Episode Transcript
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Speaker 1 (00:00):
Good morning everyone, and welcome to Life Happens Radio, your
show that brings you information, ideas, and thoughts to help
you plan your future, your family's future. Make sure that
you have the right legal documents in place, that you're
prepared for all of the challenges that life can throw
your way. And as we go through our lives in
our office, we see things every day, families coming to
(00:23):
us in crisis where the unexpected has happened, and the
key to that is be prepared, and we hope the
show helps you with that. We hope we can give
you ideas to make sure that your planning is done,
that you have things buttoned up, and as we approach
the holiday season, that you have peace of mind. Peace
of mind is kind of a concept in today's society
(00:45):
that has become foreign to a lot of people, especially
younger people. But one of the things that you can
take the angst meter away for is when you have
a well designed plan and you know that whatever happens,
you have coverage. Whatever the crisis is, whether it's healthcare, financial,
(01:05):
long term care, you have a plan in place that
makes sure that you and your family are taken care of.
Today's show, we're going to talk about the probate process.
What happens in a state, How do you navigate probate?
What are the realities, the costs, the difficulties, the hang ups,
the delays. What does probate look like in New York State?
(01:28):
If you have a will, you're in probate. A lot
of people think they have a will. They are not
in probate, but you are. If you don't have a will,
you're in the hands of the New York State Legislature,
who has enacted a statute that determines who receives your estate.
Speaker 2 (01:43):
And how can we.
Speaker 1 (01:44):
Get the best treatment for our families, the least cost,
the least delay, the most security for the plan that
you create. We're going to talk about all of that,
and we're going to open up the phone lines in
a bit, but I want to enter my guest host
member of Pierre O'Connor and Strauss, one of our star associates,
(02:06):
Adriana Mahalek. Good morning, Adriana, Good morning Low And Adriana
works with us in our state Administration department in addition
to doing real estate and some estate planning. And I
have to congratulate her because she was just admitted to
the bar in the state of Connecticut.
Speaker 2 (02:24):
So congratulations, thank you very much.
Speaker 1 (02:26):
And we love having our attorneys have multiple jurisdictions. They
can work in Connecticut is one. We have a lot
of clients in Connecticut. So now Adriana is our Connecticut council.
Speaker 3 (02:38):
That's me.
Speaker 2 (02:38):
All right, good stuff.
Speaker 1 (02:41):
So this morning we're going to tackle probate and how
to avoid it, what the best methods are, and Adriana,
you do provate estates on a day to day basis
in our firm and in New York State, we have
a very anachronistic and formalistic statute that governs probate. So
let's walk our listeners just through on a basic level
(03:05):
what you need to do to successfully administer in a state.
And where this comes into play is you have assets
assets in your name. You have real estate, you own
a house, you own bank accounts, you own broken to accounts,
You have things that fall into your state. You have
things your state has to do paying bills. Who has
authority to do that? Who is empowered upon your death
(03:29):
to handle all of the affairs, and how do they
get that authority? And that really is the probate process.
So what is it and what are the steps that
person has to take. Your loved one passes, what do
you do?
Speaker 3 (03:42):
Sure? So obviously that's a loaded question on purpose of
of course I have a long respect talk.
Speaker 2 (03:49):
For an hour. You gotta be a loaded questions.
Speaker 3 (03:51):
But to your point, who has the authority when someone passes?
No one? No one until the court actually appoints them.
And I think that's a big misc that I see
a lot that we deal with a lot, and it's
definitely a process to get the clients to have that
legal authority.
Speaker 1 (04:10):
We've actually had clients come back to our office having
had a loved one die and they have the will,
and they take the will to the bank because there's
an account that they need to get access to, and
they show it to the teller and they say, here's
the will, and here's the line where I'm appointed as
the executor. I think they call it. I'm the executor
of the will, so I need to get into this account.
Speaker 2 (04:33):
Here's the will. You know, what do we what do
we do next? And what they say is.
Speaker 3 (04:39):
Show me the letters testamentary.
Speaker 1 (04:40):
That's right, show me the letters and what are letters testamentary?
Speaker 3 (04:45):
That is the legal authority from the court officially appointing
someone as executor of the estate. So what you were
saying that it's not just I'm then named executor and
the will the court needs to actually give you that
type legally.
Speaker 2 (05:01):
Yes, And if you don't have a will, what do
you do if.
Speaker 3 (05:05):
You don't have a will? The letters you will be
receiving eventually once we get through the appointment process are
called letters of administration.
Speaker 1 (05:14):
And do you just like walk into the court with
that will and say, okay, you know where are my letters?
I need letters testamentary?
Speaker 3 (05:20):
That would be nice, but no, not New York. No,
we have a full, you know, petition accompanying documents, probably
four or five additional documents that need to be filled out, signed,
submitted with the court. And that's a process in itself.
Speaker 1 (05:37):
So when people come in having had a loved one
die and they are the person in the hot seat
as the executor or there is no executor and there
have to be there has to be an administration, what
are the things.
Speaker 2 (05:49):
That you tell people?
Speaker 1 (05:50):
What should they be thinking that they need to do
at that moment in time to begin this process to
administer in a state?
Speaker 3 (05:58):
Sure, So I always first ask people to provide me
with some type of family tree, because in New York State,
the courts require us to basically lay out everyone are
the decendents, next of kin, and a lot of times
I find that perhaps there was, you know, a friend
that they leave everything to, and a lot of clients think, well,
(06:21):
I don't know their family, their family, they haven't been
in contact for years, et cetera, et cetera. So that's
one of the main things I always try to hone
in on since that's one of the main issues I
find with administering a state that we need to contact
all of their next of kin, the distributees of the estate.
I also always like to ask for a projected asset list.
(06:44):
And now a lot of times when these people don't
have the authority to get access to all their accounts
whatever they may have, they don't.
Speaker 2 (06:52):
Know the assets, so you don't know what you don't know.
Speaker 3 (06:54):
You don't know what you don't know, so you know,
maybe if you see something in the mail or you
find documents in the house, I try to just say, well,
let's think about it. Life insurance, would they have retirement
you know, would they have named a beneficiary? So I
always just try and get a rough idea of assets,
because that is something we have to report to the
court as well. At the beginning.
Speaker 1 (07:16):
There is there's one thing that I dread when the
client says, oh, and I think they had a safe
deposit box. Yeah, so talk about that. I mean, people
used to use safe deposit boxes all the time. It
was much much more common. Every bank had a wall
with safe deposit boxes in it. But it's less and
less frequent that people are using them and with some reason.
Speaker 3 (07:38):
So again, you need to have that legal authority from
the court to gain access to that safe deposit box.
It's not like, as you were saying, Lou, you just
show up to the bank or wherever and they'll just
immediately open it for you. That's an additional proceeding with
additional paperwork that we have to file and go through
with the court to gain access to that safe deposit box.
Speaker 1 (08:00):
So if someone has a safe deposit box, the odds
are they have their most important papers in that box.
Speaker 3 (08:06):
You're not going to find out about it.
Speaker 1 (08:08):
And when they die, that box gets sealed yup, and
you have to have authority to get in there, and
the bank is going to go with you to inventory
the box and you used to have to take someone
for the state tax authority with you. Oh wow, Yeah,
that did away with that requirement. So but the bank
is going to inventory it and you have to account
for everything in that box. You're not going to get
away with anything.
Speaker 3 (08:29):
Mm hm.
Speaker 1 (08:30):
And you're not going to get if there's a will
or a trust in there that you need it, you
can't get it until.
Speaker 2 (08:35):
You get through the court process.
Speaker 3 (08:37):
Yeah, and I see that a lot. You know, clients
are saying, well, perhaps they do have a safe deposit box,
maybe the will is in there. I said, well, we're
not going to be able to really prepare these documents
for the court when it comes to getting appointed as
an executor or administrator until we gain access to that
safe deposit box then and then that causes delays.
Speaker 1 (08:57):
And so in our office for my entire career, which
spans now coming up on forty three years.
Speaker 2 (09:05):
Yeah, you're not that old. Don't clap.
Speaker 3 (09:07):
I'm clapping.
Speaker 2 (09:09):
Forty three years.
Speaker 1 (09:11):
We have kept the wills in our office in all
but one case. And that one case where the client
came in and demanded that we give her her will back,
went really.
Speaker 2 (09:20):
Badly because the will got lost.
Speaker 1 (09:23):
But we have every original will in this expanding series
of vault drawers, fireproof safes that we keep. So when
a client calls us up and says, oh, you know,
so and so has passed away, I think I'm the executor.
We go right to the vault, We pull out the
will and we have two documents in there, not one,
(09:43):
but two. One is the will itself, which is the
original and there are a lot of formalities. In New York,
it has to be signed in front of two witnesses,
and then the witnesses have to sign an affidavit. And'll
just talk briefly about that affidavit, what it is, and
why it's important and why you need it.
Speaker 3 (10:03):
Sure. So that's called an affidavit of a testing witnesses.
As you were saying, Lou, It's typically signed by the
two well, it is signed by the two people that
witness the will being sign and they are testing to
the fact that the test dator signed their will on
this date in the presence of these two people that
this they expressed that this was their last will and testament.
(10:25):
And essentially it's used in the event of if there's
ever a will contest for you know, fraud, undue influence
mental capacity that you have two witnesses there say no,
this was their last will and testament, So.
Speaker 1 (10:41):
Who can challenge you will because there are others and
the affidavit of testing witnesses you need to have and
if you don't have it at the time the will
gets signed. And a lot of people that do it
yourselfers the di wise, they never think about this document.
And they have two neighbors signed the will as witnesses,
and the two have moved away and they got divorced,
(11:02):
and now they can't find either neighbor.
Speaker 2 (11:04):
They need those two people.
Speaker 1 (11:06):
They need to track those two people down after the
death of the of the testator right and making the
will and get them to sign an affidavit at that
point in time.
Speaker 2 (11:15):
How easy is that?
Speaker 3 (11:16):
Not easy at all.
Speaker 1 (11:18):
So a lot of the administrative hassles and drags are
just finding people.
Speaker 3 (11:24):
Yes, I spend a lot of time trying to explain
that to people that it's all about I need to
locate these next I ken and I know we're talking
right now about the witnesses, but.
Speaker 2 (11:35):
Well, okay, we're gonna get to the waivers of citation next.
Speaker 3 (11:38):
Okay.
Speaker 1 (11:38):
Yeah, So it's it's like you look at probate and
and people say, well, isn't it simple. I asked the question,
you know what could go wrong everything? There are so
many places that that an estate can get hung up,
and we're going to talk about how those hang ups
hinder the administration. But also we're gonna talk about how
(11:59):
to plan around them, how to get a plan in
place that keeps you out of this court nightmare in
some cases because we have to find the witnesses I
have in estate. I talk about it on the radio
every now and then. It was a client who was
also an attorney, one of the first female graduates of
Albany Law School, and she was a DIY person. She
did her own will and she did four codicils to
(12:22):
that will, and each time she did a will and
a constil, she took it to the bank and she
had bank tellers. Back then they would witness wills. She
had bank tellers as her witnesses, eight different people.
