Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Good morning everyone, Welcome to Life Happens Radio. Im Lupiro
your host for this morning, and Life Happens is a
weekly radio broadcast bringing you ideas, thoughts, planning concepts so
that you can do the things you need to do
to prepare yourself, prepare your family, and make sure that
things are covered throughout your life. And life Happens. It's
just that we look around us, the things that we do,
(00:25):
the things that we see, the things that we read,
but more importantly, the things happening right around us in
our own homes, in our neighbor's homes, in our relatives' homes.
Every day there's something that happens that impacts you and
the people that you love. So how do we prepare
ourselves as we go through life to face those challenges,
to face death, disability, incapacity, changes of fortune, changes of health.
(00:51):
How do we do the things we need to do
to be in a place where we can do that.
And I have some clients that just say, you know what,
I'll be dead, let my family figure it out. And
that's not a plan, folks, that's not something that's going
to serve you or your family very well. Because things
happen during your lifetime that you may not like, and
upon your passing, your family has to figure it all out.
(01:14):
So I'm very lucky today to have with me one
of our associate attorneys who handles all of these kinds
of matters at Pierre O'Connor and Strauss. That is Adriana Mahala.
Good morning, Adriana. And Adriana does a state administration and
a series of other things. She's a very good real
estate attorney. And I think you talked about that last
time you were on the air. I did, yes, the
(01:35):
real estate stuff. And we are going to talk today
about how to punish your family when you die. If
that's an intentionally thought provoking concept, how to punish your
family when you die, what does that really mean? Well,
if you fail to plan, or you do a poor plan,
your family can have not months, but years of anguish,
(02:00):
cost conflict. And so we're going to talk about some
of the things that you need to think about now
to be prepared for then. And Adriana, one of the
things that people don't understand is if you don't have
a will, you're just throwing it up for grabs. Correct,
So what happens if I have assets my home, and
(02:24):
I don't have anybody else on the deed. It's just
mine and I die. How does that all work out?
What happens to the house is sitting there, nobody's paying taxes,
nobody's maintaining the house. How do you deal with that property?
Speaker 2 (02:38):
Well, we follow what New York State wants, which is
laws of Intestine.
Speaker 1 (02:42):
And there's the problem, folks, right there, you're putting your
estate plan in the hands of the New York State legislature.
Speaker 2 (02:49):
Yes, and it typically the way it follows. If you
don't have a will, and you pass without a will,
your assets will first go if you have a spouse,
to your spouse, then to your children. Then you go
up the ladder to your parents, then you go back
down the ladder. Siblings, yeah, aunts, uncles first, cousins, et cetera.
Speaker 1 (03:08):
A lot of people think, and I've had this case
happen that. Okay, I have a wife, I have three kids,
so when I die, it all goes to my wife,
and then ultimately she dies, it goes to our three kids.
But that's not the case.
Speaker 2 (03:19):
It's not the case.
Speaker 1 (03:20):
So how does it go if I have children and
a spouse, how does it pass?
Speaker 2 (03:24):
Sure? So the first fifty thousand off the top of
the estate will go to the spouse, and then the
remainder gets split between. In your example, if you have
three kids, the four of them, Yeah, and it's how
much do the spouse first fifty thousand and then half yes,
and then the other half goes to the kids.
Speaker 1 (03:42):
Yes. So I had a family which they had businesses,
you know, not one, two, three, four different businesses, and
they were all in the husband's name, and the husband
died unexpectedly prematurely, and they went to court to probate
an administration and there's no will in that case. So
how do you even begin Who starts this process?
Speaker 2 (04:04):
Well, someone needs to petition the court to be appointed
as administrator of someone's a state. In that instance, again
we follow New York law. There are you know, priority,
So in that instance, the spouse would get priority. I mean,
the question is is the spouse probably the best person
to handle that a state? You know, are they financially responsible,
(04:25):
are they able to keep accurate records? But per New
York law, the spouse is the first priority. After that
we'll look at children.
Speaker 1 (04:32):
And then it goes to children. So there are several
things that come to mind there. And I've had this
case over my forty two year career where the spouse
didn't want it to or wasn't capable. But now, in
that case, there are businesses to run and the kids
were working in the businesses. So how do you do
that if the spouse has priority, how do you go
(04:53):
about getting the right person, the right child or children
in as administrators?
Speaker 2 (04:58):
Sure, so these that would probably need to sign some
type of renunciation and all, you know, a waiver and
consent saying yes, I am fine with this child surveying
as the administrator of the estate. But it's not just
you know, with the courts, you actually have to go
through those steps. Yeah, they're not just going to take
your word for it. You actually have to take the steps.
Speaker 1 (05:19):
I get it. And so it's a very formalistic state.
And Adrian and I were talking a little bit before
the show. The statutes that govern this area of law
in New York State are almost one hundred years old
and they have not been updated. And I have a
professor from Albany Law School that I was friends with
that I got to know very closely over time, and
(05:39):
that's going back a while. So we worked together on
Bar Association committees, and he wrote a new statute for
New York for state's powers and trust law to modernize
New York's state law. And it's still sitting as far
as I know, on the legislature's desk. And this goes
back to the initial comment I made. You're relying on
the New York state legislature to write your will and
(06:01):
to write your estate plan, and that law, that new
modernization of the statute to bring us in compliance with
all the other states that we practice in Florida, New Jersey, Connecticut,
We're in a lot of states, Massachusetts, there's nothing like
New York probate. It's so different in the other states.
And yet New York has not changed its law in
almost one hundred years. So you have these antiquated formalistic
(06:24):
forms and documents and procedures that you have to follow.
And if you don't have a will, you have a
spouse in this case who is not going to be
the administrator. So one of the kids has to come
up first of all. Adriana first and foremost. When someone
dies prematurely, families are in chaos. They are mourning, They
(06:45):
have emotional issues that they have to overcome. I've seen
a lot of spouses that just couldn't deal with the
estate or the matter is in the estate for months,
it's not years or at all, And so we have
to be cognizant of that and be empathetic to the
situation that our families are in. And then you have
to tell them how formalistic and screwed out the systemus.
(07:07):
So how do you do that?
Speaker 2 (07:09):
Yeah, I know sometimes people might get a little upset
with me, and I just say, listen, blame it on
the courts, blame it on New York State. But yeah,
it is very difficult when you are, you know, dealing
with families that are going through probably one of the
most difficult times in their lives or maybe something they've
never had to experience before. And here we come saying that, oh,
(07:33):
in order to get access to these funds, or let's
talk about a house if it was just solely owned
by the decedent, that we need to go through X,
Y and Z, and we need to do that now.
Speaker 1 (07:44):
And I think, folks, it's worth you listening as we
walk through what has to happen. You hear everybody talk about, oh,
Probate's bad probate's bad. Here's what has to happen for
that family, wife, three kids, husband dies, owning businesses. What
do they have to do in order to start the process.
But then, what if there are people out there that
(08:06):
aren't part of this nuclear family, there's a child from
a prior marriage, or strange children. How do you deal
with all of that in the context of an administration
like this with no will?
Speaker 2 (08:19):
Yes, So New York State requires that all distributees, which
that's pretty much the fancy way of saying next of
kin that all distributees are either signing off on a
document saying that yes, they approve this estate going through probate,
they're fine with the administramt.
Speaker 1 (08:38):
What's a distribute for our listeners?
Speaker 2 (08:40):
So next of kin? That's the way I like, statue
by statute next of kins. So you know, spouse, child,
no child, parents, so on and so forth.
Speaker 1 (08:51):
That's twice removed.
Speaker 2 (08:53):
Yes, and we have a couple of those. We're the
only quote unquote next of kin distributees our first cousins
once removed.
Speaker 1 (09:00):
Talk about that problem a little bit later. Let's get
back to our family. So we this is a good
situation because we don't have that fourth child who we
can't find, who we would have to search for, and
we'll talk about that situation, what to do with missing
airs or recalculitrant errors, who just won't sign anything. In
(09:20):
this case, we have a clean slate, we have everybody cooperating.
The spouse is going to renounce, and one or two
or three of the kids are going to step up
and become the administrators. What do they then have to do?
Speaker 2 (09:32):
So that's a little more simple. I mean, there still
is a lot of paperwork they have to sign. They
all need to sign what's called the waiver and consent,
as I mentioned before, saying that they agree to the
will being probated. They agree to let's say this child
surveying as the administrator of the estate. But there's other
(09:52):
paperwork as well. We have to fill out the whole
petition for letters of administration, and that's a very d
of the document. It's typically around six pages where we
have to include a lot of information. Damn death, place
of death, Who are the next of kin that are
entitled to everything?
Speaker 1 (10:11):
And you have to try to give the court of value, yes,
of all of the assets.
Speaker 2 (10:17):
Yes, lou thank you for bringing that up, because that's
one of I think the most difficult parts when I
talk with people, especially when they're grieving, like I need.
Speaker 1 (10:25):
A value, or where are these businesses work?
Speaker 2 (10:28):
Yes, let's talk about these accounts. And maybe they don't
know all the accounts are out there yet because they
don't have the court authority to look at all of
the accounts yet. And it's always we have to provide
a value to the court. The court's not going to
accept us.
Speaker 1 (10:42):
And why because they charge yes, yes, approbate fee based
upon the value of the estate. So they want to
know what's coming through the pipeline, what's going to come
through this estate in the surrogate's court, this is the
court that you're dealing in, and what is the value
and how do they charge? There's a statutory commit a
sassory feet that the court's charge and so you have
(11:06):
to come up with all of that before you petition.
So you got to do an inventory, get an idea
on values. It doesn't have to be by the dollar,
but it has to be closed.
Speaker 2 (11:15):
Yeah, and we always try to I guess underestimate a
bit and.
Speaker 1 (11:19):
You might just later because you do, and we'll talk
about this. Ultimately have to file an inventory which has
an itemization of those assets. So this is just to
start the ball rolling. You need basic values, but then
you have to itemize those values later for the court
to approve. And then okay, so we have an inventory,
(11:39):
we have to ask the inventory of the assets, value
the assets, pay a probate fee, prepare a petition, get
the people that are not going to be participating to
sign waivers. In this case, the spouse would sign a
waiver and a renunciation and then the kids that are
going to take this forward would file all of that
documentation with the court and then what.
Speaker 2 (12:02):
Happens well, and there's even other documents too. Yes, we
have the affidavit of family truth.
Speaker 1 (12:07):
Oh let's talk about that.
Speaker 2 (12:08):
Yeah, and we need someone disinterested, preferably not a family member.
I like to say, you know a neighbor or a
close friend.
Speaker 1 (12:15):
So an affidavit swearing to who those heirs are correct,
who the distributees are, because you can't just ramre ond
this through without identifying people. And if you was the
fiduciary and the person who's petitioning the court to be
the administrator takes on a whole series of duties and
obligations to the beneficiaries, including the beneficiaries that they omit,
(12:38):
whether intentionally or by accident. And we've had situations. I've
had a case myself where we didn't find out about
a child of the decendent until after the petition had
already been filed, and all of a sudden, it's discovered
that they had an illegitimate child earlier in life that
was out there and all of a sudden, wow showed up.
