What should I know about letters testamentary?

You might wonder how an executor gains the legal authority in New York to take direct charge of the finances and property of a person who has died. It is actually quite simple. The legal authority to start managing an estate comes when a probate court issues letters testamentary. Whether you are preparing to become an executor yourself or are just a beneficiary, it is important to know what part letters testamentary play in probate matters.

As Bankrate explains, after an individual has passed away, a probate court will determine the validity of the decedent’s last will and testament. Assuming that the decedent had named a person in the will to take on the duties of the executor, the court will authorize that person to act as the executor if the court rules that the will can go into effect. This authorization occurs when the court issues letters testamentary.

Letters testamentary allow a person to perform all the necessary duties of an executor. The executor is allowed to open a bank account in the estate’s name and gather the money of the estate into the account for the purposes of closing out the various matters of the estate. These can include paying off bills and taxes the decedent had still owed before passing away. Additionally, the executor is empowered to take inventory of the assets of the estate, file the final tax return for the estate, and distribute the assets of the estate.

In the event that someone dies without a will, a court will not authorize letters testamentary. Since the decedent did not make a will and did not name an executor for the estate, the decedent’s estate is deemed intestate. It will be up to the court to appoint someone to be the executor. To authorize the executor to carry out the duties of the position, the court will issue letters of administration.

Keep in mind that this article is written to educate New York residents on probate topics. Since issues with probate take many forms, this article should not be read as legal advice.

Why millennials need estate planning

 

 

It is not uncommon for a person in their 20s or 30s to think that a will or a trust is only something that people in their parents’ or even their grandparents’ generations need. The truth, however, is far from this. While most people die later in life, accidents can happen at any time and a person may become disabled at a young age and unable to take care of their obligations or affairs even if they are still alive. An estate plan is simply smart insurance in a way.

NerdWallet notes that as more millennials become parents, the need for them to  engage in estate planning grows. A clearly identified plan including named guardians for what will happen to their children should they die is something every parent should have. This is not a decision to be taken lightly. Simply saying that a grandparent will raise a child is not enough. A plan should also identify financial support for the to-be guardian.

ThinkAdvisor encourages millennials to give consideration to what might happen if they were to be involved in a tragic accident. Who would be able to  make medical decisions on their behalf if they could not do it for themselves? This is another thing that can be identified in a good estate plan.

Documenting online identity and login information should also be done so that the appropriate person or persons would have access to these accounts in the event of a death. Beneficiaries for work-sponsored 401K plans and life insurance policies should also be updated and reviewed regularly.

 

 

 

Estate planning and health issues

When it comes to setting up an estate plan, health issues may play a role in various ways. For example, someone may be prompted to set up an estate plan specifically because of health challenges they are going through, which have made them realize that it is important to be prepared for unexpected problems that may be life-threatening. Moreover, other people may want to prepare for health issues that leave them unable to take care of themselves.

There are a number of options for those who want to ensure that they are cared for in the event they become incapacitated, and many people have benefit from setting up a health care proxy, also known as a durable power of attorney for healthcare. By doing so, you can appoint someone who you trust to make key medical decisions for you in the event that you are no longer able to make these decisions yourself. There may be other ways you can prepare for these potential challenges as well, such as making revisions to your will.

Ultimately,  health issues can be incredibly overwhelming and disruptive, so it is imperative to be prepared. When it comes to estate planning, you should not only be taking into consideration your finances and those you love, but other important aspects of your life as well, such as your health. By preparing yourself for issues that could arise in the future, you may be able to rest easier at night knowing that you are ready for unexpected problems.

What New York law says about no contest clauses

The possibility of a nasty court battle over a last will and testament motivates some people to stick a “no contest” clause into their wills. If anyone is going to step forward to contest the will, the no contest clause will specify that the contesting individual will be cut out of the will’s provisions. While this seems like a good way to dissuade beneficiaries from going to court over a will, New York law might not uphold such clauses in all cases. 

No contest clauses might seem unfair at first glance since they present an all or nothing proposition, and if a person finds fault with the will, that person could lose out completely on the benefits of the will by contesting it. FindLaw states that for these reasons, many states will not enforce such clauses and will allow people with standing to contest wills if valid reasons exist to do so.

New York law, however, is quite specific, stating that no contest clauses are valid in the state. A testor does not need to provide a beneficiary with any alternative benefits if the beneficiary contests the will. Also, it does not matter if a beneficiary has a probable cause to contest the will. The no contest clause can still take effect and disinherit the person for contesting. However, this is not true for all cases.