Speaker 2 (12:35):
Wow.
Speaker 1 (12:36):
So when we probated the will, there were two relatives,
niece and nephew, who were fighting over it. So we
had to go through the process of bringing every witness
to the court. Eight bank tellers who never didn't work
for the same bank in the hallway waiting to testify
as to the execution of not just the will, but
each consult to my will as well. And that was
(12:58):
a hearing I did many years ago. But it just
illustrates the fact that you just need to think about
these things in advance and not set yourself up for
that kind of thing. And then you talked about distributees
people who would take that. You need to get waivers
of citation for. Then you need to serve notices of
probate and all kinds of things that we're going to
(13:20):
come back after a break, talk about these last few requirements.
In God forbid, you have a beneficiary who's a minor
or with a disability, and you need a guardian d light.
It goes on and on, folks, but we'll get to
that chase, and then we'll talk about planning. How do
you plan for yourself your family to stay out of
this probate morass, to have an efficient, time efficient and
(13:45):
cost efficient estate and how can you do this Today
we'll be back.
Speaker 2 (13:50):
Stay with us.
Speaker 1 (13:50):
You're listening to Life Happens Radio on talk radio WGY,
and we are back. Welcome back to Life Happens I'm Lupiro,
your host for this morning's episode of Life Happens, and
I'm live in studio with Adriana Mahelek, and we're enjoying
a December sixth day here in the Capitol region. It
isn't that bitter cold, Adriana, that we had over the
(14:11):
earlier days of the week.
Speaker 3 (14:13):
Thank goodness.
Speaker 1 (14:14):
Yeah, waking up and seeing one degree on the thermometer,
that's no fun. But here we are and it's twenty six,
twenty seven degrees and we're supposed to get up into
the thirties today. So enjoy your day. And what we're
going to do for the next forty minutes or so
is talk about this process of probate.
Speaker 2 (14:32):
What is it?
Speaker 1 (14:33):
Why do you need it? Then you need it if
you don't have an alternative plan. If you're relying on
a will, the will by definition has to go through probate.
If you don't have a will, you have to go
through an administrative proceeding. And neither one is easy and
neither one is inexpensive. So the people, let's get back
(14:54):
to the people, because searching for these folks, and trust me,
if you have a very very clean state, we'll talk
about that where you have two children, one spouse, everybody's known,
you have a very simple effidavit, a family tree that
you were talking about earlier. That is a pretty easy probate.
But even that probate is going to be one to
two years, right, But when you get into these other
(15:16):
ones and oh, well, we think they may have had
a child back when they were twenty two and they
paid some child support, but we don't know where that
child is now they're gone, or that child has been
excommunicated from the family or left the family and we
haven't talked to them in thirty years.
Speaker 2 (15:33):
You still have to find them.
Speaker 3 (15:34):
And it happens more than you think it does. Like
I'm working on those types of matters every day. That's
something that's happening. And I think everyone assumes that again
when you have the will, like we had someone come
in recently saying, okay, here's this person's well. I apologize,
I can't remember their relation, the client's relationship to the decedent,
(15:58):
And I said, okay, he has a well, he names
a bunch of people in the will, But who's you know.
Did he have ever spouse? No, did he have children? No?
Our his parents alive. No, I don't believe so, so
I said, what about a sibling, and they said, well, yeah,
he has a brother, but I can't tell you the
brother's name. I can't tell you where he lives. I said,
(16:20):
how about even you know, is the east coast, west coast? No? Nothing,
And I said, well, I'm just giving you the warning.
I have to we have to attempt to locate this
person in order to get this will through probate.
Speaker 1 (16:33):
And you have to show due diligence, yes, because if
you can't find someone, and the law of New York
State requires that people who would have taken but for
the will, and those are called distributees and howard distributees determined, Adriana.
Speaker 3 (16:50):
The order you're asking me, Lou, Sure, So it starts
with spouse first, then it goes to child, then it
goes up the ladder to your parents. Then after that
it goes to siblings and so on and so forth.
Speaker 2 (17:04):
Yeah. And that's a statue, yes, under the code in
New York.
Speaker 1 (17:09):
And it's a statute that lays out who would take
if there were no will. So if you don't have
a will, these are the people that are the beneficiaries.
And in order to get a will in you have
to get the consent of each of these people, and
if you can't find them, you can't get their consent.
And we've had estates recently where we've sent waivers out
(17:31):
where the papers that the people need to sign, and
they go out and get their own lawyer and they want.
Speaker 2 (17:37):
To contest the will.
Speaker 1 (17:38):
They want to try to get some more money out
of it, more than they're really entitled to. And this
is leverage that they have because if you can't find them,
or if you don't get consents from them, you have
to go.
Speaker 2 (17:49):
Back to court.
Speaker 3 (17:50):
Right prolonged the process. I have an estate right now
that has there was no will, so it's an administration
proceeding and the next of kin. The distributies are forty
one first cousins, once removed, and even just determining finding
out that there are forty one first cousins, what their
names are, whether they're alive, whether if they predeceased, whether
(18:12):
they had children, because then it goes to them. It
has been a process and I think our clients just
thought it would be.
Speaker 1 (18:22):
Simple and there's something the end of the chain here.
If you've done your due diligence. Then sometimes you have
to hire genealogical.
Speaker 3 (18:29):
Companies and we did in this instance, yeah.
Speaker 1 (18:31):
To do the search because the court wants to be convinced,
and you have to convince the judge that you've done
everything you can do to find these airs, and that's
your effidavit of due diligence that you submit to the
court when you want to get service by publication, which
courts are very reluctant to give. But if you really
just can't find people and you've taken every step possible,
(18:52):
you can publish in the papers for a few weeks
and get service that way.
Speaker 3 (18:56):
And I'd like to just remind the listeners too that
this even of when you have a will, when someone
has a will, if we don't know you're next of kin,
we still will having to be going through this to
try and probate your estate.
Speaker 1 (19:10):
So when we start talking about trusts and trust planning,
this is the way we do them. And they have
a lot of benefits. We're going to talk about that
in a moment, but I want to talk about cost.
And you know, we're lawyers. When the states get messy,
we're the ones spending the time and it takes hours
and hours and hours to do this work and try
(19:30):
to find people and do all the things necessary. And
if they do not consent to the will, if there's
you know, three children and one's being cut out, which happens,
and that child that gets cut out refuses to sign
the waiver, then you have to go out and you
have to hire a process server to serve them with
citation yes, and then you get something called a citation
(19:51):
return date where you have to go to court and they.
Speaker 2 (19:53):
Come in with their lawyer.
Speaker 1 (19:54):
You're there representing the estate and all they have to
do is raise their hand and object, say I want
to hearing, and they get a hearing, even though there's
no reason or no grounds to contest the will. They
get to examine those witnesses that you now have to
produce at the hearing that executed the will with the
test dator at the time, and that could be a
thirty year old will.
Speaker 3 (20:15):
And this is just costing the estate more money in
the meantime, even having to hire running the process server.
I've had people recently evade service. It's like, come on,
every time we send someone out there, you're costing the
estate money that perhaps that person even is entitled to.
It's just it's.
Speaker 2 (20:35):
It's kind of crazy.
Speaker 3 (20:36):
Yeah.
Speaker 1 (20:37):
In New York, there is no statutory legal fee. The
fees are based upon a series of cases in New
York that courts will cite if there's a challenge to
a legal fee. But we try to do it on
the basis of those factors and create a reasonable fee.
And many of our states we charge on a fixed
fee basis, but most we do hourly.
Speaker 2 (21:00):
So it could go either way.
Speaker 1 (21:02):
And in some states though there's actually a statutory legal thing.
In New York, there's a statutory executors commission. So that's
the other major component, and that's pretty generous.
Speaker 3 (21:15):
It is, It definitely is they it goes off. There's
certain percentages. It's like the first four hundred thousand off
the estate is a percentage. Then you go down to
the next three hundred thousand of the estate and so
on and so forth.
Speaker 1 (21:27):
And it starts at five percent, yes, five four two
and a half. So you know, if you have a
five hundred thousand dollars estate, there's going to be a
significant executors commission off of that, unless it's a family
member that waves and there's going to be a legal thing,
and we used to pattern our legal fees off of
those executors commissions. So in a five hundred thousand dollars state,
(21:50):
which today is nothing, you would end up with a
fee in the fifteen to twenty thousand dollars range. So
that's coming off for the attorney, that's coming off for
the executors, and those are fees that for the executives statutory,
but for the attorney it has to fall into that
reasonableness category based upon ten factors that the court will evaluate.
(22:10):
So those are moneies coming out of the coffers that
could go right to the beneficiaries. And there's a minimum
period in New York, a creditors period of seven months.
It usually takes to just to locate all the individuals
the documentation, get everything signed.
Speaker 2 (22:25):
It usually takes a few months.
Speaker 1 (22:27):
To get everything ready to submit to probate, and then you,
after the creditors period, have to get all these people
to sign releases on the back end. So twelve months
is a really good estate.
Speaker 2 (22:38):
If you can get in and out of probate in
twelve months, you're doing well, definitely, But a lot of
states go two years, three years.
Speaker 1 (22:46):
We have some five six seven, eight years, if there
are contests, if there are questions, if you can't find beneficiaries,
you find a beneficiary and they died during the process
of administration, that's the worst. Yeah, that's the worst because
then you have to find the better officiaries of the beneficiaries, right.
Speaker 3 (23:02):
And they need to sign off on all the documents,
and it's it is really just a hassle. It's a
hassle for people.
Speaker 1 (23:09):
So you have executors, commissions, legal fees, court costs, process servers,
all of these things going into the probated state and
you do not get anything done with a will until
you clear all those hurdles, correct, So we just want
to make sure that our listeners are clear on that.
Speaker 2 (23:24):
You have a will.
Speaker 1 (23:25):
It's good, but you still have to go through all
of these processes. So when we come back, we're going
to start looking at how to improve the situation, how
to avoid probate, how to make an estate administration easier, cleaner, faster,
more efficient, and less expensive. So this is what we
(23:48):
do at our law firm.
Speaker 2 (23:50):
Every day.
Speaker 1 (23:51):
We sit with clients with very complex matters, very simple
matter sometimes, but every plan is different, it's unique and
it needs to be yours.
Speaker 2 (23:59):
Stay with us.
Speaker 1 (23:59):
We're going to tell talk about that when we come back.
We're going to take a short break for the news.
Hope you're enjoying your Saturday, stay with us, Adriana Mahalik Lupiro.
Speaker 2 (24:07):
We will be right back after this and we're back.
Thanks for listening.
Speaker 1 (24:13):
I'm Lupiro, your host this morning again, Adriana meheck, we're
live in studio. Adriana, you have some family in town
this weekend. Yes, I do want to give a shout out.
