Estate planning to benefit multiple generations

New Yorkers who have spent their lives working hard to amass wealth are often concerned about how to preserve it so it will benefit multiple family generations. Due to factors such as dividing assets between beneficiaries, the effect of risk and taxes with each successive generational transfer, family wealth can be depleted in as little as two or three generations.

People are able to use family trusts to help preserve the wealth for which they have worked for generations to come. Instead of simply dividing the assets between children through a traditional estate plan, they can leave them to a trust to benefit them.

One key way to make amassed wealth benefit many generations is to treat the money as a way to give new generations a start in life. Money can be earmarked to pay for college educations or to provide seed money to start new businesses. Grantors can make distributions contingent on any number of different activities. Successive generations can also contribute to the trust to allow the funds contained within it to continue growing, thus benefiting the family in perpetuity.

It is often a good idea for wealthy people to use multiple types of estate planning tools in order to minimize the amount of assessed taxes and pass their assets on to their intended beneficiaries. In addition to preparing a will , people may want to consider setting up different types of trusts to help meet their estate goals. With careful estate planning, people can help to make certain they leave their families with a legacy that can last. They may want to discuss how best to go about planning to transfer their assets with their estate planning lawyer. A lawyer, upon reviewing their client’s assets, goals and needs, may advise their clients about the various types of documents that may best help them.

Probate process in New York

When a person dies, whether or not there is a will, the decedent’s estate will be subject to the probate laws for the distribution of his or her assets. Probate laws exist in order to protect creditors, beneficiaries and heirs, and the probate process involves making certain taxes and debts are paid as well as passing assets to beneficiaries or heirs.

If a person dies with a will , then the person who is named by the decedent as the executor must then file the will in court. The court will determine the will’s validity. The executor will also be responsible for notifying the decedent’s beneficiaries and creditors. The executor will inventory all of the assets held by the estate and be responsible for paying creditors who make claims as well as taxes and legal expenses. Finally, the executor will then distribute assets according to the provisions of the will.

When a person dies without a will, the court will appoint an administrator for the estate. The administrator will have similar duties to pay taxes and creditors that are owed money. The assets will be distributed according to the state’s intestacy laws at the end of the probate administration process.

Most people benefit by drafting wills and other estate planning documents rather than dying without them. By doing so, they can help to make certain their assets are passed according to their wishes rather than according to the intestacy laws. People may want to be careful when they are deciding who to name as the executor of their estates. Will execution can be a complicated process involving substantial time, documentation and paperwork. It may be a good idea for people to make certain that the executors they are thinking about naming will be willing and able to complete the duties that will be required of them.

Taking care with IRAs and estate planning

Many New Yorkers have individual retirement accounts. They can be problematic for estate planning purposes as the IRS considers them to be income that the decedent would have otherwise received and thus in some cases taxable to the estate.

In many cases, a decedent who had an IRA failed to update beneficiaries or to name them on the account, which can also be an issue after they die. Careful drafting of estate documents must be undertaken in order to avoid problems created by the existence of an IRA. When IRAs are treated as income to the estate by the IRS after death, the amounts that are distributed are subject to the highest income tax bracket of 39.6 percent. This may mean that, although the estate would otherwise fit under the estate tax exemption amount, the IRA itself may face significant taxation.

Some people try to avoid this issue by naming a trust as the beneficiary to their IRAs. They then designate charities as beneficiaries to the trust. Care must be taken even when doing this. If the income from the IRA goes to the trust, the IRS may treat it as taxable. If the portion from the IRA instead goes to the residual portion from the trust, and from there, to the designated charities, the income is considered to pass to the charity instead of to the trust. This can help since charities are tax-exempt.

Estate planning and estate administration may be highly complicated. People who need help may want to talk with an estate planning and administration lawyer. An attorney may be able to provide guidance regarding the best way to handle the person’s estate planning goals and needs. They may also be able to reform a pre-existing trust that was drafted incorrectly by filing motions to do so with the court. It is possible to minimize taxes if the documents are drafted correctly.

How to dispute a will

When it comes to challenging a will, New York residents may find the process difficult. However, there are times when someone, especially the decedent’s spouse, can successfully challenge a will based on certain circumstances.

One of the ways a will can be challenged is if there is an alternate will that trumps the present one. When an outdated will is in the process of being executed, a newer one can trump it. Usually, an older will is destroyed once the testator creates a new will. Since the court’s goal is to fulfill the decedent’s wishes, it will probably take into consideration an updated will.

Another ground for challenging a will is if the testator’s capacity is held in question. In order to prove before a court that a testator lacked testamentary capacity when he or she created a will, there must be evidence showing the testator suffered from substance abuse, insanity, dementia, senility or from another factor that negatively influenced the person’s mental abilities at the time the will was written. Moreover, a will is not legal if it was created by a person younger than 18 years of age. However, a will written by a minor is considered legal in some jurisdictions if the minor is married or is serving in the military.

People can also challenge a will if they believe that the will is the result of undue influence, forgery or fraud. It must be clearly evidenced in such cases that the testator was manipulated into writing the will in a way that he or she left all or the majority of his or her valuables to someone who had influence in the testator’s life, such as a caregiver, friend or relative.

Disputing a will can be time consuming and complicated. However, an experienced probate attorney could explain the laws regarding the matter and offer solutions that might result in a favorable outcome.

Source: FindLaw, “Reasons to Challenge a Will” , accessed on Dec. 9, 2015

2nd will before court in New York man’s ongoing estate saga

According to reports, a second will has now been filed for the court to consider in the ongoing case of a wealthy Staten Island man who died, leaving a $40 million estate without apparently having heirs. The 97-year-old man’s wife predeceased him, and they had no children.

Another will that had been filed in the case was thrown out of court and dismissed. Now, an attorney representing a woman who died in 1999 and her estate has come forward with a new will for the court to consider. That woman’s caregiver of more than 20 years is the sole beneficiary of her estate.

Reportedly, the man and the woman had been lovers during World War II, until she was sent to Siberia by the Russians and he was sent to a concentration camp by the Nazis. She reportedly had been pregnant with his child but lost the baby in Siberia. Her caregiver reportedly found a will containing a letter, partially written in Polish, that was sent to the woman in 1987 by the man. In the letter, the man allegedly wrote that he was leaving all of his fortune to the woman due to their being separated by war and her losing their child. It is unclear whether the man behind the first will is intending to file an appeal or not. After taxes, the deceased man’s fortune is currently valued at $29 million.

When a person dies, leaving an estate behind with no valid will, the probate process will include trying to find any potential heirs. Without a will and other estate planning tools, the decedent’s estate could be subject to taxes that may have been avoided with the appropriate documents.

Source: SI LIVE, “What’s next? Fight for S.I. millionaire’s fortune shifts to 2nd will,” Mira Wassef, Nov. 23, 2015.