If the person died in New York City you can order a certified copy of the death certificate online or by mail from the Office of Vital Records.

f the person died outside of New York City but in New York State, you can order a certified copy of the death certificate online or by mail from the New York State Department of Health.

In New York State, the County Surrogate’s Court has a vault where Wills can be stored for safekeeping until the person dies.

New York Consolidated Laws, Surrogate’s Court Procedure Act – SCP § 2507. Reception of wills for safekeeping

1. The court of any county upon being paid the fees allowed therefor by law shall receive and deposit in the court any will of a domiciliary of the county which any person shall deliver to it for that purpose and shall give a written receipt therefor to the person depositing it.  An attesting witness to any will may make and sign an affidavit before any officer authorized to administer oaths setting forth such facts as he would be required to testify to in order to prove the will.  The affidavit may be written upon the will or on some paper securely attached thereto and may be filed for safekeeping with the will to which it relates.  There may also be filed with the will affidavits of certified medical examiners, under the provisions of the mental hygiene law, certifying that the maker of the will was of sound mind at the time of its execution, together with any facts supporting such opinion.

2. The will shall be enclosed in a sealed wrapper so that the contents thereof cannot be read and shall have endorsed thereon the name of the testator, his domicile, and the day, month and year when delivered and shall not on any pretext whatever be opened, read or examined until delivered to a person entitled to it as hereinafter directed.

3. The will shall be delivered only

(a) to the testator in person or

(b) upon his written order duly proved by the oath of the testator which shall be duly acknowledged or

(c) after his death to the persons named in the endorsement on the wrapper of the will, if such endorsement be made thereon or

(d) if there be no such endorsement or if it has been deposited with any other officer than a surrogate, then to the surrogate’s court of the county.

4. If the will shall have been deposited with a surrogate’s court or shall have been delivered to it as above prescribed the court after the death of the testator shall publicly open and examine the will and make known the contents thereof and shall file it in the court, there to remain until it shall have been duly proved, if capable of proof, and then to be delivered to the person entitled to the custody thereof or until required by the authority of some competent court to produce the same in such court.

Non-probate assets are not affected by intestate succession laws. Non-probate assets will pass to the surviving joint tenant (in the case of joint tenancy with right of survivorship) or to the beneficiary you designate (in the case of the first 5 bulleted items below), whether you have a will or you do not have a will. Examples of non-probate property include:

• Property you’ve transferred to a revocable trust;
• Life insurance proceeds (unless your estate is the designated beneficiary);
• IRA, 401(k), or retirement plans (unless your estate is the designated beneficiary);
• Securities held in a transfer-on-death bank account (TOD account);
• Payable-on-death bank accounts (POD accounts); or
• Property you own with another person in joint tenancy with right of survivorship.

The Spouse’s Share in New York

In New York, if you are married and you die without a will, what your spouse gets depends on whether or not you have living descendants (children, grandchildren, or great grandchildren).

• If you die without a will in New York, and have no living descendants your spouse inherits everything.
• If you have living descendants, then your spouse inherits the first $50,000 of your intestate property, plus 1/2 of the balance

Children’s Shares in New York

If you die without a will in New York, your children will receive an “intestate share” of your property. The size of each child’s share depends on how many children you have and whether or not you are married.

If you die with children but no spouse your children inherit everything.

For children to inherit from you under the laws of intestacy, the state of New York must consider them your children, legally. Here are some things to keep in mind.

