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Authors Posts by Linda Toga, P.C.

Linda Toga, P.C.

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By Linda Toga

Linda Toga, Esq.

THE FACTS: My friend Joe, a New York State resident, was never married, but he and his on-again off-again girlfriend had a son together. The child was 14 months old when Joe died without a will. Before his death, Joe spent most of his free time with his son who lives with the girlfriend in New York. My friend’s parents live in Ohio and did not know about the girlfriend, much less the baby. They were shocked to learn that a baby they did not even know existed was the sole heir to Joe’s estate. They are now insisting on a DNA test.

THE QUESTION: Can Joe’s parents insist that a DNA test be done to prove paternity?

THE ANSWER: Whether or not a DNA test is appropriate will depend on what steps Joe may have taken to establish paternity. If, for example, Joe signed a paternity acknowledgment, the Surrogate’s Court will not order a genetic marker test or DNA test.

Under Public Health Law 4135-B, the father of a child can establish paternity by signing a paternity acknowledgment immediately before or after an in-hospital birth of a child to an unmarried woman. The acknowledgment must be signed by both parents and witnessed by two people who are not related to either parent. The acknowledgment must be filed with the registrar along with the child’s birth certificate.

If neither parent rescinds the acknowledgment within 60 days of signing it, the acknowledgment is deemed conclusive evidence of paternity. While challenges to a paternity acknowledgment based upon fraud or duress can be brought, the burden of proof is very high.

Another way the paternity of a child born out of wedlock can be established is through an Order of Filiation. A proceeding to establish paternity may be brought in Family Court by the mother of the child, a person claiming to be the father, the child or the child’s guardian. Assuming adequate proof is submitted to the court, an order will be issued setting forth the relationship between the father and the child. Just as there is a 60-day period during which the paternity acknowledgment can be rescinded, the court has 60 days in which to vacate an Order of Filiation before it is deemed conclusive evidence of paternity.

If, during Joe’s lifetime, an order of filiation was issued stating that the girlfriend’s son was Joe’s child, Joe’s parents cannot demand a genetic marker or DNA test. If there is no paternity acknowledgment or Order of Filiation, Joe’s parents can insist that proof be presented establishing that Joe is the child’s father. In that case, genetic marker and/or DNA testing would certainly be appropriate.

Other evidence may include proof that Joe was providing child support or that he publicly held himself out as the child’s father. If paternity cannot be established, Joe’s parents are in line to inherit his estate. Such an unfortunate outcome could have easily been avoided if Joe discussed his situation with an experienced estate planning attorney and had a will prepared that expressed his desire to leave his assets to his son.

Linda M. Toga, Esq. provides legal services in the areas of estate planning, probate, estate administration, litigation, wills, trusts, small business services and real estate from her East Setauket office.

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By Linda Toga, Esq.

Linda Toga, Esq.

THE FACTS: My mother’s will provides that her house will be sold and the proceeds divided equally between me and my brother. However, because she was concerned about needing long-term care, a few years ago she signed a deed transferring the house to my brother and retaining a life estate in her favor.

THE QUESTION: Am I likely to see any of the proceeds when the house is sold?

THE ANSWER: Unfortunately, if your mother has already passed away, it is unlikely that you will get anything when the house is sold unless your brother is willing to essentially gift you one-half of the proceeds. That is because a will only controls the distribution of assets that are owned by the decedent at the time of her death.

Here, your mother does not have an ownership interest in the house but simply a right to live in the house until her death. When she dies, that right dies with her. As such, the provision in the will pertaining to the division of the proceeds from the sale of the house will be ignored.

If you mother is still alive, competent and sorry that she transferred the house to your brother, she can remedy the situation in a number of ways. She can, of course, revise her will so that you receive a larger portion than your brother of other assets that may be passing under her will. She can also change the beneficiary on her nonprobate assets like IRAs, 401(k)s and/or life insurance. Neither of these strategies require your brother’s cooperation, but they will only work if your mother has assets worth about one-half of the value of the house.

