When I start representing someone who is about to become a Fiduciary (Executor or Administrator) of an Estate, I always talk about “how an Estate finishes”.  Like many things in life and business, if you know where you are trying to go it is much easier to make a good plan to get there.

Not every State handles “estate completion” the same way.  There are two basic approaches:  mandatory accounting vs non-mandatory accounting.

In a mandatory accounting State, there is some proceeding that must be filed so the the Court knows the Estate has been completed and the fiduciary has done what they are supposed to do.  This generally involves filing forms and paying a filing fee, and there are generally time constraints (so if it is not ready to be completed you have to explain why).  I’m not going into more detail because New York (where I practice) is NOT a mandatory accounting State.

In a non-mandatory accounting State, the fiduciary is not required to file anything with the Court to show that the Estate is completed.  This raises two logical questions:

  1. What SHOULD fiduciaries do to complete an Estate and protect themselves?
  2. What happens in New York if there is some issue or problem in completing the Estate?

What a fiduciary SHOULD do is keep good records, communicate regularly with the beneficiaries in a transparent way, file any tax returns that are required, and then….SEEK TO COMPLETE THE ESTATE WITH AN INFORMAL ACCOUNTING.

This is done by showing the beneficiaries what has been done.  This can be done with a letter, or on a spreadsheet, or in any way that shows a bottom line for a proposed final distribution.  With this informal accounting we would send a document called a “Receipt & Release”.  This document essentially says “I know what you did as Fiduciary and I agree it was correct and I agree with the bottom line and I release any claims I may have about this”.  The letter to the beneficiary makes clear that when the Receipt and Release is signed “then you will get your money”.

What if the beneficiaries don’t agree?  Or don’t respond?

While New York is not a mandatory accounting State, the Surrogate’s Courts have an Accounting Department, and there is plenty of law on how one CAN file a formal Accounting Proceeding.  Unfortunately, this happens a lot.  The Accounting Department is where the action is, and most of the really acrimonious disputes are there.

In a nutshell, when a Fiduciary wants approval for what he has done, or what he is proposing to do to complete the Estate, a formal accounting is filed with the Court.  The Court will then issue a Citation to the interested parties, which essentially says “Fiduciary has filed the attached accounting and is asking the Court to approve it.  Come to Court on (date) or a Decree will be issued approving the Accounting.”

If a beneficiary gets such a Citation and wants to dispute something, they come to Court and file Objections to the Accounting.  This then becomes a case, like any other civil litigation….discovery, motions, conferences, etc.

Generally, an expensive, nasty mess.

Which is why it’s better to do a good job as fiduciary and find a way to account informally.

Next post – what if you are the beneficiary and the Fiduciary doesn’t account (formally or informally)…. at that point it’s a “Petition to Compel an Accounting”

 

Basic definition – A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, a fiduciary prudently takes care of money or other asset for another person.

When doing Wills or handling Estates, we are often talking about fiduciaries.  A person who is named as Executor of an Estate, or who is appointed as Administrator of an Estate (in a no-will situation) is a fiduciary.  What does this mean?  Why is understanding this so important?

I usually explain it this way – “A fiduciary has a higher level of responsibility than an individual.  They are responsible to look out for the interests of everyone who has an interest in the thing they are the fiduciary for.  If there is a conflict between an individual’s interest and their responsibility as a fiduciary, they must exercise extreme caution and make sure they fulfill their fiduciary responsibility before looking out for their individual interests.”

Very often a person named as Executor in a Will (who will therefore become a fiduciary) is also a beneficiary.  Is there an inherent conflict of interest in this?  YES, but this is not a prohibition against doing it, it is simply something to heed at all times and to work through carefully.

On the surface, we can see that if a Will names one child of four as Executor, and splits the Estate equally among the four, the Executor should divide the Estate equally and not make their own share higher, or pay their share earlier than the others.  That’s easy.

