Probate
Probate is the process after the Testator dies,
by which the Will is filed with the court, is verified
that it is the true Will of the Testator, and the
process by which the Executor/Executrix is appointed
representative of the estate. The Will is filed with
a petition which provides pertinent information to
the Court regarding the Testator.Some other documents
you might need are the Testator's certified death
certificate (with a raised seal), a copy of the death
certificate of the spouse, if one dies before the
other, or a copy of the divorce decree, if divorced.
Different courts have different requirements.
After the Court is certain that the Will is a true
copy of the Testator's wishes, the Court will issue
Letters Testamentary. It is with these Letters Testamentary
that you will go to banks and other financial institutions
to receive money from the Testator's accounts. You
will also need this document to transfer title to
all the Testator's property, including home and car.
*Please note that it will be easier for you if you
order many certified copies of the death certificate
from the Funeral home and Letters Testamentary from
the Court.
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Intestacy
When a person dies without a Will, he is considered
to have died Intestate. This means that an Administrator/Administratrix
will have to be appointed legal representative of
the estate.
Under New York State Law (SCPA §1001), Letters
will be granted in the following order:
- The surviving spouse;
- The children;
- The grandchildren;
- The father or mother;
- The brothers or sisters and so on.
There are, of course, exceptions to the rule and
other circumstances which might cause a different
result.
The property would be given to the following people
(EPTL §4-1.1):
If the testator is survived by:
- A spouse and children: $50,000 and one-half of
the estate, after the debts are paid, to the spouse,
with the balance going to the children;
- A spouse and no children: everything to the spouse;
- Children and no spouse: everything to the children;
- One or both parents, and no spouse or children:
everything to the surviving parent(s) and so on.
Once again, there are, of course, exceptions to the
rule and other circumstances which might cause a different
result.
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Wills
- Last Will and
Testament or Will: A document by
which goes into a effect when the Testator dies.
In it, the Testator disposes of all his property.
- Living Will: In states which
provide for Living Wills, a person can create a
document which sets forth in detail what health
and medical procedures he wants performed, in the
event he becomes incapacitated or unable to state
what his wishes are at the time.
- Testator/Testatrix: The person
who creates the Will.
- Executor/Executrix: The person
who is appointed to represent the estate, follow
the terms set forth in the Will, files tax returns
for the estate and collects the property of the
estate for distribution to the beneficiaries.
- Beneficiary/Beneficiaries: Those
people who are given money or property in, or who
otherwise benefit from the Will.
- Intestate: A person who dies
without a Will.
- Guardian: The person who has
physical custody of minor or handicapped children.
- Trustee: The person who holds
money and property for the benefit of another person,
a minor child or incompetent person.
- Probate: It is the process,
after the Testator dies, by which the Will is filed
with the court, is verified that it is the true
Will of the Testator, and by which the Executor/Executrix
is appointed representative of the estate.
- Letters Testamentary: The document
issued by the Court, which certifies that the Executor/Executrix
has been appointed and may act as legal representative
of the estate.
- Administrator/Administratrix:
When there is no Will, the Court will appoint an
administrator/administratrix to act as legal representative
of the estate.
- Letters of Administration: Similar
to Letters Testamentary, it is the document issued
by the Court, which certifies that the Administrator
has been appointed and may act as legal representative
of the estate.
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Estate Taxes
- Taxable Estate: That property
which is subject to taxes. Please understand that
even if you did not have a probate estate, your
estate can still be a taxable estate. It includes,
among other things, property which was held jointly,
insurance policies, houses, bank accounts, brokerage
accounts and gifts that were given by the deceased
person within three years of his death.
- Probate Estate: Only that property
which the decedent owned in his own name only, or
as a tenant in common with someone else. Those assets
held jointly with the right of survivorship or by
the entirety (special only to married couples),
by operation of law automatically run to the joint
owner, and need not go through probate. Please note
that although said joint property does not have
to go through probate, the entire value of the joint
property is placed as if the first to die owned
it entirely and taxes have to be paid on the entire
value of the asset.
- Lifetime estate tax credit: It
is the total amount of money which the government
allows you to transfer in your lifetime and at death
tax-free.
- Stepped up basis: The fair market
value of the decedent's assets as of the time of
his death, versus the value of the assets at the
time the decedent purchased said assets or was gifted
said assets.
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Trusts
- Trust: A Trust is where title
to property is held by one person (the trustee)
for the benefit of another person (the beneficiary).
- Trustee: The person who holds
the property for the benefit of another person.
- Beneficiary: The person who
receives the benefit of the property held in a Trust.
- Donor/Grantor: The person who
creates the Trust and puts the property in a Trust.
- Intervivos Trust/Living Trust:
A Trust that is established while the Donor is alive.
- Testamentary Trust: A Trust
that is drafted into a will and is established after
the Donor dies.
- Revocable Trust: A Trust which
can be revoked at any time while the Donor is alive.
- Irrevocable Trust: A Trust which
cannot be amended or revoked.
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Health Care
Proxy and Power of Attorney
- Health Care Proxy: A document
which appoints a Health Care Agent whom you would
like to make health care and medical decisions for
you in the event you become incompetent or incapacitated
and cannot state what you yourself want.
- Power of Attorney: A document
which sets forth whom you would like to make financial
decisions, sign checks, pay bills etc. on your behalf.
- Durable Power of Attorney: Generally,
when one becomes incompetent, his legal documents
become invalid or unenforceable. A Durable Power
of Attorney has a provision which states that the
document will not become ineffective if the creator
of the document becomes incompetent.
- Living Will: New York does not
have Living Will statutes and laws. In states that
do have these laws, a person can create a document
which sets forth in detail what health and medical
procedures he wants performed, in the event he become
incapacitated or unable to state his wishes at the
time.
- Attorney in Fact: The person
appointed under a Power of Attorney to take care
of your finances or certain financial transactions.
- Health Care Agent: The person
appointed under a Health Care Proxy to make health
care and medical decisions for you in the event
you become incapacitated or incompetent.
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Pet Trust
A pet trust is a legally sanctioned arrangement that
provides for the care and maintenance of one or more
pets in the event of their owner’s disability
or death. The person who creates the trust is commonly
referred to as the ‘settlor’. The person
who is entrusted with the funds is called the ‘trustee’.
A trust can take effect either during a person’s
lifetime or after their death. Typically, a trustee
will hold property (cash, for example) “in trust”
for the settlor’s pet or pets. When the time
comes, the trustee will make payments on a regular
basis to a designated caregiver. In some states, the
trust may continue for the rest of the animal’s
life or for 21 years, whichever comes first. Other
states allow a pet trust to continue for the rest
of the animal’s life without regard to the 21-year
limitation. This is especially advantageous when planning
for companion animals such as horses and parrots,
who have longer life expectancies than cats and dogs.
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