If your brother is cooperative, your mother’ assets are limited and she is not already receiving needs-based government benefits, your mother and brother can sign a new deed either adding you as a co-owner or transferring the house back to your mother. The will would then control. This solution will require the preparation of a new deed and transfer of documents and the filing/recording of the deed but will not require your mother to change her beneficiary forms or her will.

If transferring the house again will put your mother’s benefits at risk, she and your brother can sign a written agreement in which (1) your mother states that it was not her intent in transferring the house to “gift” it to your brother and (2) your brother states that when he sells the house, he will split the net proceeds 50/50 with you.

If the agreement provides that you are an intended beneficiary of the agreement between your mother and your brother, and specifically states that it is binding upon the heirs, successors, assigns and executors of the parties signing the agreement, you will have an enforceable legal right to one-half of the proceeds.

It is important that any agreement that may be signed by your mother and brother pertaining to the house include the “heirs, successors, assigns and executors” language since, without that language, the agreement, like your mother’s life estate, will die with your mother.

Because there are so many issues to consider when deciding if and how to insure that you receive a share of the proceeds from the sale of her house, your mother should discuss this matter with an experienced estate planning attorney. The attorney can explain the pros and cons of each option that may be available to your mother so that she can make an informed decision. Only then can she be sure that her actions will not adversely impact her down the road and that her wishes will be honored.

Linda M. Toga, Esq. provides legal services in the areas of estate planning, probate, estate administration, litigation, wills, trusts, small business services and real estate from her East Setauket office.

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Wills kept in a safe deposit box are not obtainable to an executor without a court order.

By Linda Toga, Esq.

Linda Toga, Esq.

THE FACTS: I am trying to help my elderly parents organize their affairs. They want things to be as simple as possible for me when it comes time to handle their estates. My parents have wills and other advanced directives in place.

THE QUESTIONS: Other than their wills, are there other documents or any types of information that they should collect and organize now to make the administration of their estates easier?

THE ANSWER: You are lucky to have parents who seem to appreciate the fact that administering an estate is not necessarily easy and who are anxious to have everything in place. Having wills will certainly help you with respect to distributing your parents’ assets after they pass. However, distributing assets is often one of the last things that an executor must do.

Long before distributions are made it will be necessary to make funeral arrangements, contact life insurance carriers and banking and investment institutions, gain access to your parents’ safe deposit box, cancel credit card accounts, as well as all online accounts that your parents may have and locate documents relating to any real estate they may own or lease, to name a few.

While many of these things can be done before your parents’ wills are admitted to probate, you will not be able to marshal assets, close bank accounts or sell property until you are issued letters testamentary by the Surrogate’s Court. If your parents keep their wills in a safe deposit box, you will not be able to even get the will without a court order.

Although not exhaustive, the following is a list of the types of documents and some of the information that your parents may want to put together to facilitate your handling of their estates:

1. Deeds to burial plots

2. Documents relating to any preplanned or prepaid funeral arrangements, including military discharge papers if either parent was in the armed forces and wishes to be buried in a military cemetery or have an honor guard

3. Wills and any codicils to the wills and a list of the addresses of all of the people named in the will and/or codicil.

4. Trust instruments that name your parents as grantors, trustees and/or beneficiaries

5. Life insurance policies, including the beneficiary designation forms

6. Annuities

7. Bank statements and pins for use in ATMs

8. A list of bills that are automatically paid from their bank accounts or charged to their credit card accounts

9. Brokerage statements

10. Statements relating to IRAs, 401(k)s or any similar plans, including the beneficiary designation forms

11. Documents relating to pensions and/or deferred compensation plans

12. Deeds, leases and documents relating to time share properties

13. Loan documents, including mortgages, reverse mortgages, home equity lines, lines of credit (whether your parents are the lenders or the borrowers)

14. Credit card statements

15. Keys to safe deposit boxes and the combination to any safe they may use

16. Pins, security codes and passwords for online accounts, social media accounts and email accounts

17. Account numbers and log-ins for frequent flyer and other rewards programs

18. The names and contact information for their financial advisor, brokerage account manager, insurance agent, accountant and attorney

If your parents are able to gather these documents and provide the information set forth above, handling their estates once they pass should not be overly burdensome. The burden can be further reduced by retaining an attorney with experience in the areas of probate and estate administration. Doing so will ensure that the process goes smoothly and will give you the opportunity to deal with your loss without having to think about what needs to be done.