(13:00):
Now you have to take all of that into consideration too,
And so they file all of this and then you wait,
you wait, So what just talk about the court Because
there's only one surrogate's court, and in many counties one
judge that handles all of these. Some counties have judges
(13:20):
that rotate between different Supreme Court surrogate's court, but most
counties have won. What if the judge is on vacation
or on trial, or just has a backlog of cases
and during COVID folks, these courts were shut down? What happens?
Speaker 2 (13:35):
We wait? I mean, some courts, some surrogates courts maybe
are quicker than others with granting the petitioner the letters
to act as fiduciary. You know, Albany County is a
pretty quick turnaround. Thank you, Albany, because that is very
nice for the family members to get the documents they
need to actually start collecting assets of the decedent. But
(13:58):
I know, Lou you were saying earlier that you know
in some counties there's a sixty nine month or.
Speaker 1 (14:03):
So New York Country practice all over the state, folks.
And we have an office in Manhattan, in Manhattan and
New York County six to nine months on a routine application. Yeah,
so this family that I just laid out has four businesses.
What happens to those four businesses while we're waiting for
to find all the heirrors, to find somebody to sign
an affidata family tree, to get the waivers all signed,
(14:24):
and back to get the petition signed, to file all
those papers with the court, wait for the judge to
issue a court order opening up the probate, and then
issuing something called letters of administration. What happens to the
businesses theren limbo nothing? Think about that. While you take
a short break, we're gonna be back after this. You're
listening to Life Happens Radio on Talker Radio WGY. All right,
(14:48):
we are back. Thanks for listening. I'm Lupiro, your host
for this morning on Life Happens Radio, and I want
to give a shout out to our faithful listeners. I've
been running into people more and more frequently, and people
coming up and saying, oh, I listened to your show
on Saturdays while I am dusting or doing the laundry
or whatever whatever, But thank you for listening. We're glad
(15:11):
that you're here. Today is a very interesting show. I
have with me one of our star associates, Adriana Mahelk,
who is working we are our clients on a state administration. Now,
this is not something that you think about very often.
You shouldn't think about it. But what we're going to
do today is talk about the realities of what happens
when someone dies, and in this case, we've been talking
(15:33):
about without a plan, without a will, even what happens.
How do assets get dealt with, how does the court
deal with them? And because we are in court, we
are titling today's show how to punish your family when
you die. Why would you ever subject your family to
two or three years of court proceedings, lawyers, fees, delays,
no control. We're going to talk about that in the
(15:55):
second half of the show, So stay with us. How
to avoid that problem for your family, how to pull
them out of this fire before the fire even starts.
So it's fire prevention week here doing a plan that
keeps you out of this mess. And we were talking
about when someone dies without a will and the process,
all the documents that have to get signed and all
(16:16):
the people that are involved in this have to sign
off and sign waivers. What if one of those beneficiaries
says you, no, not so much. I don't think my
brother should be the administrator. I think I should be
the administrator. And that happens. It does happen very frequently.
Speaker 2 (16:31):
So the court gives you another option that you can
serve them with the citation saying you appear in court
on this day usually it's thirty days out or so,
and you can attend the court date and express your objections,
express why you think you should be the administrator or
(16:51):
why the person that is the proposed administrator should not
be serving.
Speaker 1 (16:56):
Because my brother had power of attorney and I think
he stole all the assets and there's nothing left in
the state. We'll get to that later, sure, but those
are the things that we hear from our clients when
they come in. And when there's no will, there's no guidance, folks,
this is just up for grabs. So what happens when
that brother comes in and shows up with a lawyer
(17:18):
on the citation return date? How do you decide? How
does the judge decide?
Speaker 2 (17:23):
Well, and the judge probably is not going to decide
right then and there either, so that's even going to be.
Speaker 1 (17:28):
More time for they don't have a legal basis.
Speaker 2 (17:30):
Right right, so they'll here are all the parties, positions, arguments,
and then they I have at least.
Speaker 1 (17:38):
Two law firms, law firms.
Speaker 2 (17:39):
The meter is running more legal fees going.
Speaker 1 (17:42):
Through a hearing, and you've got to brief the hearing
and submit documents, papers, affidavits, petitions to be appointed, and
then you have a hearing and you're running the meter. Yeah,
you know whatever. The legal fees are three four, five, six,
seven hundred dollars an hour for the attorney of choice,
and that's not a pleasant position for a family to be,
(18:04):
and especially when you've got businesses that are held up
that can't produce revenue, they can't distribute money, they can't
do anything.
Speaker 2 (18:10):
There's so many delays. Yeah, there's so many delays that
can happen. That's just process, right, And they're not even
appointed yet as anything, and they keep you know, taking weeks,
months and excess legal fees.
Speaker 1 (18:23):
What if one of those children has a disability, is
there a different procedure because I know the courts protect
people with disabilities.
Speaker 2 (18:33):
Yes, So if one of the children or you know,
distributees has a disability, the court requires that something called
the guardian at item is appointed. And that's another private
practice attorney that the court appoints coming in to advocate
and protect that child with disabilities interest. So again adding
(18:56):
on more legal fees, there is another attorney in the mix,
and typically that payment comes out of the estate.
Speaker 1 (19:02):
Yeah. Yeah, so just keep piling up those fees, folks.
And probate and you mentioned delays, Adriana, and we're going
to talk about this, but there are processes, and I
mentioned the formalistic nature of New York state probate procedure.
You can't just walk into the court and get letters testamentary.
You have to go through all of these paper all
(19:23):
this paperwork, and then get the court to issue in
order approving all of that paperwork and then you get
your authority, which is a certificate that you can use
to go about collecting the assets of the estate. But
when we have the guardian at lighthem, you have to
wait for that report. When we can't find airrors, you
have to wait for that. And let's just take that
on now, because it happens probably more in intestate situations
(19:45):
than even probate situations with a will. We're going to
talk about the will next. But what if you cannot
find beneficiaries.
Speaker 2 (19:53):
That's a fun one. Fun that's a fun one for everyone,
just one for you to explain. Yes, yes, you know,
just because you don't know who. Let's say if someone
who passed away they had a sibling that predeceased them,
so the court wants to see who are the predeceased
siblings next of ken And just because you don't know
(20:14):
who they are or where they live, the court's not
just going to roll over and say that's fine. We
have to actually take the steps show the court that
we've done our due diligence, whether that's a you know,
people search, even to the fact where we might need
to publish in a newspaper something looking for these side. Right,
the decedents that there's a.
Speaker 1 (20:35):
Proceeding and that you have opportunities. But before you get
to that, judges will let you just go there. No,
you have to go through a full due diligence search
and file an affirmation of due diligence with the court
as to all the attempts you made to find this
potential distributee who has never known the decedent and now
has to be part of the court proceeding. And that's
(20:57):
hard for people to understand.
Speaker 2 (20:58):
Well, and I find it it's even more difficult to
understand to your point, when there is a will, as
people say, well, this person's not even in the will,
why do we have to do all this? That's the
court process we have to follow when it comes to
probate and administration.
Speaker 1 (21:14):
So we wouldn't be given you all the negative without
some positive, folks. In the second half of the show,
we're going to talk about how to keep your family
out of this mess, and how to prepare and plan
accordingly so that you have an efficient, economical, prompt administration
of your trust. And in this case, we're going to
try to avoid all of this court morass. So in
(21:36):
testacy we then just follow it quickly through once they
get appointed. What are some of the processes.
Speaker 2 (21:43):
Once they get appointed, they have a seven month creditor
period in New York State, So creditors have seven months
from the date they're appointed to file a claim against
the estate, whether the decedent't owed any money, whether that's
a potential Medicaid leen. But during those seven months, the
estate cannot be closed. Distribution should not be made because
(22:04):
if a creditor does turn up, we need to make
sure that that creditor gets paid first.
Speaker 1 (22:09):
Yeah, if the person was on medicaid, you as a fiduciary,
whether it's with a will or without a will, you
have an obligation to address the Medicaid lean issue because
you know that Medicaid has a claim against that estate,
and if there are assets in probate, that's what they
claim against. New York State has farmed this out to
(22:30):
a company in Texas. So executors once they get appointed
or administrators, they get this missive from this company in
Texas with six or seven pages they have to fill
out of all of the information, what are the assets,
all the different things with regard to that claim, and
if they don't do it properly and they're either an
executor under a will or administrator pointed by the court,
(22:52):
they have potential liability. Thought, So, if you've distributed all
the assets, folks, you say, oh, I want to do
the right thing. I want to get all these things
out of the estate. And a claim comes back against
the estate and you have voided the estate of the assets,
you are liable and responsible personally for your breach of
(23:12):
fiduciary duty. So this seven month creditors period is no joke.
Speaker 2 (23:17):
No it's not. And during that seven months, even though
we make sure and advise our clients not to be
making those distributions that you referenced, during that seven month
is their time to actually use their letters they received
from the court appointing them as fiduciary to collect assets.
See what you know, bank accounts that the deceitent had
out there, and they can transfer them into the estate
(23:39):
bank account that we instruct them to open, and we
hold those funds there for seven months. So at some
point in the beginning of the process, you know, filing
all that paperwork, you're hearing from me a lot, You're
dealing with me a lot. But during that seven months
it doesn't have to be as much because you can
be collecting assets and we have to wait.
Speaker 1 (23:58):
And there's not a lot that you can do except wait.
So don't well, I hope you do. Wait till the
news is over and you come back with us, because
in the second half we're going to talk about the
will and all the issues involved with the will and
then move to trusts because the trust is the answer.
Stay with us, and we are back. I want to
(24:20):
give you a heads up on an upcoming program that
our listeners have found extremely useful, and we've been doing
this now for a number of years. We do it
on a quarterly basis and we call it our Trust
Administration Workshop. The things that we're talking about today, the
problems that arise because of a failure to plan, really
come out in the wash when you start administering that trust.
(24:40):
What happens when you set it up, you put your
assets in, how do you maintain it year over year?
What tax returns do you have to file? We talked
about fiduciary responsibility. The trustee is responsible for that trust
and the beneficiaries, So how do you make sure that
you're doing your due diligence and accounting properly? As a trustee.
We cover all of that in a very comprehensive ninety
(25:02):
minute session and it's coming up on September thirtieth. We
do it in conjunction with David Wijeski, who is the
founding partner and manager of Wijeskian Company CPAs. So we
have a CPA, we have myself as an attorney, we
have Michael Bates as a trust officer and representing Trustco
and the trust officers. And this is a ninety minute
(25:24):
seminar begins at eleven thirty with registration twelve to one
thirty is the program. We do serve a lunch, so
you can join us at the Capital Region Chamber of Commerce,
which is five computer drive, South Albany, New York, September thirtieth,
starting charp at twelve noon, and you'll learn about how
to find the right trust, how to administer the trust,
(25:46):
and how this trust works ultimately upon distribution. And we're
going to contrast a trust administration soon on the show
here in the next thirty minutes with approbate administration and folks,
they are night and day, and this is where it
all comes out. So September thirtieth, noon to one thirty
join us at the Capital Region Chamber of Commerce. And
(26:08):
you can always register for all of our events at
pyrolaw dot com. That's p I E R R O
l a w dot com. Go to the events tab.