But there are often others the Executor/fiduciary has obligations to, like creditors and tax authorities.  What happens if the Estate owes taxes, or if a creditor claim arises within the permitted time?  Let’s add the fact that the Executor has marshaled the assets and wants to do right by the other beneficiaries, so he pays them their full shares.  Lo and behold, a timely creditor claim against the Estate pops up but the Estate funds have already been paid out to the beneficiaries.  Guess what?  The fiduciary can  be held personally responsible for breaching their fiduciary responsibility!

Being a fiduciary can often be a difficult and stressful job.  In New York an Executor or Administrator is entitled to be paid a fee for their work.  The fees (called “commissions”) are roughly 5% of the first $100,000, 4% of the next $200,000, 3% of the next $700,000, and so on.  It can add up to some money, but most would tell you, they EARNED IT.  I have to agree.

A few observations about fiduciaries….

  • Selecting an Executor via a Will is a VERY important decision.  Sometimes even more important than naming beneficiaries.  Naming successor Executors in a Will is also very important.  These people will be fiduciaries, so make sure they are up to it.
  • When an Estate is being handled well, usually it’s because the fiduciary understands their responsibility.  When an Estate is not being handled well, or when someone has an issue with the way things are being handled, a “breach of fiduciary responsibility” is generally at the core of any claims.
  • In an Estate Administration (no Will), when people are fighting over who should be appointed fiduciary, they either don’t understand the fiduciaries’ role, or they are fearful that the others don’t.  I have seen this scenario MANY times.
  • The best ways for fiduciaries to avoid problems are to have clear and transparent communications with the interested parties and to keep great records.  Other than outright stealing, nothing will put a fiduciary in a worse position than secretiveness and lack of communication.  I counsel client fiduciaries to be pro-active in communicating with the other interested parties.  I can’t say they always follow my advice, but I KNOW it is the right advice.

I may have given a few practical reasons to do things right, but there is a bigger reason.  If someone named you as Executor, it’s because they TRUSTED YOU.  As difficult as the fiduciary role can be, it is an “honor bestowed”.   That alone ought to be enough for a person behave as a fiduciary should.

If you are that person, remember that.  If you are making a Will, choose someone who will get that!

Sometimes in Surrogate’s Court proceedings there are parties who have an interest in the proceedings but for some reason they cannot legally participate.  This can occur in any type of proceeding:  Probate, Administration and Accounting are the most common.  A party is considered “interested” if the proceeding affects them in some way.  In order to proceed with ANYTHING in Surrogate’s Court, you have to have “jurisdiction” over interested parties.  What this really means is you have to show the Court that the party was legally notified of the proceeding, and they either agree, object or take no position.  Bottom line though, the Court has to know they were notified and given the opportunity to be heard.

In a probate proceeding, the Court must have jurisdiction over anyone who would inherit under intestacy, since these are the only people would would have standing to object.  In an Administration proceeding (no Will), we need jurisdiction over all the inheritors because someone is asking to be named as Administrator, a right that the inheritors also have.

The problem is sometimes the people you need jurisdiction over either cannot consent, cannot legally be served with a notice, or cannot be found.

Here are a few common examples:

  • Minors – in New York a person under age 18 is cannot legally sign a Waiver or object to a proceeding that affects them.
  • People who are mentally or physically disabled.
  • People who are incarcerated.
  • People whose whereabouts are unknown.

If someone fitting any of the above categories is identified as having an interest in a Surrogate’s Court proceeding, the Court will appoint a “Guardian-ad-Litem” (Latin for Guardian for the litigation).  These Guardians represent their ward’s interest in the case and report their findings to the Court.  If they have a basis to file Objections on their ward’s behalf, they are empowered to do it.  Guardian-ad-Litems are usually attorneys who practice in the Surrogate’s Court.  At the conclusion of their service, they file a Report which includes a statement of the time spent, for which they request the Court to set a fee.  This fee is paid by the Estate.

I have been appointed Guardian-ad-Litem many times.  I take the assignments very seriously, and am honored that the Surrogate has the confidence to appoint me. Although many times the reports are pro-forma and state that things are all in order and there is no basis to object, by no means is it always a rubber stamp.  I have filed Objections MANY times, and very often these cases are quite interesting.

