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What is Considered a Small Estate in New York Probate Court?

Published on: August 22, 2017 | by Ettinger Law Firm

In New York, estates with real property valued at less than $30,000 are considered “small estates” and may be able to pass through probate court much more quickly than larger estates, if the executor handles the process correctly. Although small estates can pass through a simplified probate process, executors will still need to perform some of the duties as if he or she were overseeing a much larger estate and will even need to file certain paperwork with the court.

Ordinarily, probate proceedings in New York Surrogate Courts can be lengthy and time consuming processes but with a simplified estate, moving the last will and testament through court can be much more expedient. Although the asset threshold may appear very small, as even a modest mode and possessions will easily be valued at well over $30,000, there are scenarios where even seemingly large estates could pass through.

Only property solely owned by the deceased counts towards the small estate threshold. This means assets like homes, vehicles, and family businesses in two people’s names will not count towards the $30,000 limit. This can be especially helpful when there is a surviving spouse named to the title of homes and real estate.

Basics of International Wills

Published on: August 20, 2017 | by Ettinger Law Firm

Recently, we have written on the intricacies of estate planning when an individual owns foreign property. If you own international property or have other estate assets that span two or more countries, one of the most effective ways to ensure that your estate is properly administered according to your wishes is to make sure that you have an internationally recognized Last Will and Testament.

Understanding International Wills

For the most part, Wills are essentially the same the world over. In jurisdictions that allow recognition of a Will, such documents typically need to meet the same requirements:

The Basics – Understanding Dynasty Trusts

Published on: August 17, 2017 | by Ettinger Law Firm

Dynasty trusts often conjure up images of very wealthy families that have a great deal of money to pass onto their heirs. However, dynasty trusts can actually be an effective tool for families with more average assets to distribute. Investopedia defines dynasty trusts as long-term trusts established to transfer wealth from generation to generation while avoiding the incurrence of transfer taxes such as the estate tax and the gift tax. Before deciding if a dynasty trust is right for your needs, it is important to understand how they work and whether or not their benefits will meet your individual needs.

The Basics

Basically, dynasty trusts are established so that they can survive for 21 years after the death of the last person for whom the trust was established. Theoretically, this means such trusts could be in existence for more than 100 years. Typically, the original beneficiaries are the children of the person that has established the trust. When those children die, the trust typically begins to benefit the grandchildren and possibly great-grandchildren of the individual that established the trust. This is why they are referred to as dynasty trusts because they can continue to benefit several generations of heirs. Dynasty trusts are irrevocable, which means that the person that establishes such a trust will have no control over the trust or its terms once it is funded. Instead, it will be controlled by a trustee appointed by the person that has established the trust.

How are Taxes Calculated for Inherited Property?

Published on: August 17, 2017 | by Ettinger Law Firm

When people learn they are going to be the beneficiaries of someone’s estate and will inherit property, many of them often wonder whether it will actually cost them money to do so. We often hear about raising or lowering the federal and state estate tax, sometimes referred to as “the death tax” and all this talk can be quite confusing. While every situation is different and the tax code itself is quite complicated, there are a few basic principles beneficiaries should be able to rely on.

To start, New York is one of only a handful of states with a state inheritance tax but there are exceptions to the rule and that amount has increased substantially over the past few years. As of April 2017, the exemption on inheritance tax in New York is $5.25 million, meaning beneficiaries will only be taxed for assets worth more than this amount. The tax rate for inherited assets above $5.25 million is five to 16 percent, much lower than the federal inheritance tax rate of 40 percent.

Unlike other states with inheritance taxes, New York has a “tax cliff,” meaning if your inherited assets are greater than the tax exemption then the entire value of the asset is taxed. By contrast, other states with inheritance taxes only tax at the value above the exemption threshold. New York is one of the only states to institute its inheritance tax rate this way and although this may seem steep, the current tax rates are much more fair than they used to be.

Estate Planning and Foreign Assets

Published on: August 14, 2017 | by Ettinger Law Firm

Estate planning can be a complicated process, especially for individuals that have diversified assets. The process can be even more complex for individuals engaging in estate planning when those individuals have foreign assets to consider. If you have or are considering acquiring foreign assets, including foreign real estate property, it is important that you understand how doing so may affect your estate planning tools. An experienced estate planning attorney can help you further understand the unique nature of foreign assets as well as the mechanisms that you can put in place to protect them.

Validity of Wills

It is possible for a valid United States Last Will & Testament to be considered invalid in a foreign country. Typically, to avoid a Will being deemed invalid it must comply with the requirements of a valid Will in the foreign jurisdiction where a person’s assets are located. This is one reason why it is imperative to work with an experienced estate planner in the country in which your foreign assets are located – otherwise, you risk losing those assets or having them distributed in a way that is not according to your wishes. You also need to check with an experienced estate planning attorney in the United States to see how multiple Wills can affect your Will here.

