New York Real Estate Lawyers Blog
As our political landscape is more uncertain than ever after this week’s election results, our readers cannot be certain that estate tax repeal is on the horizon. Also, most people do not own substantial assets so that estate taxes may apply to their estates. However, most of our clients could benefit from the drafting of a Will and other estate documents by a skilled attorney. This post will address the benefits of engaging a qualified attorney to draft your estate documents.
Without a Will, one’s property will be left according to the laws of intestacy. Intestacy distribution through an administration proceeding may serve most people well enough. For instance, if one’s closest surviving relative is a daughter with whom there is a good relationship, the parent would have no problem with the daughter inheriting her entire estate. However, if there is also a son with whom the parent has an estranged relationship, intestacy would result in both children sharing in the estate equally. Since this is not a result favored by the parent, the drafting of a Will is essential so that the parent’s wishes that only the daughter inherit will be honored. Also, should the parent wish for both children to inherit, but in unequal portions, a Will would be needed to address this desire. Likewise, a Will can allocate responsibility for the payment of estate taxes between beneficiaries and may direct that only certain assets be liquidated in order to pay estate taxes.
When working with an attorney to draft estate documents, the opportunity to select an executor to manage the estate is also available. Otherwise, with intestacy, the person who inherits the estate also is appointed to serve as administrator to manage the estate. This may not be a favorable result if this person is not as prudent in managing money as another person that may be selected by the decedent.
The posting of a bond may also be avoided if there is an executor (as in a Will) rather than an administrator (as in intestacy). Generally, the Surrogates Court requires that a fiduciary managing the estate post a bond. This requires that the fiduciary’s personal credit be run by the bonding company and is another expense of the estate. If the fiduciary does not have good credit, he cannot serve as fiduciary. However, a Will can state that the posting of a bond by the executor is not required.
Also, those with children under eighteen years of age should have a Will in order to appoint a guardian for their children. Otherwise, the Court would appoint someone to care for the children. Obviously, most parents would rather select their preferred guardian for their children. Once the parents agree as to who should serve as guardian and the guardian agrees to serve, it is appropriate to have the Will drafted.
It is important in New York to have estate documents drafted by a skilled professional, who will make sure that they are signed in accordance with statutory requirements. Should a Will be improperly executed, it is not valid and the rules of intestacy will dictate the distribution of the subject estate.
Engaging in the process of having a Will drafted is also an opportunity to check on other aspects of estate planning. Perhaps one of the multiple types of trusts is appropriate for the client, whether included within the Will or as its own separate document. In addition, your attorney may recommend that a Living Will or Health Care Proxy be drafted to state the end of life care wishes of the client. Likewise, checking beneficiary designations and the manner in which title is held is required, since the Will would be effective only on those assets that are not jointly held with another. Also, certain assets such as life insurance, retirement accounts and pension plans are distributed according to beneficiary designations, rather than as stated in the Will. Reviewing these issues with your attorney may result in the revision of beneficiary designations and in title transfers.
We look forward to listening to the specific situations and concerns presented by our clients as we draft all necessary estate documents.