State law does provide specific exceptions that bar a person from being disinherited. For instance, the contesting individual may only be claiming that the will is not being offered in the correct jurisdiction and is not challenging the provisions of the will. A challenger may also not be competent under the law to make the challenge in the first place and thus cannot be held responsible. State law provides this exception to infants as well.

People may also suspect that there is something wrong with the will itself, perhaps believing that the will is not even legitimate. State law permits residents to challenge wills if they are forgeries. A will might also have been superseded by a later will but the earlier will was wrongly put into effect, which can also form the basis for a legitimate challenge.

Additionally, a no contest clause cannot be used to coerce people to not engage in legitimate probate actions. A beneficiary may have documents or information that are relevant to a probate proceeding but the testor of the will might not want to come to light. Regardless of the testor’s wishes, a person cannot be disinherited for bringing these documents forward. A person also cannot be disinherited for not participating in a petition to put a document through probate as a last will.

Taking time to grieve after the death of a relative

The immediate period after the passing of a relative is not easy and can mix heartbreak and confusion. You might feel you have to start quickly on all of your plans to handle the estate of your loved one. However, you should not feel pressured to swiftly carry out your New York estate plan. There is only one step to worry about off the bat.

The first step you should take as soon as possible is to secure the tangible property of your loved one. You want to make sure that the tangible assets your relative owned will not go missing before it is time to distribute them to whoever is listed in your relative’s will, or, if there is no will, through whatever means your relative planned. There are times when assets may vanish if someone else has access to them.

Agingcare.com explains that after this step, you can take the time to grieve . The financial matters of your relative’s estate will not require immediate attention. However, if your loved one was issued a Social Security check after passing away, you will have to go through the proper procedures listed on the Social Security Administration’s website to return it.

Also make sure that, if your relative made a will, you file the will for probate as soon as you can. This will help prevent delays with the probate process and keep you from feeling stressed out. On top of your grief, you do not need to worry about your estate plan taking longer to carry out than it has to.

You should also plan on seeing an attorney, but you do not have to make an immediate visit. An article on Caring.com points out that the period following the death of a loved one is very emotional and you may  carry those feelings with you into the attorney’s office. Waiting a while can help clear your mind and let you address estate issues with your attorney in a calmer manner.

Is there a problem if executors are slow to communicate?

It is a scenario that some people face. A family member has passed, yet the executor of their deceased loved one’s New York estate has barely reached out with news about the estate and its assets, if the executor has communicated at all. You might think something is up and are exploring legal action against the executor. However, slow communication may not be a sign that you should worry, at least not yet.

As ThinkAdvisor points out, estate administration is not a quick process . It may take months or perhaps even years to complete because of the various legal hurdles that the executor must get over, including sending the estate through probate and dealing with creditors who are claiming some of your loved one’s assets due to old debts. There might also be tax problems that could take years to resolve. All of these duties may hamper an executor from making regular communications to beneficiaries.

The range of responsibilities can feel overwhelming for some executors. In addition to the ordinarily slow process of administrating an estate, an executor may lag in talking to you due to trying to figure out how to handle the duties of the office. Some executors may be occupied seeking out help from outside parties, such as an attorney, to figure out legal and financial matters.

Nevertheless, beneficiaries of an estate will want to know that assets promised to them are in good hands. An executor, even if not ready to dispense the assets, should still let the beneficiaries know that the estate is secure. Shortly thereafter, an executor should convey a description of how the estate will be administrated and copies of the important estate planning papers. Regular communication from the executor to the beneficiaries should follow.

Since it is possible an executor’s lack of communication is not due to malice, it could be a smarter move to reach out to the executor or discuss the matter with fellow beneficiaries to decide on how to approach the executor. However, if an executor continues to remain silent or is too vague or infrequent in talking to you, you might want to see if the estate is having any problems that the executor could be covering up. Consultation with an attorney would also be appropriate.

Probate litigation can take many forms. For that reason, do not consider this article as offering any legal advice, and read it only for educational benefit.

What happens to overseas assets in estates?

Whether your will could pass through probate without your overseas assets diminished by U.S. tax depends on a variety of factors. It also is possible that you could avoid putting some of these assets in your will by establishing a trust, thereby avoiding the probate process in most cases. 

For assets you do not wish to place in trust ownership or move to the United States, you would probably want to consider a number of key points for each. It is often helpful to keep in mind that the court will likely have a different set of rules for nearly every gift you intend to bestow.

The most common concern for wills in terms of United States taxes and foreign assets is often the gift tax. Real estate, securities and other forms of wealth you intend to transfer from outside of the country may be subject to this tax if they come from certain non-treaty nations and exceed a specified dollar value. 

