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Last will and testament

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Creating an estate plan can give you the peace of mind you need. Stock photo

By Nancy Burner, ESQ.

Nancy Burner, Esq.

Planning for the future can sometimes be difficult. Creating an estate plan can give you the peace of mind you need, while also making it easier for your loved ones to handle your affairs when you die. We often find that while our clients understand the basics of certain estate planning documents, they are often surprised to see that many of these documents are multifaceted and serve multiple purposes.

A last will and testament is a legal document memorializing your wishes on how you, the testator or creator of the will, want your estate to be distributed after you die. If you die without a will, your assets will be distributed according to state statute, also known as the laws of intestacy.  

For example, in New York State, if you die with a surviving spouse and children, your spouse will receive the first $50,000 of your estate and then one-half of the balance. The remainder will be distributed equally among your children. This is not ideal for someone who wants all their assets to go to their surviving spouse.   

Instead of being bound by the laws of intestacy, one can create a will that specifies to whom they want their assets to go and how they want their assets to be distributed. Under the scenario above, a will would allow the testator to distribute their assets to their surviving spouse. Only if the spouse predeceases the testator should the assets be distributed to their children.

The will has functions other than just listing the distribution of assets upon death. For parents with young children, a will allows a guardian to be named for minor children. Also, if there are beneficiaries that are minors or incapacitated, the will can provide that the assets be distributed in trusts on behalf of those beneficiaries. 

Many clients will choose to leave assets to beneficiaries in trusts in other circumstances, such as for creditor protection or to delay the age by which they can have full access to the funds. 

A will can also create a supplemental needs trust for beneficiaries who currently receive, or may be in need of, means-tested government benefits.  

Another advantage of executing a will is that it allows the creator to waive any bond that the executor would otherwise have to pay in order to administer the estate. A bond is often required by the court to protect the interests of the distributees and beneficiaries of one’s estate.  

Depending on the size of the estate, the bond may have a large annual premium that will be paid out of the assets of the estate. A will can also provide for the decedent’s wishes regarding funeral arrangements and cremation.

It is important to have a will even for individuals who hold all accounts jointly with another person. While the joint assets will go directly to the co-owner, the terms of the will can be used to administer any assets that are held outside of the joint accounts. An estate account will have to be opened to cash any checks delivered after death that are made payable to the decedent, including tax refunds or a return of other funds. Having a will ensures that these funds are distributed to the appropriate persons.  

Creating a last will and testament can help avoid many of the pitfalls that occur when a person dies without any estate plan in place. We strongly recommend seeking a trust and estates and elder law professional to help determine the right estate plan for you.

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

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When a person dies without a will, the law determines who the heirs of the estate are. Stock photo

By Linda M. Toga, Esq.

Linda Toga

THE FACTS: After my mother’s death I was approached by a man I will refer to as Joe who claims that my mother was his biological mother as well. According to Joe, before she and my father married, my mother gave birth to Joe and immediately put him up for adoption. Although Joe admits that my mother rejected his attempts to develop a relationship with her during her lifetime, Joe now claims that since my mother died without a will, he is entitled to a share of my mother’s estate.

THE QUESTION: Is Joe correct? Will my siblings and I have to share our inheritance with him?

THE ANSWER: Fortunately for you, Joe is wrong.

HOW IT WORKS: Generally a child who is adopted out does not have the right to an inheritance from the estate of his birth mother. The order of adoption generally relieves the birth parents of all parental duties and of all responsibilities for the adopted child. At the same time, the order extinguishes all parental rights of the birth parent to the estate of a child who has been adopted, including the right to serve as administrator of that child’s estate and the right to inherit under the intestacy statutes.

Although Joe seems to be relying upon the fact that your mother died without a will and, therefore, did not explicitly disinherit him, his reliance is unwarranted. That is because the New York State intestacy statute and the domestic relations law govern how your mother’s estate should be distributed.

While the child of a decedent is generally entitled to a share of his parent’s estate if the parent dies without a will [Estates, Powers and Trusts Law §4-1.1 (a)(1) and (3)], the rights of an adopted child in the estate of a birth parent are governed by subsection (d) of the statute. It provides that the Domestic Relations Law, specifically Domestic Relations Law §117, controls.

Domestic Relations Law §117 (1)(a) and (b) provide that an order of adoption relieves the birth parent of all parental duties and responsibilities and extinguishes any rights the parent would otherwise have over the adoptive child’s property or estate. At the same time, the order terminates any rights of the adoptive child to an inheritance from the birth parent.

Although there are some exceptions to these laws, the logic behind terminating inheritance rights is to prevent people in Joe’s position from enjoying a windfall by inheriting from both his birth and adoptive parents and to prevent a birth mother from receiving an inheritance from a child that she did not support during her lifetime.

Under the circumstances, the only way Joe could inherit from your mother’s estate would be if she chose to name him as a beneficiary in a will or a trust or on a beneficiary designation form. If Joe decides to pursue a claim against your mother’s estate, you should be able to defeat the claim by providing the court with evidence that Joe was legally adopted as a child.

It would be wise to retain an attorney experienced in estate administration to assist you with this matter.

Linda M. Toga provides personalized service and peace of mind to her clients in the areas of elder law, estate administration and estate planning, real estate, marital agreements and litigation. Visit her website at www.lmtogalaw.com or call 631-444-5605 to schedule a free consultation.

