New York Real Estate Lawyers Blog

Many of our readers are looking forward to the upcoming Memorial Day holiday weekend.  Most of us are thinking of spending time at a backyard barbeque or taking advantage of a sale at a department store.  Memorial Day also has a more somber connotation, thanking our military for the ultimate sacrifice that they have made for our country.  As attorneys, we wish to bring to your attention particular legal matters with which we can assist should your loved one make such a sacrifice for our country.

We think of our military as young and not wealthy as yet.  Saving estate taxes is not the concern of this population.  However, estate and financial planning is still needed due to the inherent danger in their profession and their age.  For instance, an accident could result in permanent disability or death.  The service member may get married.  These changes could have significant consequences if the proper legal documents are not drafted by a skilled professional.

In the absence of a Will , the service member would be deemed to die intestate and an Administration proceeding would be required to manage the person’s assets and liabilities.  Concerns with the disposition of personal property need to be addressed, preferably in a Will.

Fans of the musician Prince were distressed to learn of his untimely passing last week.  News reports now circulating have noted that Prince died without a Will.  This post will address the implications of dying without a Will.  As this firm is located in New York State, this post will address this issue from the standpoint of the law in New York.

When a person dies without a Will, an Administration proceeding is conducted.  Such a proceeding is undertaken in Surrogate’s Court.  The attorney for the surviving relative files a Petition in the proceeding.  The surviving relative of the closest relationship will apply to be Administrator of the estate.  In Prince’s case, we have heard that he was not survived by a spouse, children, or parents, making his sister the first person to be qualified to be Administrator of the estate.  Both New York and Minnesota provide that half-siblings are ranked in a similar fashion, so that half-siblings may potentially share in the administration duties of the sister who filed the Petition.  When significant sums of money are at stake, a kinship proceeding may also be filed to determine whether other relatives should be given the opportunity to share in the estate.  Once the proper fiduciary is appointed by the Court, particular duties need to be undertaken.

What if Prince’s doves continue to cry after his death?  If he had a Will, his pets could have been provided for in his estate plan.   Absent such provisions, any pets would become the property of the person(s) appointed administrators.  For pet lovers, this disposition could become a major problem if the person receiving the pets has no interest in taking care of beloved animals.  Prince’s Little Red Corvette must also be considered.  In New York, personal property could be specifically identified in a Will as a specific bequest, left in the residuary clause for the person intended to inherit all unspecified property or will be left to the person qualifying as Administrator if there is no Will.

Given that the 2015 tax filing deadline is imminent, taxes and the potential reduction of tax liability are on the minds of many of our clients.  Some of our clients are fortunate enough to own collections of valuable personal property, such as artwork, cars and the like.  Our estate attorneys are in the position of advising clients how to dispose of such personal property and how to reduce potential tax liability.

For purposes of this post, let us assume that the valuable collection contains artwork.  It is prudent for the owner of such a collection to make a detailed catalog of the individual components of the collection.  That way, it may be easier to keep track of the possessions.  Gift and estate taxes could be due to the extent that an event of a public nature occurs, such as a sale or auction, or museum loan of the artwork.  If the owner of the artwork merely decides to give a work of art to his daughter, who will privately display it in her home, then such an act may be unlikely to trigger the interaction of the tax authorities.

If the artwork is given to an institution during one’s lifetime, then the value of such item can be deducted from the donor’s taxes.  Should the artwork be given to an individual and be valued at less than $14,000, then the annual gift tax exclusion will apply to make this event not taxable.  Once a person passes away, estate taxes may be due, depending on the value of the estate.