have to address daunting administrative tasks.”

For most families, the process of estate administration or the probate of a will starts weeks after the death of a loved one.  However, before that time, there are certain steps that need to be taken immediately after death, according to a recent article “Protecting an estate requires swift action” from The Record-Courier. It is not always easy to keep a clear head and stay on top of these tasks but pushing them aside could lead to serious losses and possible liability.

The first step is to secure the deceased’s home, cars and personal property. The residence needs to be locked to prevent unauthorized access. It may be wise to bring in a locksmith, so that anyone who had been given keys in the past will not be able to go into the house. Cars should be parked inside garages and any personal property needs to be securely stored in the home. Nothing should be moved until the trust administration or probate has been completed. Access to the deceased’s digital assets and devices also need to be secured.

Mail needs to be collected and retrieved to prevent the risk of unauthorized removal of mail and identity theft. If there is no easy access to the mailbox, the post office needs to be notified, so mail can be forwarded to an authorized person’s address.

Estate planning documents need to be located and kept in a safe place. The person who has been named as the executor in the will needs to have those documents. If there are no estate planning documents or if they cannot be located, the family will need to work with an estate planning attorney. The estate may be subjected to a probate proceeding.

One of the responsibilities that most executors don’t know about is that, when a person dies, their will needs to be admitted to the court, regardless of whether they had trusts. If the deceased left a will, the executor or the person who has possession of the will must deliver it to the court clerk. Failing to do so could result in a large civil liability.

At least five and as many as ten original death certificates should be obtained. The executor will need them when closing accounts. As soon as possible, banks, financial institutions, credit card companies, pension plans, insurance companies and others need to be notified of the person’s passing. The Social Security Administration needs to be notified so direct deposits are not sent to the person’s bank account. Depending on the timing of the death, these deposits may need to be returned. The same is true if the deceased was a veteran—the Veterans’ Administration (VA) needs to be notified. There may be funeral benefits or survivor benefits available.

It is necessary, even in a time of grief, to protect a loved one’s estate in a timely and thorough manner. Your estate planning attorney will be able to help you through this process.

Reference: The Record-Courier (Oct. 17, 2020) “Protecting an estate requires swift action”

For more information on elder law and estate planning, please visit my estate planning website.

Prevent Estate Administration Problems Before They Occur / White Plains, NY & Greenwich, CT

“If your will was signed before 2013 and you have a so-called by-pass estate tax saving trust that is no longer necessary, you really should update and simplify your will.”

Estate administration, that is, when the executor gets busy with paying debts, taxes and distributing assets, is often the time when any missing steps in an estate plan are revealed. The best legal problems are the ones that don’t happen, advises the article “Practical tips for estate administration, pre-planning advice, and a Coronavirus update” from the Winston-Salem Journal. Here are tips to avoid problems:

Do you need a trust to avoid probate fees and simplify estate administration?

Think of a trust as a secret box or bank account. If you own property in another state, want adult heirs to receive their inheritance over a period of time, have a beneficiary with special needs, or simply don’t want the public to learn about your assets, then a stand-alone trust that works in conjunction with your will is something to consider. However, you may be able to achieve some of these goals through beneficiary designations. A big advantage of a trust is that it is not subject to probate; assets in a probate estate become public record. If privacy is an issue, you’ll want a trust.

Is your estate plan out of date?

If your estate plan has not been updated in the last three or four years, it is likely that you have extra expenses that are no longer necessary. It’s also likely that you are missing out on tax savings opportunities. There have recently been a huge number of changes to estate and tax laws. If your will was signed before 2013, it is time to simplify your will.

Did you inherit real estate with your siblings?

If the sale of the property is still pending, get it wrapped up as soon as possible. If one of your siblings dies, or moves away, managing the disposition of real estate can become complicated and expensive.

When was the last time you reviewed Power of Attorney documents?

If you are not competent and critical steps need to be taken for your care, your agents may find themselves unable to act on your behalf if your POA and related documents are “outdated.” They may need court intervention to make even simple decisions.

How has coronavirus impacted choices in long-term planning documents?