Speaker 3 (24:23):
I would love to Hi, mom, thank you for listening.
Speaker 2 (24:27):
We hope you're very proud of your daughter. We are.
Speaker 1 (24:30):
We love to have her working with us, and very
happy that she's now admitted in Connecticut, New York. You know,
she's a great addition to the firm. And thanks for
listening this morning.
Speaker 3 (24:40):
Thank you for saying that to her.
Speaker 2 (24:42):
Low. We have a workshop coming up.
Speaker 1 (24:45):
All the things we're talking about here, administering estates, administering trusts.
It's hard to get a full handle on it. I
do a lot of seminars and in an hour I
will talk about all of these topics and people just
walk away saying I came for a dream, of a
water out of a fountain, and I feel like I
drank from a fire hose because all of this information,
(25:05):
it's complex, and if you try to take it all
in and think about all the things that have to
happen in an estate, they don't all necessarily have you
as part of that. So your state may be different
than the next estate, the next estate, the next estate.
And the only way that you really get to the
point where you know, and we talked about earlier that
(25:27):
you don't know what you don't know, well, a good consultation.
Gather up all of your information, bring in all of
the assets, all the family members that affidavit a family
tree is best when you do it as opposed to
somebody doing it after you die, and give us all
of those beneficiaries. We have all of that in our file.
We sit with our clients, We go through a very
(25:47):
comprehensive consultative process. We then look at all of the
options and we're going to talk about those options over
the next thirty minutes, and we then develop a plan,
design the plan, and then it's up to you and
we offer this process. It's a very comprehensive consults. We
don't charge for that folks. It's a free consultation. You
(26:07):
can come sit with our attorneys. You can have that
process done for you based upon your particular situation, and
then you can make informed choices. And it's all about
being an informed consumer. We have a workshop on January
twentieth that delves into the trust in the state administration
side of things. How does a trust get administered? Why
(26:28):
is it so different than a probated state And that's
January twentieth, from twelve to one thirty, and it's going
to be at the Albany Regional Chamber of Commerce, the
Capital Region Chamber at five Computer Drive south right off
of Wolf Road in Albany.
Speaker 2 (26:42):
It's a free seminar.
Speaker 1 (26:43):
We serve lunch and you can register today for the
trust administration workshop January twentieth, twelve to one thirty by
going to our website purolaw dot com. That's pie r
law dot com. Go to the events tab. You can
always call us five one eight four or five nine
twenty one hundred. Join us January twentieth, twelve to one
(27:06):
thirty at the Colony Regional Chamber of Commerce and we'd
be happy to see you there and give you some
information Okay, we have a caller, and caller, I apologize
our technology and studio is not working, so tell me
your name and welcome to the show. Hi, my name's Cassandra.
Speaker 2 (27:28):
Hi Cassandra, and I'm calling.
Speaker 3 (27:30):
Because I have a question with regard to siblings. Yes,
I know that you look into siblings that time.
Speaker 1 (27:36):
How does a half sibling play into the situation. It
depends on which half it's blood relatives. So if they
are a blood relative, then they are a sibling. So, Adriana,
have you faced that situation.
Speaker 3 (27:54):
With half siblings? Yes, I have, And again it depends
on the person that actually passed away as well, who
who's the blood line, who's the next of ken or
whether it's the adopted child.
Speaker 1 (28:06):
So if you share a father with someone not the
mother or vice versa, and that father dies, then they're
a blood relative of the father, They're going to be
considered as a child of the father and be one
of those distributees that would have to get served in
that situation.
Speaker 2 (28:25):
So Cassandra, answer your question.
Speaker 3 (28:29):
I think so.
Speaker 1 (28:29):
Thank you very much.
Speaker 2 (28:30):
All right, you're welcome, Thanks for calling. Okay, thank you,
bye bye, go bye. Now all right, any other callers,
let me give that number out.
Speaker 1 (28:39):
It's eight hundred eighty two five five nine four nine
again eight hundred talk WG why eight hundred eight two
five fifty nine forty nine eight two five fifty nine
forty nine love to hear from you, and I hope
you can join us on the twentieth of January for
a workshop where we talk about all of these things
in depth for ninety minutes. We also talk tax at
(28:59):
that workshop. How are trust in the state's taxed, what
are the rates, how do you avoid it? How do
you minimize taxes? A big part of this as well.
That's all covered and we have working with us for
this seminar, Gretchen Gunther, who is a partner a shareholder
at Tilbecker and Sheermante CPAs and they cover the tax
side of things. We're going to cover all the administrative
(29:21):
side of things for trusts, wills, probate, and the states. So, Adriana,
it's time to turn the page here in our outline
and we're going to go now to all the things
that we talked about that keep people tied up, make
them angry.
Speaker 2 (29:37):
The frustration level mounts, and we bear the brunt of
this folks don't.
Speaker 1 (29:41):
We don't create the delays In most cases, they're just
natural things that have to happen. We wait for people
to sign papers, We have to get all of these
things back before we can file a petition with the court,
all the waivers of citation, etc. And the question what
could go wrong? There are so many steps that could
could be missteps if they're not perfectly executed, and there
(30:04):
is delay cost and all of those kinds of things.
And as I mentioned, fees five percent of the initial
phase and four percent, three percent, two percent, two and
a half percent. Those fees mount commissions, legal fees, court costs.
How do we get around that? And there are solutions
to this. There are what appear to be very simple solutions,
(30:25):
and then there are more comprehensive solutions. And the simple solutions, Adriana,
are really just looking at every asset and making sure
it's covered correct.
Speaker 3 (30:36):
I I myself, am very happy when I see that
we have. First of all, it's a trust administration, and
I know we're segueing into discussing trusts, but then when
everything is titled in the name of the trust, because
there are instances where someone might come in, you know
they have a trust, but there's maybe one bank account
(30:58):
or something that was left outside of the trust, and
then it's the conversation of is it worth it to
have to go through probate for that one bank account
or not.
Speaker 1 (31:08):
And so when we do planning, it's critical to us
that we have a complete list of every asset because
if you miss, oh we forgot she had this shoe
box under the bed, and oh, there are stock certificates
in the shoe box, and the stock certificates have been
looked at in fifty years and those companies split and diversified,
(31:32):
and now that's you know that you had the baby
bells when the stocks went to from one company to
eight companies and you had to trace all the stocks
and chairs and find all of that information. So today
most things are online, and we'll talk about our program
to track all of these things when clients become clients,
(31:52):
and our trust clients are palms program. But when people
come in, we have to know every detail every asset,
how is it owned and is there a beneficiary US
Savings bonds. I have clients with hundreds of US Savings
bonds and they don't have beneficiaries on them. They're probate assets.
(32:13):
So you need to identify what the assets are. And
I sit with clients all the time who are just, well,
I don't know what I have. I'm not quite sure. Well,
if you don't.
Speaker 2 (32:22):
Know, how is your executor going to know? And how
do you put these pieces together? So there is work
involved here.
Speaker 1 (32:29):
Identify all of those assets and get a clear picture
of what you have and how it's going to pass.
A lot of people that are trying to do this
on their own are going to name beneficiaries on accounts,
and you can name a beneficiary on most things. You
can have a bank account and you can put a
(32:50):
beneficiary on so when you pass it passes to that individual.
It's called an intrust for designation. When you have a
stock or brokerage account, you can now have a beneficiary
named on that account or on that stock and it's
a transfer on death designation. Those savings bonds they call
it payable on death. When you have an IRA four
(33:11):
oh one K retirement account, you name beneficiaries. When you
have an annuity life insurance, you name beneficiaries. So most
of those assets you can name beneficiaries on, and if
you do it perfectly, you can be somewhat successful, but
you can't name a beneficiary on a deed, you can't
name a beneficiary on a title to a car, and
(33:33):
there are certain types of assets that don't lend themselves
well to this type of probate avoidance.
Speaker 2 (33:41):
There are also pitfalls to this.
Speaker 1 (33:44):
And Adriana when we have clients that come in and say, oh,
you know, I have a beneficiary on my life insurance policy.
It's my mom or my former spouse. Yeah, and they
haven't updated it, they haven't changed it, so they don't
want that per to be the beneficiary. And we have
had a lot of circumstances where either the beneficiary named
(34:05):
on accounts has died, or has suffered a debilitating illness
or chronic illness, or is not the person that they
want to be the beneficiary any longer. So keeping all
of these things fresh and current is great, but look
at who those beneficiaries are and how you want assets.
Speaker 2 (34:25):
To pass to them.
Speaker 1 (34:27):
One of the major features of trust planning in our
office is that the trust doesn't necessarily end when the
original grant tour dies.
Speaker 2 (34:38):
We do the trust administration. We do it. It's clean
and just let's go. Let's go there for a minute.
Speaker 1 (34:45):
What are the differences between a trust administration and a
probate administration.
Speaker 3 (34:51):
It is very different. The trust administration really is only
a couple of starting documents versus what lu and I've
been talking about for the past forty or so minutes
regarding all of the probate steps. Trust administration, there's a
couple of documents that I fill out and if I'm
being transparent, the administration process for a trust, depending on
(35:14):
the size of the trust the amount of trust beneficiaries,
can only take a couple of months. Regarding actually being
able to distribute the assets. Yes, much different than the
year two years that we're talking about in probate or
even how long that it takes a couple months to
even get you the authority to start distributing.
Speaker 1 (35:35):
If I'm a successor trustee, because in the trust administration process,
you don't have an executor correct who needs those letters
testamentary that.
Speaker 2 (35:45):
A court gives.
Speaker 1 (35:47):
You have a successor trustee who has a trust document,
and you prepare a something called the certification of trust
showing that they're now the trustee, and they take that
in a death certificate to the bank, to the brokerage,
to wherever the assets are, and they have access to
those assets.
Speaker 2 (36:05):
They have access that can happen.
Speaker 3 (36:07):
In a day, and I prepared, yeah, one document, a
certification of trust.
Speaker 1 (36:10):
Yeah, that's it, and we have all that available to us.
So the process is so different. There is no seven
month creditors period applicable to a trust, which makes no
sense because a trust could have creditors just like a
probated state, but it doesn't apply. There are a lot
of anomalies in the law that make trusts just much
(36:33):
more favorable. And so when you do a trust administration,
you have success or trustees who will come in and
what are the steps for them then to administer the
trust and do the things they need to do. Who
do they need to find, who do they need to serve?
All these processes papers, Not.
Speaker 3 (36:53):
Much of all of that low, not much. You know,
we obviously need to find the trust beneficiaries named in
the trust, but we're not doing this crazy search to
find their next of kin or so on and so forth.
It's who's named in the trust document or even potentially,
if we want to be ready for a potential contest,
(37:13):
their prior trust documents.
Speaker 1 (37:16):
So a lot of our clients have had relationships during
their lifetimes go sour, and so there are people that
may have once been included in their planning or by
default would have been distributees that would have been included
in their planning, that are no longer included in their planning.
