Bailey & Bailey LLCFindLaw IM Template2024-02-19T22:39:42Zhttps://www.bblawny.com/feed/atom/WordPress/wp-content/uploads/sites/1600746/2020/05/cropped-favicon-32x32.pngOn Behalf of Bailey & Bailey, LLChttps://www.bblawny.com/?p=469132024-02-19T22:39:42Z2024-02-19T22:39:42ZThe state requires two adult witnesses
Most lawful wills in New York are written documents, and those wills are subject to witness requirements. Generally speaking, there need to be two outside witnesses who can attest to someone's cognitive function and identity. Those witnesses must sign the documents, although they do not necessarily need to witness the testator signing the paperwork.
Instead, they must communicate with the testator and affirm that they signed the document and are aware of the terms included in the will. Technically, witnesses in New York can sign after the testator drafts and signs the paperwork. The law only requires the signatures of witnesses within 30 days of the testator's signature.
Any competent adult could be a witness for the signing of a will. It is often a smart decision to select witnesses who do not have an interest in the estate. Someone who is also a beneficiary of the estate might not be an impartial witness because they stand to benefit from the terms included in the paperwork.
Witnesses may eventually need to speak in probate court if there is conflict about the terms included in the will or questions about the testator's mental capacity at the time when they signed the documents. Only those who conform to New York state probate standards have the certainty of knowing that their wills are valid and enforceable after their passing.]]>On Behalf of Bailey & Bailey, LLChttps://www.bblawny.com/?p=468682023-11-21T15:32:17Z2023-11-21T15:32:17ZWhat is the “cliff?”
New York’s estate tax is calculated differently from the federal tax. Typically, when determining whether a estate is large enough to be subject to New York estate tax, only the amount that is designated to go to any person besides the surviving spouse or a charity is counted. If that amount is below the threshold, which increases each year, it’s not subject to New York estate tax. For 2023, that threshold is $6.58 million.
There’s still some exemption available on any amount slightly over the threshold. However, if the estate’s value is more than 5% over it, that’s what’s known as the “cliff,” and the entire amount is subject to tax.
What about gifting to decrease the value of your estate?
Gifting during one’s lifetime is a popular strategy – particularly because New York. unlike some states, has no gift tax. (The federal government does, so you need to be aware of that.) You may choose to give jewelry, art, stocks, real estate, cash and other assets to family while you’re still around. This will bring down the value of your estate.
It’s crucial to be careful about the timing of these gifts. New York has a three-year “clawback” rule. That means if a person passes away within three years after they’ve gifted assets, the value of those assets is “clawed back” to the estate. This can make late-in-life attempts to reduce your estate value fruitless. Note that assets not located in New York typically aren’t subject to clawback.
It's a lot to consider. That’s why it’s wise to take the time and consideration needed to protect your assets for future generations and the causes you care about. It can help to work with financial and tax advisors in addition, of course, to seeking sound legal guidance, when crafting an approach.]]>On Behalf of Bailey & Bailey, LLChttps://www.bblawny.com/?p=468672023-08-18T15:39:27Z2023-08-18T15:39:27ZThe beneficiary designation
Proper beneficiary designations are vital to ensure that the life insurance proceeds go to intended recipients and avoid probate. You should choose a beneficiary when you initially set up your plan. The insurance company can pay this beneficiary directly when you have passed away. Beneficiary designations generally override instructions in a will. If you want to change how the money will be distributed, then you need to change your designations.
For example, say that you had two children when you decided to buy a life insurance policy. You named them both as beneficiaries and said that they should split the money. But then you had another child, and you simply added into your will that the first two siblings need to share their life insurance with the third. Those two older siblings would have the option to do this if they wanted to, but they wouldn’t be legally obligated to do so because the insurance company is still only going to send the money to the two individuals who are named in the policy.
Your legal options
Remember that your will only governs your estate. Before the policy is paid out, it is not part of your estate. To better ensure that your life insurance policies are integrated effectively into your estate plan, take the time to carefully consider all of your legal options. You may need to consider tax implications, choose appropriate ownership structures and make beneficiary designations that align with your broader estate planning objectives as you move forward.]]>On Behalf of Bailey & Bailey, LLChttps://www.bblawny.com/?p=467632023-05-09T17:33:13Z2023-05-09T17:33:13ZWhat about my spouse or one of my kids?