• Children you legally adopted will receive an intestate share, just as your biological children do
• Foster children and stepchildren. Foster children and stepchildren you never legally adopted will not automatically receive a share.
• Children you placed for adoption and who were legally adopted by another family will not receive a share. However, if your biological children were adopted by your spouse, that won’t affect their intestate inheritance.
• Children born outside of marriage. If you were not married to your children’s mother when she gave birth to them, they will receive a share of your estate if (1) you and the child’s mother signed an acknowledgment of paternity and filed it where your child’s birth certificate is registered, (2) you signed a document acknowledging paternity; you openly acknowledged the child as your own; (4) or a court has determined your paternity.
• Children born through artificial insemination. Your child born through artificial insemination will receive a share of your estate if you consented to the use of your genetic material to be used after your death and this consent was made within seven years of your death.
• A grandchild will receive a share only if that grandchild’s parent (your son or daughter) is not alive to receive his or her share.
• “Half” relatives inherit as if they were “whole.” That is, your sister with whom you share a father, but not a mother, has the same right to your property as she would if you had both parents in common.
• Posthumous relatives (relatives conceived before — but born after — you die) inherit as if they had been born while you were alive.

What is Escheat?

If you die without a will and don’t have any family, your property will “escheat” into the state’s coffers. However, this very rarely happens because the laws are designed to get your property to anyone who was even remotely related to you. For example, your property won’t go to the state if you leave a spouse, children, grandchildren, great grandchildren, parents, grandparents, siblings, nieces, nephews, great nieces or nephews, aunts, uncles, or cousins.

Best to have a Will

If you die without a will, state law will determine the distribution of your estate. As explained above this is known as the law of intestate succession. Through these laws, each state, in effect, draws your will for you – determines “who gets what” – according to what seems most equitable for the greatest number of its citizens. The problem with these laws is they are designed for general application and rarely suit individual circumstances. Preparing your own will assures that your property will go to the people you choose.

Property can be transferred back and forth between spouses without gift tax consequences and transferred to the surviving spouse upon the death of the first spouse to die, without estate tax consequences. Only upon the death of the second spouse will the “family unit’s” wealth be taxed (except to the extent that property may have been transferred outside the family unit (i.e., other than to the surviving spouse) when the first spouse died. It should be noted that transfer by the first spouse to die, of his or her entire gross estate to the surviving spouse, although it will eliminate any estate tax when the first spouse dies, may not be desirable from a longer-range estate planning viewpoint. A will creating a credit shelter trust (sometimes referred to as a bypass trust or family trust or non-marital trust) can result in estate tax savings by taking full advantage of the unified credit in the estates of both spouses (without relying on portability) thus sheltering from estate taxation an amount equal to two times the applicable exemption amount.

Consistent with this approach, the unified transfer tax system assumes — and indeed, attempts to assure — that any of the property of the first spouse to die, which passes tax free under the marital deduction to the surviving spouse, will be includable in the gross estate of the surviving spouse when he or she dies. In this respect the unlimited marital deduction is essentially a mechanism for deferral of tax which might otherwise be payable upon the death of the first spouse to die.

In order to qualify for the marital deduction the subject property must have been included in the decedent’s gross estate and have passed from the decedent to his or her surviving spouse. For this purpose, property is deemed to qualify as passing from the decedent to the surviving spouse only under seven possible circumstances set forth in I.R.C. §2056(c):

1. by bequest or devise from decedent;
2. by inheritance from decedent;
3. through dower or curtesy rights, or their statutory equivalent, under local law;
4. by transfer from the decedent during lifetime (in a manner which caused the transferred property to be includable in the gross estate; e.g., a gift “with strings attached” under I.R.C. §2036, 2037 or 2038);
5. by accession to decedent’s share of jointly owned property, through joint tenancy with right of survivorship;
6. by exercise of a power of appointment by the decedent, or by the surviving spouse’s taking by reason of non-exercise of such a power over the property;
7. by receipt of insurance proceeds on the life of decedent.

Transfers to a surviving spouse which qualify for the marital deduction may take a variety of forms, from outright full ownership, to various trust arrangements in which the surviving spouse (or his or her estate) receives, or has the right to direct the disposition of, the benefits of ownership. In essence, the surviving spouse must have an interest sufficient to cause the trust property to be included in his or her gross estate when he or she dies.