Only a few foreign countries hold gift tax treaties with the United States. As stated on the IRS website, these select nations include some of the USA’s most dedicated  business and trading partners :

  • The United Kingdom
  • Japan
  • Denmark
  • Australia

However, it is not always safe to assume that a court would your assets as foreign. It would be in your best interests to look at each line item in your will individually to determine the exact IRS definition under which it might fall.

Knowing the details of these treaties could be an important first step in developing a strategy for your foreign assets in an estate plan. however, laws change all the time and this should not be considered specific advice. It is only meant to inform and educate.

Understanding “undue influence”

While creating an estate plan is a wise move for any adult living in New York, many people fail to take important steps to plan for their futures and get their affairs in order until they are old or in particularly poor health. This can prove problematic, however, because in some cases, other people take advantage of older Americans who they believe they can easily influence, and they may exploit the trust of an aging American if they think doing so would be to their benefit. At Joseph A. Ledwidge, P.C., we understand that undue influence is a common reason courts may deem a will invalid, and we have considerable experience helping others with similar concerns pursue solutions that meet their needs.

According to the American Bar Association, undue influence, although somewhat difficult to define, refers to someone’s efforts to  manipulate someone else for his or her own personal gain. While undue influence can affect virtually anyone, those with memory loss and related issues are particularly vulnerable to this type of treatment. Older Americans, for example, may find that others exploit them for their own financial gain, and those responsible for doing so may try to isolate the victim in an effort to better protect themselves from detection.

Deciphering between undue influence and simple persuasion can prove difficult, however, so many judges and juries consider certain factors when determining whether  undue influence is at play. For example, a judge or jury will likely consider the vulnerability of the victim and the degree of authority the influencer has over this person when determining whether someone experienced undue influence.

Judges and juries may also consider the tactics used by the influencer, and the results of the influencer’s behavior, before making final determinations about undue influence. You can find out more about this and other common reasons for contesting wills by visiting our webpage.

Putting homes in trusts

Many people in the New York City area rent their primary residence. However, for those who own their homes, these parcels of real estate are often among the largest single-item assets in their portfolios. This, combined with the fact that property values are high in the area, has the potential to cause a considerable amount of loss in the probate process.

The way most people avoid this loss is by using trusts. As mentioned on CNN, this type of ownership has the potential to avoid the probate process entirely . Trusts are legally distant from the person who establishes them, and many are not dissolved upon that person’s death. Rather, those who use these financial tools typically plan ahead so that certain heirs gain access to the funds and assets held within.

Trusts seem more complex on paper than they often are in reality. The most commonly used trusts are rather simple in terms of function. They are official stores of wealth that one may transfer assets to, modify the terms of and withdraw from if one has certain prescribed funding, modification and beneficiary privileges. Per FindLaw: People often name themselves as beneficiaries of their trusts, a title they schedule to pass to their children  under certain conditions.

The FindLaw resource also mentions the fact that those who felt burdened by trust paperwork in the past may find the processes surrounding funding and deed paperwork more streamlined now. Even so, performing these tasks is often not as straightforward as it might be for other types of simple ownership structures, such as brokerage or banking accounts. However, there are many ways that an estate planner might address this complexity, potentially allowing a higher percentage of an estate to weather probate without diminishing. 

Is it possible to change an executor?

New York law allows people who write a will to name an executor. This executor would take care of the estate after the testator passed, but you as a beneficiary or interested party may not always be happy with the way this happens. 

Your first course of action would probably be to speak with the individual about their performance. Many executors are not experienced in the capacity, so they could see criticism as a way of improving and therefore making the probate process more efficient. If someone did not respond to your polite inquiries, or if you believe they were engaging in some sort of malfeasance or malicious action, you could act on those grounds to dismiss that individual from the executor position.

Attempting to remove someone who is responsible for administering a will as it goes through the probate process is, as you might imagine, not a simple matter. This is due in part to the court’s general assumption that the testator already assessed and approved the abilities of the individual named as executor.

Complications may also arise from the specific points in the New York consolidated laws procedural rules that allow for removal of executors. In fact, the New York codes specify 12 specific situations  in which you might have grounds for such a removal.

Probate is a complex process. Not everyone has the qualifications or the ability to perform the fiduciary and actual duties required of an executor. However, you would probably need to establish evidence of the specific ways in which you found your executor unsuitable for the rigors of his or her position before having any chance of removal. This is not legal advice. It is only general educational information.