For example, I am currently Guardian-ad-Litem in a case where an Administrator was appointed, then found a Will among the decedent’s possessions, which was filed with the Court.  However, they did not try to probate the Will because the Will had writing on it, apparently in the Testator’s handwriting, saying “This Will is no good”. The Will also had sections crossed out.  The Will named a non-family member as the sole beneficiary.  The Administrator took the position that the Will had been “revoked” by the writings on it, and proposed to pay all the money to the decedent’s estranged son.  The Administrator claimed they did not know where the named beneficiary was.  The Surrogate appointed me Guardian-ad-Litem for the beneficiary.   I filed Objections on my wards behalf, because in my opinion it is arguable this Will was not properly revoked.  I then tried to find my ward (who the Administrator claimed they could not find), and within an hour I found her!  I don’t know yet how this will turn out, but at least now the issues can be fairly decided, with all the interested parties being heard from.

I have certain steps I follow when I am appointed Guardian-ad-Litem.  Among the things I do are review the Court file, contact the Petitioner’s attorney and discuss the case, contact my ward (if appropriate), contact other interested parties if necessary, research legal issues, participate in Court proceedings, file a report and any supplemental reports the Court may require.

Anyway, the above are the basics.  In future posts I will discuss other specific Guardian-ad-Litem situations.

What happens if someone involved in an Estate is dead?  These situations are very common.  A few standard approaches apply….let’s look at a few situations:

The most important distinction to know is that PRE-deceased situations are very different than POST-deceased situations.  When I refer to “PRE” and “POST” I am talking about when the person died in relation to the decedent (the one whose Estate we are talking about)

The basic rule is that POST-deceased persons do not lose their rights.  Generally, the interest a post-deceased person had in an Estate now belongs to THEIR Estate.

A quick example – A widow with three adult children dies with no Will.  Her heirs would be her three adult children.  Some time passes and no action is taken in this woman’s Estate and then one of her adult children (let’s make him a son) dies. What are the shares in the widow’s estate?  It would be one-third each to the two living children and one third to the heirs of the post deceased son.  Those heirs would be determined either by the son’s Will, or if he had no will, by HIS heirs under intestacy.  Let’s give the post-deceased son a spouse and 4 minor kids, and no will.  So now, his one-third interest will be divided within his Estate under intestacy ($50K + half to the spouse and the other half among the minor children).

Wait, it gets worse…..if we want to move forward with the widow’s Estate, we can’t even get started until we get jurisdiction over the post-deceased son’s estate.  That is, we have to establish the post-deceased son’s estate before we can even move forward with the main estate.  It is not unusual to process a post-deceased estate BEFORE you can even do the main Estate.

Pre-deceased situations are different.  Let’s take the above example and make the adult son pre-deceased.  In that case, the widow’s Estate would go one-third to each of the the two surviving children and one-third split among the 4 grandchildren.  The daughter-in-law would be OUT.  (Note – in a post-deceased situation she would be IN for a meaningful share).

I have been involved in Estate with multiple “estates within estates”.  These complexities must be addressed or nothing can move forward.

There are a few important lessons in all this:

  • Estates should be addressed promptly.  For various reasons things can get delayed.  I have seen situations where nobody did anything in an Estate for 20 or 30 YEARS!  This usually happens when the only asset is a house, and nobody does anything because some family member is living in the house and then they die (or move, or need money).  But even in non-extreme situations, a delay of a few years due to procrastination creates complications related to post-deceased parties.
  • People should make Wills.  When people don’t make Wills, results are often a crapshoot.  In the predeceased child situation above, if the widow had a Will her wishes would be clear.  Maybe she would have left something to the daughter-in-law…it happens more than you might think.  Maybe she would have put her grandchildren’s funds in a trust and named an appropriate Trustee.
  • People should make Wills, Part 2.  If the post-deceased son above had a Will, it would have been clear what HE would have preferred, and I suspect it would have been 100% to his spouse…for her benefit and so she could take care of their children.  Having the inheritance going partially to the grandchildren is a horrible result, especially if they are minors.  The money would be tied up in Guardianships, with a ton of money wasted, to say nothing of the inconvenience and heartache.  Easily preventable, but a person has to be pro-active and make the Will.
  • When people make Wills, among the most important considerations are the “what-if” scenarios.  Well drawn wills reflect the persons intentions in case someone pre-deceases.  Wills that don’t do this leave too much to chance.