You can call us right now and leave us a
message and we will register you at five one eight
four five nine two one zero zero five one eight
four five nine twenty one hundred or pyro law dot com.
(26:28):
Would love to see you on September thirtieth at noon
at the Capitol Region Chamber of Commerce. So I'm in
studio live today here on a nice looking weekend, nice
fall weekend, So get your apple picking in, you know,
get out and rake some leaves. Well they're not really
down yet, so that's premature, but get out and enjoy
the day, enjoy the weekend. I hope you do. And
(26:50):
today we're talking about some things that you know, it's
good things to think about now. And as we use
this adage they attribute it to John F. Kennedy. The
time to fix a leaky roof is when the sun
is shining. So the sun is shining, and if you
need a plan that is going to make sure that
you don't have leaks that your estate is administered properly,
(27:11):
that the right people are in charge of your estate,
that they have the right authority, and that they're not
relying on a court that is overburdened, overwhelmed, and unnecessarily
formalistic based upon the law that the judges have to
deal with. I mean, they can't change the law, they
can only administer it. And our legislature huh, forget it.
(27:32):
They haven't changed this law in one hundred years, folks,
So how do we avoid that? But let's talk first, Adriana.
We talked about intestacy, what happens when you don't have
a will, all of the issues, all the fights that
come up, and finding the people, finding your distributees or
your natural errors, and then petitioning the court and going
through all of the processes. How long does this usually
(27:53):
take to get through this kind of administration on a
good day in an estate that has no real issues.
Remembering that you don't file for probate on the day
the person dies, right.
Speaker 2 (28:06):
So on a good day, we could potentially have this
wrapped up seven months from the date they're appointed, which.
Speaker 1 (28:15):
In most cases, by the time you get all the information,
as we said, find all the errors, find all the assets,
value the assets, pay the probate fee.
Speaker 2 (28:24):
Have everyone sign off, wait for the court.
Speaker 1 (28:26):
You're a few months in, a few months in, and
then you're not going to wind it down on the
last day of the seven month period. You're going to
take some time. You have to make distributions, you have
to file some paperwork. So how do you close an
estate with the court.
Speaker 2 (28:40):
So, as Lou referenced earlier, you do have to file
that inventory of assets document, So that's one document the
court does require. And pretty much with that again, they
want to know what's in the estate and to make
sure that they get their filing fee paid.
Speaker 1 (28:54):
Ask the filing fee. They want to make sure you
have an overcharged commissions.
Speaker 2 (28:58):
Right and if you have, you know, found or discovered
more assets, does that reflect the potentially higher filing fee
that you should have paid originally. And then there's also
receipts and releases that all beneficiaries do have to sign.
So if the will or for in testacy, let's say
the spouse or the children are given a sum of
money or let's say a diamond ring or something, the
(29:21):
beneficiaries need to sign off on a document saying yes,
I received this. This was pursuant to you know, this
section under the will, or because I'm taking an intestacy
share and that I'm holding the executor or administrator harmless.
Speaker 1 (29:37):
Yeah, it's coming back to the liability. Yes, So if
you get to the end of the seven month creditors period,
you've checked one box. Yes, but what if there are
taxes do that you didn't know about? You have to
file final income tax returns for the deceson, correct, and
you also have to file an a state tax income
tax return, so you ain't done. No, the paperwork's done now,
(30:01):
and that can be a tax return that isn't due
till the next April fifteenth. So this isn't going to
be a seven month or a twelve month period in
most cases because you still have details like income tax
returns and other things that are going to keep you
in the game and keep the estate open. And you know,
eighteen months is a pretty good timeframe to tell people
(30:25):
because then you've got the tax returns that would be done.
But two years is not unusual, no, and these are
in cases where you don't have contests. We have a
case right now that it closed last year, but it
was ten years in the probate court because the siblings
were fighting. Everybody had a lawyer cost a fortune, and
(30:48):
one vestige of that is still going on. Our clients
are out, but there's one piece that's still going on.
And this is something, folks, that is going to cost money.
We talked about the delay, We talked about the aggravation
and frustration and the emotional roller coaster that you go
through with this kind of a process. But the costs, Adriana,
(31:10):
come in several forms. We mentioned the court costs. Attorney's
fees are not insubstantial in cases where you have complex matters,
and that may not be one lawyer, that may be
two lawyers. You may have a guardian ed item, you
may have other attorneys.
Speaker 2 (31:25):
To represent the other beneficiaries, interests or whatnot.
Speaker 1 (31:28):
Yep. And then the person and this is kind of
a contest to get the appointment. The person who handles
the estate, who becomes the administrator, is entitled to statutory commissions, yes,
and those are not in substantial either.
Speaker 2 (31:44):
No.
Speaker 1 (31:45):
So statutory commissions in New York start at five percent yeah,
of the first one hundred thousand dollars of value, four
percent of the next two hundred thousand dollars of value
three percent. I believe up to a million. But when
you calculate those commissions on approbated state of a million dollars,
it's it's a chat, it's a real check. And you're
(32:08):
paying your attorneys, you're paying your commissions to your executor
or administrator, you're paying court fees, you're paying property maintenance
fees during the course of the administration. So some folks,
if you read the articles, estimate three to five percent
of the estate is going to go in fees, commissions
and other costs. And so a trust, I can tell you,
(32:31):
is a lot less. So we're going to talk about
that in a minute. But let's turn over to wills
and how many clients come into us and say, oh,
I have a will, I don't have to go to probate.
Are they right?
Speaker 2 (32:42):
They are not right, unfortunately, And you know most of
the loved ones say that to me too. Oh they
had a will. I'm named as the executor in the will.
All's fine, yep.
Speaker 1 (32:51):
I tell them take the will to a bank and.
Speaker 2 (32:53):
See how it goes.
Speaker 1 (32:54):
Show take a death certificate and this will show them
on page twelve that you're the executor of the estate
and try to access the bank accounts in that bank.
Are they going to be successful? No? So what's what's
the teller going to tell them that.
Speaker 2 (33:06):
They need the letters? Testamentary?
Speaker 1 (33:08):
Say, I need some kind of letters. I don't know
what they are.
Speaker 2 (33:11):
Testimonial. I gear a lot, but it's testamentary. But I
don't blame some people for not knowing that.
Speaker 1 (33:19):
People don't do this listeners of life happens. No one
has an education in this area.
Speaker 2 (33:24):
Good point, low.
Speaker 1 (33:26):
So take the will. What are the steps? Are they
similar to the intested administration? Is there more to do
less to do? Kind of the same.
Speaker 2 (33:35):
I would say it's very similar. You know, obviously the
court needs to see a copy or the original will.
Excuse me, never.
Speaker 1 (33:42):
A copy, and don't unstaple it.
Speaker 2 (33:44):
Don't unstable it, because then.
Speaker 1 (33:46):
You have to do a separate affidavita.
Speaker 2 (33:47):
We have to do another affidavit for you. So just
keep the original will.
Speaker 1 (33:51):
Folks, every time you turn around, if there's a glitch,
you've got a paper the heck.
Speaker 2 (33:55):
I know. And again, it's not me, it's not us,
you know, we're just doing what the or it needs
to get you appointed. But it's pretty similar. You know
we have the petition, you still need to do that
affidavit of family tree. Everyone. Back to what I was
saying originally with distributees, the next of kin signing off
on waivers and consents or getting served with a citation
(34:18):
even if they're not listed in the will. Even if
the person, if the decedent left everything to their best friend,
their family members, their next of kin, the court requires
still need to sign off on all those documents.
Speaker 1 (34:31):
And this becomes a drafting issue too. And this is
how you learn how to draft a will by looking
at the mistakes that people make in the administration of
the estate. Because when you look back to front and
you have the value of time to see where the
land mines are in the administration of that estate. You
never want to ignore distributees in the will, right you
(34:51):
want to acknowledge them. Say that I know that I
have a son who lives in California who I haven't
talked to for twenty years. I am specifically disin inheriting
that son from this will so that when they come
back to court on that citation return date, because we'll
talk about that, you have to come back to court
if they don't waive. They're going to look at this
and say, Okay, I wasn't forgotten. Then they have grounds
(35:15):
to contest a will, and there are four grounds in
New York. Will kind of allude to them. One is
that the will wasn't signed properly. So if you don't
have two witnesses that have signed it at the end
with the test dator having declared it to be their will,
and they have to have requisite capacity that s item
number two. They have to be competent to sign a will.
(35:37):
You can't just do it if you're you know, comatose
and holding Dad's hand and forging in effective signature. They
cannot be under undue influence or duress. So somebody can't
have a gun to their head saying you need to
sign this will and leave me all your money, or
there are other types of duress. I'm not going to
take care of you unless you leave me all of
your money. We hear that from siblings of children who
(36:00):
have taken mom and dad in and are quote unquote
taking care of him and taking care of their assets
at the same time. So all of these kinds of
things come out in this wash in the court, and
then you go through this whole process, and the will
doesn't answer all of those questions because if you have
forgotten someone or left someone out, when they have to
(36:21):
come in and you have an executor who's named in
the will and they need to get these letters testamentary,
go through these steps again. The petition is number one, yes,
and all the things that go into that petition correct.
Speaker 2 (36:35):
So with the petition again where you have to fill
out all of those distributees. So even though let's say,
as you are saying, lo, the will specifically says I
disinherit my son, well he's still the decedent son, he's
still considered a next of kin and he needs to
sign off on the documents saying that. Yeah, I understand
the will's going to probate and this person can serve
(36:56):
as executor. Again, we'll do the affidavit of family tree.
You know, there's a couple different attorney certification forms we
have to sign when it comes to probate. But if
we have to do a citation return date, it's kind
of similar with the administration. You know, it's about thirty
days out. You have to serve them.
Speaker 1 (37:14):
You have to appear in court.
Speaker 2 (37:15):
Appear in court if you don't appear in court, it's
deemed that you have no objections to anything.
Speaker 1 (37:22):
But if you're representing, as we often do, the petitioner,
we have to appear in court and wait for people
to show up yeap. And in New York, all they
have to do is show up, raise their hands, say
I object to the will and I want a hearing.
And the hearing is called a fourteen oh four examination,
(37:42):
where you have to produce the witnesses to the will yeah,
to prove that the will was validly executed. And this
is one of the hostage taking efforts that people make
to try to squeeze some money out of the estate
when they're not entitled to any Is okay, We're going
to rate this executor over the coals. We're gonna make
them do a fourteen oh four hearing. I had one
(38:03):
where the will showed up late. We had already filed
for administration, and there were eight witnesses. The person had
done a main will in three constiles wow, and they
had taken it to a bank to have bank personnel.
Banks don't do this anymore. That bank personnel as their witnesses.