Linda M. Toga, Esq. provides legal services in the areas of estate planning, probate and estate administration, real estate, small business service and litigation from her East Setauket office.

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By Linda Toga

THE FACTS: My father died recently. He had a will in which he named my brother as executor. My brother and I have not spoken to each other in a number of years. I am concerned that he will close out my father’s accounts and sell his house and keep all the money even though I am named as a half beneficiary under the will. He seems to be under the impression that since he is the named executor, he can do these things simply by presenting the will.

QUESTION: Is that true?

THE ANSWER: Absolutely not! Although your brother is named in your father’s will as the executor of his estate, the surrogate’s court in the county in which your father resided at the time of his death must admit the will to probate and issue letters testamentary to your brother before he can take any action with respect to your father’s assets.

In other words, he must establish to the court’s satisfaction that the will is valid before he is able to act as executor. He cannot assume the responsibilities of executor without the court’s explicit approval. The complexity, cost and time involved in having a will admitted to probate will vary with the number of beneficiaries named in the will, as well as the number of heirs to the estate, the ease with which the attorney assisting the named executor can locate the beneficiaries and heirs, how cooperative those people may be with the attorney in moving forward, the value of the estate and whether anyone contests the admission of the will to probate, among other factors.

While the probate process can be straightforward and relatively inexpensive, there are numerous issues that can arise in the probate process that are best handled by an experienced estate attorney. Some of the most common issues with probate are not being able to locate individuals who are entitled to notice and dealing with individuals who contest the validity of the will. Fortunately, the percentage of cases where a will is contested and ultimately not admitted to probate is small. However, if there are objections filed to the probate of a will, the probate process can drag on for quite some time, significantly increasing the expenses of the estate.

If you and your brother are the only beneficiaries named in the will and your father’s only children, and you do not have a basis for contesting the will, the probate process should be relatively straightforward. Once the court issues letters testamentary to your brother, he can sell the house and close your father’s bank accounts. However, he cannot simply keep the money for himself since he has a legal obligation to carry out the wishes set forth in your father’s will.

In your case, he would be required to distribute to you assets valued at half of the value of the estate after accounting for your father’s legitimate debts, funeral and estate administration expenses, commissions and estate taxes. If you suspect that he has not done so, you should demand that he account for all of the estate assets so you can see the value of the marshaled assets and the expenses incurred by the estate. If you are not satisfied with the accounting he provides, or have reason to believe that he breached his fiduciary duty to you as a beneficiary, you can ask that his letters testamentary be revoked.

Since this process can get quite involved, if it comes to that, you should seek the advice of an attorney with expertise in the areas of estate administration and litigation.

Linda M. Toga, Esq. provides legal services in the areas of estate planning, probate and estate administration, real estate, small business service and litigation from her East Setauket office.

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By Linda Toga

screen-shot-2016-12-08-at-3-41-23-pmTHE FACTS: With the holidays fast approaching, I’ve been thinking about making gifts of cash to my grown children. I’ve heard that I can give each child $14,000 without any negative tax consequences. I am not wealthy but, at this point, I believe I can afford to give each of my children $14,000. I know they could really use the money.

THE QUESTION: Is there any reason I should think twice before making the gifts?

THE ANSWER: The quick answer is that when you’re talking about giving away thousands of dollars, you should always think twice. That being said, there are many factors that you should consider before deciding whether making significant cash gifts to your children is in your best interest.

Since you did not mention your age, your health status or the number of children you have, it is difficult to say which factors may prove the most important in your decision-making process.

Under current federal gift tax laws, a person can give any number of people up to $14,000 a year without incurring any gift tax liability. The recipients of the gifts need not report them on their tax returns and can simply enjoy the grantor’s generosity.

The need for the grantor to report gifts to the IRS only arises if the value of the gifts made to any one person in a single calendar year exceeds the $14,000 gift exclusion.  In that case, in April following the year in which gifts valued at over $14,000 were given to a single recipient, the grantor is required to file a gift tax return with the IRS. The return reports the amount of the gift in excess of $14,000.

