What Happens if I Die without a Will?

What happens if I die without a Will featuring Daredevil Dan

If a person dies without leaving a Last Will & Testament, that person has died intestate.  Intestacy is the default rules in New York has as to who would inherit your property if you did not have a Will.  It is codified in EPTL 4-1.1.  The relatives who are entitled to a share of the decedent’s estate are called distributees.

 

Daredevil Dan Example:

Daredevil Dan got caught up in this Pokémon Go craze.  While he was trying to catch a Pikachu in Bushwick, Brooklyn he accidentally stepped in front of the B52 bus and that was the end of Daredevil Dan.    Daredevil Dan never made it to Ira K. Miller & Associates for any estate planning and died without a Last Will & Testament.  The intestacy laws of New York would determine who inherited Daredevil Dan’s estate.

 

If Daredevil Dan had:
A spouse and no children Spouse inherits everything
children* but no spouse His children would inherit everything
spouse and children* His spouse would inherit the first $50,000 of Daredevil Dan’s estate plus half of the balance. His children* would inherit everything else.
parents but no spouse and no children* His parents would inherit everything
siblings (brothers or sisters) but no spouse, children*, or parents the siblings inherit everything
* If a child dies prior to Daredevil Dan and had children of their own, then Daredevil Dan would have grandchildren. Those grandchildren would step into the Daredevil Dan’s child’s place and inherit in place of the child.

Example 1:

Daredevil Dan was married to Brittany and they did not have any children.  Brittany would inherit Daredevil Dan’s entire estate

 

Example 2:

Daredevil Dan was not married but had three children, Anna, Betty, and Charlie.  Each child would be entitled to 1/3 of Daredevil Dan’s estate.

Example 3:

Daredevil Dan was not married but had three children, Anna, Betty, and Charlie. Betty passed away two years before Daredevil Dan and had two children, Devin and Emma (Daredevil Dan’s Grandchildren). Under this scenario Anna would inherit (1/3), Charlie would inherit (1/3) and Devin and Emma would inherit Betty’s 1/3 share.  Therefore, Devin would inherit 1/6 (.5 of the 1/3) of Daredevil Dan’s estate and Emma would inherit 1/6 of Daredevil Dan’s estate.

Example 4:

Daredevil Dan was married to Brittany and had three children, Anna, Betty and Charlie.  Daredevil Dan died with $170,000 in his bank account which he received from his stunt of swimming in the Gowanus Canal.

In this scenario Brittany would inherit the first $50,000 and would receive ½ of the remainder. The remainder = $120,000 (170,000-50,000=120,000) (1/2 of $120,000 is $60,000). Brittany would inherit $110,000 of Daredevil Dan’s estate.

Anna, Betty and Charlie would each receive $20,000 (1/3 of $60,000).

 

Example 5:

Daredevil Dan was married to Brittany and had three children, Anna, Betty and Charlie.  Betty passed away two years before Daredevil Dan and had two children, Devin and Emma (Daredevil Dan’s Grandchildren).  Daredevil Dan died with $170,000 in his bank account which he received from his stunt of swimming in the Gowanus Canal.

In this scenario Brittany would inherit the first $50,000 and would receive ½ of the remainder. The remainder = $120,000 (170,000-50,000=120,000) (1/2 of $120,000 is $60,000). Brittany would inherit $110,000 of Daredevil Dan’s estate.

Anna and Charlie would each receive $20,000 (1/3 of $60,000).

Devin and Emma would each receive $10,000 (1/2 of the $20,000 that Betty would have received if she were living)

 

 

Do not let New York intestacy laws determine who inherits your money. For more information about different scenarios or Estate Planning, please contact Ira K. Miller & Associates

 

What is a Probate Estate?  

Probate is defined as the official proving of a Will.  Many people think that when they create a Will all their assets will be distributed according to their will. This may not be the case. The only assets that can be administered according to the terms of the Will are assets in the probate estate.

Assets includible in the probate estate are:

  • Any asset owned by the decedent alone
  • Any real property owned in the decedents name alone or assets owned in the decedents name that are titled tenants in common.
  • Personal property such as household items or jewelry as long as this property is not in trust.