While “estate within estate” situations are more work than estates without this issue, it is a huge mistake to procrastinate.  These situations only get harder, and yes, there are cases with MULTIPLE estate within estates.  My own personal record is six!

If you are confronted with one of these situations, or if you want to prevent such a situation, please contact me.

When I do Wills for clients, I always discuss the option of doing Living Wills and Health Care Proxies.  I consider these so important, and so fundamental to proper practice, that I offer them at no additional charge.  Here are the basics:

LIVING WILL – This is a person’s written declaration that if they are in a hopeless situation, they do not want to be kept alive artificially.  Sometimes I say to clients “This is like that Florida situation from a few years ago, where the woman was in a coma and the husband was feuding with her parents.”  For some reason, everyone seems to remember that case.  The basic forms for a living will provide for pain relief, but invasive life sustaining procedures not be undertaken. Having this all stated in writing makes it much easier for doctors, hospitals and families to know what to do…or not do.

When I state the option, most people opt for it, but not all.  I have not editorial opinion on it.  When people express a strong opinion that they want a Living Will, the sentiment is usually “If I’m hopeless pull the plug, I don’t want to suffer and I don’t want my family to suffer.”  When there is a strong opinion not to do it, it’s usually along the lines of “These things should be in G-d’s hands”.  I never argue.  My informal data suggests that when this option is suggested, people say to do a Living Will about 90% of the time.

HEALTH CARE PROXY – This is different than a Living Will, but crucially important.  A health care proxy designates someone to make health care decisions if you are not able to make the decision.  This would be a “not hopeless” situation.  My usual quote is “A health care proxy comes into play if you are in a coma, but not hopeless, and the risky ‘xyz’ procedure MIGHT help, but who will decide whether to do it?”  The health care proxy gives someone, usually a trusted family member, the responsibility to decide.

I always include the designated person’s cell phone and home #.  Hey, if we need to reach the person quickly we better be able to.  Sometimes people want to have two people have the responsibility together.  I am not a fan of this, but will do it if clients insist.  I often name one person and a successor or back-up.

Obviously, being designated a Health Care Proxy is a big responsibility, so the decision on who to designate is important.  I had some first hand experience with this, and I often relate this to my clients, to illustrate its importance.  Bottom line:  my Dad had named me his health care proxy and unfortunately ended up a a very serious medical crisis where decisions had to be made.  My step-mom and I were not in agreement on what should be done and when, but I had the health care proxy which enabled me to be clear to the doctors and the hospital that I was the one designated to make decisions.  I took the time to investigate ALL the options, and discussed them with her and other family members.  I had made a painful decision that I was comfortable with, but thankfully I did not have to actually implement it because my Dad regained consciousness, lived another two weeks, then passed peacefully (This was in 2010).  The reason I tell this story is to impart that not only did I feel I had honored my Dad’s wishes, but that in the short time he regained consciousness, I told him what had transpired.  In fact, his last words to me were “I’m proud of you”.

Health care proxies are VERY important!

When I am discussing the possible preparation of a Will, I ask a series of questions that follow a general framework.  This tends to bring all the issues to the surface in a logical way.  I respect that people often want to just “tell me what they want the Will to say”, and that very often they have put serious thought into it.  I usually then ask if they would be OK if I asked questions in my preferred order, as it tends to bring out EVERYTHING, including the things I am sure they want to tell me.  Most people are fine with this.

I call my approach the WHO, the WHAT, and the HOW.