So in a trust document you can put a negative
(37:36):
bequest that simply says I leave nothing to Johnny because
of reasons. And some people want to be specific here,
but most don't because of reasons known to him. So
we just put that in there to know that we
haven't forgotten Johnny, right, But we also don't need to
find Johnny.
Speaker 3 (37:55):
But if they put that in a will and Johnny
was the next of kin, we still need to be
serving Johnny having him sign paperwork. And that's the big difference.
Speaker 1 (38:04):
That is the major difference. So we don't have to
find unknown children, recalcitrant children, you know, children that have
kind of gone gone off the reservation, other beneficiaries. We
don't have to do all of that investigative work. If
we know who the beneficiaries are and they're named in
the trust, and we know where they are, and if
they're named in the trust, usually that's the case.
Speaker 2 (38:24):
The work is simple.
Speaker 1 (38:26):
So what's the next step the trust he comes in,
gets a certification of trust and then has access to
the assets.
Speaker 2 (38:33):
Yes, what do they do next?
Speaker 3 (38:34):
I always need to have an idea of the assets.
I ask for trust account statements. That way I can
see exactly, you know, what's the trust value, and we
can start to calculate eventually the distribution scheme to all
of the beneficiaries. And obviously you need to read the
trust document more in depth to see whether the beneficiaries
(38:56):
are taking via another descendants trust that's being created, or
so on and so forth.
Speaker 1 (39:01):
Okay, we're gonna take our last short break. We're gonna
come back. If you do have a question or comment,
give us a call. Eight hundred eight two five five
nine four nine. That's eight hundred talk WG. Why when
we come back, we're going to kind of tear apart
the notions of well, can I do this just by
naming beneficiaries on an account? Or should I really have
(39:24):
a trust? Why is a trust better? What are the advantages?
And why should I consider it at this point in time?
Remember I said peace of mind. This is where that
comes into play. We'll be back right after this short break.
And we're back. So probate na if you can avoid it,
(39:45):
because it is a costly, lengthy, and in today's world,
unnecessary process. It used to be that probate was very
efficient and the surrogate was the overseer of all of
these cases.
Speaker 2 (40:00):
And the counties.
Speaker 1 (40:01):
It's county by county folks, so you have one judge
in one county and another judge in another county, and
it depends upon who that judge is, what the processes are.
Every court has a little nuance in Adriana. You find
this out when you deal with the counties. You have
to call the cork in a lot of cases.
Speaker 3 (40:16):
Yeah, I've started to create my own list to at
least try and make it easier on our clients or
to be more efficient. Like there are some courts around
here that require three versions of the family tree, EFFI,
David all saying the same thing, but they want three
separate documents, where some counties just require one. So I
find it's you know, let's keep a list so that
we can make this the most efficient way for our
(40:37):
client as possible. They're already dealing with a tough time.
It's already taken probably way too long to even get
to this point and they're still not appointed yet.
Speaker 2 (40:45):
Yeah, and that's that's the other part of this.
Speaker 1 (40:48):
When your loved ones are going through an emotional turmoil
of the loss of someone who's been an integral part
of their lives and that's you. So when they're going
through that, you don't want them to have to deal
with all of these technicalities, all of these formalities. You
know who you want to receive your assets, you know
who you want to make the decisions, and you can
(41:11):
do all of that in a trust document, but you
can't do it in a will without the court blessing
everything that you want done and approving everything that has
to be done. So the processes, as Adriana said, are
just vastly different. And when we're doing a trust administration,
you have the initial phase where they're collecting assets. They
(41:34):
have immediate authority, immediate access to those assets. They can
pay bills, they can pay funeral home bills, pay to
any taxes that maybe do see to the last tax returns,
because that's something that an executive trustee have to do,
make sure all the income tax returns are filed for
the decedent sell property sell. You know, they I had
this case that I did where and I don't know
(41:59):
why I do this, but I left the client name
me as executor. He had no family, his brother had passed,
his parents had passed, he had no spouse, no family,
and he had been a long standing client. And he said,
would you be my executor? And I said, yeah, sure. Well,
he fell on hard times. He was in the process
of applying for medicaid, which means he had no cash. Sure,
(42:20):
he had very little money, but he had a home,
and he had mortgage to the home up to the hilt.
Speaker 2 (42:26):
Took out a reverse mortgage.
Speaker 1 (42:28):
And there was a realtor who was a neighbor who
was helping him and helped him tremendously. Had the house
listed and he had a buyer for the house. So
he was going to sell the house and move into
an apartment where he could kind of manage it, not
have all the cost of the home.
Speaker 2 (42:44):
And he died.
Speaker 1 (42:46):
And so he had this contract pending to sell the house.
And it was right at the point in time when
interest rates started to pop.
Speaker 2 (42:55):
Oh no, So.
Speaker 1 (42:58):
He had no known distributees to me. So I had
to search out his mother's cousin, you know, from romania
and try to get But in the bottom lines, it
took me a very long time, six months to find
the right people and to find the people that I
could get to sign off to get the will into probate. Well,
(43:19):
in the meantime, the realtor's calling me up saying the
buyer's getting antsy, the buyer's getting antsy, And I applied
for preliminary letters because you can do preliminary letters.
Speaker 2 (43:28):
Sometimes they didn't grant that either, and I got.
Speaker 1 (43:32):
To the point where the buyer said, now I'm done,
I'm out. Well, we had a contract at a certain
price that would have covered the mortgage and left enough
money to pay expenses put it back on the market.
Speaker 2 (43:42):
We couldn't get anything.
Speaker 1 (43:43):
Close to it because the interest rates had been up
to So though if she had a trust and I
was a successor trustee, I would have closed on that
house the next day. I would have had immediate access
to it. And that's the difference between the trust and
a probated state proceeding. So the trust administration is instantaneous.
If it's well drafted, it has everything it needs to
(44:05):
pay expenses, pay bills, pay taxes, and collect things like
retirement accounts, but Adriana in our office, we like to
see those trusts not end but morph into trusts for
the beneficiaries.
Speaker 2 (44:22):
And as you know, I'm.
Speaker 1 (44:23):
Very passionate about this and I talk about this to
clients every day. And the reason I'm passionate about it
is that people are at much higher risk today. There
is I'm seeing less opportunity for next generations. The baby
boomers have a ton of money, They've accumulated it, they've
(44:45):
inherited it from their parents, and now they're transitioning it
on to next generations. The job opportunities, the opportunities for
people to improve their lot in life, put their assets
that they inherit at risk. The divorce it is over
fifty percent. Lawsuits are rampant, bankruptcies are plentiful, especially for
(45:06):
healthcare purposes. So I think it's the best prudent plan
to have your trust become a trust for your beneficiaries.
And this is the biggest difference between just having in
trust for designations or tod transfer on death designations, having
your trust fully funded, having all the assets in that trust.
(45:28):
Create trusts for your beneficiaries that will protect them, and
we call it a beneficiary control trust the BCT. We
have a handout on it. If you want to get
that hand out, you can call our office. But the
BCT is to me one of the best planning devices
that in my career we've had an opportunity to put
(45:50):
in place for clients.
Speaker 3 (45:51):
I think a misconception is too is I think when
I'm talking with clients and they hear that it's going
into the BCT, think that they're on the hook in
a way then having to then create their own trust
and pay for their own trust. And I said, well, no,
in the trust document itself already has all of the
(46:11):
terms for your trust, and your trust is already created.
So I think that's something important to note about this
BCT that we include in our trust as well.
Speaker 1 (46:20):
Sure and for the beneficiary, if they ever did get divorced,
these assets are fully protected if they ever got sued,
if they ever went bankrupt, if they ever had a
health crisis, and lord knows, when the health premiums go
up there are going to be a ton of people
uninsured for basic health care. You can create a trust
that is protected for all of those purposes. And if
(46:42):
your children are wildly successful and they have taxable estates
and their states are over seven million in New York.
The money you leave in this trust is not part
of their taxable estate either, so the beneficiary control trust
protects it from divorcing spouses, lawsuit creditors, bankerd sees, medicaid
and healthcare creditors, and a state taxes if they have
(47:05):
their own taxable estates. And the best part about this,
adrian if you're thinking about it, and Mom think about this,
you can create a trust for Adriana that would leave
the assets to her in a trust that she controls,
that she's the trustee of that she can invest on
her own and invest in anything she wants, use the
money for herself, use the money for her family. And
(47:28):
it's an open door for her to do all of
those things for this trust. But there is no door
for anyone else. No one else can touch the trust.
And so when you're doing trust planning, this trust simply
splits out. We get a new tax identification number and
a certification of trust. That's the administration, and then the
(47:48):
child takes their inheritance whatever share it is, and they
manage it and they have an opportunity to take that
money out of the trust. But In all of my
years of practice, I've heard children talk about it and say, oh,
I'm just going to take the money out. But once
they see how easy it is and how protected it is,
they don't have to do any work themselves to protect
(48:09):
the assets left by the parent.
Speaker 2 (48:11):
It's done.
Speaker 3 (48:12):
They created a trust for them.
Speaker 1 (48:14):
They created a trust, and even if the parent doesn't
like their children, which I know is not the case
in your case, but if they love their grandchildren, they
can lock this trust down, make it available to their child,
but ensure that it gets down to the grandkids.
Speaker 2 (48:30):
This is a three generation plan in one.
Speaker 1 (48:33):
Revocable living trust or irrevocable living trust. So you're taking
care of yourself during your lifetime. You're taking care of
your kids and engineering a plan for them that they
could never do for themselves. You can't do this for
your own assets. It can only be done by a
third party, a parent for a child, and then it
goes right on down to the grandkids. So it's in
(48:55):
my estimation, giving your children, your grandchildren the best possible
solution to secure their future, to make sure that the
things you've worked a lifetime for are protected and that
they pass down through the generations, and all of this
is done without ever stepping foot in a courtroom. So Adriana,
(49:17):
just some final thoughts. We got about a minute left
on trust versus will probate versus nonprobate.
Speaker 3 (49:24):
Sure, I mean, I am doing this every day. As
you said in the beginning, this is really what I
look at all day, and I think before joining the
firm here, it wasn't as clear to me. The huge
difference is actually when it comes to administering a will
versus a trust. And now since working here, it's I
highly recommend please do the trust administration for your loved ones.
(49:48):
It's much simpler, it saves your estate money, and it's
just it's something I can't stress enough.
Speaker 1 (49:54):
And with that we're going to close it out. So
we have a few more seconds. Remember January twentieth our
Trust Administration Workshop. It's going to be at the Capitol
Region Chamber of Commerce at five Computer Drive off of
Wolf Road, twelve to one thirty on January twentieth. Learn
about trusts, learn how they work, why they work, and
(50:15):
as always, you can contact us at five one eight
four five nine two one zero zero or go.
Speaker 2 (50:22):
To our website.
Speaker 1 (50:23):
Our website has a lot of resources, rich resources. We
have videos, webinars. Check it out at pyrolad dot com.
We hope to see you back on the radio next week.
