Estate Planning

The word “Irrevocable” usually implies no ability to change. Most people believe that the Trustee is required to adhere to the wishes of the Trust’s creator, even though the times and circumstances have changed. Nonetheless, that is no longer true in the case of New York State.

There are two circumstances where an Irrevocable Trust may be changed or revoked.

The first circumstance exists when the Grantor of the Trust is still alive, wants to make a change and ALL the beneficiaries of the Trust agree with the proposed change.

An incredible book that I read in the past year was “Being Mortal: Medicine and What Matters in the End” by Dr. Atul Gawande. The book is a discussion of the state of American medicine as it relates to end-of-life care. Mr. Gawande argues that doctors often cause more suffering to patients by prescribing completely unnecessary procedures at the end of a person’s life.

I received a call this month from a man who wanted to  receive his share of his father’s building. The property had a value of approximately $4MM. There were 5 children in total, 2 from father’s first marriage (one of whom was this client) and 3 from father’ second marriage.  The caller could not understand why, after the death of his father, the property was being listed for sale by his 3 half-siblings without any input from him.

After I looked up the ownership of the property, I had to tell him the unpleasant truth: He will not get a penny from the sale of this real estate.

According to the most recent data from Credit.com, 73% of consumers had outstanding debt when they were reported as dead, with the average total balance of $62K. Debts included home loans, credit cards, auto loans, personal loans and student loans.

An estate is responsible to pay the deceased person’s debts. If there is sufficient money, the creditors get paid first, and the beneficiaries receive whatever remains.

In a recent case that I saw, a woman lived together with a man for approximately 10 years. She loved him very much and wrote a Will, leaving all of her assets to him. They never married.

Eventually, the couple separated. After a couple of years, the woman began dating another man.

1. Location of Siblings. It is often the case that one sibling provides care and support for an aging parent, while other siblings are distant (either physically or psychologically). While the local sibling provides support, that same sibling may also control the parent’s finances. The same sibling may also bring the parent to an attorney to get his affairs in order.

In 2016, several well-known families had well-publicized fights about estates. These disputes should teach everyone to plan while one has capacity!

Prince

Pop artist Prince died in April 2016 without a Will. Since his death, at least 30 individuals have come forward, claiming to be Prince’s children, spouses, or half-sibling. As of this writing, the judge on the case dismissed most of these claims. It looks like the estate, valued in the hundreds of millions of dollars, will be split amongst Prince’s younger sister and five half-siblings (pending the final results of genetic testing).

1. Schedule a family meeting to discuss your assets and your wishes with them. Create an inventory of your assets and share it with your family. Don’t leave your family in the position of scrambling in their search for documents and assets in the future!
2. Consider giving your children and your spouse passwords to your digital assets and email accounts: Your email may contain a lot of important information.

A Will execution has many formalities - ensure that your attorney actually knows them!

Most people think that writing and signing a Will is easy. I often hear from friends "Any attorney can do it", or better yet "It's so easy, I don't need an attorney, I will do it myself".

Well, do so at your own peril. Remember that the content of your Will is only half of the calculation for getting a Will probated, since Wills can and often do get invalidated based on improper execution, particularly when the Will is executed without an attorney being present. The latest case in point: Matter of Costello, 136 A.

Sometimes adults get adopted. Even though most adults no longer need a parent to make legal and financial decisions for them, adult adoptions still happen for other reasons.

The main reason for adult adoption is usually inheritance. If a person is not related to you biologically or legally, if there is no Will, then the person will not inherit your money. Of course, this issue can often be easily resolved by writing a Will and naming that specific person in the Will.