WHO – I start with a pretty detailed family tree.  I don’t go back to the Mayflower…what I am looking for is establishing who are the “distributees”, that is to say “who would inherit if this person died without a Will?”.  As mentioned in earlier posts, this is very important because even if those people are not in the Will you have to get jurisdiction over them during probate.  All my will files start with a little family tree diagram.  I get the names, the relationships, the ages, and make note of anything pertinent the client tells me.  Of particular interest are people in the tree who are minors, or disabled, or missing, or elderly.  I make note of pertinent details about them.  During this part of the interview I usually have a sense of what is going on and who is “involved” and who isn’t.  Since the people on the tree are likely to be discussed as the interview proceeds, I can now refer to them all by name and with some clarity as to who they are.  When I have enough family information, I draw a line on my notepad and say….”This concludes the WHO portion of the program, let’s move on the the WHAT”.

WHAT – In this section I make clear that while I don’t need to know every account and asset down to the penny, I do need to know WHAT we are talking about.  I specifically want to be clear about what assets the Will will affect and what assets it won’t.  For example, Wills don’t generally change things like life insurance beneficiaries, or bank accounts with beneficiaries.  This must be looked at carefully because, and I actually say this to clients “I once did an Estate where the drafting attorney did not ask about these things, and there was a horrific result”.  In that case a man did a Will and left everything to his sister, who was his closest relative. However, his biggest asset was a retirement account where he had named a beneficiary, a girlfriend from 20 years ago where there was a bad break-up…Orders of Protection, death threats, etc.  Guess what? – the ex inherited $400K, and there is no doubt that if the drafting attorney had asked, the client would have been told to change the beneficiary. He surely thought a Will leaving “everything to my sister” would do the job.  It didn’t.  So now, I always ask

I also ask about things like title to real estate, and if it’s within NYC I check it on ACRIS (the City’s e-recording system).  Many times we find surprising things and address them.

I basically inquire about the title to any meaningful assets and make notes about it.

And then at some point I say “Now we are done with the WHAT, lets move on to the HOW, as in HOW DO YOU WANT THINGS TO TURN OUT”

HOW – At this point I ask the clients how they want things to go, what is their idea about who should get what?  It is a good idea for people to have thought about this before we speak, and most have.  An interesting question is often whether to do things in terms of dollars or in terms of percentages.  Generally the smaller bequests (if any) should be in dollars, and the broader ones (often called the “residuary bequests”) should be in percentages.  At this point I ask questions that many people have not thought of, which is a series of “what if” questions.  Things should not be left to chance, so we then get into the sometimes uncomfortable “what ifs”.  What would happen if “so and so” dies before you, which is something we ought to provide for.  I don’t take this to ridiculous extremes, but I do go pretty far into it.  Strange things happen, and as long as we are doing a Will, I do not leave these things to chance, especially if someone has a strong opinion, like “if x dies before me, I do not want y to get his share”.  I make sure this is covered.

Also very important in the HOW section is naming Executors and if applicable, Trustees.  The Executor is the person who takes care of the Estate after a person dies. They get the Will probated, marshal the assets, pay expenses and taxes, and make sure the Wills terms are carried out,  Naming an Executor is a VERY important decision.  Co-Executors are permitted and sometimes appropriate. Naming a successor Executor (another what-if) is also important.  Trustees come into play if the Will is establishing aTrust, which would usually apply for a minor or a disabled beneficiary.

Obviously, the above is just a framework.  If the discussion leads to more details about particular issues, of course we explore them.

Funny thing though, when I follow my outline and we reach the end and I ask “Is there anything else?” most of the time the answer is “Nah, we covered it, what happens next as far as preparing and signing the Will?

And so it goes.

Next post – “Living Wills & Health Care Proxies”

 

As noted in previous posts, aunts/uncles/cousins CAN inherit, subject to certain special rules.