Terminable Interests

If the interest passing to the surviving spouse is subject to possible termination (with the beneficial enjoyment passing to another party) at some future point, the spouse’s interest is not considered sufficiently vested in the spouse to give rise to the marital deduction. For example, if the surviving spouse were to receive beneficial ownership for only five years, and then the property is to pass to someone else, a marital deduction cannot be taken for the value of the property (or even for the present value of the five-year interest). This type of interest and other interests in a surviving spouse which may terminate by passage of time, the happening of a contingency, or the failure of an event or contingency to occur, are referred to as “terminable interests.” Because of the possibility that the interest of the surviving spouse may terminate before his or her death, it would be inappropriate to assume that the value of the property will eventually be included in his gross estate, and thus, it must be included in the gross estate of the first to die (i.e., no marital deduction is allowable). This general principal is sometimes referred to as the “terminable interest rule.” There are exceptions to the general rule that a terminable interest does not qualify for the marital deduction. These are spelled out in I.R.C. §2056(b)(5), dealing with situations in which the surviving spouse holds a power of appointment; §2056(b)(7), dealing with life estates which can be made “qualified terminable interests” by election; and §2056(b)(8), dealing with “qualified charitable remainder trusts.” A critical common element is that the property in question will eventually be included in the surviving spouse’s gross estate or pass to charity.

Forms of Property Transfer to Surviving Spouse

Property transfers to a surviving spouse, qualifying for the marital deduction, may be in the form of outright transfer of full ownership or a variety of trust arrangements, utilized to meet certain specific objectives, depending on factual circumstances. Again, an essential element of any such transfer in trust is that the trust be established in such a manner that the property of the first spouse to die will eventually be included in the gross estate of the surviving spouse.

Outright Transfer

This is the most straightforward accession of ownership by the surviving spouse. No trust is involved, and the survivor merely takes unrestricted outright legal title. This could occur, for example, through direct transfer from the decedent by will or survivorship with respect to joint tenancy property.

Power of Appointment Trust

Property is transferred to a trust which provides for income to be paid to the surviving spouse for life, with the spouse being granted a general power of appointment over the property. Although this is technically a terminable interest, it is specifically excepted from the terminable interest rule by §2056(b)(5); the exception is based upon the fact that the subject property will ultimately be includable in the gross estate of the surviving spouse by reason of the power of appointment. I.R.C. §2056(b)(5) contains specific requirements in order for such a transfer to qualify for the marital deduction. The surviving spouse must be entitled to all of the income for life, payable at least annually. He or she must have a power of appointment over the property, which may be exercisable during lifetime or by will (or either) in favor of himself or herself or his or her estate. (Although §2056(b)(5) requires that the power of appointment be exercisable in favor of the surviving spouse/power holder or his or her estate, it does not use the term “general power of appointment,” which is defined in §2041. Under that definition a power of appointment is a “general” power of appointment if it can be exercised in favor of the power holder, his/her estate or creditors of either of them. Thus, whereas a power to appoint to creditors but not to the power holder or his/her estate directly would qualify as a general power of appointment, it would not qualify the power of appointment trust for the marital deduction under §2056(b)(5).) The power of appointment must be exercisable by the surviving spouse alone and in all events. No other person may have a power to appoint to someone other than the surviving spouse. This type of trust arrangement, with the power of appointment exercisable by will only, might be desirable as an alternative to outright ownership in situations where the decedent has doubts about the surviving spouse’s ability to deal appropriately with the property during his or her lifetime.

Estate Trust

A variation on the power of appointment marital deduction trust is the so-called “estate trust.” In the case of an estate trust the income from the trust property goes ultimately for the exclusive benefit of the surviving spouse, but the trustee has discretionary authority over whether to distribute income currently or to accumulate the income, adding it to the trust corpus. In any event the trust property, including any previously undistributed income, goes to the estate of the surviving spouse on his or her death. See Regs. §2056(e)-2(b)(1).