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Accountings are part of the administration of an estate, regardless of whether the decedent died with a will or intestate.

By Nancy Burner, ESQ.

Nancy Burner, Esq.

There are many steps and layers associated with the administration of an estate. Ultimately, for most estates, the goal is to distribute the assets to the respective beneficiaries named in the decedent’s will or are intestate heirs pursuant to the laws of intestacy. As part of this administration process, and prior to making any final distributions, the beneficiaries of the estate are entitled to receive and review an accounting prepared and provided by the fiduciary for the estate.

One of the fiduciary duties the executor or administrator is tasked with is to marshal the assets of the estate. The administrator reports to the beneficiary the assets of the estate; the income collected during the pendency of the administration; the expenses, debts and claims that were paid on behalf of the estate; and the amount and value of funds that ultimately remain on hand to be distributed to the beneficiaries.

The function of the accounting is to provide a clear and concise review, in proper reportable form, of all of the estate receipts and expenditures of the estate so that the beneficiary fully understands exactly why he or she is receiving a certain sum of money. As discussed above, once the accounting is approved, the ultimate distribution is made in accordance with the terms of the probated will or as provided by the laws of intestacy.

Once provided with the accounting from the fiduciary, the beneficiaries of the estate generally have questions regarding the transactions of the fiduciary. It is important that the fiduciary respond and address any concerns the beneficiary may have regarding the administration of the estate.

After explanation and substantive discussions, most accountings are approved by the beneficiaries and the estate fiduciary can proceed to the next and likely final step of making final distributions.

Conversely, beneficiaries also have the legal right to object to the accounting provided by the fiduciary. Once this occurs, there are provisions in the Surrogate’s Court Procedure Act (SCPA) and other statutes that provide a means by which the beneficiaries can investigate any questions they have about the administration of the estate.

Specifically, SCPA 2211 entitled, “Voluntary account; proceedings thereupon” allows a party to take oral testimony of a fiduciary to examine all of the papers relating to the accounting. These papers include, but are not limited to, bank statements, brokerage statements, deeds, tax returns, financial records, bills and receipts. Following the completion of the SCPA 2211 examination, a decision can then be made by the beneficiaries as to whether to file formal objections to the accounting.

The Surrogate’s Court in New York generally encourages interested parties to resolve their disputes, including any accounting contests, without extensive court intervention, proceedings or a trial as these proceedings can be costly and time consuming.

Accountings are part of the administration of an estate, regardless of whether the decedent died with a will or intestate. Accordingly, whether you are the fiduciary or a beneficiary, it is important to consult with an experienced estate administration attorney to assist and guide you through the accounting process.

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

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By Nancy Burner, ESQ.

In terrorem is a term derived from Latin that translates to “in fear.” An in terrorem provision in a decedent’s last will and testament “threatens” that if a beneficiary challenges the will then the challenging beneficiary will be disinherited (or given a specified dollar amount) instead of inheriting the full gift provided for in the will.

Nancy Burner, ESQ
Nancy Burner, ESQ

An in terrorem clause is intended to discourage beneficiaries from contesting the will after the testator’s death. New York State law recognizes in terrorem clauses; however, they are strictly construed. An example of an in terrorem clause might read as follows: “If any person shall at any time commence a proceeding to have this will set aside or declared invalid or to contest any part or all of the provisions included in this will they shall forfeit any interest in my estate.”

There are, however, some limits on in terrorem clauses in the interest of preventing fraud, undue influence, or gross injustice. These statutory “safe harbor provisions” allow a beneficiary to inquire into the circumstances surrounding the drafting of a will without risking forfeiture of any bequest. Since, as discussed above, New York State courts strictly construe in terrorem clauses, these safe harbor challenges are a means by which a beneficiary can evaluate the risk of contesting the will. In relevant part, the statute provides for the preliminary examination of (i) the testator’s witnesses, (ii) the person who prepared the will, (iii) the nominated executors and (iv) the proponents in a probate proceeding.

These persons “may be examined as to all relevant matters which may be the basis of objections to the probate of the propounded instrument.” If the beneficiary challenges the will and the will is found to be invalid due to lack of mental capacity, undue influence or failure to have the will properly executed, then the in terrorem clause also fails. It is important to note that a beneficiary may present a petition to the court, prior to the will being admitted to probate and before formal objections have been filed, seeking a determination as to the construction or effect of the in terrorem clause of the will. The basic principle of construction is that the decedent’s intent, as expressed from a reading of the relevant provision of the will under the circumstances under which it was drawn, is to be given effect by the courts.

Keep in mind that simply having an in terrorem clause in your will may not be enough to dissuade beneficiaries from potentially challenging your will. Theoretically, however, for an in terrorem clause to have any weight at all, a beneficiary under a will must be left a substantial amount to incentivize their compliance with the will. An in terrorem clause may have no effect on a beneficiary who was not left anything under a will as they risk losing nothing by challenging the will. While in terrorem clauses may be effective in minimizing a will contest, for some it holds no power. It is important to discuss your estate plan and your wishes regarding the ultimate disposition of your assets with an experienced estate attorney to determine the proper provisions to include in your will.

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

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