During a kinship trial, cousin claimants not only have to prove their relationship, they also have to dis-prove the prior classes.  Specifically, they have to prove that the decedent died without a spouse, children, grandchildren, parents, grandparents, siblings, nieces/nephews.  It can be challenging to prove the non-existence of classes of people.  However, there are a few sources and techniques that we frequently use.  Here are a few:

  1. Testimony – During a kinship trial we generally need court testimony to lay a foundation for the introduction of documents into evidence.  The best testimony often comes from older relatives who can essentially “testify as to the family tree”.  Not everyone can do this, and not every family has someone who can do it. But many do.  In a cousin case we need someone that can testify about the decedent’s grandparents and more importantly, the grandparents children (who are the aunts and uncles of the decedent). Testimony and documents about aunts and uncles is crucial in a cousins case because after all, who are cousins? They are children of aunts and uncles!
  2. Surrogate’s Court records – These are often the gold standard for proof in a kinship case.  This is because the files contain Affidavits where people have sworn to familial information.  So, if you have an old Surrogate’s Court file for Grandpa, where there are Affidavits stating how many children he had, this is very useful in establishing how many aunts and uncles there were.  These files often have other useful peripheral information too.  Outside of New York there are similar Courts relating to probate and inheritance, and they are always worth looking for in a kinship situation.
  3. Obituaries – The internet has made these much easier to search for and obtain.  When you are trying to prove how many children a particular person had, or who someone’s relatives were, obits are often useful.  That being said, sometimes they get it wrong too.  For example, obits sometimes step-children and even foster children are referred to as children.  This can often be explained with testimony.  So, obits are useful, but you have to look at them carefully and be prepared to explain discrepancies.
  4. Census records – You can send away for certified Federal (and State) census records.  The Federal census is every ten years, and at this time you can get them through 1940.  These are very useful in establishing how many children a particular person had.  The records are pretty detailed regarding who was living in a particular household, and how they are related.  As with obits, sometimes the census records really help, and sometimes they present questions that have to be explained.  Like, if in 1920 you have a 3 year old showing as a child in a household, and in 1930 that child is no longer there, what happened?  Sometimes there’s a useful explanation….like, he died.  But what if the explanation is “the family was poor so he was sent to live with relatives down South, and we lost track of him”?  Hopefully you can pick up the trail and account for this person and his/her offspring.
  5. Military records – these can often be obtained and provide useful family information, particularly about a person’s parents.
  6. Church records – Very useful for marriages, births and sometimes deaths. Very often in kinship cases we are going back in time and needing to prove family histories from other countries. Very often the local church records are a good source of documents and leads to other documents.
  7. Cemetery records and tombstones.  Yes – I’ve even gone myself and looked, and taken a picture or two to use as evidence.
  8. Documents themselves – Sometimes documents themselves prove more than what you got them for, and/or provide great leads.  For example, death certificates show marital status and also show the relationship of the “informant”.  Marriage records list parents.  Immigration records list family members and relations. Birth certificates from many places list “number of children born to this mother” (which can either be very helpful or cause a need for some ‘splaining)

The records above are just a few of the more common techniques and sources.  But every case presents unique proof issues, and we are always finding new and creative ways to establish kinship.

Sometimes family members feud.

Sometimes it’s irreparable (in the eyes of the participants…..I would always beg to differ, but that’s another story).

Sometimes thoughts of money and mortality will lead a person to take action.

So they make a will….with one main purpose…..to make sure that “X” doesn’t get anything.  Sometimes there are related purposes, to make sure that “X” gets the message, or knows what (s)he missed out on, but the theme is often the same…….”X” gets nothing.

I’ve done a lot of wills like this. In these situations, you want to minimize the possibility of a will contest in the future. Sometimes the will-maker’s main problem with “X” is “he’s the kind of person who would contest a will”. The solution is something called an “in terrorem clause”.  Sounds pretty cool…..here’s how it works. You leave “X” enough of a bequest to make it interesting, and add a clause that says effectively “If after my death “X” takes ANY steps to contest this will, he will get ZERO”. People who are so inclined generally love this suggestion, but some real thought has to go into it. To make it effective, you actually have to leave “X” something in the Will.  Clients invariably say “So leave him $10″….but that’s not the way to do it, because “X” would have nothing to lose. A better approach would be to leave “X” a bequest of say, $10,000 or $25,000, in a million dollar estate, and let him have to deal with it.

