New York Estate Planning & Elder Law Blog

An estimated 50 million American households now include a child being raised by a grandparent. Even more households include multi-generational families, where 3 and 4 generations live together. Even the Whitehouse included such an arrangement, as President Obama’s own grandmother resided with his family until her death just before the 2008 election.

But with more Americans than ever raising their grandchildren, there is even more urgency for aging caregivers to consider early estate planning. Without wills, trusts, and powers of attorney, elderly grandparents may find their estates being paid to adult children who have no been a part of their lives for many years. Here are just a few ways that estate plans may be used to protect grandchildren and the grandparents who raise them.

Wills and Trusts

Americans love our furry friends. In fact, the richest dog in the world died in 2011. For those who don’t already know the story, Leona Helmsley was a wealthy hotel mogul who disinherited all her family and $12 million in trust for her dog, Trouble. She was known for her malcontent and often cruel nature, which earned her the title, “The Queen of Mean.” She died in 2007, but Trouble lived until 2011. Stories like this are becoming more common with time. Many people, however, wonder how they would possible create a trust for a pet. Fortunately, the American Society for the Prevention of Cruelty to Animals (ASPCA) has several great tips that everyone should consider when planning a pet trust.

Identifying the beloved pet

A vehicle has a VIN number, a home usually has a PIN number and a deed, but a cat has no such “FUR number.” And, although we all like to think our pet is as unique as a snowflake, a bank’s trust manager or the relative you selected to be the trustee may not be able to tell your loveable cat from the neighbor’s stray. At a minimum, here are some options to consider:

Once upon a time, there were these somewhat sexist laws called “dower and curtesy.” These laws applied to the specific amount of a decedent’s estate to which his or her surviving spouse would be entitled. They were usually very different; men received more than women. Over the years, these laws were abolished and made way for their modern counterparts – the elective share. Most states have enacted some variation of an elective share statute, which states that surviving spouses are automatically entitled to a specific share – usually around one-third – of their deceased spouse’s estate.

While it may seem harsh to disinherit a spouse, there are often many reasons to do so. For instance, couples that marry late in life after raising their own children may each have substantial assets from prior marriages and from their working careers. Each person may wish to provide for their own descendants rather than seeing their entire estate pass to another family line. This is just one common example.

So, is it impossible to disinherit one’s spouse? Hardly. There are several ways to limit or eliminate a spousal inheritance.

Gene Chandler (aka Eugene Dixon) was one of the more prominent figures in mid-Twentieth Century Soul and R&B. In 1962, he released his biggest hit – The Duke of Earl. Following this award winning number one billboard hit, he began to refer to himself as the Duke of Earl. However, according to court documents in Cook County, Illinois, the Duke of Earl had a very troubled life, from felony convictions for Heroine possession to fathering well over 20 children by many women. Late in life, he married a wealthy real estate mogul, Lilli Kinnard, who already had children of her own.

Just before his wealthy wife passed away from cancer, her will mysteriously was changed to entirely disinherit her children, leaving millions to the Duke. In fact, the new will made no mention of her children and instead named several of Chandler’s children from prior relationships as successor executors. Even more shocking, the attorneys who drafted the new will were the same ones that helped the Duke negotiate his prenuptial agreement with Kinnard.

Today, Chandler is still embroiled in an ongoing will contest case and several supplemental proceedings involving allegations of fraudulent transfers of business and real estate assets, unlawful attempts to defraud creditors, and undue influence. This case, however, teaches a couple invaluable lessons.

How does joint tenancy avoid probate?

Let’s use a simple example: the family home. When an aging widow places her home in joint tenancy with an adult daughter, they both immediately are entitled to possession and ownership. Each has the same rights. If the property is rented, each is entitled to the entire rent equally. Therefore, the law generally considers the widow’s action as a gift to her daughter. Likewise, upon the widow’s death, the house is immediately the sole possession of the daughter and not part of the probate estate. In other words, it passes outside of probate.

So what is wrong with joint tenancy?

Estate planning attorneys are frequently asked a troubling question: what’s the quickest, cheapest, and easiest way to just avoid probate altogether? Of course, you can never expect an attorney to provide a blanket response to that question. It is similar to asking your doctor, “What’s the quickest, easiest, and cheapest way to avoid heart disease?” The answer in both cases will undoubtedly depend on many things. For the doctor to give an informed response, he or she would need to perform blood tests, get some idea of your history, lifestyle choices, eating habits, family history, and so forth.

The same is somewhat true of offering a comprehensive estate plan. It is, after all, designed to protect you and your family later. So, your attorney will likely need to know your net worth, what real estate you own, your relationship with your children, siblings, and other relatives, your goals, career, income, and your level of health. These are just a few of the issues that go into deciding how to properly establish your estate plan. This warrants discussion, because people continue to find themselves engulfed in painful litigation against their own family, often despite good intentions.

Every year many Americans are fooled into choosing quick fixes to “avoid probate.” In many ways, a complete misunderstanding of the probate process has perpetuated this mentality. In fact, web-based “self-help” legal services are often the worst culprit. But if handled properly by an experienced attorney, probate can be a powerful and straightforward process for settling a decedent’s affairs. Some sadly choose to simply open joint bank accounts with an adult child or close friend and then place all of their money in those accounts with simple instructions regarding how they want the money spent upon death. Many people also do the same thing with their homes, automobiles, and other types of property, thereby completely avoiding probate. But this is not a wise strategy.