Why I really, really, really need an estate plan.

In a recent new York Times article, entitled "He Left a Fortune, to No One," highlights the dangers of failing to create even the most basic estate plan.  The subject of the story,  Roman Blum, died without any known heirs or relatives.  His estate valued at approximately forty million dollars,  may escheat, ore revert, to the State.  This is an extreme example.  However, it highlights the importance of having at least a basic estate plan in place.  Preparing a Will, a Living Will, a Health Care proxy and a short form Power of Attorney will go a long way.  Here's why:

1. A will can direct how assets are distributed. 
If you do not have a will, the State in which you are domiciled (your permanent home)  at the time of your death will determine how your assets are distributed.   For example, suppose you are married and have one child. If you die intestate (without a will) in New York, according to the New York State Estates, Powers and Trusts Law, your estate will be distributed as follows: fifty thousand dollars and one half of the estate passes to your spouse and the remainder to your child.  If you have small children, this could mean that your minor child has inherited a substantial amount of money.  A will affords you the opportunity to create a situation whereby a trusted adult, often a "trustee," "custodian" or "guardian," in legal terms, manages the assets for a child and distributes them to the child at a time specified by you, the parent. 

2. You can name a guardian for your minor child if you are a single parent.
You can name a guardian for your minor children in your will.  The death of a parent is a traumatic experience for a child. Naming the person that you wish to raise your children in the event that you die is one way to help your child deal with the loss of you, the parent.  Children fare much better when there is certainty and stability in their lives.  Naming a guardian may also lessen inter-familial conflict after  your death.  There is much less conflict when the wishes of the deceased are clear. 

3. Your end of life wishes are known to all.
By creating a Living Will your wishes are clear.  A living will is a document that describes in detail how you want to  be cared for when you are no longer able to make medical decisions for yourself. Living wills inform family members and healthcare professionals of your wishes regarding artificial measures used to keep you alive in a situation where there is little or know hope for recovery. 

4.  Medical Professionals and Family Members know who is responsible for making medical decisions for you when you are unable.
A Healthcare Proxy is the person named by you who makes  healthcare decisions for you when you are unable.  This person should know your wishes regarding medical treatment.  Your Living Will will reflect those wishes.

5. A Power of Attorney will enable your Agent to complete financial transactions for you if you are incapacitated. 
Giving a trusted friend or family member power of attorney protects you if you are incapacitated.  The New York Short form Power of Attorney  gives you Agent the authority to pay your bills, buy and sell property, and complete other financial transactions on your behalf.  In a situation where you are unable to pay your mortgage for instance, the power of attorney could be exceptionally useful. 

Standby Guardianships and Children

I read an interesting article by fellow attorney Antonia J. Martinez in the New York State Bar Association's Trusts and Estates Law Section Fall/Winter 2012 Newsletter. When parents are planing their estates, they normally consider who will care for their minor children when they are deceased and do not consider who will care for a minor child in the event of their incapacity.  Enter the Standby Guardianship.

As the author explains, a Standby Guardianship is similar in nature to a power of attorney, which grants the appointee, or agent, the authority to manage the affairs of individuals who cannot manage their financial affairs.   In the case of a Standby Guardianship, a parent names a guardian to take care of a child while the parent is incapacitated.  The guardianship lasts for an initial period of  up to sixty days.  At that point, the guardian has to petition the court to be named permanently. The Standby Guardianship is especially helpful for single parents.  It gives a parent some say in who will care for a minor child in the event of his or her incapacity.

If you have any questions about Standby Guardianships or estate planning in general,  please feel to call or e-mail me:

Robert Maher
Law Office of Robert J. Maher, P.C.
52 Duane Street, 7th Floor
NewYork, NY 10007
212-939-7548
RMaherEsq@gmail.com

Time to Think Ahead

The below article recently published in the New York Times shares a startling statistic: 57% adults in the United States do not have a will.  This means that their estates will be settled pursuant to the laws of their state related to intestacy, the situation where a person dies without a will.  The issues the author raises regarding the uncertainty that exists when a person dies without leaving behind a plan or even a list of passwords are very real. 


http://www.nytimes.com/2013/01/12/your-money/estate-planning/shell-tell-you-its-time-to-think-ahead.html?_r=0&adxnnl=1&ref=general&src=me&adxnnlx=1358960496-3zJaAUnPVK6EkO01Ue5esg

If you have any questions regarding the issues raised in the article or have any questions about preparing a will, health care proxy, living will or power of attorney,  please contact me at RMaheresq@gmail.com. for a  free estate planning consultation

Law Office of Robert J. Maher, P.C.
52 Duane Street, 7th Floor
New York, NY 10007

Executor: Whom shall I choose?

You can choose your spouse, another family member or a close friend to be the Executor of your estate. It is a generally helpful to choose a person who is willing and able to make financial decisions, and who is organized, trustworthy and efficient.  Although the amount of work required depends to a degree on the size and complexity of the estate, the role of executor can require a considerable amount of work.  Executors are entitled to collect fees for their work.  They can also be held liable if they mismanage the estate. So, it is important that the executor seek assistance in administering a decedent’s estate.  

What is the role of the executor?

The Executor (male) or Executrix (female) of a Will makes sure that the dictates of a Will are carried out and is responsible for the administration of a decedent’s Estate.  An Estate is the property owned by a decedent at death that passes to beneficiaries under a will.  It can include cash, jewelry, a house, a co-op and any other property owned by a decedent.   It does not include property owned jointly with another, like a home owned jointly by two spouses, or the proceeds of a life insurance policy.   

The Executor gathers the assets of the decedent and manages them while the estate is probated.  Probate means to file the original will with the court and to notify those required by law of the filing of the will.  The Executor then pays the decedent’s outstanding debts.  If there is a co-op apartment or other property, the Executor may have to sell the property.    The Executor is also responsible for filing the decedent’s final income tax return and a tax return for the estate.  After all of the decedent’s expenses are paid, the Executor distributes the remainder of the decedent’s assets in accordance with the decedent’s will.  Finally, the executor may be required to file an accounting with the court.  An accounting includes a description of all of the income and expenses of the estate and lists any distributions made to the beneficiaries by the Executor. 

Do I Need a Will?

Many people I meet ask, “What will happen if I do not have a will?” In short, the answer is that if you die intestate, without a will, the Surrogates Court or its equivalent (if you live outside of New York State) will make the decisions about your property, your investments and if you have young children and your spouse is deceased, the care of your children. The Court will follow your state's laws related to intestacy in determining how your estate is distributed.

If you wish to direct how your assets will be distributed, you should have a will.  You can leave all of your assets and belongings to one or more specific individuals, charities, or family members.  The first step is naming an executor. Typically, married individuals name their spouses; however, if your spouse is incapacitated or unable, or if you are single or widowed, you can name another individual you trust as your executor. The executor's responsibilities include collecting and organizing your financial papers, gathering your assets, paying any outstanding bills, selling your home if necessary, and answering relatives' questions and making sure that your wishes are fulfilled.  

If you have any questions, please feel free to contact me:

Robert Maher

Law Office of Robert J. Maher, P.C.

52 Duane Street, 7th Floor

New York, NY 10007

212-939-7548

RMaherEsq@gmail.com

Do I need an Estate Plan?

The Wall Street Journal recently ran this interesting article regarding the importance of estate planning for people at different stages of life:

blogs.wsj.com/juggle/2011/10/18/get-an-estate-plan-now/?mod=wsj_share_linkedin&goback=%2Egde_1701677_member_77675248