Sometimes people don’t want to do an in terrorem clause, they simply want to leave “X” nothing, and minimize “X”‘s chances in a will contest.  If someone is being left out, I always suggest that the Will specifically refer to them. It can be as simple as “I intentionally make no provision in this Will for “X”, and this is not due to an oversight”. Some people go further and say something more…..”I leave “X” nothing because he…..whatever.” Another phrase clients have requested, more than once, is “I leave nothing to “X”, for reasons which are well known to him.” I didn’t like it, but the clients wanted it and I did it. I always wondered if “X” really knew the reasons.

If there are potential issues regarding the will-makers competency, additional practical steps must also be taken to ensure the Will will stand. These would include using the best witnesses possible, keeping the language of the will as clear as possible, keeping detailed notes, and making sure it is documented that the attorney/draftsman met with the will-maker ALONE.

There are legal provisions for video-taping a Will, but for many reasons I have never done it. Imagine having the “out-takes” being subject to discovery in a will contest?

Why all the fuss about possible will contests? Consider this…..attorneys can (and frequently do) take will contests on a contingency fee.  I have done this, IF I think I have a good shot at knocking the Will out.  There are often high stakes, where the will beneficiaries may get nothing (or much less) if the Will gets tossed.  Guess which ones I pass on?  The one’s where good steps were taken to thwart a contest.

With this in mind, and if the possibility of a will contest is being considered during the will drafting process, steps can and should be taken to protect the Testator’s wishes.

Who REALLY ought to make a Will?

If you are considering whether you need to or not, the answer to this question starts with a question…..

“Who would inherit from you if you did not make a Will?”

When I interview someone who is considering making a Will, the first issue I explore is THAT.  There is a good reason I start with “who would inherit if you do not make a Will?”   It lets me know who the “players” are. Not only that, later on, the people on my little family tree are the people who must be notified when I try to probate the will.

People are sometimes surprised when I start off questioning them about their closest family members, especially when what they want me to know is “I don’t want those people in my Will”.  This is fine with me, but I still have to know who they are. This is because anyone who would inherit if there were no will is considered an “interested party” when the Will is being probated. Legally, we call these people “distributees” or people who are “adversely affected” by the Will. They are the only people who will have standing to contest a Will.  If it’s a close relation being excluded, say a child or a sibling, I always ask WHY they are being left out, and I make a written note of it in my file.

When somebody is left out and squawks after the person dies, having a note about it in the drafting attorneys file is VERY important. When I represent someone in a potential will contest, one thing I hate to see is a note in the drafting attorneys file explaining WHY the person is being left out.

I am amazed at how often people do not consider the question “Who would inherit from me if I did not make a Will?”  I frequently see this is Estates where there is no Will, and distant relatives are inheriting. Whenever I see this, often with meaningful money involved, I always think “Could they have intended THIS?”  Did they not have anyone, a friend, or a charity, that was more deserving than the distant relatives who are now inheriting?  I’ve seen cousins inherit who never even met the decedent!

Think this never happens?

I GET THESE CASES ALL THE TIME!!!

Truth be told, I frequently represent distant relatives in the inheriting position, when the inheritance is a major score for them. I like these cases, but at some point it always occurs to me (and it sometimes occurs to people who actually knew the decedent) “they should have made a Will”.

Very often in those cases people tell me “the decedent talked about making a Will”, or “he told me he was going to make a Will”, but for some reason they never did. I think there are several reasons for this….

Procrastination – a vague intent to do it in the future, and just not getting with it.
Superstition – a fear that doing it will cause illness or death.
Cheapness – not wanting to pay for a Will.
Delusions of immortality – more people have this than one might think.
Monumental inconsiderateness – totally not caring what happens to others after you go.