For example, if the grantor made a gift of $20,000, he would have to report $6,000 of the gift on the gift tax return. Under current federal law, no gift tax will be due unless and until the cumulative value of the gifts reported by the grantor exceeds the estate tax exclusion amount in effect when the gift tax return is filed.

For gifts made in 2015 and reported in 2016, the grantor would not have to pay any gift tax unless the value of his cumulative lifetime gifts exceeded $5.45 million. Under New York State law, there is no gift tax, but the value of gifts made in the last three (3) years of the grantor’s life may be added to the value of his estate for purposes of calculating estate tax.

Since most people are not in a position to give away millions of dollars during their lifetime, whether or not a gift triggers a gift tax liability is usually not a deciding factor in making gifts. A more important factor for many grantors is whether they will need the money as they age. The cost of long-term care and the possibility that the grantor may need to apply for Medicaid are factors that frequently dictate whether gifting is a good option.

While the gift tax laws allow people to make gifts of up to $14,000 to countless people each year without adverse tax consequences, Medicaid eligibility is not governed by the tax code. As a result, many people who make gifts in accordance with the IRS guidelines are later surprised to find they are penalized for making those gifts when applying for Medicaid.

Under the Medicaid guidelines, gifts made within five (5) years of applying for benefits may trigger a penalty period based upon the value of those gifts. For younger, healthier grantors, the risk of having to apply for benefits within five (5) years of making a gift and then facing a penalty period may be minimal. However, the risk increases for the elderly or those with serious health conditions.

If you feel that you have adequate assets to cover the cost of your care, or if you have a generous long-term care insurance policy, you may not be concerned about the cost of care down the line, in which case making significant gifts to your children should be fine.

However, before you actually write those $14,000 checks to your children, I encourage you to carefully look at both your financial and physical health and assess your risk tolerance. After all, you don’t want to make the gifts this year and then have to ask your children to return the money or pay for your care next year.

Linda M. Toga, Esq. provides legal services in the areas of estate planning, probate and estate administration, real estate, small business service and litigation from her East Setauket office.

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By Linda Toga

THE FACTS: I have three young children and want to be sure that they will be taken care of in the event my husband and I die before they are adults. I understand that I can appoint guardians for my children in my will but I am having a great deal of difficulty deciding who to name.

THE QUESTION: Do you have any suggestions as to the things I should consider when naming guardians for my minor children?

THE ANSWER: It is not surprising that you are having difficulty deciding who would best stand in your shoes in the event you and your spouse die before your children are adults. As an experienced estate planning attorney and the mother of two wonderful children, I know that the decision with which you are struggling is the most difficult estate planning decision faced by most parents. It is hard to think about not being there for your children and even harder to picture someone else taking your place.

However, if both you and your spouse die while your children are minors, the appointment in your will of a guardian for your children will likely prove to be the most important appointment you make. It is one that requires a great deal of thought and soul searching. Although people have different priorities when it comes to how their children will be raised, every parent wants their children to be loved, to be safe and to be able to reach their potential. Whether these goals will be achieved undoubtedly depends in large part upon the parenting skills of the children’s parents and guardians.

When considering who you would like to step into a parental role with your children, you should give thought to the following:

• Is the person married or single? If married, do you want to name both spouses as co-guardians? What happens in the event of death or divorce?

• Does the person have children? Do you approve of the person’s parenting skills as applied to his own children?

• Is the person’s house/apartment large enough to accommodate your children? If not, is the person willing to relocate?

• Is the person’s lifestyle “child friendly,” i.e., does he travel extensively or for long periods of time or work irregular hours, and if so, who will be there in his absence to care for your children?

• How old is the person and how is the person’s health?

• Is the person financially stable and can the person afford to include your children in his life?

• Does the person share your values, i.e., does the person place the same importance on education, religion, community etc. that you do?

• Does the person get along well with your children and your extended family?

• Would placement with the person require your children to move from your current community and possibly away from other family members?