What are the Marital Inheritance Laws in New York?

Published on: August 14, 2017 | by Ettinger Law Firm

A last will and testament spells out the final wish of the deceased, including how he or she wishes to allocate assets amongst friends and family. However, there are certain limitations to the extent deceased spouses may effectively cut out their surviving spouse from a will. Under New York estate laws, like so many other states, surviving spouses have certain claims to assets that cannot be undone by a will.

If an individual attempts to leave his or her spouse completely out of a will or only leave the surviving spouse a small amount, New York probate courts, known as Surrogate Courts, will step in and apportion a large part of the estate regardless of the text of the will. This is because just like in divorce, spouses have certain rights to community property like homes, cars, and bank accounts.

When someone passes away, with or without a will, all heirs with legal claims to the estate like spouses and children must be notified by the court. Next, the executor of the estate will need to find these persons and ask each of them to sign a waiver giving up their right to challenge the estate. Typically, this is no problem since close family members with estate claims are usually already mentioned in the will and the estate is apportioned fairly.

What are the Rules for Appointing an Executor in New York?

Published on: August 11, 2017 | by Ettinger Law Firm

Estate planning is something everyone, regardless of age or wealth, should take care of in order disperse assets and have final instructions carried out. Whether that plan be a last will and testament or a trust, folks need to create a plan early on in life and update their estate planning as life events like marriage, buying a home, or acquiring wealth. One of the most common ways for folks to settle their affairs is to create a last will and testament and name an executor to oversee the will in probate.

Often times, executors to estates are close family or friends to the testator, the person crafting the will. The executor will bring the will through probate court, taking stock of all the deceased’s assets and debts and ensuring creditors are paid and the assets are dispersed to the proper beneficiaries, which may also include the executor.

However, New York does place certain very limited restrictions on who may serve as an executor to an estate. Under N.Y. Surr. Ct. Proc. Act § § 103, 707, the basic rules for serving as an executor of an estate are:

The Importance of Flexibility in Estate Planning

Published on: August 9, 2017 | by Ettinger Law Firm

While some aspects of estate planning can seem pretty rigid, it is important to look at them while keeping an eye on things that will allow for some flexibility. By building flexibility into your estate planning tools where it makes sense, you can save yourself from headaches down the road and also plan effectively for the unexpected events that happen during life. Additionally, flexibility in your approach to estate planning will allow you to effectively plan for changes in tax policy and even the value of your assets so that such changes will not significantly impact your ability to distribute your assets according to your wishes.

Determine Tax Consequences

One of the first things to do when building flexibility into your estate planning portfolio is to determine which options will have the greatest impact on taxes, not only for you but also for your heirs. This is especially important for younger people beginning the estate planning process. One of the most common questions is whether or not you should try to distribute your assets through lifetime gifts or if you should keep them in your estate to be distributed later. Without having a crystal ball to predict the future of the estate tax, this really depends on the current and potential value of the assets in question.

Ways to Spend Down Assets for Medicaid

Published on: August 7, 2017 | by Ettinger Law Firm

Medicaid is an important needs-based program to help pay for the vital healthcare of millions of at risk people in this country. In fact, many older Americans plan on using some part of Medicaid to pay for nursing home or in-home nursing care later on in life only to find out they do not qualify for the program because they own too many assets.

Fortunately, with a little forward thinking and estate planning, these individuals can spend down their assets to qualify for Medicaid and avoid possible look back penalties, if applicable. In fact, you may already be working on some of these types of thing already and never knew they would help you qualify for Medicaid.

Paying off debt

New York Voluntary Administration

Published on: August 3, 2017 | by Ettinger Law Firm

It is important to remember that whether your estate is subject to probate or not, you should make sure that you have designed a comprehensive estate planning strategy that effectively distributes all of your assets so that your family is not forced to rely on the state to make important decisions regarding the distribution of your estate. At the same time, smaller estate may be eligible for a process known as voluntary administration in New York. This process is also called disposition without administration or small estate proceeding, but regardless of what it is called it is important to understand the process especially if it may be applicable to you.

Basics of Voluntary Administration

Voluntary administration can take place whether or not the deceased person has left a Last Will & Testament. Typically, only personal property is eligible for distribution through voluntary administration. This means that if a deceased person solely owned real property such as a home that you plan to sell, then such property would not be eligible for voluntary administration and would presumably exceed the value of the small estate threshold. Currently, the New York small estate threshold is set at $30,000 which means that any estate valued over that amount will still be required to go through probate. Generally, any interested party may file to become the voluntary administrator of a deceased person’s estate that qualifies for voluntary administration.