MEETING WITH YOUR ESTATE PLANNING ATTORNEY
Congratulations, you have decided to be a responsible adult and protect your family by making a will or trust. It never ceases to shock us that more than half of the adults in the United States do not have wills. Perhaps it is because of the business we are in. We see the fighting and litigation that can result when there is no will or trust in place.
Many people say, “I don’t have any property, I don’t need a will.” That is not correct. Everyone has property. A home, a car, a bank account, a retirement account, a collection of artwork or guns or coins. Tools or books or jewelry. People always have more than they think they do. And if their children or relatives are inclined to have a fight, there is always something to fight about. Making a will or trust goes a very long way to prevent those fights and preserve family wealth for future generations.
When a person does not have a will, the law steps in and states what will happen to that person’s property. For example, in New York, if a person is survived by a spouse and children, the surviving spouse gets the first $50,000 in value. The remainder is divided equally between the spouse and all the children together as a class. This could lead to difficulties, for example, minor children owning an interest in a home or other real estate. Minor children lack the legal capacity to enter into contracts so they cannot sign deeds or otherwise deal with the property they own. Often this means a court will have to appoint a guardian for the children, adding time and expense to the estate administration process.
Another difficulty is when siblings do not get along and more than one applies to the court to administer the estate. We have had cases where it took more than a year for the court to choose the administrator. Legal proceedings were expensive and delayed everyone receiving their inheritance. It also further poisoned the family relations.
All this and more can be avoided with a simple will. There are just a few decisions to be made.
• The Distributive Plan. Who is to get your property? It is very common for property to be left to the surviving spouse, or if there is none, to then be divided equally among the children. But you may have other ideas or needs. Sometimes there are children with disabilities or addictions. Today it is common to have blended families where there are children from prior marriages. In such cases, a trust may be more appropriate than a will. You can discuss various options with your estate planning attorney.
• The Executor. This is the person who carries out your wishes and instructions as set forth in your will. It is a good idea to also name a backup in case the first person chosen is unable or unwilling to serve.
• The Trustee. This is the person who will manage property for any minor children who may receive bequests. Again, it is always good to name a backup.
• The Guardian. This is the person whom minor children will live with if both parents should die.
The Executor, Trustee, and Guardian can be the same person, or not.
When preparing to meet with your estate planning attorney, you should know who you want to appoint to these positions, and their backups, and should have their full legal names, addresses, and contact information. You should also bring the same information for all children and grandchildren and other people who may be in your distributive plan.
You should also bring with you information concerning your assets. Real estate, businesses, checking accounts, savings accounts, investment accounts, insurance, pensions, cars, boats, airplanes, collectibles, and anything else having more than nominal value. Also, any outstanding debt on those assets. Some property, like real estate, cars, and guns, require particular procedures for distributing out of the estate.
Your attorney will want to consider whether your estate is large enough to be subject to federal or state estate taxation. There should also be consideration of long-term health care planning and whether you might qualify for Medicaid. This often requires reducing the size of one’s estate by making gifts. Close analysis of assets and income is required to make these determinations.
Making a will or trust can often go quite quickly. With proper preparation as outlined above, the process should be straightforward and efficient.
This is not intended to be legal advice. You should contact an attorney for advice regarding your specific situation.
Gary M. Schuster is Partner at the firm and practices business, non-profit, arts and entertainment law and marijuana licensing.
He can be reached at 845-764-9656 and by email.