WILLS AND ESTATES. Arthur D. Sederbaum, Esq.

9 WILLS AND ESTATES Arthur D. Sederbaum, Esq.

WILLS AND ESTATES Q. How old does a person need to be in New York to make a will? A. Eighteen. In addition, the testator must be of sound mind and memory, and have made the will free from undue influence. Q. Can I write out my own will? A. Yes, and you can also perform an appendectomy upon yourself. It would be wiser to seek professional advice in both instances. Q. How many witnesses do I need? A. The will must be signed by you (the testator) in the presence of at least two witnesses. In the alternative, you could sign the will alone and later acknowledge that the signature is your own before each of the two witnesses. Q. Do the witnesses need to read the will first? A. The witnesses need not know the contents of the will. However, the testator must publish the will to the witnesses, that is, confirm to them that the instrument is indeed his or her will. Q. Can one of the witnesses be a person who is a beneficiary of a legacy under the will? A. Yes, but that would void the legacy. It is best that the witnesses be disinterested. Q. How many times can I change my will? A. Since a will is ambulatory, that is, not effective until one dies, it can be changed as many times as necessary. Q. Can I change my will by writing in new instructions? A. No, there should be no writing on the will after it has been executed. If you wish to change your will, you should add a codicil or write a whole new will, either of which requires validation by two witnesses. Q. Is a photocopy of a will valid? A. No. Q. If we are adding a codicil to our will, does it have to be witnessed by the same two people who witnessed the original will? A. No, any two witnesses would make the codicil valid. Q. Can I leave more of my property to one child than the others? A. Yes. New York has no requirements that any property be left to a child. The only person to whom property must be left is a surviving spouse. 141

UNDERSTANDING THE LAW Q. I own a collection of musical instruments which I would like to leave to various relatives and former students. Must I list each individually in my will? Would I have to rewrite my will whenever I acquire a new instrument? A. If you wish specific items of personal property to go to specific individuals, you should list each item in your will. If you want your property (such as musical instruments) to pass as a collection to one individual or to a school or charity, you would not have to rewrite your will whenever you acquire a new instrument. Q. How can I provide for my grandchildren in my will? They are quite small now, but I would like to leave them something to help out with college expenses. A. Your will can provide that your grandchildren inherit property upon attaining certain ages. The will can also provide that the property be held for use to pay college expenses or any other payment that you desire. Q. I have named my wife as beneficiary of my employee insurance policy. Do I need to include this in my will? A. No, since by operation of law, the property passes to the beneficiary designated in an insurance policy or, similarly, a pension plan or IRA. Q. My husband and I have a joint checking account. Can I withdraw money after he dies or are those assets frozen? A. Under present New York law, if the surviving joint tenant furnishes proof of death of the co-tenant, the survivor can withdraw the funds. Q. My son and his wife are newlyweds with very few assets. Don t they still need a will? A. Yes. The size of an individual s assets does not change the fact that he or she needs a will. For example, you would need to designate a guardian for your minor children, even if your assets are not significant in value. Q. My wife and I have reciprocal wills. Are they invalid if we get divorced? A. No, but in most instances the separation agreement and divorce decree will provide that bequests to the divorced spouse are invalid. The safest measure is to execute a new will. Q. My spouse and I had wills drawn up when we lived in another state. Are the wills valid in New York? A. Yes, as long as they were executed in accordance with all of the requirements of the state in which they were drawn. 142

