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By Nancy Burner, Esq.

Nancy Burner, Esq.

When a co-owner of real property passes away, what happens next depends on how the co- owners took title to the property. 

Upon the death of a co-owner, it is necessary to review the last deed of record to make this determination. There are three ways to own property in New York as co-owners: tenants in common, joint tenants with rights of survivorship or tenants by the entirety.

Only married couples who were married at the time they took title to the property can own property as tenants by the entirety — a type of ownership that provides certain protections. If the property is owned as joint tenants with rights of survivorship or as tenants by the entirety, the deceased owner’s interest passes automatically to the surviving co-owner by operation of law. 

Generally, it is not necessary to have a new deed prepared removing the deceased co-owner. When the surviving owner sells the property in the future, the deceased co-owner’s interest can be disposed of by providing his or her death certificate to the title company. If the surviving owner decides to transfer the property during life for no consideration, such as to a trust for estate planning purposes, a notation on the deed should be made by the attorney who prepares it. Upon future sale, the death certificate will still need to be provided to the title company to prove that the survivor is the legal owner of the property.

If, however, the property is owned as tenants in common or if the deceased spouse was the sole owner of the property, the deceased owner’s interest does not pass by operation of law upon death. Instead, the deceased owner’s interest passes according to his or her Last Will and Testament or according to New York Law if the decedent died without a will.

While New York law technically provides that real property vests in the decedent’s heirs as of the date of death and can be transferred or sold by those heirs, the heirs may have issues with the title company insuring the transaction, especially within two years from the date of death. 

It is typically best to have an Executor or Administrator appointed to transfer or sell the property from the estate. However, in order for a fiduciary to be appointed, a probate or administration proceeding will be necessary in Surrogate’s Court.

It is important to note that if the deed is silent as to whether co-owners took title as tenants in common or joint tenants with rights of survivorship, the default is tenants in common. If the deed is silent but the co-owners were married at the time they took title, then it creates a tenancy by the entirety.

Nancy Burner, Esq. practices elder law and estate planning from her East Setauket office. Visit www.burnerlaw.com.

 

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Danya, Dean and Kevin Scott stand at the last night of the DEKS pub. Photo by Kyle Barr

It could have been like any other night at the family owned DEKS American Restaurant & Taproom Feb. 28, but of course, it wasn’t. Once the clock struck midnight March 1, the staple pub in Rocky Point that has stood for 41 years closed its doors for good.

“It’s the people, of course, it’s the people,” said Dean Scott, the pub’s owner. “It’s been nothing but accolades from people that say, ‘Look, thank you.’”

The pub and restaurant owner is moving down to Florida to enjoy a retirement that has been a long time coming. He said it was time to take a break from the hustle of running a bar as old as his.

Regulars Margaret and Vinny Labate stand with pub owner Dean Scott, center, while reminiscing about a photo taken there some 20 years ago. Photo by Kyle Barr

“It’s time,” he said. “We haven’t had any life. It’s 24/7. It’s like, ‘What are we out of? What fell down? What’s broken?’” 

Regular Margaret Labate has been coming to the pub for decades. In one of the closets toward the front entrance, the pub workers hold onto many photographs from over the years. On one of them from around 1998, Labate and her husband Vinny stand by the bar, smiling as they did the night of Feb. 28.

“This is when you had color in your hair, hon,” Margaret Labate said to her husband as she held the picture. “We’ll miss the homeliness and the comfort of this place.”

Labate had come for years, back when she and her husband had started dating. She would even eventually go by herself, saying she felt safe there.

There was a good amount of camaraderie to go around the closing night. Scott and his family, including his brother Kevin and daughter Danya, know just about everyone who walks through the doors and were able to make a quick quip about nearly every one of them as they came in from the cold night outside.

It was a night of bittersweet well wishes, but just a few days before, Feb. 24, the bar hosted its going-away party with live music. That night the space was packed shoulder to shoulder, and the parking lot across the street was lined by cars. By Feb. 28, most of the neon signs had been taken down while the Scott family sold off hundreds of beer taps, some from brands long forgotten.

Despite his love for the patrons, Scott said he has to get off his feet. He only recently underwent below-the-knee surgery due to complications from diabetes.

Scott family and friends reminisce about DEKS pub. Photo by Kyle Barr

Natalie Stiefel, president of Rocky Point Historical Society, said the building dates back to James Hallock, whose family was a well-known influence on the area in the early 19th century, and was built in 1825. Area local Charles Bloder purchased the house in 1929 and turned it into a night spot called The Rocky Point Inn.