And we had the subpoena all eight bank tellers. Wow,
(38:25):
And of course most of them had left that bank,
and there were different places, and we had a hearing
that had all eight testified goodness. And we have been
in fourteen oh four hearings. And this is a matter
of right, folks. This is not something where you have
to have a cause, celeb You're entitled to examine those witnesses.
Speaker 2 (38:42):
Yea.
Speaker 1 (38:43):
Even if and this is another document that you have
to submit, we take it for granted because we do
it with every will. An affidavit of subscribing witnesses. Yes,
so talk about that.
Speaker 2 (38:53):
So there's a separate affidavit that's with the will, and
the two witnesses sign it saying that it was signed.
You know, this person was of sound mind. They signed
it in our presence on this date, at this location.
And it's to the point where they're trying to I
guess I don't want to say back up the will,
but it gives an additional affidavit saying that, yeah, no,
(39:15):
this was valid. The person was of sound mind.
Speaker 1 (39:18):
And if you're witnessing a will, you're swearing under penalty
of perjury. Yes, that's about quest all of those facts
that the person had capacity that they were not under
any undue influence that they were free to sign the will,
that they understood the will, could read and write, read
and write English, and had an understanding of what was
going on in that will, and you're signing an affidavit
at the time the will is signed. We've seen a
(39:40):
lot of monkey business with these affidavits where they were
signed after the will was signed and different things. So
this is all the formalistic things that are good actually
to make sure that the will was validly executed. If
it wasn't, then then you have a major issue. But
if you even if you have that affidavit and the
person just shows up on citation date, raises their hand
and says I want to hearing, they get to examine
(40:02):
those witnesses. I've been that witness in several cases where
families are challenging the execution and I'm the attorney, draftsman
and witness because a lot of times that's how it happens,
and I'm testifying that the person knew exactly what they
were doing, and we actually have a checklist of questions
that we ask at the time the will gets signed.
(40:23):
That is what they call prima facia evidence that it
was duly executed. We then have to testify as to
the process that that affidavit or that checklist was filled out.
But that in our practice has carried the day in
a lot of cases. Sure, because now it's just the
witnesses are all swearing under oath as they watch the
test dat or answer these questions that they observed it,
(40:47):
that they believe that they had the capacity and were
freely acting all the things that you have to swear
to in this affidavit. We're almost out of breath and
we're not even halfway done yet. And these are all
the problems, folks, that you face when you're relying on
a will probate. We're gonna take one more short break.
When we come back, we'll finish up the problems and
talk about the solutions. So stay with us, and we
(41:11):
are back. Welcome back to Life Happens Radio. We're glad
you're with us on this Saturday morning. We are all
just getting pumped up talking about all the problems that
we face as lawyers in the probate court and what
we have to deal with for our clients, and how
we have to try to explain away the antiquated laws
and processes that they have to go through when they
(41:32):
have a will or they don't have a will and
they're in intestacy and subjecting themselves to this court process.
I talk to colleagues in New Jersey who say, my
clients can walk into a probate court with a will
and the clerk will help them fill out the paperwork
and they can get letters without any other process. Seriously, yeah, so,
and Florida's is not that dissimilar. They don't have all
(41:56):
of these same requirements that New York has, and judges
hold you to your task. They will not give you
any quarter if you don't file the papers properly, if
you don't have all the papers completed. You have to
comply with all of these rules. So the question then becomes, Adriana,
what assets? Because probate is a property proceeding. It's not
(42:19):
a proceeding for the person versus deceased, it's a property proceeding.
What assets are part of this probate process?
Speaker 2 (42:28):
Anything in the decedent's individual name alone. And that is
the way I try and word it when I'm talking
to our clients. Individual name alone, meaning no beneficiaries, nothing
that has a joint owner and nothing that's in the
name of a trust. Let's say anything in their individual
name alone, car, bank account, house boat, trailer.
Speaker 1 (42:51):
Yep. So I'll give you a recent example, as recent
as yesterday at five o'clock, I had a client call
me up and say, Okay, mom is in Florida. She
you know, dad passed away years ago. She has a
boyfriend that she's had for twenty years and he just died,
and they have a home, and they have a home together,
(43:15):
but they were not married. So the question then becomes,
how is the title on that home held?
Speaker 2 (43:23):
Sure?
Speaker 1 (43:24):
And he didn't know. And it turns out that the
gentleman had four estranged children and no spouse. So these
four kids would have to if if it was something
called a tendency in common. Yeah, and you're a real
estate lawyer, so you know what that is. Tell our
listeners the difference between righteous survivorship and tendencies in common.
(43:45):
And this leads back to probing sure.
Speaker 2 (43:47):
So, joint tenants with the right of survivorship means when
the let's say two people own a home, when one
of them dies, with that right of survivorship language, the
survivor automatically becomes the sole older of the home. They
don't have to go through probate, sign another deed or
anything like that. With tenants in common, the person that
passes away their ownership interests will follow their estate plan
(44:10):
or follow the laws of intestacy. So I guess in
your example, you're saying, if it was held as tenants
in common, his girlfriend now owns the property with his
four strange children.
Speaker 1 (44:21):
Ultimately, once they go through probate, Yeah, to get title
to that fifty percent interest, somebody has to step up
and be administrator of the estate and then deal with
the beneficiaries, get them to sign waivers if that fifth
and it's a nightmare.
Speaker 2 (44:35):
Yeah, I know in New York. I think you said
this was Florida. But in New York title vests automatically
on the day to death.
Speaker 1 (44:41):
If it's joint, Yeah, would write a survivorship, but not
tendancy in common. Yeah, I don't think invests until you
go through the process of identifying the beneficiaries.
Speaker 2 (44:52):
Well, it vests to the fact that if they go
to sala and everything, then those people will need to
sign off as well, correct, because the next of ken.
Speaker 1 (45:00):
Yeah, but you don't even know that until it's proven
in court. Correct. So in a case like that, I
did some work and I emailed my buddy down in
Florida said, okay, this is the situation. He said, okay,
let's get the deed. So I asked the client for
the deed, and the client said the tax bill. Nice.
Speaker 2 (45:20):
Hey, they tried, though they tried, and.
Speaker 1 (45:23):
We couldn't discern the ownership from the tax bill. So
I emailed my friend in Florida again and said, okay,
can you search the records in the county clerk there
where we are, and can you get me the deed.
So within two minutes he sends me a copy of
the deed joint tenants with write a survivorship. I sent
it to my client. We had that answer in a day. Nice,
which is great, and his mom is good. She can
keep the house if she wants to live there. If
(45:44):
she wants to move and sell the house, she gets
full title to it. Right, But back to probate if
it had been other than writes a survivorship, that fifty
percent interest in the house is a probate asset, which
would have to go through the court process. What are
some of the other things, What do you mean, like
individual assets, titling things people think. Don't think about cars.
Speaker 2 (46:05):
Cars cars are on boats. Yeah, those are some some
big ones we see or even I mean, in most
cases you would hope that when it comes to IRA's
life insurance there's a beneficiary, but I've seen sometimes there's not. Yeah,
or like if they have a beneficiary, they don't have
a contingent one in case they're beneficiary predeceased them.
Speaker 1 (46:26):
And that's a bone I have to pick with financial advisors,
and you know we have a lot of them on
this channel. And when you have a financial advisor that says, oh,
all you need to do is a TOD You don't
need to do anything else, just just do a transfer
on death designation, so when you die, it goes right
to your kid. Okay, what if the kid does right?
You just brought that up. What if the kid has
a disability? M h. What if they're incapacitated at the
(46:48):
time they're supposed to inherit these assets?
Speaker 2 (46:50):
Right?
Speaker 1 (46:50):
What if they're a minor. I have a lot of
grandparents that want to leave their iras to their grandkids.
I had one that left four grandchildren direct inheritances of iras.
No will gosh, so these kids cannot inherit right because
they're under eighteen. So they had to do four guardianship proceedings,
(47:11):
one for each grandchild a guardian of the property, and
it then goes into an account that's joint with the
judge in the proceeding, in the guardianship proceeding, and then
the child inherits it outright at eighteen, so you get
the worst of both worlds. It's in a court order
joint account, and then at eighteen the lid comes off
and they have the asset. So you have to be
careful how you name beneficiaries. And if you have assets
(47:32):
that you think you have named a beneficiary but that
beneficiary is gone, what happens.
Speaker 2 (47:37):
Goes to their estate, goes to probate, ghost to probate.
Speaker 1 (47:40):
So even with the best laid plans doing transfer on
deaths and intrust for designations and naming life insurance policies
and iras and having beneficiaries, there are things that can happen.
Life can happen, and you can lose that beneficiary, in
which case you dump your estate right back into probate. Yeah,
so we're leading up. You're ready for the big crescendo.
(48:02):
How do we plan for clients to avoid probate in
the first instance, to make sure all of their assets
are accounted for, to make sure that we have an administration.
And you're going to talk about the difference, so let's
start there. When we have a trust, which is just
a will or no will, what does the administration look like?
Speaker 2 (48:22):
The administration is much simpler, much smoother. With administration of
a trust. We really only need one document to start
it all off, a certification of trust. I'm the trustee,
the trust is valid, I have the authority to act.
Speaker 1 (48:40):
And every bank, brokerage, et cetera has to accept that
the next day. Right, all you need is a death
certificate or showing that the person is the valid trustee
at the time and they have access immediately.
Speaker 2 (48:53):
We don't have to fill out a million and one
documents for the core wait for the probate process. So,
you know, working in the area that I am in
this office with the estate administration, it is, you know,
a world of a difference with how quickly when it
comes with the trust, those loved ones can act.
Speaker 1 (49:10):
Yeah, and that's been We've been to a trust firm
since day one, and I always looked at it and
I said, okay, we have all these firms. And that
was very much involved in the New York State Bar Trust.
In the state section, I chaired some committees and I
would talk to my colleagues in New York City. I said,
how can and they were doing wills exclusively wills. I'm
going back a few years. You weren't important thirty years ago. Okay,
(49:32):
only wills, no trusts. We did only trusts, no wills.
And over thirty years they've come full circle. Because that
New York probate court is six to nine months on
a good day, so doing a living trust takes you
out of probate. You get to control who's in charge,
when they get the assets, how they get the assets,
(49:53):
and we do a lot of work creating trusts for
our beneficiaries, which all flow together in that living trust.
We're winding down on time, Adriana, last word, thank.
Speaker 2 (50:04):
You for having me today.
Speaker 1 (50:05):
Low that's a good last word. And I want to
remind our listeners that we opened up the trust discussion.
We do trusts very frequently here on Life Happens. But
if you want to join us for the Trust Administration
Workshop September thirtieth at twelve noon. Sign up at pyrolaw
dot com. And we have other programs coming up, Medicaid, Mondays,
and a whole series of events. We're going to be
(50:26):
doing a big seminar on November fifth for financial advisors, accountants, attorneys,
and other professionals called the Intergenerational Estate Planning Conference. If
you have any interest in that, that's on our website
as well. If you have cryptocurrency, that's on our website
as well. And we'll see you all next week here
on the radio.