WILLS AND ESTATES Q. Would a will drawn up in New York be valid if I retire in Florida or would I have to have a new will drawn up there? A. Most states, including Florida, recognize wills duly executed in other states. However, when an individual changes the state of permanent residence, it is always advisable to consult with an attorney in the new state so that various laws can be complied with. Q. In the event of an emergency, such as an airplane crash, is a handwritten will valid? A. Any handwritten will is valid provided it is signed and witnessed by at least two individuals. Q. Can I videotape my will? A. No, since the law requires that the will be in writing. Videotaping is a relatively new development, and the law may indeed change in the future. Q. What does the executor of a will do? A. The executor carries out the terms of the will and manages the property until all provisions of the will have been effected. The executor collects all assets in the name of the deceased person; pays all debts, funeral and administrative expenses; files tax returns prepared by an attorney and accountant; and is responsible for keeping the property well invested and productive. Q. Whom should I name executor of my will? A. Your executor should be someone whose judgment and integrity you trust, who knows your affairs and the members of your family, and who will be readily accessible to the attorneys for the estate. You may also wish to name a co-executor to assist the executor in the performance of his or her duties particularly if the estate is large, the executor must continue your business, or there are complex will provisions. You should also designate substitute executors in case the executors named fail to qualify or cease to serve. Q. Can I name my spouse executor of my will? A. If your spouse meets the requirements listed in the previous question, then he or she would be an ideal choice to act as an executor. This is especially true since the spouse will, in most instances, be the primary beneficiary of the will. Q. My brother lives in another state. Can he still be executor of my will? A. Yes. Q. What happens if the executor I have named dies before I do? A. The substitute executors named in the will take on the duties of executor. If no successor is named, the Surrogate s Court (the court having jurisdiction over all 143

UNDERSTANDING THE LAW matters of decedents estates) can be petitioned to choose someone from the list of beneficiaries under the will to serve as successor executor. Of course, the nominated executors death or incapacity should be a signal to you to consider executing a codicil or a new will. Q. Is the executor paid for his or her work? A. Yes, the executor is entitled to be paid fees, called commissions, for his or her work. The rate of payment is fixed by the statutes in New York based upon the size of the estate administered. Q. Do my spouse and I have to make separate wills? A. Every person who owns property should have a will. Therefore, both husbands and wives should have wills of their own. Q. Where should wills be kept? A. A will should be kept in a very safe place so that it will not be lost or destroyed. If a testator keeps the will in his or her own safe deposit box, a court order will be necessary to open the box after death in order to retrieve the will. Therefore, the will should be kept in the safe deposit box maintained by the attorney who drafted the will. Q. What happens if I lose my will? A. You should immediately contact an attorney and write a new will. If a will cannot be found after someone dies, it is presumed that the testator revoked the will by destroying it. That presumption is very difficult to overcome and in many instances the case is treated as if the testator had died without a will. Q. What happens if I die without a will? A. If you are a New York resident, the laws of the state will take over and direct how your property is to be distributed. The statutes are based upon the assumption that the individual wished to leave all property to his or her closest relatives. The major problem with dying intestate, as it is called, is that the law was written without regard to individual needs, and distribution of the property rarely coincides with an individual s particular objectives and interests. Q. What would be my first step in processing a will after someone dies? A. The first step would be to retain a lawyer to file the will in the Surrogate s Court for probate. Q. What is probate? A. Probate is the process by which the Surrogate s Court declares that the document is a valid will and that the executor is empowered to transfer property and pay all valid 144

WILLS AND ESTATES claims in the name of the deceased individual. The court must be satisfied that all the requirements for making a will were followed, so that the will is indeed valid. Q. How long does it take before an estate is all settled? A. The length of time depends on the nature of the assets, the identity of the beneficiaries, and the debts of the estate, and whether federal and New York estate tax returns must be filed. Q. Can an estate be reopened if new assets are discovered? A. Yes. An executor is responsible for accounting for all property coming into his or her hands. Therefore, if additional assets are discovered, the executor must account for the disposition of that property. Q. How do I find out whether my great-aunt who was living in another state left me anything when she passed away last month? A. Get in touch with a lawyer in that state, and provide the lawyer with the name, date of death, and resi dential address of your great-aunt. Since wills are public documents, the lawyer will be able to check the court records for the will. Q. My mother is senile and in a nursing home. I don t think she has a will. How can I find out for sure and can a valid will be made for her in her condition? A. The only way to find out if your mother has a will is by checking her personal papers to try and find out the name of the attorney who could have drafted the will. As far as making a will for your mother in her present condition, its validity would be doubtful since New York law requires that a person making a will be mentally competent. Q. My godmother always told me that her jade necklace would be mine someday. I discovered that her daughter-in-law gave it to a niece. Is there any way I can claim it? A. If it can be shown that the daughter-in-law disposed of the necklace without your godmother s consent, a proceeding can be started to claim it. The proceeding would be brought by the executor of your godmother s will. Q. My husband, Don, died of a heart attack when he was only 38, leaving me with two small children. Now a young man of 19 from Don s hometown says he was fathered by my husband and he deserves a share of the estate. How can I find out if this is true and, if so, is he entitled to any inheritance? A. If your husband died without a will, his estate would be shared by you and all of your husband s children. However, the burden of proof is on the young man to show that he is indeed your husband s son. 145