New Yorkers often name their spouse as executor. Your husband or wife might be an excellent choice if you predecease them. But if they are not experienced in financial matters or struggling with dementia, being an executor might be more than they can handle. And if you are unmarried, divorced or widowed, you will have to pick somebody else.
Alternatively, you could pick one of your children. However, your children might currently still be minors and unable to be executors. Some adult children have a strained relationship with their parents, or are struggling with mental illness or drug addiction, so they are not an appropriate choice.
Other options
Though most people choose a relative, you don't have to. A trusted friend can be your executor, as can a professional like a banker or attorney who regularly handles probate matters and is familiar with your affairs. The choice depends on your family situation, your personal preferences and other factors particular to you. You can also amend your will to change your executor at any point.
If you are unsure, you can always discuss whom to pick as executor with your estate planning attorney.]]>On Behalf of Bailey & Bailey, LLChttps://www.bblawny.com/?p=467622023-03-02T20:58:33Z2023-03-02T20:58:33ZControl over the trust
One of the biggest differences between revocable and irrevocable trusts is that you can change the terms of a revocable trust but you can’t change the terms of an irrevocable trust. This one distinction between these two types has to do with the type of control you’ll have over either option.
If you establish a revocable trust, you’ll retain control over the assets in the trust. You can do as you please with the trust, including dissolving it. This approach comes with some drawbacks, namely that creditors can seek to be paid using the assets in this kind of trust since you still have control over them.
An irrevocable trust moves to the control of a trustee once it’s created. You won’t have any control of the assets after the trust has been established. If you want to change the terms of the trust, including completely dissolving it, you’ll have to seek a court order or the full agreement of the beneficiaries. In exchange for the loss of control over the assets in the irrevocable trust, you’ll gain tax benefits and protection from creditors.
Funding the trust
The protections of the trust are the strongest after the trust is created and funded. You must transfer the assets into the trust in order for it to be funded. Funding the trust may be costly, so that’s a consideration to think about when you’re creating your estate plan.
Trusts can be a valuable part of an estate plan, but only if they’re set up properly. It’s crucial that you clearly outline your wishes so that the legal professional who is helping you can ensure that they’re suggesting the correct type of trust to meet your needs.]]>On Behalf of Bailey & Bailey, LLChttps://www.bblawny.com/?p=467612022-11-21T20:51:27Z2022-11-21T20:51:27Zcreate trusts as a means of qualifying for Medicaid.
What are the primary benefits of creating a trust as part of your Medicaid planning process?
You can get benefits quickly
Medicaid has very strict limitations for both personal property and income for applicants. Almost everything you own other than your house could count against you when you apply for Medicaid, which is why you may want to create a trust.
The trust becomes the primary owner of those assets, which means those accounts won't prevent you from qualifying or trigger a penalty. Penalties can force you to pay on your own for many months of care and can leave you without the support you need. Given that up to 60 months of financial transactions are subject to scrutiny, advance planning is crucial.
You can protect your home from estate recovery efforts
Your house won't prevent you from getting Medicaid when you need it, but it will be vulnerable to claims by the state after your death. The government can ask the probate courts for any property in your name, possibly including your home, to help repay the cost of your care before your death.
Property that you move into a trust well before you require Medicaid benefits may not be at risk of creditor claims or Medicaid estate recovery efforts during estate administration. Your home and other assets may pass to your intended beneficiaries instead of the government.
Learning about the benefits of using a trust to plan for Medicaid might inspire you to think about your future and your legacy.]]>On Behalf of Bailey & Bailey, LLChttps://www.bblawny.com/?p=467592022-08-22T21:00:32Z2022-08-22T21:00:32ZWhen are oral wills legal in New York?
Oral wills, also known as nuncupative wills, are only valid in a few specific situations. Those include if:
The oral statements are made by someone who is in the military.
The oral statements are made during a war or armed conflict.
The oral statements are made while that person is serving.
Additionally, mariners at sea, as well as those serving or accompanying those in the armed forces may also be able to create oral wills under extreme circumstances.
What’s the problem with verbal, or oral, wills?
The biggest issue with these types of wills is that they simply are not easy to verify. When you write down what you want when you pass away, for example, there is a letter available detailing all your wishes. Unlike an oral will, there will be signed witnesses and could be a notarization as well.