If your will, POA, health care proxy or medical power of attorney and HIPAA release forms have not been updated recently, decisions may be made without any discussion with the people you trust most.

Speak with an estate planning attorney now to get your legal and financial affairs in order. Many states have granted attorneys the ability to have documents executed and witnessed remotely, so there is no reason not to go forward now.

Reference: Winston-Salem Journal (May 3, 2020) “Practical tips for estate administration, pre-planning advice, and a Coronavirus update”

For more information on asset preservation and estate planning, please visit my estate planning website.

Surprising Ways Beneficiary Designations Can Damage an Estate Plan / White Plains, NY & New York, NY

“During the estate planning process, these beneficiary designations are reviewed to ensure that the beneficiaries are correct, and that the distribution of these assets conforms with the client’s intended estate plan.”

Naming a beneficiary on a non-retirement account can result in an unintended consequence—it can even topple an entire estate plan—reports The National Law Review in the article “Overuse of Beneficiary Designations: How They Can Derail a Client’s Estate Plan.” How is that possible?

In most cases, retirement accounts and life insurance policies pass to beneficiaries as a result of the beneficiary designation form that is completed when someone opens a retirement account or purchases a life insurance plan. Most people don’t even think about those designations again, until they embark on the estate planning process, when they are reviewed.

The beneficiary designations are carefully tailored to allow the asset to pass through to the heir, often via trusts that have been created to achieve a variety of benefits. The use of beneficiary designations also allows the asset to remain outside of the estate, avoiding probate after death.

Apart from the beneficiary designations on retirement accounts and life insurance policies, beneficiary designations are also available through checking and savings accounts, CDs, U.S. Savings Bonds or investment accounts. The problem occurs when these assets are not considered during the estate planning process, potentially defeating the tax planning and distribution plans created.

The most common way this happens is when a well-meaning bank employee or financial advisor asks if the person would like to name a beneficiary and explains to the account holder how it will help their heirs avoid probate. However, if the estate planning lawyer, whose goal is to plan for the entire estate, is not informed of these beneficiary designations, there could be repercussions. Some of the unintended consequences include:

Loss of tax saving strategies. If the estate plan uses funding formulas to optimize tax savings by way of a credit shelter trust, marital trust or generation-skipping trust, the assets are not available to fund the trusts and the tax planning strategy may not work as intended.

Unintentional beneficiary exclusion. If all or a large portion of the assets pass directly to the beneficiaries, there may not be enough assets to satisfy bequests to other individuals or trust funds created by the estate plan.

Loss of creditor protection/asset management. Many estate plans are created with trusts intended to protect assets against creditor claims or to provide asset management for a beneficiary. If the assets pass directly to heirs, any protection created by the estate plan is lost.

Estate administration issues. If a large portion of the assets pass to beneficiaries directly, the administration of the estate—that means taxes, debts, and expenses—may be complicated by a lack of funds under the control of the executor and/or the fiduciary. If estate tax is due, the beneficiary of an account may be held liable for paying the proportionate share of any taxes.

Before adding a beneficiary designation to a non-retirement account, or changing a bank account to a POD (Payable on Death), speak with your estate planning attorney to ensure that the plan you put into place will work if you make these changes. When you review your estate plan, review beneficiary designations. The wrong step here could have a major impact for your heirs.

Reference: The National Law Review (Feb. 28, 2020) “Overuse of Beneficiary Designations: How They Can Derail a Client’s Estate Plan”

For more information on elder law, tax planning, retirement planning and estate planning, please visit my estate planning website.

Transferring Property Can Be a Challenge / White Plains, NY & New York, NY

There is a lot of paperwork involved in transferring property and it needs to be done correctly.

Ownership of property must be traced from one owner to another. However, when someone passes away, things change. There is now property that needs to change ownership. That creates the need for a lot of paperwork that needs to be done at once, according to U.S. News & World Report in "How to Deal With the Paperwork Scramble After a Spouse Dies."

It is easy to get overwhelmed and make costly mistakes when there is that much paperwork to fill out and file in such a short period of time. Those mistakes require even more paperwork and time to fix. People who are grieving and who do not know all the things that need to be done, make these mistakes all the time.