Speaker 2 (50:32):
Have a great day.
Good morning everyone, and welcome to Life Happens Radio, your
show that brings you information, ideas, and thoughts to help
you plan your future, your family's future. Make sure that
you have the right legal documents in place, that you're
prepared for all of the challenges that life can throw
your way. And as we go through our lives in
our office, we see things every day, families coming to
(00:23):
us in crisis where the unexpected has happened, and the
key to that is be prepared, and we hope the
show helps you with that. We hope we can give
you ideas to make sure that your planning is done,
that you have things buttoned up, and as we approach
the holiday season, that you have peace of mind. Peace
of mind is kind of a concept in today's society
(00:45):
that has become foreign to a lot of people, especially
younger people. But one of the things that you can
take the angst meter away for is when you have
a well designed plan and you know that whatever happens,
you have coverage. Whatever the crisis is, whether it's healthcare, financial,
(01:05):
long term care, you have a plan in place that
makes sure that you and your family are taken care of.
Today's show, we're going to talk about the probate process.
What happens in a state, How do you navigate probate?
What are the realities, the costs, the difficulties, the hang ups,
the delays. What does probate look like in New York State?
(01:28):
If you have a will, you're in probate. A lot
of people think they have a will. They are not
in probate, but you are. If you don't have a will,
you're in the hands of the New York State Legislature,
who has enacted a statute that determines who receives your estate.
Speaker 2 (01:43):
And how can we.
Speaker 1 (01:44):
Get the best treatment for our families, the least cost,
the least delay, the most security for the plan that
you create. We're going to talk about all of that,
and we're going to open up the phone lines in
a bit, but I want to enter my guest host
member of Pierre O'Connor and Strauss, one of our star associates,
(02:06):
Adriana Mahalek. Good morning, Adriana, Good morning Low And Adriana
works with us in our state Administration department in addition
to doing real estate and some estate planning. And I
have to congratulate her because she was just admitted to
the bar in the state of Connecticut.
Speaker 2 (02:24):
So congratulations, thank you very much.
Speaker 1 (02:26):
And we love having our attorneys have multiple jurisdictions. They
can work in Connecticut is one. We have a lot
of clients in Connecticut. So now Adriana is our Connecticut council.
Speaker 3 (02:38):
That's me.
Speaker 2 (02:38):
All right, good stuff.
Speaker 1 (02:41):
So this morning we're going to tackle probate and how
to avoid it, what the best methods are, and Adriana,
you do provate estates on a day to day basis
in our firm and in New York State, we have
a very anachronistic and formalistic statute that governs probate. So
let's walk our listeners just through on a basic level
(03:05):
what you need to do to successfully administer in a state.
And where this comes into play is you have assets
assets in your name. You have real estate, you own
a house, you own bank accounts, you own broken to accounts,
You have things that fall into your state. You have
things your state has to do paying bills. Who has
authority to do that? Who is empowered upon your death
(03:29):
to handle all of the affairs, and how do they
get that authority? And that really is the probate process.
So what is it and what are the steps that
person has to take. Your loved one passes, what do
you do?
Speaker 3 (03:42):
Sure? So obviously that's a loaded question on purpose of
of course I have a long respect talk.
Speaker 2 (03:49):
For an hour. You gotta be a loaded questions.
Speaker 3 (03:51):
But to your point, who has the authority when someone passes?
No one? No one until the court actually appoints them.
And I think that's a big misc that I see
a lot that we deal with a lot, and it's
definitely a process to get the clients to have that
legal authority.
Speaker 1 (04:10):
We've actually had clients come back to our office having
had a loved one die and they have the will,
and they take the will to the bank because there's
an account that they need to get access to, and
they show it to the teller and they say, here's
the will, and here's the line where I'm appointed as
the executor. I think they call it. I'm the executor
of the will, so I need to get into this account.
Speaker 2 (04:33):
Here's the will. You know, what do we what do
we do next? And what they say is.
Speaker 3 (04:39):
Show me the letters testamentary.
Speaker 1 (04:40):
That's right, show me the letters and what are letters testamentary?
Speaker 3 (04:45):
That is the legal authority from the court officially appointing
someone as executor of the estate. So what you were
saying that it's not just I'm then named executor and
the will the court needs to actually give you that
type legally.
Speaker 2 (05:01):
Yes, And if you don't have a will, what do
you do if.
Speaker 3 (05:05):
You don't have a will? The letters you will be
receiving eventually once we get through the appointment process are
called letters of administration.
Speaker 1 (05:14):
And do you just like walk into the court with
that will and say, okay, you know where are my letters?
I need letters testamentary?
Speaker 3 (05:20):
That would be nice, but no, not New York. No,
we have a full, you know, petition accompanying documents, probably
four or five additional documents that need to be filled out, signed,
submitted with the court. And that's a process in itself.
Speaker 1 (05:37):
So when people come in having had a loved one
die and they are the person in the hot seat
as the executor or there is no executor and there
have to be there has to be an administration, what
are the things.
Speaker 2 (05:49):
That you tell people?
Speaker 1 (05:50):
What should they be thinking that they need to do
at that moment in time to begin this process to
administer in a state?
Speaker 3 (05:58):
Sure, So I always first ask people to provide me
with some type of family tree, because in New York State,
the courts require us to basically lay out everyone are
the decendents, next of kin, and a lot of times
I find that perhaps there was, you know, a friend
that they leave everything to, and a lot of clients think, well,
(06:21):
I don't know their family, their family, they haven't been
in contact for years, et cetera, et cetera. So that's
one of the main things I always try to hone
in on since that's one of the main issues I
find with administering a state that we need to contact
all of their next of kin, the distributees of the estate.
I also always like to ask for a projected asset list.
(06:44):
And now a lot of times when these people don't
have the authority to get access to all their accounts
whatever they may have, they don't.
Speaker 2 (06:52):
Know the assets, so you don't know what you don't know.
Speaker 3 (06:54):
You don't know what you don't know, so you know,
maybe if you see something in the mail or you
find documents in the house, I try to just say, well,
let's think about it. Life insurance, would they have retirement
you know, would they have named a beneficiary? So I
always just try and get a rough idea of assets,
because that is something we have to report to the
court as well. At the beginning.
Speaker 1 (07:16):
There is there's one thing that I dread when the
client says, oh, and I think they had a safe
deposit box. Yeah, so talk about that. I mean, people
used to use safe deposit boxes all the time. It
was much much more common. Every bank had a wall
with safe deposit boxes in it. But it's less and
less frequent that people are using them and with some reason.
Speaker 3 (07:38):
So again, you need to have that legal authority from
the court to gain access to that safe deposit box.
It's not like, as you were saying, Lou, you just
show up to the bank or wherever and they'll just
immediately open it for you. That's an additional proceeding with
additional paperwork that we have to file and go through
with the court to gain access to that safe deposit box.
Speaker 1 (08:00):
So if someone has a safe deposit box, the odds
are they have their most important papers in that box.
Speaker 3 (08:06):
You're not going to find out about it.
Speaker 1 (08:08):
And when they die, that box gets sealed yup, and
you have to have authority to get in there, and
the bank is going to go with you to inventory
the box and you used to have to take someone
for the state tax authority with you. Oh wow, Yeah,
that did away with that requirement. So but the bank
is going to inventory it and you have to account
for everything in that box. You're not going to get
away with anything.
Speaker 3 (08:29):
Mm hm.
Speaker 1 (08:30):
And you're not going to get if there's a will
or a trust in there that you need it, you
can't get it until.
Speaker 2 (08:35):
You get through the court process.
Speaker 3 (08:37):
Yeah, and I see that a lot. You know, clients
are saying, well, perhaps they do have a safe deposit box,
maybe the will is in there. I said, well, we're
not going to be able to really prepare these documents
for the court when it comes to getting appointed as
an executor or administrator until we gain access to that
safe deposit box then and then that causes delays.
Speaker 1 (08:57):
And so in our office for my entire career, which
spans now coming up on forty three years.
Speaker 2 (09:05):
Yeah, you're not that old. Don't clap.
Speaker 3 (09:07):
I'm clapping.
Speaker 2 (09:09):
Forty three years.
Speaker 1 (09:11):
We have kept the wills in our office in all
but one case. And that one case where the client
came in and demanded that we give her her will back,
went really.
Speaker 2 (09:20):
Badly because the will got lost.
Speaker 1 (09:23):
But we have every original will in this expanding series
of vault drawers, fireproof safes that we keep. So when
a client calls us up and says, oh, you know,
so and so has passed away, I think I'm the executor.
We go right to the vault, We pull out the
will and we have two documents in there, not one,
(09:43):
but two. One is the will itself, which is the
original and there are a lot of formalities. In New York,
it has to be signed in front of two witnesses,
and then the witnesses have to sign an affidavit. And'll
just talk briefly about that affidavit, what it is, and
why it's important and why you need it.
Speaker 3 (10:03):
Sure. So that's called an affidavit of a testing witnesses.
As you were saying, Lou, It's typically signed by the
two well, it is signed by the two people that
witness the will being sign and they are testing to
the fact that the test dator signed their will on
this date in the presence of these two people that
this they expressed that this was their last will and testament.
(10:25):
And essentially it's used in the event of if there's
ever a will contest for you know, fraud, undue influence
mental capacity that you have two witnesses there say no,
this was their last will and testament, So.
Speaker 1 (10:41):
Who can challenge you will because there are others and
the affidavit of testing witnesses you need to have and
if you don't have it at the time the will
gets signed. And a lot of people that do it
yourselfers the di wise, they never think about this document.
And they have two neighbors signed the will as witnesses,
and the two have moved away and they got divorced,
(11:02):
and now they can't find either neighbor.
Speaker 2 (11:04):
They need those two people.
Speaker 1 (11:06):
They need to track those two people down after the
death of the of the testator right and making the
will and get them to sign an affidavit at that
point in time.
Speaker 2 (11:15):
How easy is that?
Speaker 3 (11:16):
Not easy at all.
Speaker 1 (11:18):
So a lot of the administrative hassles and drags are
just finding people.
Speaker 3 (11:24):
Yes, I spend a lot of time trying to explain
that to people that it's all about I need to
locate these next I ken and I know we're talking
right now about the witnesses, but.
Speaker 2 (11:35):
Well, okay, we're gonna get to the waivers of citation next.
Speaker 3 (11:38):
Okay.
Speaker 1 (11:38):
Yeah, So it's it's like you look at probate and
and people say, well, isn't it simple. I asked the question,
you know what could go wrong everything? There are so
many places that that an estate can get hung up,
and we're going to talk about how those hang ups
hinder the administration. But also we're gonna talk about how
(11:59):
to plan around them, how to get a plan in
place that keeps you out of this court nightmare in
some cases because we have to find the witnesses I
have in estate. I talk about it on the radio
every now and then. It was a client who was
also an attorney, one of the first female graduates of
Albany Law School, and she was a DIY person. She
did her own will and she did four codicils to
(12:22):
that will, and each time she did a will and
a constil, she took it to the bank and she
had bank tellers. Back then they would witness wills. She
had bank tellers as her witnesses, eight different people.