A written will is stronger than an oral will under most circumstances, and in many cases, it’s all that will be accepted.
What can you do to prove an oral will?
Generally speaking, there will need to be witnesses to the will and some proof that the person created this will on their deathbed. That can be very hard to prove, so if someone’s last wishes are stated on camera, then that could be helpful for proving that the will was made legally if you appear in court.
Oral wills are complex, and they generally do not work well in terms of protecting yourself or your assets. While you can, it’s important to set up your own written will. Even if it’s not exactly what you want, you need to know that you have something in place to protect your estate.]]>On Behalf of Bailey & Bailey, LLChttps://www.bblawny.com/?p=467572022-05-16T19:34:45Z2022-05-16T19:34:45ZHow do New York estate taxes work?
Your executor will have to provide information about your estate plan and your assets to the New York probate courts. In scenarios where the total value of your estate is higher than the current limit for estate tax purposes, your executor will need to pay taxes to the state of New York and possibly the federal government before they distribute property to your family members and other beneficiaries.
At least under the end of 2022, a New York estate worth less than $6,110,000 is excluded from estate tax obligations. If the total value of the estate exceeds that cutoff, then the executor will need to pay taxes to the state. The tax rate depends on how much the estate exceeds the limit, and it ranges from 3.06% to 16%.
Of course, large estates will also have to worry about federal estate taxes. The current federal exemption limit is $12,060,000, and the tax rate is progressive, just like the rate in New York. The maximum rate is much higher, however, as it maxes out at a massive 40%.
How do you plan for estate taxes?
There are several ways to limit the estate tax obligations your loved ones will have when you die. Making gifts now while you are still alive can reduce the value of your estate to a point where the taxes no longer apply. Adding a trust to your estate can reduce the property you hold in your own name and achieve the same goal.]]>On Behalf of Bailey & Bailey, LLChttps://www.bblawny.com/?p=467562022-02-17T22:39:40Z2022-02-17T22:39:40Zreplace the need for a will, but having only a trust isn’t practical for most people. Trusts are usually more complex and expensive to set up, which is one consideration. You may also have assets that you don’t want to place into a trust or assets that you don’t remember to place into a trust, and not having a will would make it hard to pass those on without probate.
Using a living trust and will together could be a better option
For some people, having a living trust and will together is a better option. In the living trust, you can name beneficiaries for certain property. In the will, you can instruct how taxes and debts should be paid from your estate or name an executor. You can establish a guardian for your minor children or name property managers to take care of your children’s property.
While a living trust helps you avoid issues like conservatorships or court challenges, it isn’t necessarily enough to only have a living will on its own. Similarly, a will protects you in many ways, but it may not be as protective as a living trust in terms of helping your family avoid probate or similar issues.
A stronger estate plan is one that is molded to your needs
Everyone has different circumstances in their lives that they need to consider when setting up a will or trust. Since no two people are exactly alike, it can be hard to know what kinds of legal documents are needed and which you may be able to avoid using.
It is worth discussing the benefits of wills and trusts when you start working on your estate plan, so you can choose a combination of legal protections that will help you and your family be in the best position if you are incapacitated or pass away.]]>On Behalf of Bailey & Bailey, LLChttps://www.bblawny.com/?p=467282021-11-17T18:53:21Z2021-11-17T18:53:21ZYou could incur tens of thousands in attorney fees
Title insurance protects homeowners from claims that someone else actually owns their property. Such claims are rare but can result in legal battles when they do occur.
Without a title insurance policy, a homeowner facing a title claim will have to pay out-of-pocket for an attorney to represent them in civil court. Depending on the circumstances, that could amount to tens of thousands of dollars in legal costs just to defend the ownership of a property that you have paid on for years.
You could lose everything you ever invested in the property
Paying all of that money for legal representation does not guarantee success. The possibility exists that the judge will ultimately rule against you and determine that the property actually belongs to the person who brought the claim.
In that situation, the other party assumes title, and you lose your ownership. Your down payment, years worth of mortgage payments and any investments you've made in repairing or upgrading the property will disappear with that judgment. Title insurance protects you by reimbursing you for the value invested in the home if you lose a title-related court case and helps you pay for an attorney to defend your ownership rights.
Understanding the value of title insurance can help you make more informed decisions during your upcoming real estate transaction.]]>