Good morning everyone, Welcome to Life Happens Radio. Im Lupiro
your host for this morning, and Life Happens is a
weekly radio broadcast bringing you ideas, thoughts, planning concepts so
that you can do the things you need to do
to prepare yourself, prepare your family, and make sure that
things are covered throughout your life. And life Happens. It's
just that we look around us, the things that we do,
(00:25):
the things that we see, the things that we read,
but more importantly, the things happening right around us in
our own homes, in our neighbor's homes, in our relatives' homes.
Every day there's something that happens that impacts you and
the people that you love. So how do we prepare
ourselves as we go through life to face those challenges,
to face death, disability, incapacity, changes of fortune, changes of health.
(00:51):
How do we do the things we need to do
to be in a place where we can do that.
And I have some clients that just say, you know what,
I'll be dead, let my family figure it out. And
that's not a plan, folks, that's not something that's going
to serve you or your family very well. Because things
happen during your lifetime that you may not like, and
upon your passing, your family has to figure it all out.
(01:14):
So I'm very lucky today to have with me one
of our associate attorneys who handles all of these kinds
of matters at Pierre O'Connor and Strauss. That is Adriana Mahala.
Good morning, Adriana. And Adriana does a state administration and
a series of other things. She's a very good real
estate attorney. And I think you talked about that last
time you were on the air. I did, yes, the
(01:35):
real estate stuff. And we are going to talk today
about how to punish your family when you die. If
that's an intentionally thought provoking concept, how to punish your
family when you die, what does that really mean? Well,
if you fail to plan, or you do a poor plan,
your family can have not months, but years of anguish,
(02:00):
cost conflict. And so we're going to talk about some
of the things that you need to think about now
to be prepared for then. And Adriana, one of the
things that people don't understand is if you don't have
a will, you're just throwing it up for grabs. Correct,
So what happens if I have assets my home, and
(02:24):
I don't have anybody else on the deed. It's just
mine and I die. How does that all work out?
What happens to the house is sitting there, nobody's paying taxes,
nobody's maintaining the house. How do you deal with that property?
Speaker 2 (02:38):
Well, we follow what New York State wants, which is
laws of Intestine.
Speaker 1 (02:42):
And there's the problem, folks, right there, you're putting your
estate plan in the hands of the New York State legislature.
Speaker 2 (02:49):
Yes, and it typically the way it follows. If you
don't have a will, and you pass without a will,
your assets will first go if you have a spouse,
to your spouse, then to your children. Then you go
up the ladder to your parents, then you go back
down the ladder. Siblings, yeah, aunts, uncles first, cousins, et cetera.
Speaker 1 (03:08):
A lot of people think, and I've had this case
happen that. Okay, I have a wife, I have three kids,
so when I die, it all goes to my wife,
and then ultimately she dies, it goes to our three kids.
But that's not the case.
Speaker 2 (03:19):
It's not the case.
Speaker 1 (03:20):
So how does it go if I have children and
a spouse, how does it pass?
Speaker 2 (03:24):
Sure? So the first fifty thousand off the top of
the estate will go to the spouse, and then the
remainder gets split between. In your example, if you have
three kids, the four of them, Yeah, and it's how
much do the spouse first fifty thousand and then half yes,
and then the other half goes to the kids.
Speaker 1 (03:42):
Yes. So I had a family which they had businesses,
you know, not one, two, three, four different businesses, and
they were all in the husband's name, and the husband
died unexpectedly prematurely, and they went to court to probate
an administration and there's no will in that case. So
how do you even begin Who starts this process?
Speaker 2 (04:04):
Well, someone needs to petition the court to be appointed
as administrator of someone's a state. In that instance, again
we follow New York law. There are you know, priority,
So in that instance, the spouse would get priority. I mean,
the question is is the spouse probably the best person
to handle that a state? You know, are they financially responsible,
(04:25):
are they able to keep accurate records? But per New
York law, the spouse is the first priority. After that
we'll look at children.
Speaker 1 (04:32):
And then it goes to children. So there are several
things that come to mind there. And I've had this
case over my forty two year career where the spouse
didn't want it to or wasn't capable. But now, in
that case, there are businesses to run and the kids
were working in the businesses. So how do you do
that if the spouse has priority, how do you go
(04:53):
about getting the right person, the right child or children
in as administrators?
Speaker 2 (04:58):
Sure, so these that would probably need to sign some
type of renunciation and all, you know, a waiver and
consent saying yes, I am fine with this child surveying
as the administrator of the estate. But it's not just
you know, with the courts, you actually have to go
through those steps. Yeah, they're not just going to take
your word for it. You actually have to take the steps.
Speaker 1 (05:19):
I get it. And so it's a very formalistic state.
And Adrian and I were talking a little bit before
the show. The statutes that govern this area of law
in New York State are almost one hundred years old
and they have not been updated. And I have a
professor from Albany Law School that I was friends with
that I got to know very closely over time, and
(05:39):
that's going back a while. So we worked together on
Bar Association committees, and he wrote a new statute for
New York for state's powers and trust law to modernize
New York's state law. And it's still sitting as far
as I know, on the legislature's desk. And this goes
back to the initial comment I made. You're relying on
the New York state legislature to write your will and
(06:01):
to write your estate plan, and that law, that new
modernization of the statute to bring us in compliance with
all the other states that we practice in Florida, New Jersey, Connecticut,
We're in a lot of states, Massachusetts, there's nothing like
New York probate. It's so different in the other states.
And yet New York has not changed its law in
almost one hundred years. So you have these antiquated formalistic
(06:24):
forms and documents and procedures that you have to follow.
And if you don't have a will, you have a
spouse in this case who is not going to be
the administrator. So one of the kids has to come
up first of all. Adriana first and foremost. When someone
dies prematurely, families are in chaos. They are mourning, They
(06:45):
have emotional issues that they have to overcome. I've seen
a lot of spouses that just couldn't deal with the
estate or the matter is in the estate for months,
it's not years or at all, And so we have
to be cognizant of that and be empathetic to the
situation that our families are in. And then you have
to tell them how formalistic and screwed out the systemus.
(07:07):
So how do you do that?
Speaker 2 (07:09):
Yeah, I know sometimes people might get a little upset
with me, and I just say, listen, blame it on
the courts, blame it on New York State. But yeah,
it is very difficult when you are, you know, dealing
with families that are going through probably one of the
most difficult times in their lives or maybe something they've
never had to experience before. And here we come saying that, oh,
(07:33):
in order to get access to these funds, or let's
talk about a house if it was just solely owned
by the decedent, that we need to go through X,
Y and Z, and we need to do that now.
Speaker 1 (07:44):
And I think, folks, it's worth you listening as we
walk through what has to happen. You hear everybody talk about, oh,
Probate's bad probate's bad. Here's what has to happen for
that family, wife, three kids, husband dies, owning businesses. What
do they have to do in order to start the process.
But then, what if there are people out there that
(08:06):
aren't part of this nuclear family, there's a child from
a prior marriage, or strange children. How do you deal
with all of that in the context of an administration
like this with no will?
Speaker 2 (08:19):
Yes, So New York State requires that all distributees, which
that's pretty much the fancy way of saying next of
kin that all distributees are either signing off on a
document saying that yes, they approve this estate going through probate,
they're fine with the administramt.
Speaker 1 (08:38):
What's a distribute for our listeners?
Speaker 2 (08:40):
So next of kin? That's the way I like, statue
by statute next of kins. So you know, spouse, child,
no child, parents, so on and so forth.
Speaker 1 (08:51):
That's twice removed.
Speaker 2 (08:53):
Yes, and we have a couple of those. We're the
only quote unquote next of kin distributees our first cousins
once removed.
Speaker 1 (09:00):
Talk about that problem a little bit later. Let's get
back to our family. So we this is a good
situation because we don't have that fourth child who we
can't find, who we would have to search for, and
we'll talk about that situation, what to do with missing
airs or recalculitrant errors, who just won't sign anything. In
(09:20):
this case, we have a clean slate, we have everybody cooperating.
The spouse is going to renounce, and one or two
or three of the kids are going to step up
and become the administrators. What do they then have to do?
Speaker 2 (09:32):
So that's a little more simple. I mean, there still
is a lot of paperwork they have to sign. They
all need to sign what's called the waiver and consent,
as I mentioned before, saying that they agree to the
will being probated. They agree to let's say this child
surveying as the administrator of the estate. But there's other
(09:52):
paperwork as well. We have to fill out the whole
petition for letters of administration, and that's a very d
of the document. It's typically around six pages where we
have to include a lot of information. Damn death, place
of death, Who are the next of kin that are
entitled to everything?
Speaker 1 (10:11):
And you have to try to give the court of value, yes,
of all of the assets.
Speaker 2 (10:17):
Yes, lou thank you for bringing that up, because that's
one of I think the most difficult parts when I
talk with people, especially when they're grieving, like I need.
Speaker 1 (10:25):
A value, or where are these businesses work?
Speaker 2 (10:28):
Yes, let's talk about these accounts. And maybe they don't
know all the accounts are out there yet because they
don't have the court authority to look at all of
the accounts yet. And it's always we have to provide
a value to the court. The court's not going to
accept us.
Speaker 1 (10:42):
And why because they charge yes, yes, approbate fee based
upon the value of the estate. So they want to
know what's coming through the pipeline, what's going to come
through this estate in the surrogate's court, this is the
court that you're dealing in, and what is the value
and how do they charge? There's a statutory commit a
sassory feet that the court's charge and so you have
(11:06):
to come up with all of that before you petition.
So you got to do an inventory, get an idea
on values. It doesn't have to be by the dollar,
but it has to be closed.
Speaker 2 (11:15):
Yeah, and we always try to I guess underestimate a
bit and.
Speaker 1 (11:19):
You might just later because you do, and we'll talk
about this. Ultimately have to file an inventory which has
an itemization of those assets. So this is just to
start the ball rolling. You need basic values, but then
you have to itemize those values later for the court
to approve. And then okay, so we have an inventory,
(11:39):
we have to ask the inventory of the assets, value
the assets, pay a probate fee, prepare a petition, get
the people that are not going to be participating to
sign waivers. In this case, the spouse would sign a
waiver and a renunciation and then the kids that are
going to take this forward would file all of that
documentation with the court and then what.
Speaker 2 (12:02):
Happens well, and there's even other documents too. Yes, we
have the affidavit of family truth.
Speaker 1 (12:07):
Oh let's talk about that.
Speaker 2 (12:08):
Yeah, and we need someone disinterested, preferably not a family member.
I like to say, you know a neighbor or a
close friend.
Speaker 1 (12:15):
So an affidavit swearing to who those heirs are correct,
who the distributees are, because you can't just ramre ond
this through without identifying people. And if you was the
fiduciary and the person who's petitioning the court to be
the administrator takes on a whole series of duties and
obligations to the beneficiaries, including the beneficiaries that they omit,
(12:38):
whether intentionally or by accident. And we've had situations. I've
had a case myself where we didn't find out about
a child of the decendent until after the petition had
already been filed, and all of a sudden, it's discovered
that they had an illegitimate child earlier in life that
was out there and all of a sudden, wow showed up.