Before Scott purchased it, the bar was originally named the Sip and Bull Tavern, he said, but it was later changed to its modern incarnation. The current pub owner can still remember a time before the bypass along Route 25A, just when the area was turning from a summer destination into a place where residents could take up roots.

Overall Scott said he is happy to see so much support for what he and his family have done.

“We were the place that always stayed open no matter what, somewhere you could get warm and get a hot meal,” Scott said. “It’s really wonderful, it’s a nice thing to know that people actually appreciate what you’ve done for the past 41 years. It’s been a long time — a lifetime.”

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The Tax Cuts and Jobs Act would reduce the number of income tax brackets from seven to four; eliminate deductions for state and local income taxes; and would reduce the corporate tax rate from 35 to 20 percent. Stock photo

By Alex Petroski

Last week Republicans in the House of Representatives took a major step toward fulfilling a lynchpin campaign promise that is seemingly decades old.

The House Ways and Means committee released the framework of the Tax Cuts and Jobs Act Nov. 2, a major piece of legislation touted by President Donald Trump (R) as a cut to income taxes for “hardworking, middle-income Americans,” though it would negatively affect New Yorkers if signed into law, according to lawmakers from both sides of the political aisle.

The highlights of the bill, which would require passage by the House and Senate and the president’s signature before becoming law, include a consolidation from seven individual income tax brackets down to four; the elimination of the deduction for state and local income taxes, a provision that in the past through federal tax returns gave a portion of tax dollars back to individuals in higher income tax states like New York; and a reduction of the corporate tax rate from 35 to 20 percent.

“I am a ‘No’ to this bill in its current form,” 1st Congressional District U.S. Rep. Lee Zeldin (R-Shirley) said in a statement. “We need to fix this state and local tax [SALT] deduction issue. Adding back in the property tax deduction up to $10,000 is progress, but not enough progress. If I’m not fighting for New Yorkers, I can’t expect anyone else from another state to do it for me.”

U.S. Rep. for the 2nd District, Tom Suozzi (D-Glen Cove), was even more critical of the bill than Zeldin.

“The goal of tax reform is to help hard-working Americans make more money so they can live the American Dream,” Suozzi said in a statement. “The American people expect us to find a bipartisan solution to tax reform that helps create good paying middle-class jobs. This plan doesn’t achieve that goal. I won’t support it.”

Other New York lawmakers from the Democratic Party voiced harsh opposition to the bill in its current form.

New York’s U.S. senators Kirsten Gillibrand (D-New York) and Chuck Schumer (D-New York) each said via Twitter they viewed the bill as a tax break for corporations that would have a negative impact on middle-class citizens. New York Gov. Andrew Cuomo (D) called the bill a “tax increase plan.”

“The tax reform plan, they call a tax cut plan,” Cuomo said in a statement. “It has a diabolical dimension, which is the elimination of the deductibility of state and local taxes … what makes it an even more gross injustice is, the state of New York contributes more to the federal government than any other state. New York contributes more to Washington than any other state. We’re the No. 1 donor state. We give $48 billion more than we get back. Why you would want to take more from New York is a gross, gross injustice.”

Duncan MacKenzie, chief executive officer of the New York State Association of Realtors said in a statement the bill would harm many New York homeowners.

“It will lessen the value of the property tax deduction and it cuts a host of other key housing-related tax incentives,” he said.

The Committee for a Responsible Federal Budget, a nonpartisan, nonprofit organization founded in the 1980s and dedicated to educating the public on issues with significant fiscal policy impact, estimated the bill would result in a $1.5 trillion increase to the national deficit.

Mark Snyder of Mark J. Snyder Financial Services, a Hauppauge-based personal financial planning and management firm, called the bill a “torpedo aimed at the wallets of Long Islanders” in an email. He also pointed to the elimination of the SALT deduction as clear evidence the bill would harm New Yorkers.

“As a representative from New York, I’d kick this bill to the curb,” he said when asked what he would do if he were tasked with voting on the bill.

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If you were to ask those of us of a certain age, we would insist that we want to age in place. That is, we want to continue to live in our houses, cook in our kitchens and sleep in our bedrooms. This is a worthy goal for it saves family and the government a lot of money. Statistics have shown that hospitalization and nursing homes are far more costly than living at home. Still, we also know that more accidents happen in the home, and that means continuing to live at home presents certain challenges.

