Wills and Trusts

How should a person arrange for his property to pass upon death? Adults in New York should have either a Will or a Trust. The decision on whether a will or trust is appropriate should be made after consulting an attorney. For the purpose of this brief discussion, I refer to Will as a way to pass assets. However, I believe that in many circumstances a Trust is preferred. I will be happy to discuss this with you personally.
Does each of my parents need to have a Will? Property that either of your parents holds in his/her name alone is distributed based on the instructions laid out in his/her Will. If your parents do not have Wills, their property passes under the rules of "intestacy" set out in state law. In general, those rules provide that the property will be divided among their closest family members. For example, if your mother had no Will and was survived by her husband and two children, fifty thousand dollars plus one-half of the estate would pass to her husband and the balance would be divided equally among her children.
Why is it important to name an Executor? One of the most important aspects of a Will is that it names an Executor or personal representative to handle the probate of the estate. The Executor is responsible for distributing property and taking actions according to the directions given in the Will. In addition, the Executor determines when to make distributions, who should be the attorney for the estate and various tax matters. In addition, the Executor has the authority to arrange for burial, which is important if the deceased has no close family members to take on this responsibility
Must a person leave assets to his/her spouse or children? In New York State, people do not have to leave assets to their spouse or children. However, a spouse has a right of election whereby he/she has the right to claim a percentage of the deceased spouse's assets. If the surviving spouse has signed a valid agreement waiving the right of election, no claims can be made.
My sister is disabled and is on Medicaid. If my parents leave money to her, will she be ineligible for Medicaid? If your parents wish to leave money to your sister or any other disabled person, it is especially important that they have Wills. The Will should incorporate special provisions whereby the inheritance will not make your sister ineligible for Medicaid. I often represent parents in this position and I incorporate a SUPPLEMENTAL NEEDS TRUST in the will so that the disabled child's inheritance can be used for other things while Medicaid continues to provide medical care.
What assets do not pass in accordance with the Will? Life insurance and retirement benefits usually pass by beneficiary designation. Joint accounts pass to the surviving joint owner(s) and trust assets (including ITF bank accounts) go according to the terms of the trust. Brokerage accounts can have a Pay on Death beneficiary. However, if the named beneficiary predeceases the decedent or renounces, these assets might pass according to the Will. If there is no Will, the heirs will have to apply for Letters of Administration.
If most of my parents assets are in joint accounts, do you recommend a Will? Let me answer this with a story. Sophie put all her financial assets into joint accounts, thinking that this would save money and avoid probate. Shortly before her death, Sophie had an accident and she brought a personal injury action, which was not settled until after her death. In addition, her daughter found some old savings bonds. Sophie's heirs had to petition for Letters of Administration and the assets were distributed according to the state's plan (rather than a plan that Sophie might have wanted).
Comment: Our office appreciates that a Will can be simple or complex depending on the client's wishes and circumstances. We have found that having a Will often avoids family controversy and unnecessary expense.
Comment: If you have relatives who cannot be located bring this to the attention of your attorney. This might determine whether you should have a Will or a Trust.