An estate planning attorney can advise you on creating an estate plan that fits your specific circumstances and may include a transfer of property.

Reference: U.S. News & World Report (June 19, 2018) "How to Deal With the Paperwork Scramble After a Spouse Dies."

For more information on asset preservation and estate planning, please visit my estate planning website.

Fight over James Brown's Estate Fight Goes On / New York, NY & White Plains, NY

11 years after his death, the singer’s estate remains unsettled.

Soul singer James Brown passed away in 2006, leaving millions to poor children in Georgia and South Carolina.  However, none of the money has been given to the children because the estate is bogged down in numerous lawsuits, according to The New York Times in "Why Is James Brown's Estate Still Unsettled? Ask the Lawyers."

The main source of the dispute appears to be a family feud with Brown's children and grandchildren on one side and his widow, who is the estate administrator, on the other side. Numerous lawsuits have been filed.

In perhaps the biggest lawsuit, the children and grandchildren allege that the widow has cut inappropriate side deals for the copyrights to Brown's music. These copyrights are where the bulk of the estate's value likely is found. They also allege in another lawsuit that the widow was not even married to Brown, because she was allegedly also married to another man.

The children remain without the money. It is unlikely that the dispute will be settled soon.

Reference: New York Times (Feb. 4, 2018) "Why Is James Brown's Estate Still Unsettled? Ask the Lawyers."

For more information on asset preservation and estate planning, please visit my estate planning website.

Dispute Settled over Arthur Miller's Archives / New York, NY & White Plains, NY

Two institutions fought over rights to his journals, notes and letters.

After a heated dispute, the Ransom Center matched Yale University’s $2.7 million offer to archive Arthur Miller’s work, according to The New York Times in "Inside the Battle for Arthur Miller's Archive."

Miller, who died in 2003, had a close relationship with the Harry Ransom Center at the University of Texas at Austin. On a couple of different occasions, Miller sent the center several boxes of his work to the Ransom Center for safe-keeping.

The problem appears to have stemmed from the fact that Miller never formally left his archive to the Ransom Center.

No estate planning document was created making his preference legally binding. Therefore, his estate fulfilled its duty to maximize the amount of money it could get for the works.

It is not clear that they have that much value commercially, even if they do contain some letters and discussions about Miller's second wife, Marilyn Monroe.

The educational institutions were willing to pay for the prestige of housing the archives of the celebrated playwright.

Reference: New York Times (Jan. 9, 2018) "Inside the Battle for Arthur Miller's Archive."

For more information on asset preservation and estate planning, please visit my estate planning website.

Too Many Victims Makes Compensation Difficult / Greenwich, CT & Rye Brook, NY

Las Vegas killer leaves large estate, but fair compensation for the victims will be a challenge.

Despite a hefty estate of $5 million left behind, it will be difficult to compensate the victims of Las Vegas mass shooter Stephen Paddock, according to The New York Times in "The Las Vegas Gunman Was Rich. Will His Wealth Go to the Victims?"

It still is not known exactly why mass murder Stephen Paddock decided to shoot at Las Vegas concert goers from his hotel window. He was relatively well-off and had not been in trouble as far as anyone knows.

Despite the mystery surrounding his motivations, his victims and their families would like to be compensated for his actions.

His estate is worth approximately $5 million. That money would ordinarily go to his mother,  since Paddock is not known to have had an estate plan.  However, Paddock's family has indicated they have no interest in his estate.

There are some challenges to making sure that all the money goes to the victims.

The first is that the estate could be rolled into an existing victims' compensation fund that has already raised $22 million.  However, all of the victims might not be eligible for compensation under the fund's rules.

The second challenge is that many victims are filing independent claims and lawsuits to the estate.

Reference: New York Times (Dec. 23, 2017) "The Las Vegas Gunman Was Rich. Will His Wealth Go to the Victims?"

For more information on asset preservation and estate planning, please visit my estate planning website.

Thinking of Naming a Close Family Member Executor? / Greenwich, CT & White Plains, NY

Sometimes it creates problems to name a close family member executor, as seen in Jerry Garcia’s estate.