UNDERSTANDING THE LAW Q. When my great-aunt was undergoing surgery last month, she told one of the nurses whom she wanted to inherit her things. She passed away a week later. Does the information she told the nurse cancel out the will she had drawn up years ago? A. No. Nothing cancels out the provisions in a will except a later dated instrument executed in accordance with all formalities. Q. My sister s boy has AIDS and has gone into debt to pay his own medical expenses. Is she liable for these debts after he dies? A. No individual is liable for the debts of another except for burial expenses. If the estate of the deceased individual cannot pay for the burial expenses, the next of kin is responsible for them. Q. My husband left me years ago. Can I have him declared dead and claim his insurance? A. There is a provision under New York law which states a person must be absent for a minimum of five years before the beneficiary is entitled to claim a death benefit. In addition, a formal proceeding must be commenced with the Surrogate s Court to declare a person legally dead. Q. In my father s will, he left $5,000 to Melinda. What happens to the money if we don t find her? A. The Surrogate s Court will issue a decision on that question based upon the court s determination of what your father intended. Thus, every effort will be made to ascertain who Melinda is. Q. My neighbor says he has a living trust set up for him and his wife. What is that? A. A living trust is simply a trust which is created by an individual during his or her lifetime. The trust can be revocable or irrevocable and can name the creator as a beneficiary. Usually a trust such as this is created so that the property can be administered on behalf of the cre ator of the trust by another individual or by a profes sional fiduciary or bank. Q. How do I set up a trust for my children and how do I find a reliable trustee to handle it? A. First you must decide whether you wish to set up a trust for your children that takes effect while you are alive or after your death, as a provision in your will. Once you have made that decision, seek an attorney to draft either a will or a trust agreement. The attorney will aid you in determining who the trustee should be. Q. Can I name myself trustee for trust funds I m setting up for a niece and nephew? A. Under a recent change in New York law, yes. 146

WILLS AND ESTATES Q. Can I set up a trust to care for my pet cat after I die? A. Yes. Q. If the trustee dies, what happens to the trust? A. The trust instrument should provide for a successor-trustee. If no successor is provided, a court proceeding will be necessary. Q. What happens if the trustee is not doing a good job? A. Many trusts are drafted containing provisions detailing how the trustee can be replaced. Q. Ten years ago, I set up a trust fund for my nephew Michael. Now he is a teenager and is in with a bad crowd. Is there any way Michael can access funds from the trust before he turns 21? A. Consult the terms of the trust instrument. Since your nephew is still under the age of 18, the funds could not be paid to him directly. In most trust instruments, the trustee will have wide-ranging discretion to pay funds to a minor. Q. Can the beneficiary of a trust be changed? A. If the trust is irrevocable, the beneficiary cannot be changed. If it is revocable, the terms of the trust may provide that the terms can be amended to change the beneficiary. Q. Will my spouse or children have to pay estate or inheritance taxes on what they inherit from me? What s the difference between the two taxes? A. Following the death of an individual, the federal government and almost all state governments impose either an estate or inheritance tax. However, the threshold for imposing an estate tax is $1 million for New York State and, beginning in 2006, $2 million for federal. The federal law is in a state of flux and, by the time this book is published, may be quite different. The difference between the estate and inheritance taxes is that an estate tax is imposed upon the property owned by the deceased individual, that is, it is imposed against those assets, whereas an inheritance tax is imposed upon the recipient of the property. Both the federal tax and the New York tax are estate taxes, based on the value of the estate after subtracting deductions for funeral, debts, administrative expenses and deductions for property passing to a surviving spouse or charity. Q. Do I have to pay taxes on the $10,000 I received as beneficiary of my uncle s insurance policy? A. Since the federal estate tax and New York estate tax impose the taxes on the estate, you do not have to pay the tax. However, you may be responsible for reimbursing the estate. 147