Last Will and Testament
Please Note: The information on this Web site is not intended to be nor is it legal advice. If you intend to draft or execute any of the legal documents listed below or think you or someone you know is in need of legal assistance that relates to any of the issues raised below, it is recommended that you consult a qualified attorney before doing so. The one exception is that individuals should feel free to execute a health care proxy under the guidance of a health care provider or a social worker, if necessary.
A Last Will and Testament is an important estate planning tool for most adults. Having a will allows an individual to direct how and to whom their assets that do not pass by operation of law (i.e. a joint bank account or a retirement account with a beneficiary designation) will be distributed upon their death. It also will allow an individual to appoint the person they want to administer their estate as the executor. While a healthy, middle-aged person or senior citizen might not want to think about such a subject, it is advisable to plan for the future before an emergency arises. It is particularly important for a single parent or parents of a minor child to have a will because it allows the parent or parents to create a minor's trust within a will for the child and also appoint a guardian to care for their child if something should happen to the parent or parents.
If an individual does not have a will, the assets that do not pass by operation of law will pass to the decedent's surviving closest next of kin, as set forth in New York State Statute. In addition, the court would appoint someone to administer the estate and that individual may not be the same as the person whom the deceased would have chosen.
Another advantage to having a will is that it can include important estate planning provisions that potentially can eliminate or reduce estate taxes. In New York State, as of April 1, 2015, if your assets on death exceed $3,125,000, you may have a potentially taxable estate. Therefore, if your assets currently exceed that amount, it is advisable to speak with an attorney about your estate plan and discuss ways to eliminate or reduce potential estate taxes. (On 4/1/16, the exemption figure rises to $4,187,500, and on 4/1/17, it increases to $5,250,000. Regarding federal estate taxes, the 2016 exclusion amount for a single person is $5,450,000 and for a couple using portability, it is $10,908,000)
Some attorneys prefer and promote heavily the estate plan of having a revocable trust and a pour-over will instead of just having a traditional will. This estate plan is appropriate for some people, particularly if the person wants to avoid probate for any reason; wants to or needs to reliquish some control over their asets; and/or has kinship issues that make avoiding probate advisable. However, this plan is successful only if the person transfers all of their potential probate property into the trust once it is signed. Signing the trust does not cause a transfer. The property must be transferred into the trust. The property is transferred into the trust only if transfer papers are signed and filed with the appropriate entities managing those assets (i.e. a bank or brokerage company), or a deed is signed transferring a home. As a practicing attorney, I have seen too often new clients come to me with a revocable trust signed years ago with another attorney, but the client never transferred the property into the trust. For this reason alone, I am wary of this estate plan option unless there is a specific reason why it is needed.