While this list is not exhaustive, it gives you a good starting point for considering who to name as guardian of your children. Many people choose family members as guardians. However, the fact that someone is related by blood does not necessarily mean that that person will be able to raise your children as you would. Your parents may be very loving but are they physically able to take on the challenge of young children?

Your siblings may share some of your values; but, perhaps they are less focused on education than you are, or are reckless with money. Your experiences growing up and your family dynamics will certainly influence your thinking when it comes to naming a guardian. It is absolutely critical to talk to the person you plan on naming as guardian so that you can discuss your concerns and your wishes and confirm that the person is willing to take on the huge responsibility that comes with being a guardian.

Ask the person how he would handle certain situations that may arise, how he feels about issues that are important to you and about how having to care for your children will impact his life. Make sure the potential guardian understands what is involved in being named guardian of your children and urge him to be honest and candid when responding to your questions.

If you decide that you have the perfect person to serve as guardian but are concerned about the adverse financial consequences of that person raising three more children, you can make arrangements in your will to provide the guardian with financial support. Similarly, if a potential guardian meets your criteria but lives in a small apartment, in your will you can include provisions that would allow the guardian to move into your home to care for your children or you can provide other appropriate housing. In your will you can also state your wishes with respect to how your children will be raised.

You can instruct your guardian to seek input from your family before making important decisions about your children’s futures and you can set forth the values that you would most like to see instilled in them. As if choosing a guardian is not difficult enough, in your will you should name both a guardian and a successor guardian. If something should happen to the named guardian, it is better if you, as opposed to the courts, name the person that will continue caring for your children. This is one of the things that is simply too important to leave to chance.

Linda M. Toga, Esq. provides legal services in the areas of estate planning, probate and estate administration, real estate, small business service and litigation from her East Setauket office.

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By Linda Toga

THE FACTS: As part of their Medicaid planning, over 10 years ago my parents transferred their house to my brother Joe. They did not put my name on the deed because I had filed for bankruptcy. However, the understanding was that at some point after their deaths, Joe would sell the house and give me half of the net proceeds. My parents died two years ago without ever applying for Medicaid. Joe did not try to sell the house because he said the housing market was soft. Instead, he rented the house to a friend. Unfortunately, Joe and I did not have a good relationship, and he recently died without having sold the house. His will provides that his entire estate, including the house, passes to his wife and son.

THE QUESTION: Can I contest Joe’s will to get my share of the proceeds from the eventual sale of my parents’ house?

THE ANSWER: The short answer to your question is “No.” You cannot contest the probate of Joe’s will because you lack standing. The only people in a position to contest a will are those people in line to inherit under the intestacy statute. In other words, only those people who would inherit if there was no will have standing to contest the probate of a will. Under the intestacy statute, spouses, children and parents of the decedent have priority over siblings. Since Joe was married at the time of his death and had a child, they would inherit his entire estate even if he died without a will. Since you are not in line to inherit, you cannot contest Joe’s will.

However, you may be able to approach this from a different perspective. If you have evidence that your parents’ intent was that you receive a share of the proceeds from the sale of their house, and that they transferred it to Joe alone because of your bankruptcy, you may be able to claim an interest in the house under the theory of a constructive trust. You would not be contesting the probate of Joe’s will but, instead, trying to show that the transfer of the house to Joe was not an outright gift.

If you can show that your parents transferred the house to Joe with the expectation that he hold an interest in the house in trust for your benefit in the future, you may be able to recover from Joe’s estate the value of your share of the house.

If your parent’s plan was that the house be sold after their deaths and the proceeds split between you and Joe, they should have transferred the house into an irrevocable trust, rather than outright to Joe. Such a trust would have addressed your parents’ concerns about Medicaid without creating the problem you now face. Language could have been included in the trust to address your bankruptcy and protect your share of the proceeds from your creditors. An experienced estate planning attorney could have easily insured that your parents’ wishes were honored and that both you and Joe benefited from the sale of their house.

Linda M. Toga, Esq. provides legal services in the areas of estate planning, probate and estate administration, real estate, small business service and litigation from her East Setauket office.

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By Linda Toga

The Facts: My father died last year and I was issued letters testamentary by the Surrogate’s Court. When going through my father’s desk, I found a bank statement dated June, 1999, for a savings account I did not know existed. The balance in the account in 1999 was nearly $5,000. Unfortunately, the bank that held the account no longer exists.