A big mistake in Jerry Garcia’s estate came when third wife Debra Koons was chosen to administer the estate, according to the Wills, Trusts & Estates Prof Blog in "The Wrong Executor Can Make Family Drama Worse, As Jerry Garcia's Heirs Discovered."

Garcia passed away in 1995 after being married three times, having four children and having one stepchild.

Koons threw the first two wives out of his funeral.  However, no one challenged his will, so no problems were anticipated.

The problem for Garcia's estate is that his other heirs objected to many of the decisions made by Koons. They felt that she was acting in her own interests and not in the best interests of everyone.

This led to constant family squabbles and made the estate administration more costly and time-consuming than it needed to be.

The problems should have been anticipated.

It would have been wiser to have an independent professional hired to handle the administration of the estate. That might not have been a solution to all problems, but it would have taken much of the family drama out of the situation.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and can also advise you on naming an executor.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 12, 2017) "The Wrong Executor Can Make Family Drama Worse, As Jerry Garcia's Heirs Discovered."

For more information on asset preservation and estate planning, please visit my estate planning website.

JPMorgan Faces Bill for $4 Billion in Punitive Damages / Greenwich, CT & White Plains, NY

Jury has awarded money for damages.  However, it appears likely the amount won’t hold up to court scrutiny.

JPMorgan has been ordered to pay plaintiffs $5 million in actual damages and $4 billion in punitive damages for a suit involving the handling of a complex estate that didn’t have an estate plan, according to Bloomberg in "JPMorgan Ordered to Pay More Than $4 Billion to Widow and Family."

The case began when Max Hopper, an American Airlines executive credited with creating an innovative reservation system, passed away and left an estate valued at $19 million.

Unfortunately, he did not have an estate plan.

JPMorgan was chosen to administer his complex estate. However, Hopper's widow and her stepchildren, angry at the way the bank was handling the estate, accused it of delaying distributions for its own benefit and sued.

A jury recently came down with the verdict that included $4 billion in punitive damages.

It is very likely courts will greatly reduce this punitive damage award,  since the Supreme Court has previously ruled that punitive damages must be proportional to actual damages.

Nevertheless, this case highlights an important point.

Estate administrators can be held liable, if they do not faithfully carry out their duties.

The jury in this case believed that the bank was guilty of fraud, breach of fiduciary duty and breaking a fee agreement.

JPMorgan is a sophisticated entity that should have known better.

Reference: Bloomberg (Sep. 26, 2017) "JPMorgan Ordered to Pay More Than $4 Billion to Widow and Family."

For more information on asset preservation and estate planning, please visit my estate planning website.

Spanish Woman Claims She Is Dali’s child / Greenwich, CT & New York, NY

Court orders body of famous artist be exhumed.

A judge has found enough basis for the claims of a Spanish woman, claiming she is the child of Salvador Dali, that the body has been ordered to be exhumed from its current resting place underneath a theater in Dali's hometown, so DNA testing can be performed, according to the Washington Post in "Judge in Spain orders Salvador Dali's body exhumed for paternity test."

Dali, who was well known both for his eccentric art and lifestyle, was not known to have any children.  However, one Spanish woman claims that she is Dali's child.

The only problem is that she cannot prove her claims, since Dali passed away in 1989 at the age of 85.

The woman makes her living as a professional tarot card reader, so perhaps she could prove her paternity by reading the cards. However, she refuses to do such a self-reading. Instead, she has asked the Spanish courts to intervene.

It is not clear what the woman hopes to gain from the testing. Dali's estate has long been closed and all of his valuable artwork donated to the Spanish government.

Even though the artwork is valued at hundreds of millions of dollars, it is unlikely the woman could lay claim to any of that money. For her part, she seems uncertain of what she wants, if Dali does turn out to be her father.

She has only stated that she wants "what corresponds to her."

Reference: Washington Post (June 26, 2017) "Judge in Spain orders Salvador Dali's body exhumed for paternity test."

For more information on asset preservation and estate planning, please visit my estate planning website.