Strangely, Wills are most often made by people in a tight nuclear family….say a married couple with children. There are good reasons for such people to make Wills too, but the fact is, the inheritance aspect is not so different making a Will than if they didn’t.  (To be clear, those folks should make Wills for other reasons)

People who don’t ask the question “Who would inherit from me if I did not make a Will?” are often some combo of cheap, procrastinating, superstitious, monumentally inconsiderate, and/or delusional (vis a vis their mortality) individuals. Business-wise, I don’t mind this all that much, these end up being my largest fee cases, but…..it sure is puzzling.

Maybe they “just can’t deal with it”, and on many levels I understand and respect this. I also know that if you are the person someone SHOULD be putting in their Will, it is a difficult subject to bring up. I’ve had people ask me what to do in this situation. Not only is there is no easy answer, but every situation is unique.

I will say this…..if the person has talked about it, and you think they WANT to do it, HELP THEM get it done. But, as we say in poker, don’t overplay your hand.

Yeah, this gets complicated. But not nearly as complicated as when procrastination wins out, and the person who should make a Will doesn’t.

 

In the last post I set forth a few “little things” that affect the probate process.  These things impact the complexity, timing and expense that may be involved.  Here are a few to consider:

1. A Will that is not attorney prepared and/or supervised.  Putting aside possible lack of clarity with a non-attorney will, there are legal presumptions that apply to Wills that will later be presented for probate.  The big one is that when a Will signing is supervised by an attorney, the legal presumption is that the execution (the signing part of it) was properly done. This can be overcome, but the burden is on the potential objectants. It is a heavy burden.

On the flip side, if the Will signing was not attorney supervised, the presumption of due execution does not apply, and the burden is on the Will proponents to show proper execution. This is a heavy (and dangerous) burden. It means the witnesses have to testify that the necessary formalities took place (that the Testator declared or indicated the document was his will, asked them to be witnesses, that they saw the Testator sign, etc).  Nobody can actually remember the details of what happened, and very often big money is riding on some witnesses testifying correctly.

Contrast this with an attorney supervised Will signing.  Now the objectants have a tough burden to overcome, since all the attorney has to remember about the signing ceremony is what their customary ceremony is, that he/she always follows it, and there was nothing in this Will to indicate any deviation.

Sometimes when people are in Court with home-made or LegalZoom wills, where possible objectants were cut out, they really regret not using an attorney to do the Will. They now have a burden they would not have had if they had used an attorney.

To be clear on this….the above refers to the actual Will execution. Other grounds for objection (lack of capacity, undue influence etc) could still be pursued. That being said, it is really dumb to face “due execution” issues, when they could have been easily avoided.

2. Two witnesses and a witness Affidavit. The law in New York is TWO witnesses. Not one.  Also, the witnesses can (and SHOULD) sign a separate witness affidavit right after they witness the Will. This essentially says they were there, they signed, and everything that was supposed to be done, was done. It saves everyone from having to locate the witnesses years later. It also saves the problems that arise when it turns out later the witnesses have died, or are incompetent, or you can’t locate them.

This witness affidavit stuff applies mostly to attorney drawn wills but surprisingly, sometimes attorneys don’t do this step. Very bad. Very inconsiderate to the people trying to probate the Will later.

3. Sometimes a person has a right to inherit, but before their inheritance rights are determined, they die.  We call these persons “post-deceased”.  A post-deceased person does not lose their rights, their estate has whatever rights they would have had.  In Surrogate’s Court, an “estate within an Estate” is quite common. Sometimes, before we can proceed with an Estate we have to establish an Estate for the post-deceased person who has an interest in our Estate.  Sometimes people wait years before setting up an Estate, usually because there was no pressing need to do it.  Then, when they need to do it (usually because they want to sell a house that is still in the name of a deceased person), we have to do multiple Estates within Estates.

The probate and estate world is full of these “little things” that keep life interesting.  Many of these potential problems can be avoided with skillful planning and/or professional preparation and execution of a Will.  In reality, very often proper legal work has not happened, and we play the hand we are dealt.  These problems can all be resolved, but they often take some persistence and time.