Because every state has its own requirements related to the validity of a will, newcomers to New York should pay careful attention to these details. Neglecting to properly execute a will could result in probate complications as well as challenges from heirs. A recent case in Tennessee, for example, resulted in the wishes of the testator being successfully challenged by his son. Although the man obtained witnesses and had them complete and sign a self-proving affidavit, the witnesses failed to sign the actual will.
In the Tennessee case, strict compliance requirements were used to declare the will in question invalid. Some states might have accepted the same will as valid due to substantial compliance. Common requirements that must be observed in will execution include ensuring that enough witnesses are involved and that their ages meet state requirements. Additionally, a will cannot be executed by an individual who does not have the mental capacity to do so. The manner of handling a will’s execution may be evaluated by the courts to ensure that the document has not been created under duress. Further, individuals who stand to gain from a testator’s death are not typically acceptable as witnesses.
Legal support can be important in ensuring that a will meets appropriate criteria. A lawyer may recommend a mention of any prior wills in a new version so that there is no question if a different document turns up after the testator expires. Further, a lawyer may provide clients with the ability to safely store their wills so that there is no worry about tampering or snooping.
People who have recently moved to a new state might want to have their wills reviewed by a local attorney to ensure that any discrepancies between state law and the document are addressed. Further, annual review of a will or estate plan is a strategy for ensuring that major life events are properly addressed within the legal documents.
Trusts are important components of many New York residents’ estate plans, especially for those people who own many high-value assets. These estate planning tools can help beneficiaries to avoid taxes and probate fees while performing other functions like protecting financially irresponsible heirs from receiving a sudden windfall. Although trusts can be very useful in a variety of circumstances, they are not always necessary for every estate.
There are fees for trust administration, and beneficiaries of trusts will be required to file annual trust tax returns. For some people, these costs outweigh the benefits of creating a trust. If a person’s estate is not very complex, they may be content to simply list chosen individuals as the benefactors of their financial accounts and trust these people to handle the funds responsibly.
A person who owns property in multiple states or wishes to protect assets from creditors or a divorce settlement may want to set up a trust. A trust can also be a valuable estate planning tool for a person who has a child with special needs. Many people decide to create a living trust so that they can determine how their assets will be handled if they ever become incapacitated during their lifetime.
An attorney may be able to help an individual to determine whether or not using trusts would benefit their estate plan. There are many different types of trusts, and an attorney may help to describe the costs and benefits of each. While looking at a person’s unique circumstances, an attorney may also suggest other tax-saving financial tools such as strategic gifting.
To many New York residents, the thought of disclaiming their right to a multimillion-dollar inheritance may seem odd. There are certain situations, however, in which doing just that can be a smart idea.
Many people who disclaim their inheritance of an IRA from their parent will do so in order to remove its value from their estate, allowing them to to remain within the federal estate exemption amount. The inheritance will then pass to the co-beneficiary or the secondary beneficiary. A parent may want to disclaim their right to an inheritance so that it instead passes to their child, who might be at a lower tax bracket than the parent. This can result in an overall net savings for the family on its tax burden.
Disclaiming has to be done in writing and must occur within nine months of the inheritance. People who intend to disclaim their right should first make certain they know to whom the inheritance will pass if they do so. They should not withdraw or invest any of the money from the IRA, or they will lose their right to disclaim it. The only exception to this is if the deceased person who held the IRA didn’t take the required minimum distribution during the year of death. In that event, that amount only can be withdrawn.
When a person passes away and leaves a large IRA to an heir, the heir might want to discuss whether disclaiming it would be beneficial to their family. An estate planning attorney may be able to review their client’s estate plan and determine whether it makes sense to remove the value of the inheritance from their estate . They may also help determine whether doing so will result in a lower overall tax burden.
Retired New York residents who are considering a move to Connecticut may want to think twice. On July 1, probate fees in Connecticut were doubled for estates worth at least $2 million. With probate fees at .05 percent of an estate, Connecticut is now the most expensive state to inherit money in.
Prior to the probate fee hike, Connecticut had a fee cap that was set at $12,500 for one estate. The cap has now been eliminated, and some relatives of recently deceased Connecticut residents have received bills for $1 million. Adding to the expense, Connecticut is a state that includes the proceeds from life insurance policies in a deceased person’s taxable estate.
Many Connecticut residents weren’t aware that probate fees were increased on July 1 until they received a bill in the mail. One estate planning attorney in Greenwich said that the most surprising thing about the fee increase was that it was retroactive to January 1. The fee increase was reportedly a response to budgeting issues that caused the state legislature to cut off all funding to the probate court system. Previously, fees were used to fund two-thirds of the probate court budget. Now, fees will be used to fund Connecticut’s entire probate court budget.
Probate court fees in New York may be less expensive than the fees in Connecticut, but they can still add up and eat away at the value of an estate. An attorney may be able to help an individual to create an estate plan that includes financial tools like trusts. Because trusts do not go through probate, they might help heirs to hold onto more of their inheritance.
New York residents have probably heard about the early death of Whitney Houston’s daughter Bobbi Kristina Brown. Now, estate planning experts are speculating about whether Whitney Houston could have done something to protect Bobbi Kristina by structuring her will in a different way. Bobbi Kristina was 18 years old when her mother died at the age of 48, and she was the main benefactor of her mother’s $20 million fortune.
When Whitney Houston died in February 2012, her will had not been updated for 19 years. According to the will, Bobbi Kristina would receive 10 percent of her mother’s estate at age 21 and then receive additional payments at ages 25 and 30. Bobbi Kristina died at age 22, six months after she was found unresponsive in a bathtub.
A co-author of the book ‘Trial & Heirs: Famous Fortune Fights” said that Houston may not have wanted her daughter to receive so much money so young. If Houston had updated her estate plan at some point during Bobbi Kristina’s life, she might have created more specific provisions tailored to her daughter’s needs. After Bobbi Kristina was discovered incapacitated in her home, a conservator appointed by the court was left in charge of her assets. That conservator has since filed a lawsuit against Brown’s boyfriend alleging that he stole money from Brown’s bank account and was physically abusive towards her.
When a person dies with no will or a will that does not name an executor, the court will appoint an administrator to handle the estate. It is usually necessary for the administrator to go through probate court in order to disburse assets to beneficiaries. A person who has the job of estate administrator may want to work with an attorney to ensure that all of the duties are performed correctly.