(13:00):
Now you have to take all of that into consideration too,
And so they file all of this and then you wait,
you wait, So what just talk about the court Because
there's only one surrogate's court, and in many counties one
judge that handles all of these. Some counties have judges
(13:20):
that rotate between different Supreme Court surrogate's court, but most
counties have won. What if the judge is on vacation
or on trial, or just has a backlog of cases
and during COVID folks, these courts were shut down? What happens?
Speaker 2 (13:35):
We wait? I mean, some courts, some surrogates courts maybe
are quicker than others with granting the petitioner the letters
to act as fiduciary. You know, Albany County is a
pretty quick turnaround. Thank you, Albany, because that is very
nice for the family members to get the documents they
need to actually start collecting assets of the decedent. But
(13:58):
I know, Lou you were saying earlier that you know
in some counties there's a sixty nine month or.
Speaker 1 (14:03):
So New York Country practice all over the state, folks.
And we have an office in Manhattan, in Manhattan and
New York County six to nine months on a routine application. Yeah,
so this family that I just laid out has four businesses.
What happens to those four businesses while we're waiting for
to find all the heirrors, to find somebody to sign
an affidata family tree, to get the waivers all signed,
(14:24):
and back to get the petition signed, to file all
those papers with the court, wait for the judge to
issue a court order opening up the probate, and then
issuing something called letters of administration. What happens to the
businesses theren limbo nothing? Think about that. While you take
a short break, we're gonna be back after this. You're
listening to Life Happens Radio on Talker Radio WGY. All right,
(14:48):
we are back. Thanks for listening. I'm Lupiro, your host
for this morning on Life Happens Radio, and I want
to give a shout out to our faithful listeners. I've
been running into people more and more frequently, and people
coming up and saying, oh, I listened to your show
on Saturdays while I am dusting or doing the laundry
or whatever whatever, But thank you for listening. We're glad
(15:11):
that you're here. Today is a very interesting show. I
have with me one of our star associates, Adriana Mahelk,
who is working we are our clients on a state administration. Now,
this is not something that you think about very often.
You shouldn't think about it. But what we're going to
do today is talk about the realities of what happens
when someone dies, and in this case, we've been talking
(15:33):
about without a plan, without a will, even what happens.
How do assets get dealt with, how does the court
deal with them? And because we are in court, we
are titling today's show how to punish your family when
you die. Why would you ever subject your family to
two or three years of court proceedings, lawyers, fees, delays,
no control. We're going to talk about that in the
(15:55):
second half of the show, So stay with us. How
to avoid that problem for your family, how to pull
them out of this fire before the fire even starts.
So it's fire prevention week here doing a plan that
keeps you out of this mess. And we were talking
about when someone dies without a will and the process,
all the documents that have to get signed and all
(16:16):
the people that are involved in this have to sign
off and sign waivers. What if one of those beneficiaries
says you, no, not so much. I don't think my
brother should be the administrator. I think I should be
the administrator. And that happens. It does happen very frequently.
Speaker 2 (16:31):
So the court gives you another option that you can
serve them with the citation saying you appear in court
on this day usually it's thirty days out or so,
and you can attend the court date and express your objections,
express why you think you should be the administrator or
(16:51):
why the person that is the proposed administrator should not
be serving.
Speaker 1 (16:56):
Because my brother had power of attorney and I think
he stole all the assets and there's nothing left in
the state. We'll get to that later, sure, but those
are the things that we hear from our clients when
they come in. And when there's no will, there's no guidance, folks,
this is just up for grabs. So what happens when
that brother comes in and shows up with a lawyer
(17:18):
on the citation return date? How do you decide? How
does the judge decide?
Speaker 2 (17:23):
Well, and the judge probably is not going to decide
right then and there either, so that's even going to be.
Speaker 1 (17:28):
More time for they don't have a legal basis.
Speaker 2 (17:30):
Right right, so they'll here are all the parties, positions, arguments,
and then they I have at least.
Speaker 1 (17:38):
Two law firms, law firms.
Speaker 2 (17:39):
The meter is running more legal fees going.
Speaker 1 (17:42):
Through a hearing, and you've got to brief the hearing
and submit documents, papers, affidavits, petitions to be appointed, and
then you have a hearing and you're running the meter. Yeah,
you know whatever. The legal fees are three four, five, six,
seven hundred dollars an hour for the attorney of choice,
and that's not a pleasant position for a family to be,
(18:04):
and especially when you've got businesses that are held up
that can't produce revenue, they can't distribute money, they can't
do anything.
Speaker 2 (18:10):
There's so many delays. Yeah, there's so many delays that
can happen. That's just process, right, And they're not even
appointed yet as anything, and they keep you know, taking weeks,
months and excess legal fees.
Speaker 1 (18:23):
What if one of those children has a disability, is
there a different procedure because I know the courts protect
people with disabilities.
Speaker 2 (18:33):
Yes, So if one of the children or you know,
distributees has a disability, the court requires that something called
the guardian at item is appointed. And that's another private
practice attorney that the court appoints coming in to advocate
and protect that child with disabilities interest. So again adding
(18:56):
on more legal fees, there is another attorney in the mix,
and typically that payment comes out of the estate.
Speaker 1 (19:02):
Yeah. Yeah, so just keep piling up those fees, folks.
And probate and you mentioned delays, Adriana, and we're going
to talk about this, but there are processes, and I
mentioned the formalistic nature of New York state probate procedure.
You can't just walk into the court and get letters testamentary.
You have to go through all of these paper all
(19:23):
this paperwork, and then get the court to issue in
order approving all of that paperwork and then you get
your authority, which is a certificate that you can use
to go about collecting the assets of the estate. But
when we have the guardian at lighthem, you have to
wait for that report. When we can't find airrors, you
have to wait for that. And let's just take that
on now, because it happens probably more in intestate situations
(19:45):
than even probate situations with a will. We're going to
talk about the will next. But what if you cannot
find beneficiaries.
Speaker 2 (19:53):
That's a fun one. Fun that's a fun one for everyone,
just one for you to explain. Yes, yes, you know,
just because you don't know who. Let's say if someone
who passed away they had a sibling that predeceased them,
so the court wants to see who are the predeceased
siblings next of ken And just because you don't know
(20:14):
who they are or where they live, the court's not
just going to roll over and say that's fine. We
have to actually take the steps show the court that
we've done our due diligence, whether that's a you know,
people search, even to the fact where we might need
to publish in a newspaper something looking for these side. Right,
the decedents that there's a.
Speaker 1 (20:35):
Proceeding and that you have opportunities. But before you get
to that, judges will let you just go there. No,
you have to go through a full due diligence search
and file an affirmation of due diligence with the court
as to all the attempts you made to find this
potential distributee who has never known the decedent and now
has to be part of the court proceeding. And that's
(20:57):
hard for people to understand.
Speaker 2 (20:58):
Well, and I find it it's even more difficult to
understand to your point, when there is a will, as
people say, well, this person's not even in the will,
why do we have to do all this? That's the
court process we have to follow when it comes to
probate and administration.
Speaker 1 (21:14):
So we wouldn't be given you all the negative without
some positive, folks. In the second half of the show,
we're going to talk about how to keep your family
out of this mess, and how to prepare and plan
accordingly so that you have an efficient, economical, prompt administration
of your trust. And in this case, we're going to
try to avoid all of this court morass. So in
(21:36):
testacy we then just follow it quickly through once they
get appointed. What are some of the processes.
Speaker 2 (21:43):
Once they get appointed, they have a seven month creditor
period in New York State, So creditors have seven months
from the date they're appointed to file a claim against
the estate, whether the decedent't owed any money, whether that's
a potential Medicaid leen. But during those seven months, the
estate cannot be closed. Distribution should not be made because
(22:04):
if a creditor does turn up, we need to make
sure that that creditor gets paid first.
Speaker 1 (22:09):
Yeah, if the person was on medicaid, you as a fiduciary,
whether it's with a will or without a will, you
have an obligation to address the Medicaid lean issue because
you know that Medicaid has a claim against that estate,
and if there are assets in probate, that's what they
claim against. New York State has farmed this out to
(22:30):
a company in Texas. So executors once they get appointed
or administrators, they get this missive from this company in
Texas with six or seven pages they have to fill
out of all of the information, what are the assets,
all the different things with regard to that claim, and
if they don't do it properly and they're either an
executor under a will or administrator pointed by the court,
(22:52):
they have potential liability. Thought, So, if you've distributed all
the assets, folks, you say, oh, I want to do
the right thing. I want to get all these things
out of the estate. And a claim comes back against
the estate and you have voided the estate of the assets,
you are liable and responsible personally for your breach of
(23:12):
fiduciary duty. So this seven month creditors period is no joke.
Speaker 2 (23:17):
No it's not. And during that seven months, even though
we make sure and advise our clients not to be
making those distributions that you referenced, during that seven month
is their time to actually use their letters they received
from the court appointing them as fiduciary to collect assets.
See what you know, bank accounts that the deceitent had
out there, and they can transfer them into the estate
(23:39):
bank account that we instruct them to open, and we
hold those funds there for seven months. So at some
point in the beginning of the process, you know, filing
all that paperwork, you're hearing from me a lot, You're
dealing with me a lot. But during that seven months
it doesn't have to be as much because you can
be collecting assets and we have to wait.
Speaker 1 (23:58):
And there's not a lot that you can do except wait.
So don't well, I hope you do. Wait till the
news is over and you come back with us, because
in the second half we're going to talk about the
will and all the issues involved with the will and
then move to trusts because the trust is the answer.
Stay with us, and we are back. I want to
(24:20):
give you a heads up on an upcoming program that
our listeners have found extremely useful, and we've been doing
this now for a number of years. We do it
on a quarterly basis and we call it our Trust
Administration Workshop. The things that we're talking about today, the
problems that arise because of a failure to plan, really
come out in the wash when you start administering that trust.
(24:40):
What happens when you set it up, you put your
assets in, how do you maintain it year over year?
What tax returns do you have to file? We talked
about fiduciary responsibility. The trustee is responsible for that trust
and the beneficiaries, So how do you make sure that
you're doing your due diligence and accounting properly? As a trustee.
We cover all of that in a very comprehensive ninety
(25:02):
minute session and it's coming up on September thirtieth. We
do it in conjunction with David Wijeski, who is the
founding partner and manager of Wijeskian Company CPAs. So we
have a CPA, we have myself as an attorney, we
have Michael Bates as a trust officer and representing Trustco
and the trust officers. And this is a ninety minute
(25:24):
seminar begins at eleven thirty with registration twelve to one
thirty is the program. We do serve a lunch, so
you can join us at the Capital Region Chamber of Commerce,
which is five computer drive, South Albany, New York, September thirtieth,
starting charp at twelve noon, and you'll learn about how
to find the right trust, how to administer the trust,
(25:46):
and how this trust works ultimately upon distribution. And we're
going to contrast a trust administration soon on the show
here in the next thirty minutes with approbate administration and folks,
they are night and day, and this is where it
all comes out. So September thirtieth, noon to one thirty
join us at the Capital Region Chamber of Commerce. And
(26:08):
you can always register for all of our events at
pyrolaw dot com. That's p I E R R O
l a w dot com. Go to the events tab.