The greatest hazard, it would seem, is for older adults to fall. Now, and for the last score of years, there are programs with certifications that train people how to make homes safer, especially for preventing falls. For example, the National Association of Home Builders offers a course that trains CAPS: certified aging in place specialists. These may be builders, remodelers, occupational therapists or interior designers who can come into a home and make suggestions for retrofitting.

There are 3,500 such specialists but Dan Bawden, from Houston, who helped develop the program in 2001, told The New York Times there are 10 times as many needed to upgrade such homes. The highest rate of home ownership in the country, some 80 percent, is by older people, and the great majority of us are in single-family homes.

The three most important features allowing residents to move around safely are: to have an entrance without steps; to live on a single floor; and to have hallways and doorways wide enough to accommodate wheelchairs and walkers. According to the Joint Center for Housing Studies at Harvard, less than 4 percent meet that description. And if further features are thrown in, like doors with lever handles — rather than knobs — plus light switches and electric outlets that can be reached from a wheelchair, that rate falls to 1 percent, according to the recent article in the Times: “Planning to Age in Place? Find a Contractor Now” by Paula Span.

At this point, with about 10,000 Americans turning 65 every day, it would make the most sense for every new house to be constructed according to what is termed “universal design.” Such homes would have bathroom grab bars, higher toilets, curbless showers, widened doorways and added lighting. Such features would promote independence for the disabled and older people.

There are other associations that offer similar certification programs. Certified Living in Place Professional program is one such. Local agencies on aging and senior centers may also give this kind of information. What seems to work best is if an occupational therapist and a CAPS, or equivalently trained graduate, team up to interview each homeowner and determine what is most needed.

Costs for these modifications can be a problem. There is little government help for such remodeling, with the exception of the Department of Veterans Affairs and perhaps Medicaid. Some states do offer tax credits but not many. Mostly such alterations are privately financed, despite the potential savings from staying at home. A bipartisan bill was introduced in Congress last year for a $30,000 federal tax credit, but to date it has gone nowhere.

Approximate costs could run as follows, according to Bawden: two grab bars installed for $200-$300; replace doorknobs with lever handles $60-$90; for every relocated electrical outlet or switch, $175-$250. Those are the smaller costs. Then there is replacing a tub with a roll-in shower at $8,000-$10,000, and an entirely new bathroom with universal design elements for more than $25,000.

The biggest hurdle of all may be to get older residents to feel that they need such modifications. At the least, kitchen floors might be textured rather than covered with tiles that are slippery when wet; the color of the kitchen counters might contrast with the color of the floor as the more elderly lose depth perception; front edges of stairs could be outlined with colored tape; freezers are safer in a pullout drawer at the bottom of a refrigerator — and, for Pete’s sake, get rid of those much-beloved throw rugs.

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By Nancy Burner, Esq.

Clients often ask how they can ensure the home in which they live or their vacation home can be protected against the cost of long-term care.  These assets are often worth much more to our clients than the cash value; they represent hard work to pay off the mortgage and are wrapped in memories.

Prior to the sophistication of trust law, many individuals would pass a residence to their beneficiaries by executing a deed with a life estate. For the owner, this would mean retaining the right to live in the home until death, but upon their demise, the property would be fully owned by the beneficiaries.

Because they retained a lifetime interest in the property, they would still be able to claim any exemptions with respect to the property. Moreover, when the owner died, the beneficiaries would get a “step-up” in basis, which eliminates or lessens capital gains tax due if they did sell the property.

The negative aspect to this kind of transfer is loss of control. Once the deed is transferred to the beneficiaries, they have the ownership interest. If the original owner wanted to sell the property or change who receives it upon their death, they would have to get the permission of those to whom they transferred the property. Another negative aspect is that if the individual is receiving Medicaid benefits and the house is sold, a share of the proceeds, the life estate interest, would be paid out to the individual and could put their Medicaid benefits in jeopardy.

A better option for protecting a residence is by executing an irrevocable Medicaid Qualifying Trust, which can transfer real property at death. Like the deed with a life estate, this trust grants all the tax benefits and exclusive occupancy during life, i.e., STAR exemption, veteran’s exemption, capital gains exemption.

This method is superior to the deed with a life estate because if the property is sold during your lifetime, the full amount of the proceeds are protected within the trust and will pass to your beneficiaries upon your death. The trust also gives the ability to change the beneficiaries at any time, leaving some control in the hands of the original owner of the property.

A person’s residence is their most treasured and often most monetarily valuable asset. It is important to meet with an experienced attorney to ensure protection of your home or vacation home.

Nancy Burner, Esq. has practiced elder law and estate planning for 25 years. The opinions of columnists are their own. They do not speak for the paper.

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