The task of choosing an executor may seem daunting to New York residents who are planning their estates. Knowing what an executor does may help people identify who may best fill that role.
An executor is a person appointed in a person’s will to administer the deceased person’s estate. This includes paying any outstanding debts the deceased may have had at the time of their death, paying taxes on their assets and ensuring that their wishes as stated in their will are carried out. People who have large estates sometimes appoint money managers, attorneys or other professionals as executors since their estates may require more experience to administer. Since the tasks of an executor tend to be extensive, New York law says that executors are entitled to compensation paid from the estate.
To some people, it may seem natural to name a surviving spouse, child or other relative as executor. However, family members, beneficiaries of an estate or other people close to the deceased may have a conflict of interest if they are appointed. In addition, people who are not used to making financial decisions may be unsuited to managing the estate’s investments or other assets. Some people name more than one executor to minimize conflicts of interest or to give executors who are less experienced in managing finances or property a source of advice in handling these matters. Business partners or friends who are knowledgeable in law or asset management may serve well as co-executors.
Choosing the right executor often determines how well an estate’s assets will be managed and how fairly property will be divided among beneficiaries . Estate planning attorneys may be able to advise clients on whom to appoint as executor and other aspects of the will-writing process.
Source: The Association of the Bar of the City of New York, ” What is an executor? “, September 23, 2014
New York individuals who have gone through the process of establishing a will and trust may be interested to find out that a large portion of their estate may not be impacted by these documents. While a trust or will may name certain beneficiaries for passing assets in these documents, beneficiary designation forms affect a number of different types of assets.
Beneficiary designation forms are used on several types of financial products, including life insurance policies, payable on death accounts, retirement accounts and annuities. In the event that a beneficiary form and a will or trust contradict each other, the beneficiary form prevails. These forms include a section where the account owner names beneficiaries and the percentage of the account that the account holder wants each beneficiary to receive. These forms often allow account holders to name contingent beneficiaries in case the original beneficiary predeceases the account holder.
Assets included in beneficiary designation forms also pass outside the probate process as long as the beneficiary is not the deceased’s estate. Probate involves a public process that is supervised by the court. This process may take a while to finish, so it can delay beneficiaries from receiving the assets. In contrast, beneficiary-designated assets transfer quickly in a private manner. If no beneficiary is named or all named beneficiaries predecease the decedent, state law or the account terms may determine to whom the account goes.
Individuals who would like to ensure that their intended beneficiaries receive certain assets might discuss various options with an estate planning lawyer. Beneficiary designation forms may be used in conjunction with other estate planning documents, such as a will or trust. Designating certain beneficiaries for the relevant assets may also help a testator provide funds to individuals more quickly than would be accomplished by transfers from wills.
Source: MarketWatch, ” Why an air-tight will can’t protect beneficiaries “, Robert Klein, September 09, 2014
It may be important for New York residents to understand what happens when someone dies without a will. A will is a legal document that is written before a person’s death that dictates how that person would like their property to be divided after they die. When there is no will left by a deceased person, the state will then determine how to divide the remaining assets.
In New York, the assets of a person who died without a will are divided among the surviving family members in accordance with state intestacy laws. To begin this process, the family needs to visit the Surrogate’s Court in the decedent’s last county of residence. The family will have to present a certified copy of the death certificate, an administration petition and other documents.
When there is a will, the deceased person would have appointed an executor who is responsible for the disbursement of the assets and the payment of any remaining debts in the estate. When there is no will, one person will be named the estate administrator and take on the same responsibilities. If the deceased person had under $30,000 in assets at the time of their death, the filing fee in Surrogate’s Court is $1.
A deceased person could leave behind any number of assets and any number of family members to disperse those assets to. When there is no will to use as a guide, an estate administrator’s job becomes even more complicated. An estate planning attorney may be able to help a person who has been named as the administrator of an estate or as the executor of a will to perform their job lawfully and correctly.
Source: New York State Unified Court System, ” New York City Surrogate’s Courts “, September 10, 2014
One of the most important documents New York residents can include in their estate plans is a living will. Not to be confused with a last will and testament, a living will is a short document that gives directions to medical providers to follow in cases where patients are unable to make decisions for themselves. A living will can be as general or as specific as the writer wants it to be. Experts advise those who are interested in writing a very specific living will to consult with their doctor about their treatment options.
Living wills are permitted everywhere in the United States. However, in some states, a person who wants to leave instructions to their medical providers must use a specific form in order for their document to be valid. As long as the proper form is used and the document is formatted according to the state guidelines, medical professionals are bound by the instructions in a living will.
In addition to a living will, many people also include a durable power of attorney in their estate plans. Unlike a living will that gives instructions directly to medical providers, a durable power of attorney assigns another person to deliver those instructions. That person could be one of the beneficiaries of the estate or another trusted friend.Some people specify for their attorney-in-fact to make health care decisions based on what they believe the patient’s wishes would be while others instruct another person to make sure the living will is carried out.
An attorney who focuses on estate planning may provide guidance to a person interested in having control over their health care when they aren’t able to make the decisions on their own. With a living will and a durable power of attorney, a client can either explicitly make their wishes known to their doctors or put someone else in charge of advocating of their behalf.
Source: Findlaw, ” Living Wills: Introduction “, September 04, 2014