Speaker 2 (12:35):
Wow.
Speaker 1 (12:36):
So when we probated the will, there were two relatives,
niece and nephew, who were fighting over it. So we
had to go through the process of bringing every witness
to the court. Eight bank tellers who never didn't work
for the same bank in the hallway waiting to testify
as to the execution of not just the will, but
each consult to my will as well. And that was
(12:58):
a hearing I did many years ago. But it just
illustrates the fact that you just need to think about
these things in advance and not set yourself up for
that kind of thing. And then you talked about distributees
people who would take that. You need to get waivers
of citation for. Then you need to serve notices of
probate and all kinds of things that we're going to
(13:20):
come back after a break, talk about these last few requirements.
In God forbid, you have a beneficiary who's a minor
or with a disability, and you need a guardian d light.
It goes on and on, folks, but we'll get to
that chase, and then we'll talk about planning. How do
you plan for yourself your family to stay out of
this probate morass, to have an efficient, time efficient and
(13:45):
cost efficient estate and how can you do this Today
we'll be back.
Speaker 2 (13:50):
Stay with us.
Speaker 1 (13:50):
You're listening to Life Happens Radio on talk radio WGY,
and we are back. Welcome back to Life Happens I'm Lupiro,
your host for this morning's episode of Life Happens, and
I'm live in studio with Adriana Mahelek, and we're enjoying
a December sixth day here in the Capitol region. It
isn't that bitter cold, Adriana, that we had over the
(14:11):
earlier days of the week.
Speaker 3 (14:13):
Thank goodness.
Speaker 1 (14:14):
Yeah, waking up and seeing one degree on the thermometer,
that's no fun. But here we are and it's twenty six,
twenty seven degrees and we're supposed to get up into
the thirties today. So enjoy your day. And what we're
going to do for the next forty minutes or so
is talk about this process of probate.
Speaker 2 (14:32):
What is it?
Speaker 1 (14:33):
Why do you need it? Then you need it if
you don't have an alternative plan. If you're relying on
a will, the will by definition has to go through probate.
If you don't have a will, you have to go
through an administrative proceeding. And neither one is easy and
neither one is inexpensive. So the people, let's get back
(14:54):
to the people, because searching for these folks, and trust me,
if you have a very very clean state, we'll talk
about that where you have two children, one spouse, everybody's known,
you have a very simple effidavit, a family tree that
you were talking about earlier. That is a pretty easy probate.
But even that probate is going to be one to
two years, right, But when you get into these other
(15:16):
ones and oh, well, we think they may have had
a child back when they were twenty two and they
paid some child support, but we don't know where that
child is now they're gone, or that child has been
excommunicated from the family or left the family and we
haven't talked to them in thirty years.
Speaker 2 (15:33):
You still have to find them.
Speaker 3 (15:34):
And it happens more than you think it does. Like
I'm working on those types of matters every day. That's
something that's happening. And I think everyone assumes that again
when you have the will, like we had someone come
in recently saying, okay, here's this person's well. I apologize,
I can't remember their relation, the client's relationship to the decedent,
(15:58):
And I said, okay, he has a well, he names
a bunch of people in the will, But who's you know.
Did he have ever spouse? No, did he have children? No?
Our his parents alive. No, I don't believe so, so
I said, what about a sibling, and they said, well, yeah,
he has a brother, but I can't tell you the
brother's name. I can't tell you where he lives. I said,
(16:20):
how about even you know, is the east coast, west coast? No? Nothing,
And I said, well, I'm just giving you the warning.
I have to we have to attempt to locate this
person in order to get this will through probate.
Speaker 1 (16:33):
And you have to show due diligence, yes, because if
you can't find someone, and the law of New York
State requires that people who would have taken but for
the will, and those are called distributees and howard distributees determined, Adriana.
Speaker 3 (16:50):
The order you're asking me, Lou, Sure, So it starts
with spouse first, then it goes to child, then it
goes up the ladder to your parents. Then after that
it goes to siblings and so on and so forth.
Speaker 2 (17:04):
Yeah. And that's a statue, yes, under the code in
New York.
Speaker 1 (17:09):
And it's a statute that lays out who would take
if there were no will. So if you don't have
a will, these are the people that are the beneficiaries.
And in order to get a will in you have
to get the consent of each of these people, and
if you can't find them, you can't get their consent.
And we've had estates recently where we've sent waivers out
(17:31):
where the papers that the people need to sign, and
they go out and get their own lawyer and they want.
Speaker 2 (17:37):
To contest the will.
Speaker 1 (17:38):
They want to try to get some more money out
of it, more than they're really entitled to. And this
is leverage that they have because if you can't find them,
or if you don't get consents from them, you have
to go.
Speaker 2 (17:49):
Back to court.
Speaker 3 (17:50):
Right prolonged the process. I have an estate right now
that has there was no will, so it's an administration
proceeding and the next of kin. The distributies are forty
one first cousins, once removed, and even just determining finding
out that there are forty one first cousins, what their
names are, whether they're alive, whether if they predeceased, whether
(18:12):
they had children, because then it goes to them. It
has been a process and I think our clients just
thought it would be.
Speaker 1 (18:22):
Simple and there's something the end of the chain here.
If you've done your due diligence. Then sometimes you have
to hire genealogical.
Speaker 3 (18:29):
Companies and we did in this instance, yeah.
Speaker 1 (18:31):
To do the search because the court wants to be convinced,
and you have to convince the judge that you've done
everything you can do to find these airs, and that's
your effidavit of due diligence that you submit to the
court when you want to get service by publication, which
courts are very reluctant to give. But if you really
just can't find people and you've taken every step possible,
(18:52):
you can publish in the papers for a few weeks
and get service that way.
Speaker 3 (18:56):
And I'd like to just remind the listeners too that
this even of when you have a will, when someone
has a will, if we don't know you're next of kin,
we still will having to be going through this to
try and probate your estate.
Speaker 1 (19:10):
So when we start talking about trusts and trust planning,
this is the way we do them. And they have
a lot of benefits. We're going to talk about that
in a moment, but I want to talk about cost.
And you know, we're lawyers. When the states get messy,
we're the ones spending the time and it takes hours
and hours and hours to do this work and try
(19:30):
to find people and do all the things necessary. And
if they do not consent to the will, if there's
you know, three children and one's being cut out, which happens,
and that child that gets cut out refuses to sign
the waiver, then you have to go out and you
have to hire a process server to serve them with
citation yes, and then you get something called a citation
(19:51):
return date where you have to go to court and they.
Speaker 2 (19:53):
Come in with their lawyer.
Speaker 1 (19:54):
You're there representing the estate and all they have to
do is raise their hand and object, say I want
to hearing, and they get a hearing, even though there's
no reason or no grounds to contest the will. They
get to examine those witnesses that you now have to
produce at the hearing that executed the will with the
test dator at the time, and that could be a
thirty year old will.
Speaker 3 (20:15):
And this is just costing the estate more money in
the meantime, even having to hire running the process server.
I've had people recently evade service. It's like, come on,
every time we send someone out there, you're costing the
estate money that perhaps that person even is entitled to.
It's just it's.
Speaker 2 (20:35):
It's kind of crazy.
Speaker 3 (20:36):
Yeah.
Speaker 1 (20:37):
In New York, there is no statutory legal fee. The
fees are based upon a series of cases in New
York that courts will cite if there's a challenge to
a legal fee. But we try to do it on
the basis of those factors and create a reasonable fee.
And many of our states we charge on a fixed
fee basis, but most we do hourly.
Speaker 2 (21:00):
So it could go either way.
Speaker 1 (21:02):
And in some states though there's actually a statutory legal thing.
In New York, there's a statutory executors commission. So that's
the other major component, and that's pretty generous.
Speaker 3 (21:15):
It is, It definitely is they it goes off. There's
certain percentages. It's like the first four hundred thousand off
the estate is a percentage. Then you go down to
the next three hundred thousand of the estate and so
on and so forth.
Speaker 1 (21:27):
And it starts at five percent, yes, five four two
and a half. So you know, if you have a
five hundred thousand dollars estate, there's going to be a
significant executors commission off of that, unless it's a family
member that waves and there's going to be a legal thing,
and we used to pattern our legal fees off of
those executors commissions. So in a five hundred thousand dollars state,
(21:50):
which today is nothing, you would end up with a
fee in the fifteen to twenty thousand dollars range. So
that's coming off for the attorney, that's coming off for
the executors, and those are fees that for the executives statutory,
but for the attorney it has to fall into that
reasonableness category based upon ten factors that the court will evaluate.
(22:10):
So those are moneies coming out of the coffers that
could go right to the beneficiaries. And there's a minimum
period in New York, a creditors period of seven months.
It usually takes to just to locate all the individuals
the documentation, get everything signed.
Speaker 2 (22:25):
It usually takes a few months.
Speaker 1 (22:27):
To get everything ready to submit to probate, and then you,
after the creditors period, have to get all these people
to sign releases on the back end. So twelve months
is a really good estate.
Speaker 2 (22:38):
If you can get in and out of probate in
twelve months, you're doing well, definitely, But a lot of
states go two years, three years.
Speaker 1 (22:46):
We have some five six seven, eight years, if there
are contests, if there are questions, if you can't find beneficiaries,
you find a beneficiary and they died during the process
of administration, that's the worst. Yeah, that's the worst because
then you have to find the better officiaries of the beneficiaries, right.
Speaker 3 (23:02):
And they need to sign off on all the documents,
and it's it is really just a hassle. It's a
hassle for people.
Speaker 1 (23:09):
So you have executors, commissions, legal fees, court costs, process servers,
all of these things going into the probated state and
you do not get anything done with a will until
you clear all those hurdles, correct, So we just want
to make sure that our listeners are clear on that.
Speaker 2 (23:24):
You have a will.
Speaker 1 (23:25):
It's good, but you still have to go through all
of these processes. So when we come back, we're going
to start looking at how to improve the situation, how
to avoid probate, how to make an estate administration easier, cleaner, faster,
more efficient, and less expensive. So this is what we
(23:48):
do at our law firm.
Speaker 2 (23:50):
Every day.
Speaker 1 (23:51):
We sit with clients with very complex matters, very simple
matter sometimes, but every plan is different, it's unique and
it needs to be yours.
Speaker 2 (23:59):
Stay with us.
Speaker 1 (23:59):
We're going to tell talk about that when we come back.
We're going to take a short break for the news.
Hope you're enjoying your Saturday, stay with us, Adriana Mahalik Lupiro.
Speaker 2 (24:07):
We will be right back after this and we're back.
Thanks for listening.
Speaker 1 (24:13):
I'm Lupiro, your host this morning again, Adriana meheck, we're
live in studio. Adriana, you have some family in town
this weekend. Yes, I do want to give a shout out.
Speaker 3 (24:23):
I would love to Hi, mom, thank you for listening.