The Question: How can I find out if my father removed the money from the account prior to his death?

The Answer: If the statement you found had been dated within the last five (5) years, you could likely find out which bank took over the assets of your father’s bank and contact them to see if the account still exists. However, in New York State, if a bank account is dormant for an extended period of time, after five years, the bank can hand over all of the money in the account to the State Comptroller’s Office.

In other words, after the requisite waiting period, the account will escheat to the state. While bank accounts escheat to the state after five (5) years, other types of assets and property such as insurance policies escheat after only three (3) years and checks issued by the state escheat after only one (1) year.

If you believe the money in your father’s account was escheated to the state, you can obtain information by calling the New York State Comptroller’s Office, which oversees the New York Office of Unclaimed Funds. You can also go online to www.osc.state.ny.us/ouf/ and search under your father’s name and address for any of his property that may have escheated to the state.

If your father ever lived outside New York, you may also want to search on the sites maintained by the offices of unclaimed funds in other states to be sure you don’t miss anything.

While you are searching for assets belonging to your father that may have escheated to the state, you should also search on your own name and address. You may be pleasantly surprised to find that a rent or utility deposit you forgot you even made or dividends on stocks that you once owned have escheated to the state and are available to you. There is no statute of limitations on unclaimed property, and online searches are free, so you have nothing to lose.

While it is highly unlikely that you will find you are entitled $6.1 million like the largest unclaimed property recipient but, you never know!

If you are lucky enough to find that the balance in your father’s account did, in fact, escheat to the state, you can request that the funds be sent to you. To do so, you must file a claim and provide sufficient information to establish your entitlement to the funds. Since you are the executrix of your father’s estate, you will be asked to provide your letters testamentary as well as documents establishing that your father was, in fact, the person named on the account. Any unclaimed funds that you collect as executrix should be considered as part of your father’s probate estate and distributed in accordance with the provisions in his will.

The process of recouping unclaimed property can be very frustrating because it takes quite some time. It is not unusual to be asked to resubmit paperwork previously provided or to provide documents that were not initially requested. However, being able to get your hands on “found” money is exciting and usually worth the effort.

Linda M. Toga, Esq. provides legal services in the areas of estate administration and planning, real estate and litigation from her East Setauket office.

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By Linda Toga

The Facts: My father married a woman named Jane after my mother’s death. They were married for 10 years before my father died. In his will, my father left everything except the contents of his house to me and my sister.

The Question: Is it true that Jane is entitled to a larger share of my father’s estate than what he left her in his will?

The Answer: Unfortunately for you and your sister, because she is your father’s surviving spouse, Jane is entitled to more than the contents of the house. Under New York law, spouses cannot disinherit each other. Although your father left something to Jane and did not technically disinherit her, the value of the contents of the house likely make up a very small percentage of the value of your father’s estate.

Assuming Jane wants more than what is left to her in the will, and assuming she did not waive her rights in a pre- or postnuptial agreement, Jane may ask the Surrogate’s Court to award her approximately one-third of the net value of your father’s entire estate, regardless of the terms of his will. If someone is legally married at the time of their death, their spouse can exercise what is called a “right of election.” This means that the surviving spouse can elect to receive a share of the decedent’s estate valued at approximately one-third of all of the assets of the deceased spouse. Under the facts you provided, Jane can elect to receive not only one-third of the net value of your father’s testamentary assets passing under his will (assets that were owned outright by your father in his individual capacity) but also one-third of the net value of your father’s nontestamentary assets.

Such assets are sometimes referred to as testamentary substitutes and include, among other things, gifts made by a decedent in contemplation of death, jointly held real property, accounts in a decedent’s name that were held in trust for another person or designated as transfer on death accounts, assets held in trust for the benefit of another, assets payable under retirement plans, pensions, profit sharing and deferred compensation plans and death benefits under a life insurance policy. Since the assets a decedent owned jointly with others and/or held for the benefit of others are considered when calculating the value of a surviving spouse’s elective share, the beneficiaries under the will are not the only people who may be adversely impacted when a surviving spouse successfully exercises his/her right of election.