You can call us right now and leave us a
message and we will register you at five one eight
four five nine two one zero zero five one eight
four five nine twenty one hundred or pyro law dot com.
(26:28):
Would love to see you on September thirtieth at noon
at the Capitol Region Chamber of Commerce. So I'm in
studio live today here on a nice looking weekend, nice
fall weekend, So get your apple picking in, you know,
get out and rake some leaves. Well they're not really
down yet, so that's premature, but get out and enjoy
the day, enjoy the weekend. I hope you do. And
(26:50):
today we're talking about some things that you know, it's
good things to think about now. And as we use
this adage they attribute it to John F. Kennedy. The
time to fix a leaky roof is when the sun
is shining. So the sun is shining, and if you
need a plan that is going to make sure that
you don't have leaks that your estate is administered properly,
(27:11):
that the right people are in charge of your estate,
that they have the right authority, and that they're not
relying on a court that is overburdened, overwhelmed, and unnecessarily
formalistic based upon the law that the judges have to
deal with. I mean, they can't change the law, they
can only administer it. And our legislature huh, forget it.
(27:32):
They haven't changed this law in one hundred years, folks,
So how do we avoid that? But let's talk first, Adriana.
We talked about intestacy, what happens when you don't have
a will, all of the issues, all the fights that
come up, and finding the people, finding your distributees or
your natural errors, and then petitioning the court and going
through all of the processes. How long does this usually
(27:53):
take to get through this kind of administration on a
good day in an estate that has no real issues.
Remembering that you don't file for probate on the day
the person dies, right.
Speaker 2 (28:06):
So on a good day, we could potentially have this
wrapped up seven months from the date they're appointed, which.
Speaker 1 (28:15):
In most cases, by the time you get all the information,
as we said, find all the errors, find all the assets,
value the assets, pay the probate fee.
Speaker 2 (28:24):
Have everyone sign off, wait for the court.
Speaker 1 (28:26):
You're a few months in, a few months in, and
then you're not going to wind it down on the
last day of the seven month period. You're going to
take some time. You have to make distributions, you have
to file some paperwork. So how do you close an
estate with the court.
Speaker 2 (28:40):
So, as Lou referenced earlier, you do have to file
that inventory of assets document, So that's one document the
court does require. And pretty much with that again, they
want to know what's in the estate and to make
sure that they get their filing fee paid.
Speaker 1 (28:54):
Ask the filing fee. They want to make sure you
have an overcharged commissions.
Speaker 2 (28:58):
Right and if you have, you know, found or discovered
more assets, does that reflect the potentially higher filing fee
that you should have paid originally. And then there's also
receipts and releases that all beneficiaries do have to sign.
So if the will or for in testacy, let's say
the spouse or the children are given a sum of
money or let's say a diamond ring or something, the
(29:21):
beneficiaries need to sign off on a document saying yes,
I received this. This was pursuant to you know, this
section under the will, or because I'm taking an intestacy
share and that I'm holding the executor or administrator harmless.
Speaker 1 (29:37):
Yeah, it's coming back to the liability. Yes, So if
you get to the end of the seven month creditors period,
you've checked one box. Yes, but what if there are
taxes do that you didn't know about? You have to
file final income tax returns for the deceson, correct, and
you also have to file an a state tax income
tax return, so you ain't done. No, the paperwork's done now,
(30:01):
and that can be a tax return that isn't due
till the next April fifteenth. So this isn't going to
be a seven month or a twelve month period in
most cases because you still have details like income tax
returns and other things that are going to keep you
in the game and keep the estate open. And you know,
eighteen months is a pretty good timeframe to tell people
(30:25):
because then you've got the tax returns that would be done.
But two years is not unusual, no, and these are
in cases where you don't have contests. We have a
case right now that it closed last year, but it
was ten years in the probate court because the siblings
were fighting. Everybody had a lawyer cost a fortune, and
(30:48):
one vestige of that is still going on. Our clients
are out, but there's one piece that's still going on.
And this is something, folks, that is going to cost money.
We talked about the delay, We talked about the aggravation
and frustration and the emotional roller coaster that you go
through with this kind of a process. But the costs, Adriana,
(31:10):
come in several forms. We mentioned the court costs. Attorney's
fees are not insubstantial in cases where you have complex matters,
and that may not be one lawyer, that may be
two lawyers. You may have a guardian ed item, you
may have other attorneys.
Speaker 2 (31:25):
To represent the other beneficiaries, interests or whatnot.
Speaker 1 (31:28):
Yep. And then the person and this is kind of
a contest to get the appointment. The person who handles
the estate, who becomes the administrator, is entitled to statutory commissions, yes,
and those are not in substantial either.
Speaker 2 (31:44):
No.
Speaker 1 (31:45):
So statutory commissions in New York start at five percent yeah,
of the first one hundred thousand dollars of value, four
percent of the next two hundred thousand dollars of value
three percent. I believe up to a million. But when
you calculate those commissions on approbated state of a million dollars,
it's it's a chat, it's a real check. And you're
(32:08):
paying your attorneys, you're paying your commissions to your executor
or administrator, you're paying court fees, you're paying property maintenance
fees during the course of the administration. So some folks,
if you read the articles, estimate three to five percent
of the estate is going to go in fees, commissions
and other costs. And so a trust, I can tell you,
(32:31):
is a lot less. So we're going to talk about
that in a minute. But let's turn over to wills
and how many clients come into us and say, oh,
I have a will, I don't have to go to probate.
Are they right?
Speaker 2 (32:42):
They are not right, unfortunately, And you know most of
the loved ones say that to me too. Oh they
had a will. I'm named as the executor in the will.
All's fine, yep.
Speaker 1 (32:51):
I tell them take the will to a bank and.
Speaker 2 (32:53):
See how it goes.
Speaker 1 (32:54):
Show take a death certificate and this will show them
on page twelve that you're the executor of the estate
and try to access the bank accounts in that bank.
Are they going to be successful? No? So what's what's
the teller going to tell them that.
Speaker 2 (33:06):
They need the letters? Testamentary?
Speaker 1 (33:08):
Say, I need some kind of letters. I don't know
what they are.
Speaker 2 (33:11):
Testimonial. I gear a lot, but it's testamentary. But I
don't blame some people for not knowing that.
Speaker 1 (33:19):
People don't do this listeners of life happens. No one
has an education in this area.
Speaker 2 (33:24):
Good point, low.
Speaker 1 (33:26):
So take the will. What are the steps? Are they
similar to the intested administration? Is there more to do
less to do? Kind of the same.
Speaker 2 (33:35):
I would say it's very similar. You know, obviously the
court needs to see a copy or the original will.
Excuse me, never.
Speaker 1 (33:42):
A copy, and don't unstaple it.
Speaker 2 (33:44):
Don't unstable it, because then.
Speaker 1 (33:46):
You have to do a separate affidavita.
Speaker 2 (33:47):
We have to do another affidavit for you. So just
keep the original will.
Speaker 1 (33:51):
Folks, every time you turn around, if there's a glitch,
you've got a paper the heck.
Speaker 2 (33:55):
I know. And again, it's not me, it's not us,
you know, we're just doing what the or it needs
to get you appointed. But it's pretty similar. You know
we have the petition, you still need to do that
affidavit of family tree. Everyone. Back to what I was
saying originally with distributees, the next of kin signing off
on waivers and consents or getting served with a citation
(34:18):
even if they're not listed in the will. Even if
the person, if the decedent left everything to their best friend,
their family members, their next of kin, the court requires
still need to sign off on all those documents.
Speaker 1 (34:31):
And this becomes a drafting issue too. And this is
how you learn how to draft a will by looking
at the mistakes that people make in the administration of
the estate. Because when you look back to front and
you have the value of time to see where the
land mines are in the administration of that estate. You
never want to ignore distributees in the will, right you
(34:51):
want to acknowledge them. Say that I know that I
have a son who lives in California who I haven't
talked to for twenty years. I am specifically disin inheriting
that son from this will so that when they come
back to court on that citation return date, because we'll
talk about that, you have to come back to court
if they don't waive. They're going to look at this
and say, Okay, I wasn't forgotten. Then they have grounds
(35:15):
to contest a will, and there are four grounds in
New York. Will kind of allude to them. One is
that the will wasn't signed properly. So if you don't
have two witnesses that have signed it at the end
with the test dator having declared it to be their will,
and they have to have requisite capacity that s item
number two. They have to be competent to sign a will.
(35:37):
You can't just do it if you're you know, comatose
and holding Dad's hand and forging in effective signature. They
cannot be under undue influence or duress. So somebody can't
have a gun to their head saying you need to
sign this will and leave me all your money, or
there are other types of duress. I'm not going to
take care of you unless you leave me all of
your money. We hear that from siblings of children who
(36:00):
have taken mom and dad in and are quote unquote
taking care of him and taking care of their assets
at the same time. So all of these kinds of
things come out in this wash in the court, and
then you go through this whole process, and the will
doesn't answer all of those questions because if you have
forgotten someone or left someone out, when they have to
(36:21):
come in and you have an executor who's named in
the will and they need to get these letters testamentary,
go through these steps again. The petition is number one, yes,
and all the things that go into that petition correct.
Speaker 2 (36:35):
So with the petition again where you have to fill
out all of those distributees. So even though let's say,
as you are saying, lo, the will specifically says I
disinherit my son, well he's still the decedent son, he's
still considered a next of kin and he needs to
sign off on the documents saying that. Yeah, I understand
the will's going to probate and this person can serve
(36:56):
as executor. Again, we'll do the affidavit of family tree.
You know, there's a couple different attorney certification forms we
have to sign when it comes to probate. But if
we have to do a citation return date, it's kind
of similar with the administration. You know, it's about thirty
days out. You have to serve them.
Speaker 1 (37:14):
You have to appear in court.
Speaker 2 (37:15):
Appear in court if you don't appear in court, it's
deemed that you have no objections to anything.
Speaker 1 (37:22):
But if you're representing, as we often do, the petitioner,
we have to appear in court and wait for people
to show up yeap. And in New York, all they
have to do is show up, raise their hands, say
I object to the will and I want a hearing.
And the hearing is called a fourteen oh four examination,
(37:42):
where you have to produce the witnesses to the will yeah,
to prove that the will was validly executed. And this
is one of the hostage taking efforts that people make
to try to squeeze some money out of the estate
when they're not entitled to any Is okay, We're going
to rate this executor over the coals. We're gonna make
them do a fourteen oh four hearing. I had one
(38:03):
where the will showed up late. We had already filed
for administration, and there were eight witnesses. The person had
done a main will in three constiles wow, and they
had taken it to a bank to have bank personnel.
Banks don't do this anymore. That bank personnel as their witnesses.