Assets NOT includible in the probate estate are:

  • Joint accounts
  • Accounts that have beneficiaries attached to them
  • Any real property titled joint tenants with rights of survivorship or tenants by the entirety
  • Any properties that are in trust

Seven Benefits of a Revocable Living Trust

 

Trust

Many Americans simply leave a will to distribute their assets upon their passing.  However, the creation of a Revocable Living Trust creates several benefits unavailable to those simply leaving a will. Here are seven benefits to creating a Revocable Living Trust

1) Avoiding Probate- A great benefit of a living trust is that it avoids probate. Probate means the official proving of a will.  This official proving is done at the Surrogates Court in the county where the person was domiciled before their passing.  In order to probate a will, a copy of the will must be distributed to everyone who would inherit from the person’s estate if there were no will.  In some cases, locating these people who would inherit can be very difficult, costly, and time consuming.  By creating a trust, this issue can be avoided.

2) Privacy- Another key distinction between leaving a will and creating a living trust is the level of privacy. A living trust is not made public and upon death of the grantor, the distribution of an estate is done in private.  A will becomes a public document once it is probated and anyone can view how you left your estate upon your passing.

3) Quicker access to funds- Probating a will and having the Surrogates Court grant authority to the executor can take months. With a Revocable Living Trust, the successor trustee can gain access the person’s funds quickly and distribute them according to the terms of the trust.

4) Revocable- The trust can be changed, revoked, or amended at any point during the grantor’s life. Once the grantor dies, the trust becomes irrevocable.

5) Protect your beneficiaries from creditors- Terms can be placed in the trust to protect your beneficiaries from creditors. If a trust owns the beneficiaries funds, creditors cannot gain access to those funds.

6) Avoid Ancillary Probate- If a person has property in multiple states, they can deed or transfer all property into the trust. Upon the passing of the grantor, the property can be distributed according to the trust. If a person has a will and resides in New York and has property in Florida, a court proceeding for probate would have to be started in New York. Following the executor given legal authority under the will by the Surrogates Court of New York, a second proceeding for Ancillary Probate would have to be started in Florida in order for the executor to collect the property in that state.

7) More Specific Terms- A trust gives the grantor more options as to when a beneficiary receives an inheritance or what condition is necessary for the beneficiary to receive their inheritance.

A Revocable Living Trust is more complex and expensive than a simple will, however, there are many benefits associated with it.

The Power of the Power of Attorney

A power of attorney is a very interesting and possibly powerful document. The document gives a person you choose, your agent, the power to act for you.  The powers given to the agent can be incredibly broad or very specific. For instance, you can narrowly tailor an agent’s power to act only for real estate transactions. You can go as broad as to give an agent power to gift away all a person’s assets for Medicaid planning.   That person may even be given authority to make gifts to themselves.   Your agent should be a person that you trust implicitly.  A power of attorney is a very important estate planning tool and can possibly prevent the need for a guardianship.

Powers of attorney can be durable or springing. A durable power of attorney will continue through a person’s incapacity.  A springing power of attorney, ‘springs’, into action when a person becomes incapacitated.  The problem with a springing power of attorney is, who decides that you are incapacitated? Many springing power of attorneys require that two or more certified doctors declare you to be incapacitated. This can become an issue due to HIPAA violations and can result in costly court hearings.  A durable power of attorney is recommended.

Your agent is under a fiduciary responsibility to act in your best interest.  The agent should also keep records and receipts of all payments through the power of attorney and needs to keep the property separate and distinct from their own assets. Ira K. Miller & Associates has over 35 years of experience within estate planning & power of attorneys. For further questions or to request a consultation please feel free to give us a call at (718) 875-2191 or fill out an online contact form.

“Running Roughshod?” – A Case to Ponder

An important case has recently been decided and should be thoroughly reviewed by those who practice Article 81 Guardianship.   In a bitterly split panel of the Appellate Division,  First Department, the majority affirmed sanctions imposed on an attorney in an Article 81 guardianship hearing.  The majority, however, reduced the amount of sanctions imposed.  Justice Andrias wrote the majority opinion for In Re Kover, 2015 N.Y. Slip Op 7802 (N.Y. App. Div., 2015)  in which he found that two affirmations submitted by the Alleged Incapacitated Person’s (AIP) attorney were “replete with misrepresentations, omissions, distortions, and statements taken out of context.”   Justice Saxe wrote a scathing dissenting opinion stating that “[t]he majority has extended the law of sanctions in the First Department beyond any existing precedent to the point where it will dangerously chill zealous advocacy and impair the independence of the trial bar.”  Despite the disagreement on the issue of sanctionable conduct, both the majority and dissent agreed on what is necessary for consent in an Article 81 Guardianship hearing. The majority, however, states that consent was before this Court and therefore not an issue to be decided on this appeal.  The facts of  In Re Kover, are as follows:

In July 2012, Self Help Community Services, Inc. petitioned for a Guardian to be appointed over the person and property of Dr. Dworecki, a 94 year old woman. Dr. Dworecki obtained representation who submitted opposition to the guardianship petition on behalf of Dr. Dworecki. Included in this opposition was an affidavit of a treating physician which stated that Dr. Dworecki was competent and did not need a guardian. Dr. Dworecki’s longtime friend Edward Muster had a valid power of attorney and Dr. Dworecki specifically stated she wanted Edward to control her finances. Mr. Muster was also listed as the Executor and primary beneficiary of Dr. Dworecki’s will.   Dr. Dworecki had no immediate family and Mr. Muster had been Dr. Dworecki’s friend and financial advisor for over 22 years.

On August 9, 2012 a conference was held with counsel for each party and the court evaluator to discuss the structure of the proposed guardianship. Afterwards a proceeding was held on the record in which Dr. Dworerki agreed to the appointment of an “interim special guardian for a trial period.”  This trial period was for five months.

On August 10, 2012 the court issued an order appointing Sabrina Morrisey, Esq. as interim special Guardian and stated that Mr. Muster could continue to assist Dr. Dworecki in paying bills but revoked Mr. Muster’s power of attorney.

From August 2012 until January 2013, Ms. Morrissey helped implement many different forms of assistance for Dr. Dworecki.  A status conference was held on January 16, 2013 in which Dr. Dworecki’s appearance was waived due to inclement weather.   At this status conference Dr. Dworecki’s attorney stated that:

“I think that the temporary guardianship would be easier for our client to accept and consent to if there were a joint temporary guardianship with Ms. Morrissey and Mr. Muster under those circumstances.  And Mr. Muster has indicated that he would defer to Ms. Morrissey on all matters of the person with respect to that.  And they could deal with that as a joint capacity. Our client certainly, if Mr. Muster and Ms. Morrissey, together, given the relationship that has developed, were indicated to be the joint temporary guardians, [Dr. Dworecki] would consent to that arrangement.”

 

This consent is where many problems in the case stemmed from.

Both the majority and dissent agree that consent cannot be obtained from counsel without the AIP present.  The majority states:

“We agree with the dissent that a court should not accept counsel’s representation that the AIP has consented to the appointment of a guardian where the AIP is not present. Pursuant to article 81 of the Mental Hygiene Law, the court must first determine whether the AIP has the requisite capacity to consent, and must the make a finding of the AIP’s agreement to the terms of the guardianship, on the record.”

 

The dissent states:

 

“In order to obtain the consent necessary to avoid the need of an affirmative adjudication of incapacity before instituting a guardianship, the court must inquire of the client herself to ensure that she agrees to the guardianship and its terms.  This, the court failed to do, relying instead on counsels presumed consent on behalf of his client.”

 

Another important point in the history of this case, was the consent agreed to by counsel to the AIP appeared conditional on Mr. Muster continuing as the financial “power of attorney” for Dr. Dworecki’s funds.   However, the trial court, removed Mr. Muster stating that he had a conflict of interest as executor and primary beneficiary of Dr. Dworecki’s Last Will and Testament. The terms of the proposed order had Mr. Muster as nominal co-guardian limiting him to paying the day to day expenses of Dr. Dworecki but no longer controlling the rest of her finances, a job which Mr. Muster had done for the previous 22 years. It also appears there was no showing of misfeasance or malfeasance by Mr. Muster. 

In the case at bar, both the majority and dissent agree that the court erred in appointing a guardian based on counsels “consent.” The majority however stated that the consent was not the basis of appeal and said the issues before them where sanctionable conduct by the AIP’s attorney and the denial of attorney’s fees for the AIP’s attorney.

In conclusion, three clear points have come from this decision. First, an attorney cannot consent to a guardianship on behalf of the AIP if the AIP is not present. Second, a court must determine if the AIP has the requisite capacity to consent. Finally, the terms in which an AIP consents must be on the record. The dissent believes that the issue of consent should be decided in this appeal while the majority believes this issue was not raised in the appeal.   Where the majority and dissent differ is on the events that follow the “consent” from the AIP’s attorney.  The majority believes that the AIP’s attorneys conduct was sanctionable for fraudulent and misleading statement while the dissent believes that the AIP’s attorney was zealously advocating for his client.

 

This article was published in the Brooklyn Barrister (http://www.brooklynbar.org/wp-content/uploads/Barrister_Feb_2016_BBA-Web.pdf )