Speaker 2 (24:27):
We hope you're very proud of your daughter. We are.
Speaker 1 (24:30):
We love to have her working with us, and very
happy that she's now admitted in Connecticut, New York. You know,
she's a great addition to the firm. And thanks for
listening this morning.
Speaker 3 (24:40):
Thank you for saying that to her.
Speaker 2 (24:42):
Low. We have a workshop coming up.
Speaker 1 (24:45):
All the things we're talking about here, administering estates, administering trusts.
It's hard to get a full handle on it. I
do a lot of seminars and in an hour I
will talk about all of these topics and people just
walk away saying I came for a dream, of a
water out of a fountain, and I feel like I
drank from a fire hose because all of this information,
(25:05):
it's complex, and if you try to take it all
in and think about all the things that have to
happen in an estate, they don't all necessarily have you
as part of that. So your state may be different
than the next estate, the next estate, the next estate.
And the only way that you really get to the
point where you know, and we talked about earlier that
(25:27):
you don't know what you don't know, well, a good consultation.
Gather up all of your information, bring in all of
the assets, all the family members that affidavit a family
tree is best when you do it as opposed to
somebody doing it after you die, and give us all
of those beneficiaries. We have all of that in our file.
We sit with our clients, We go through a very
(25:47):
comprehensive consultative process. We then look at all of the
options and we're going to talk about those options over
the next thirty minutes, and we then develop a plan,
design the plan, and then it's up to you and
we offer this process. It's a very comprehensive consults. We
don't charge for that folks. It's a free consultation. You
(26:07):
can come sit with our attorneys. You can have that
process done for you based upon your particular situation, and
then you can make informed choices. And it's all about
being an informed consumer. We have a workshop on January
twentieth that delves into the trust in the state administration
side of things. How does a trust get administered? Why
(26:28):
is it so different than a probated state And that's
January twentieth, from twelve to one thirty, and it's going
to be at the Albany Regional Chamber of Commerce, the
Capital Region Chamber at five Computer Drive south right off
of Wolf Road in Albany.
Speaker 2 (26:42):
It's a free seminar.
Speaker 1 (26:43):
We serve lunch and you can register today for the
trust administration workshop January twentieth, twelve to one thirty by
going to our website purolaw dot com. That's pie r
law dot com. Go to the events tab. You can
always call us five one eight four or five nine
twenty one hundred. Join us January twentieth, twelve to one
(27:06):
thirty at the Colony Regional Chamber of Commerce and we'd
be happy to see you there and give you some
information Okay, we have a caller, and caller, I apologize
our technology and studio is not working, so tell me
your name and welcome to the show. Hi, my name's Cassandra.
Speaker 2 (27:28):
Hi Cassandra, and I'm calling.
Speaker 3 (27:30):
Because I have a question with regard to siblings. Yes,
I know that you look into siblings that time.
Speaker 1 (27:36):
How does a half sibling play into the situation. It
depends on which half it's blood relatives. So if they
are a blood relative, then they are a sibling. So, Adriana,
have you faced that situation.
Speaker 3 (27:54):
With half siblings? Yes, I have, And again it depends
on the person that actually passed away as well, who
who's the blood line, who's the next of ken or
whether it's the adopted child.
Speaker 1 (28:06):
So if you share a father with someone not the
mother or vice versa, and that father dies, then they're
a blood relative of the father, They're going to be
considered as a child of the father and be one
of those distributees that would have to get served in
that situation.
Speaker 2 (28:25):
So Cassandra, answer your question.
Speaker 3 (28:29):
I think so.
Speaker 1 (28:29):
Thank you very much.
Speaker 2 (28:30):
All right, you're welcome, Thanks for calling. Okay, thank you,
bye bye, go bye. Now all right, any other callers,
let me give that number out.
Speaker 1 (28:39):
It's eight hundred eighty two five five nine four nine
again eight hundred talk WG why eight hundred eight two
five fifty nine forty nine eight two five fifty nine
forty nine love to hear from you, and I hope
you can join us on the twentieth of January for
a workshop where we talk about all of these things
in depth for ninety minutes. We also talk tax at
(28:59):
that workshop. How are trust in the state's taxed, what
are the rates, how do you avoid it? How do
you minimize taxes? A big part of this as well.
That's all covered and we have working with us for
this seminar, Gretchen Gunther, who is a partner a shareholder
at Tilbecker and Sheermante CPAs and they cover the tax
side of things. We're going to cover all the administrative
(29:21):
side of things for trusts, wills, probate, and the states. So, Adriana,
it's time to turn the page here in our outline
and we're going to go now to all the things
that we talked about that keep people tied up, make
them angry.
Speaker 2 (29:37):
The frustration level mounts, and we bear the brunt of
this folks don't.
Speaker 1 (29:41):
We don't create the delays In most cases, they're just
natural things that have to happen. We wait for people
to sign papers, We have to get all of these
things back before we can file a petition with the court,
all the waivers of citation, etc. And the question what
could go wrong? There are so many steps that could
could be missteps if they're not perfectly executed, and there
(30:04):
is delay cost and all of those kinds of things.
And as I mentioned, fees five percent of the initial
phase and four percent, three percent, two percent, two and
a half percent. Those fees mount commissions, legal fees, court costs.
How do we get around that? And there are solutions
to this. There are what appear to be very simple solutions,
(30:25):
and then there are more comprehensive solutions. And the simple solutions, Adriana,
are really just looking at every asset and making sure
it's covered correct.
Speaker 3 (30:36):
I I myself, am very happy when I see that
we have. First of all, it's a trust administration, and
I know we're segueing into discussing trusts, but then when
everything is titled in the name of the trust, because
there are instances where someone might come in, you know
they have a trust, but there's maybe one bank account
(30:58):
or something that was left outside of the trust, and
then it's the conversation of is it worth it to
have to go through probate for that one bank account
or not.
Speaker 1 (31:08):
And so when we do planning, it's critical to us
that we have a complete list of every asset because
if you miss, oh we forgot she had this shoe
box under the bed, and oh, there are stock certificates
in the shoe box, and the stock certificates have been
looked at in fifty years and those companies split and diversified,
(31:32):
and now that's you know that you had the baby
bells when the stocks went to from one company to
eight companies and you had to trace all the stocks
and chairs and find all of that information. So today
most things are online, and we'll talk about our program
to track all of these things when clients become clients,
(31:52):
and our trust clients are palms program. But when people
come in, we have to know every detail every asset,
how is it owned and is there a beneficiary US
Savings bonds. I have clients with hundreds of US Savings
bonds and they don't have beneficiaries on them. They're probate assets.
(32:13):
So you need to identify what the assets are. And
I sit with clients all the time who are just, well,
I don't know what I have. I'm not quite sure. Well,
if you don't.
Speaker 2 (32:22):
Know, how is your executor going to know? And how
do you put these pieces together? So there is work
involved here.
Speaker 1 (32:29):
Identify all of those assets and get a clear picture
of what you have and how it's going to pass.
A lot of people that are trying to do this
on their own are going to name beneficiaries on accounts,
and you can name a beneficiary on most things. You
can have a bank account and you can put a
(32:50):
beneficiary on so when you pass it passes to that individual.
It's called an intrust for designation. When you have a
stock or brokerage account, you can now have a beneficiary
named on that account or on that stock and it's
a transfer on death designation. Those savings bonds they call
it payable on death. When you have an IRA four
(33:11):
oh one K retirement account, you name beneficiaries. When you
have an annuity life insurance, you name beneficiaries. So most
of those assets you can name beneficiaries on, and if
you do it perfectly, you can be somewhat successful, but
you can't name a beneficiary on a deed, you can't
name a beneficiary on a title to a car, and
(33:33):
there are certain types of assets that don't lend themselves
well to this type of probate avoidance.
Speaker 2 (33:41):
There are also pitfalls to this.
Speaker 1 (33:44):
And Adriana when we have clients that come in and say, oh,
you know, I have a beneficiary on my life insurance policy.
It's my mom or my former spouse. Yeah, and they
haven't updated it, they haven't changed it, so they don't
want that per to be the beneficiary. And we have
had a lot of circumstances where either the beneficiary named
(34:05):
on accounts has died, or has suffered a debilitating illness
or chronic illness, or is not the person that they
want to be the beneficiary any longer. So keeping all
of these things fresh and current is great, but look
at who those beneficiaries are and how you want assets.
Speaker 2 (34:25):
To pass to them.
Speaker 1 (34:27):
One of the major features of trust planning in our
office is that the trust doesn't necessarily end when the
original grant tour dies.
Speaker 2 (34:38):
We do the trust administration. We do it. It's clean
and just let's go. Let's go there for a minute.
Speaker 1 (34:45):
What are the differences between a trust administration and a
probate administration.
Speaker 3 (34:51):
It is very different. The trust administration really is only
a couple of starting documents versus what lu and I've
been talking about for the past forty or so minutes
regarding all of the probate steps. Trust administration, there's a
couple of documents that I fill out and if I'm
being transparent, the administration process for a trust, depending on
(35:14):
the size of the trust the amount of trust beneficiaries,
can only take a couple of months. Regarding actually being
able to distribute the assets. Yes, much different than the
year two years that we're talking about in probate or
even how long that it takes a couple months to
even get you the authority to start distributing.
Speaker 1 (35:35):
If I'm a successor trustee, because in the trust administration process,
you don't have an executor correct who needs those letters
testamentary that.
Speaker 2 (35:45):
A court gives.
Speaker 1 (35:47):
You have a successor trustee who has a trust document,
and you prepare a something called the certification of trust
showing that they're now the trustee, and they take that
in a death certificate to the bank, to the brokerage,
to wherever the assets are, and they have access to
those assets.
Speaker 2 (36:05):
They have access that can happen.
Speaker 3 (36:07):
In a day, and I prepared, yeah, one document, a
certification of trust.
Speaker 1 (36:10):
Yeah, that's it, and we have all that available to us.
So the process is so different. There is no seven
month creditors period applicable to a trust, which makes no
sense because a trust could have creditors just like a
probated state, but it doesn't apply. There are a lot
of anomalies in the law that make trusts just much
(36:33):
more favorable. And so when you do a trust administration,
you have success or trustees who will come in and
what are the steps for them then to administer the
trust and do the things they need to do. Who
do they need to find, who do they need to serve?
All these processes papers, Not.
Speaker 3 (36:53):
Much of all of that low, not much. You know,
we obviously need to find the trust beneficiaries named in
the trust, but we're not doing this crazy search to
find their next of kin or so on and so forth.
It's who's named in the trust document or even potentially,
if we want to be ready for a potential contest,
(37:13):
their prior trust documents.
Speaker 1 (37:16):
So a lot of our clients have had relationships during
their lifetimes go sour, and so there are people that
may have once been included in their planning or by
default would have been distributees that would have been included
in their planning, that are no longer included in their planning.