Qualified Charitable Remainder Trust

Suppose that a decedent’s will establishes a trust which provides for annual distribution to the surviving spouse of an amount equal to 5 percent of the net market value of trust assets, and upon his or her death, the trust corpus is to be distributed to the American Red Cross. Technically, the property interest given to the surviving spouse is a terminable interest, since it will end when he or she dies. The general terminable interest rule would prevent the first decedent from claiming a marital deduction for the value of the surviving spouse’s life income interest. However, §2056(b)(8) provides an exception when the holder of the remainder interest (following the interest of the surviving spouse) is a qualified charity. This exception is based upon the fact that if the property is going to ultimately pass to a qualified charity, and therefore, would be deductible from the gross estate of the surviving spouse (and would be deductible from the first decedent’s gross estate if given outright to the charity, without the spouse’s intervening life estate), there is no reason to subject the property to tax in the estate of the first decedent, who made the split-interest transfer. The effect of §2056(b)(8) is simply to eliminate any technical impediment to the complete deductibility of a split-interest transfer, where the only recipients of interests in the property are a surviving spouse and one or more qualified charities. In order for §2056(b)(8) to apply, the remainder interest in the charitable organization must be such that it would qualify for the gross estate charitable contribution deduction of I.R.C. §2055 as an interest in either a charitable remainder annuity trust or a charitable remainder unitrust.

Qualified Terminable Interest Property (“QTIP”) Trust

As previously mentioned, one of the exceptions to the terminable interest rule is the election permitted under §2056(b)(7) with respect to “qualified terminable interest property,” often referred to as the “QTIP” election. In general, a QTIP election will allow the marital deduction to be taken with respect to property as to which the surviving spouse has been given a life income interest, but which passes to another party upon the surviving spouse’s death. Such an interest in a surviving spouse is a terminable interest within the general rule of §2056(b)(1), and absent the QTIP provision, no marital deduction would be available. This is consistent with the underlying rationale of the terminable interest rule because the terminable interest property would not be includable in the gross estate of the surviving spouse (absent a general power of appointment). The QTIP election permits the personal representative of the estate of the first spouse to die to make an election, the effect of which is to allow the marital deduction for property not otherwise deductible, in return for acceptance of the consequence that the property will later be included in the gross estate of the surviving spouse. The inclusion of QTIP property in the gross estate of the surviving spouse is mandated by I.R.C. §2044.

In order to qualify for the QTIP election, certain conditions must be met. The property must pass from the decedent, and the surviving spouse must have a qualifying income interest for life. The surviving spouse has a qualifying income interest for life if he or she is entitled to all of the income from the property, payable annually or at more frequent intervals (or has a usufruct interest (in general, the term “usufruct interest” means the right to enjoy the physical fruits of (as opposed to rental income from) real property. For example, the right to harvest crops or to exploit mineral resources for life in the property), and no person has a power to appoint any part of the property to any person other than the surviving spouse (unless exercisable only upon or after the surviving spouse’s death). The personal representative of the estate must make the election in the estate tax return, and the election is irrevocable. The election may be made as to the entire amount of the subject property (as to which the surviving spouse holds the requisite life estate), or as to any specified fractional or percentage portion. Any such partial election must be in terms of a fractional or percentage share of the property (rather than a stated dollar amount) so that the portion as to which the election is made will reflect the proportionate share of any increase or decrease in value when it is ultimately included in the surviving spouses gross estate. The fraction or percentage may be defined by means of a formula. This ability to make a QTIP election as to any proportionate share of the trust is a significant post-death planning tool.

The significant difference between the QTIP trust under §2056(b)(7) and the power of appointment trust under §2056(b)(5) is that under the power of appointment trust the property will be brought into the surviving spouse’s gross estate by reason of his or her possession of a general power of appointment, whereas, with a QTIP trust, the surviving spouse need not have a power of appointment, the property being includable in his or her gross estate by reason of the QTIP election having been made. In this respect the QTIP trust is particularly useful in situations where the decedent wishes to direct the disposition of the property after the death of the surviving spouse, and does not want the surviving spouse to have the power to change it (through exercise of a power of appointment). QTIP trusts are often used where an individual’s children of a prior marriage are to be his or her ultimate beneficiaries, however, the decedent wants to take full advantage of the marital deduction.