And we had the subpoena all eight bank tellers. Wow,
(38:25):
And of course most of them had left that bank,
and there were different places, and we had a hearing
that had all eight testified goodness. And we have been
in fourteen oh four hearings. And this is a matter
of right, folks. This is not something where you have
to have a cause, celeb You're entitled to examine those witnesses.
Speaker 2 (38:42):
Yea.
Speaker 1 (38:43):
Even if and this is another document that you have
to submit, we take it for granted because we do
it with every will. An affidavit of subscribing witnesses. Yes,
so talk about that.
Speaker 2 (38:53):
So there's a separate affidavit that's with the will, and
the two witnesses sign it saying that it was signed.
You know, this person was of sound mind. They signed
it in our presence on this date, at this location.
And it's to the point where they're trying to I
guess I don't want to say back up the will,
but it gives an additional affidavit saying that, yeah, no,
(39:15):
this was valid. The person was of sound mind.
Speaker 1 (39:18):
And if you're witnessing a will, you're swearing under penalty
of perjury. Yes, that's about quest all of those facts
that the person had capacity that they were not under
any undue influence that they were free to sign the will,
that they understood the will, could read and write, read
and write English, and had an understanding of what was
going on in that will, and you're signing an affidavit
at the time the will is signed. We've seen a
(39:40):
lot of monkey business with these affidavits where they were
signed after the will was signed and different things. So
this is all the formalistic things that are good actually
to make sure that the will was validly executed. If
it wasn't, then then you have a major issue. But
if you even if you have that affidavit and the
person just shows up on citation date, raises their hand
and says I want to hearing, they get to examine
(40:02):
those witnesses. I've been that witness in several cases where
families are challenging the execution and I'm the attorney, draftsman
and witness because a lot of times that's how it happens,
and I'm testifying that the person knew exactly what they
were doing, and we actually have a checklist of questions
that we ask at the time the will gets signed.
(40:23):
That is what they call prima facia evidence that it
was duly executed. We then have to testify as to
the process that that affidavit or that checklist was filled out.
But that in our practice has carried the day in
a lot of cases. Sure, because now it's just the
witnesses are all swearing under oath as they watch the
test dat or answer these questions that they observed it,
(40:47):
that they believe that they had the capacity and were
freely acting all the things that you have to swear
to in this affidavit. We're almost out of breath and
we're not even halfway done yet. And these are all
the problems, folks, that you face when you're relying on
a will probate. We're gonna take one more short break.
When we come back, we'll finish up the problems and
talk about the solutions. So stay with us, and we
(41:11):
are back. Welcome back to Life Happens Radio. We're glad
you're with us on this Saturday morning. We are all
just getting pumped up talking about all the problems that
we face as lawyers in the probate court and what
we have to deal with for our clients, and how
we have to try to explain away the antiquated laws
and processes that they have to go through when they
(41:32):
have a will or they don't have a will and
they're in intestacy and subjecting themselves to this court process.
I talk to colleagues in New Jersey who say, my
clients can walk into a probate court with a will
and the clerk will help them fill out the paperwork
and they can get letters without any other process. Seriously, yeah, so,
and Florida's is not that dissimilar. They don't have all
(41:56):
of these same requirements that New York has, and judges
hold you to your task. They will not give you
any quarter if you don't file the papers properly, if
you don't have all the papers completed. You have to
comply with all of these rules. So the question then becomes, Adriana,
what assets? Because probate is a property proceeding. It's not
(42:19):
a proceeding for the person versus deceased, it's a property proceeding.
What assets are part of this probate process?
Speaker 2 (42:28):
Anything in the decedent's individual name alone. And that is
the way I try and word it when I'm talking
to our clients. Individual name alone, meaning no beneficiaries, nothing
that has a joint owner and nothing that's in the
name of a trust. Let's say anything in their individual
name alone, car, bank account, house boat, trailer.
Speaker 1 (42:51):
Yep. So I'll give you a recent example, as recent
as yesterday at five o'clock, I had a client call
me up and say, Okay, mom is in Florida. She
you know, dad passed away years ago. She has a
boyfriend that she's had for twenty years and he just died,
and they have a home, and they have a home together,
(43:15):
but they were not married. So the question then becomes,
how is the title on that home held?
Speaker 2 (43:23):
Sure?
Speaker 1 (43:24):
And he didn't know. And it turns out that the
gentleman had four estranged children and no spouse. So these
four kids would have to if if it was something
called a tendency in common. Yeah, and you're a real
estate lawyer, so you know what that is. Tell our
listeners the difference between righteous survivorship and tendencies in common.
(43:45):
And this leads back to probing sure.
Speaker 2 (43:47):
So, joint tenants with the right of survivorship means when
the let's say two people own a home, when one
of them dies, with that right of survivorship language, the
survivor automatically becomes the sole older of the home. They
don't have to go through probate, sign another deed or
anything like that. With tenants in common, the person that
passes away their ownership interests will follow their estate plan
(44:10):
or follow the laws of intestacy. So I guess in
your example, you're saying, if it was held as tenants
in common, his girlfriend now owns the property with his
four strange children.
Speaker 1 (44:21):
Ultimately, once they go through probate, Yeah, to get title
to that fifty percent interest, somebody has to step up
and be administrator of the estate and then deal with
the beneficiaries, get them to sign waivers if that fifth
and it's a nightmare.
Speaker 2 (44:35):
Yeah, I know in New York. I think you said
this was Florida. But in New York title vests automatically
on the day to death.
Speaker 1 (44:41):
If it's joint, Yeah, would write a survivorship, but not
tendancy in common. Yeah, I don't think invests until you
go through the process of identifying the beneficiaries.
Speaker 2 (44:52):
Well, it vests to the fact that if they go
to sala and everything, then those people will need to
sign off as well, correct, because the next of ken.
Speaker 1 (45:00):
Yeah, but you don't even know that until it's proven
in court. Correct. So in a case like that, I
did some work and I emailed my buddy down in
Florida said, okay, this is the situation. He said, okay,
let's get the deed. So I asked the client for
the deed, and the client said the tax bill. Nice.
Speaker 2 (45:20):
Hey, they tried, though they tried, and.
Speaker 1 (45:23):
We couldn't discern the ownership from the tax bill. So
I emailed my friend in Florida again and said, okay,
can you search the records in the county clerk there
where we are, and can you get me the deed.
So within two minutes he sends me a copy of
the deed joint tenants with write a survivorship. I sent
it to my client. We had that answer in a day. Nice,
which is great, and his mom is good. She can
keep the house if she wants to live there. If
(45:44):
she wants to move and sell the house, she gets
full title to it. Right, But back to probate if
it had been other than writes a survivorship, that fifty
percent interest in the house is a probate asset, which
would have to go through the court process. What are
some of the other things, What do you mean, like
individual assets, titling things people think. Don't think about cars.
Speaker 2 (46:05):
Cars cars are on boats. Yeah, those are some some
big ones we see or even I mean, in most
cases you would hope that when it comes to IRA's
life insurance there's a beneficiary, but I've seen sometimes there's not. Yeah,
or like if they have a beneficiary, they don't have
a contingent one in case they're beneficiary predeceased them.
Speaker 1 (46:26):
And that's a bone I have to pick with financial advisors,
and you know we have a lot of them on
this channel. And when you have a financial advisor that says, oh,
all you need to do is a TOD You don't
need to do anything else, just just do a transfer
on death designation, so when you die, it goes right
to your kid. Okay, what if the kid does right?
You just brought that up. What if the kid has
a disability? M h. What if they're incapacitated at the
(46:48):
time they're supposed to inherit these assets?
Speaker 2 (46:50):
Right?
Speaker 1 (46:50):
What if they're a minor. I have a lot of
grandparents that want to leave their iras to their grandkids.
I had one that left four grandchildren direct inheritances of iras.
No will gosh, so these kids cannot inherit right because
they're under eighteen. So they had to do four guardianship proceedings,
(47:11):
one for each grandchild a guardian of the property, and
it then goes into an account that's joint with the
judge in the proceeding, in the guardianship proceeding, and then
the child inherits it outright at eighteen, so you get
the worst of both worlds. It's in a court order
joint account, and then at eighteen the lid comes off
and they have the asset. So you have to be
careful how you name beneficiaries. And if you have assets
(47:32):
that you think you have named a beneficiary but that
beneficiary is gone, what happens.
Speaker 2 (47:37):
Goes to their estate, goes to probate, ghost to probate.
Speaker 1 (47:40):
So even with the best laid plans doing transfer on
deaths and intrust for designations and naming life insurance policies
and iras and having beneficiaries, there are things that can happen.
Life can happen, and you can lose that beneficiary, in
which case you dump your estate right back into probate. Yeah,
so we're leading up. You're ready for the big crescendo.
(48:02):
How do we plan for clients to avoid probate in
the first instance, to make sure all of their assets
are accounted for, to make sure that we have an administration.
And you're going to talk about the difference, so let's
start there. When we have a trust, which is just
a will or no will, what does the administration look like?
Speaker 2 (48:22):
The administration is much simpler, much smoother. With administration of
a trust. We really only need one document to start
it all off, a certification of trust. I'm the trustee,
the trust is valid, I have the authority to act.
Speaker 1 (48:40):
And every bank, brokerage, et cetera has to accept that
the next day. Right, all you need is a death
certificate or showing that the person is the valid trustee
at the time and they have access immediately.
Speaker 2 (48:53):
We don't have to fill out a million and one
documents for the core wait for the probate process. So,
you know, working in the area that I am in
this office with the estate administration, it is, you know,
a world of a difference with how quickly when it
comes with the trust, those loved ones can act.
Speaker 1 (49:10):
Yeah, and that's been We've been to a trust firm
since day one, and I always looked at it and
I said, okay, we have all these firms. And that
was very much involved in the New York State Bar Trust.
In the state section, I chaired some committees and I
would talk to my colleagues in New York City. I said,
how can and they were doing wills exclusively wills. I'm
going back a few years. You weren't important thirty years ago. Okay,
(49:32):
only wills, no trusts. We did only trusts, no wills.
And over thirty years they've come full circle. Because that
New York probate court is six to nine months on
a good day, so doing a living trust takes you
out of probate. You get to control who's in charge,
when they get the assets, how they get the assets,
(49:53):
and we do a lot of work creating trusts for
our beneficiaries, which all flow together in that living trust.
We're winding down on time, Adriana, last word, thank.
Speaker 2 (50:04):
You for having me today.
Speaker 1 (50:05):
Low that's a good last word. And I want to
remind our listeners that we opened up the trust discussion.
We do trusts very frequently here on Life Happens. But
if you want to join us for the Trust Administration
Workshop September thirtieth at twelve noon. Sign up at pyrolaw
dot com. And we have other programs coming up, Medicaid, Mondays,
and a whole series of events. We're going to be
(50:26):
doing a big seminar on November fifth for financial advisors, accountants, attorneys,
and other professionals called the Intergenerational Estate Planning Conference. If
you have any interest in that, that's on our website
as well. If you have cryptocurrency, that's on our website
as well. And we'll see you all next week here
on the radio.
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