So in a trust document you can put a negative
(37:36):
bequest that simply says I leave nothing to Johnny because
of reasons. And some people want to be specific here,
but most don't because of reasons known to him. So
we just put that in there to know that we
haven't forgotten Johnny, right, But we also don't need to
find Johnny.
Speaker 3 (37:55):
But if they put that in a will and Johnny
was the next of kin, we still need to be
serving Johnny having him sign paperwork. And that's the big difference.
Speaker 1 (38:04):
That is the major difference. So we don't have to
find unknown children, recalcitrant children, you know, children that have
kind of gone gone off the reservation, other beneficiaries. We
don't have to do all of that investigative work. If
we know who the beneficiaries are and they're named in
the trust, and we know where they are, and if
they're named in the trust, usually that's the case.
Speaker 2 (38:24):
The work is simple.
Speaker 1 (38:26):
So what's the next step the trust he comes in,
gets a certification of trust and then has access to
the assets.
Speaker 2 (38:33):
Yes, what do they do next?
Speaker 3 (38:34):
I always need to have an idea of the assets.
I ask for trust account statements. That way I can
see exactly, you know, what's the trust value, and we
can start to calculate eventually the distribution scheme to all
of the beneficiaries. And obviously you need to read the
trust document more in depth to see whether the beneficiaries
(38:56):
are taking via another descendants trust that's being created, or
so on and so forth.
Speaker 1 (39:01):
Okay, we're gonna take our last short break. We're gonna
come back. If you do have a question or comment,
give us a call. Eight hundred eight two five five
nine four nine. That's eight hundred talk WG. Why when
we come back, we're going to kind of tear apart
the notions of well, can I do this just by
naming beneficiaries on an account? Or should I really have
(39:24):
a trust? Why is a trust better? What are the advantages?
And why should I consider it at this point in time?
Remember I said peace of mind. This is where that
comes into play. We'll be back right after this short break.
And we're back. So probate na if you can avoid it,
(39:45):
because it is a costly, lengthy, and in today's world,
unnecessary process. It used to be that probate was very
efficient and the surrogate was the overseer of all of
these cases.
Speaker 2 (40:00):
And the counties.
Speaker 1 (40:01):
It's county by county folks, so you have one judge
in one county and another judge in another county, and
it depends upon who that judge is, what the processes are.
Every court has a little nuance in Adriana. You find
this out when you deal with the counties. You have
to call the cork in a lot of cases.
Speaker 3 (40:16):
Yeah, I've started to create my own list to at
least try and make it easier on our clients or
to be more efficient. Like there are some courts around
here that require three versions of the family tree, EFFI,
David all saying the same thing, but they want three
separate documents, where some counties just require one. So I
find it's you know, let's keep a list so that
we can make this the most efficient way for our
(40:37):
client as possible. They're already dealing with a tough time.
It's already taken probably way too long to even get
to this point and they're still not appointed yet.
Speaker 2 (40:45):
Yeah, and that's that's the other part of this.
Speaker 1 (40:48):
When your loved ones are going through an emotional turmoil
of the loss of someone who's been an integral part
of their lives and that's you. So when they're going
through that, you don't want them to have to deal
with all of these technicalities, all of these formalities. You
know who you want to receive your assets, you know
who you want to make the decisions, and you can
(41:11):
do all of that in a trust document, but you
can't do it in a will without the court blessing
everything that you want done and approving everything that has
to be done. So the processes, as Adriana said, are
just vastly different. And when we're doing a trust administration,
you have the initial phase where they're collecting assets. They
(41:34):
have immediate authority, immediate access to those assets. They can
pay bills, they can pay funeral home bills, pay to
any taxes that maybe do see to the last tax returns,
because that's something that an executive trustee have to do,
make sure all the income tax returns are filed for
the decedent sell property sell. You know, they I had
this case that I did where and I don't know
(41:59):
why I do this, but I left the client name
me as executor. He had no family, his brother had passed,
his parents had passed, he had no spouse, no family,
and he had been a long standing client. And he said,
would you be my executor? And I said, yeah, sure. Well,
he fell on hard times. He was in the process
of applying for medicaid, which means he had no cash. Sure,
(42:20):
he had very little money, but he had a home,
and he had mortgage to the home up to the hilt.
Speaker 2 (42:26):
Took out a reverse mortgage.
Speaker 1 (42:28):
And there was a realtor who was a neighbor who
was helping him and helped him tremendously. Had the house
listed and he had a buyer for the house. So
he was going to sell the house and move into
an apartment where he could kind of manage it, not
have all the cost of the home.
Speaker 2 (42:44):
And he died.
Speaker 1 (42:46):
And so he had this contract pending to sell the house.
And it was right at the point in time when
interest rates started to pop.
Speaker 2 (42:55):
Oh no, So.
Speaker 1 (42:58):
He had no known distributees to me. So I had
to search out his mother's cousin, you know, from romania
and try to get But in the bottom lines, it
took me a very long time, six months to find
the right people and to find the people that I
could get to sign off to get the will into probate. Well,
(43:19):
in the meantime, the realtor's calling me up saying the
buyer's getting antsy, the buyer's getting antsy, And I applied
for preliminary letters because you can do preliminary letters.
Speaker 2 (43:28):
Sometimes they didn't grant that either, and I got.
Speaker 1 (43:32):
To the point where the buyer said, now I'm done,
I'm out. Well, we had a contract at a certain
price that would have covered the mortgage and left enough
money to pay expenses put it back on the market.
Speaker 2 (43:42):
We couldn't get anything.
Speaker 1 (43:43):
Close to it because the interest rates had been up
to So though if she had a trust and I
was a successor trustee, I would have closed on that
house the next day. I would have had immediate access
to it. And that's the difference between the trust and
a probated state proceeding. So the trust administration is instantaneous.
If it's well drafted, it has everything it needs to
(44:05):
pay expenses, pay bills, pay taxes, and collect things like
retirement accounts, but Adriana in our office, we like to
see those trusts not end but morph into trusts for
the beneficiaries.
Speaker 2 (44:22):
And as you know, I'm.
Speaker 1 (44:23):
Very passionate about this and I talk about this to
clients every day. And the reason I'm passionate about it
is that people are at much higher risk today. There
is I'm seeing less opportunity for next generations. The baby
boomers have a ton of money, They've accumulated it, they've
(44:45):
inherited it from their parents, and now they're transitioning it
on to next generations. The job opportunities, the opportunities for
people to improve their lot in life, put their assets
that they inherit at risk. The divorce it is over
fifty percent. Lawsuits are rampant, bankruptcies are plentiful, especially for
(45:06):
healthcare purposes. So I think it's the best prudent plan
to have your trust become a trust for your beneficiaries.
And this is the biggest difference between just having in
trust for designations or tod transfer on death designations, having
your trust fully funded, having all the assets in that trust.
(45:28):
Create trusts for your beneficiaries that will protect them, and
we call it a beneficiary control trust the BCT. We
have a handout on it. If you want to get
that hand out, you can call our office. But the
BCT is to me one of the best planning devices
that in my career we've had an opportunity to put
(45:50):
in place for clients.
Speaker 3 (45:51):
I think a misconception is too is I think when
I'm talking with clients and they hear that it's going
into the BCT, think that they're on the hook in
a way then having to then create their own trust
and pay for their own trust. And I said, well, no,
in the trust document itself already has all of the
(46:11):
terms for your trust, and your trust is already created.
So I think that's something important to note about this
BCT that we include in our trust as well.
Speaker 1 (46:20):
Sure and for the beneficiary, if they ever did get divorced,
these assets are fully protected if they ever got sued,
if they ever went bankrupt, if they ever had a
health crisis, and lord knows, when the health premiums go
up there are going to be a ton of people
uninsured for basic health care. You can create a trust
that is protected for all of those purposes. And if
(46:42):
your children are wildly successful and they have taxable estates
and their states are over seven million in New York.
The money you leave in this trust is not part
of their taxable estate either, so the beneficiary control trust
protects it from divorcing spouses, lawsuit creditors, bankerd sees, medicaid
and healthcare creditors, and a state taxes if they have
(47:05):
their own taxable estates. And the best part about this,
adrian if you're thinking about it, and Mom think about this,
you can create a trust for Adriana that would leave
the assets to her in a trust that she controls,
that she's the trustee of that she can invest on
her own and invest in anything she wants, use the
money for herself, use the money for her family. And
(47:28):
it's an open door for her to do all of
those things for this trust. But there is no door
for anyone else. No one else can touch the trust.
And so when you're doing trust planning, this trust simply
splits out. We get a new tax identification number and
a certification of trust. That's the administration, and then the
(47:48):
child takes their inheritance whatever share it is, and they
manage it and they have an opportunity to take that
money out of the trust. But In all of my
years of practice, I've heard children talk about it and say, oh,
I'm just going to take the money out. But once
they see how easy it is and how protected it is,
they don't have to do any work themselves to protect
(48:09):
the assets left by the parent.
Speaker 2 (48:11):
It's done.
Speaker 3 (48:12):
They created a trust for them.
Speaker 1 (48:14):
They created a trust, and even if the parent doesn't
like their children, which I know is not the case
in your case, but if they love their grandchildren, they
can lock this trust down, make it available to their child,
but ensure that it gets down to the grandkids.
Speaker 2 (48:30):
This is a three generation plan in one.
Speaker 1 (48:33):
Revocable living trust or irrevocable living trust. So you're taking
care of yourself during your lifetime. You're taking care of
your kids and engineering a plan for them that they
could never do for themselves. You can't do this for
your own assets. It can only be done by a
third party, a parent for a child, and then it
goes right on down to the grandkids. So it's in
(48:55):
my estimation, giving your children, your grandchildren the best possible
solution to secure their future, to make sure that the
things you've worked a lifetime for are protected and that
they pass down through the generations, and all of this
is done without ever stepping foot in a courtroom. So Adriana,
(49:17):
just some final thoughts. We got about a minute left
on trust versus will probate versus nonprobate.
Speaker 3 (49:24):
Sure, I mean, I am doing this every day. As
you said in the beginning, this is really what I
look at all day, and I think before joining the
firm here, it wasn't as clear to me. The huge
difference is actually when it comes to administering a will
versus a trust. And now since working here, it's I
highly recommend please do the trust administration for your loved ones.
(49:48):
It's much simpler, it saves your estate money, and it's
just it's something I can't stress enough.
Speaker 1 (49:54):
And with that we're going to close it out. So
we have a few more seconds. Remember January twentieth our
Trust Administration Workshop. It's going to be at the Capitol
Region Chamber of Commerce at five Computer Drive off of
Wolf Road, twelve to one thirty on January twentieth. Learn
about trusts, learn how they work, why they work, and
(50:15):
as always, you can contact us at five one eight
four five nine two one zero zero or go.
Speaker 2 (50:22):
To our website.
Speaker 1 (50:23):
Our website has a lot of resources, rich resources. We
have videos, webinars. Check it out at pyrolad dot com.
We hope to see you back on the radio next week.
Speaker 2 (50:32):
Have a great day.
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