This is just one of the reasons an election is often the first step in what can be a contentious and protracted litigation. The right of election is personal to the surviving spouse; but, if the surviving spouse is unable to make the election, a guardian or guardian ad litem appointed by the court to represent the interests of the surviving spouse may make the election on the spouse’s behalf. The surviving spouse must exercise the right of election within six months of the issuance of letters testamentary and in no event later than two years after the decedent’s death.

To prevent the distribution of assets that may ultimately be determined to be part of the elective share payable to the surviving spouse, notice of the election must be served upon all people and entities that are in possession of or have control over the decedent’s assets. The executor administering an estate where the right of election has been exercised may be able to disqualify the person who made the election from receiving the elective share. To do so the executor must prove that the person attempting to collect an elective share was not actually married to the decedent at the time of death.

If there is no question that the person seeking an elective is the surviving spouse, the executor may be able to defeat the election by establishing that the spouse had the means but refused to support the decedent prior to death, that the spouse abandoned the decedent prior to death or that the marriage was void as incestuous or bigamous. Although the outcome of all litigation is uncertain, because of the issues raised in litigation involving the right of election, it can be particularly emotional and disturbing. As such, it is best to consult an attorney with experience in estate litigation and specifically with cases involving a claim for an elective share.

Linda M. Toga, Esq. provides legal services in the areas of estate administration and planning, real estate and litigation from her East Setauket office.

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By Linda Toga

The Facts: I have always believed that trusts were for people with money and that I would not need to create a trust in my will, since my net worth is modest.

The Question: Are there circumstances when someone with modest means should consider a trust?

The Answer: Absolutely! It is unfortunate that there are so many people like you who believe that trusts are only for the wealthy. As a result, steps that could be taken to ensure that assets pass only to beneficiaries who are mature, responsible and competent or pass in a manner that protects the interests of beneficiaries who may not meet that standard are oftentimes overlooked.

For example, if a beneficiary under a will suffers from alcohol abuse or is addicted to gambling and the will directs the executor to make an outright distribution to that individual, there is a chance that the bequest will be squandered or used in a manner that is detrimental to the beneficiary.

However, if the will includes language creating a testamentary trust and dictates that the bequest go into that trust for the benefit of the beneficiary, the trustee can ensure that the trust funds are used in a manner that truly benefits the beneficiary. The trustee can use trust funds to cover the cost of the beneficiary’s housing, food, school or medical treatment and can be given discretion to make outright distributions to the beneficiary if the trustee feels doing so is in the beneficiary’s best interest.

Clearly, by having funds go into a trust rather than being distributed outright to a beneficiary who may have issues, the assets in the trust are protected and are more likely to be used in a responsible manner.

In addition to creating a testamentary trust for a beneficiary who suffers from substance abuse or an addition, testamentary trusts are useful when beneficiaries are too young to handle an inheritance, when they have credit problems and/or judgments filed against them, when they are in the midst of a divorce or when they have a habit of making poor choices when it comes to money. Even when a beneficiary is mature and responsible, some people create testamentary trusts for such beneficiaries to ensure that the funds passing to the beneficiary will be available throughout the beneficiary’s lifetime.

By including trusts in a will, a person can dictate exactly how the funds in the trust are distributed, what the trust fund can be used for and when the beneficiary may enjoy the benefits of the trust. Distributions can be made annually, or when the beneficiary attains a certain age, or may be left entirely to the discretion of the trustee.

As long as the distribution of the trust fund is not contingent upon events that are contrary to public policy such as illegal activity, the person creating the trust has a great deal of latitude in dictating the terms of the trust. Since the costs associated with testamentary trusts similar to the ones described above are minimal, these trusts are appropriate even when the share of an estate passing into the trust is modest.

Trusts can take many forms and can be created to address any number of circumstances. To ensure that you understand your options and the benefits of trusts, even when the value of the assets going into the trust is modest, you should consult an estate planning attorney with expertise in this area.

Linda M. Toga, Esq. provides legal services in the areas of estate administration and planning, real estate and litigation from her East Setauket office.

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