In order to satisfy the requirement that the surviving spouse holds an income interest for life in a power of appointment trust or a QTIP trust, the trust provisions may not impose restrictions on the spouse’s degree of beneficial enjoyment of the trust property which are inconsistent with the normal rights of a life beneficiary under the general law of trusts. Thus, the requirement that the surviving spouse be entitled to all of the income will not be satisfied if the primary purpose of the trust is to safeguard property without providing the spouse with the required current beneficial enjoyment. This would apply to trusts which expressly provide for the accumulation of income and trusts which indirectly accomplish a similar purpose. For example, assume that the trust consists substantially of property which is not likely to produce income during the life of the surviving spouse. An interest passing to such a trust will not qualify for the marital deduction unless the applicable trust law and rules for trust administration require, or permit the life beneficiary to require, that the trustee make the property currently productive or convert it to alternative income-producing property. In general, the designation of the surviving spouse as sole income beneficiary for life will be sufficient to qualify the trust unless the terms of the trust and the surrounding circumstances considered as a whole evidence an intention to deprive the spouse of the requisite degree of enjoyment.

Qualified Domestic Trust

As previously mentioned, a transfer to a surviving spouse who is not a U.S. citizen will not generally qualify for the marital deduction. Since the marital deduction is merely a deferral privilege, it presumes that the property of the first spouse to die will eventually be taxed as part of the estate of the surviving spouse. However, this critical presumption may well not be applicable when the surviving spouse is not a U.S. citizen, since there is a material risk that the original decedent’s property will be removed from U.S. taxing jurisdiction before the death of the surviving spouse. See Qualified Domestic Trust.

Section 1014(a)(1) of the Code states that the basis of property in the hands of a person acquiring the property from a decedent or to whom the property passed from a decedent shall, if not sold, exchanged, or otherwise disposed of before the decedent’s death by such person, be the fair market value of the property at the date of the decedent’s death.

Section 1014(b)(1) of the Code provides that property acquired by bequest, devise, or inheritance, or by the decedent’s estate from the decedent shall be considered to have been acquired from or to have passed from the decedent for purposes of section 1014(a).

Section 1014(b)(9)(C) of the Code further provides that section 1014(b)(9) shall not apply to property described in other paragraphs of section 1014(b).

Section 1014(b)(9) of the Code provides that, in the case of a decedent dying after December 31, 1953, property acquired from a decedent by reason of death, form of ownership, or other conditions (including property acquired through the exercise or non-exercise of a power of appointment), if by reason thereof the property is required to be included in determining the value of a decedent’s gross estate shall be considered to have been acquired from or to have passed from the decedent for purposes of section 1014(a).

Section 1.1014-2(b)(2) of the Income Tax Regulations provides that section 1014(b)(9) property does not include property that is not includible in the value of a decedent’s gross estate, such as property not situated in the United States acquired from a nonresident who is not a citizen of the United States.

There are three different kinds of estate proceedings in Surrogate’s Court.

Small Estate: This is also called a voluntary administration. If a person died with less than $50,000 worth of personal property, then a small estate can be filed. It doesn’t matter if there was a Will or not.

Probate: If a person dies with a Will, then the kind of proceeding filed is called probate and the property is divided according to the Will.

Administration: If a person dies without a Will, then the proceeding filed is called administration and the property is divided according to New York State law.

If you’ve recently lost a loved one, or are helping someone who has, we know this is a challenging time. We are here to help you with estate administration, New York probate and the inheritance process: Probate and Estate Administration

New York Estates Powers and Trust Law (EPTL) Section 5-1.1-A provides a right of election for the surviving spouse to take a share of his or her spouse’s estate, no matter what the will provides. The right of election provides that the elective share of the surviving spouse is the greater of one-third of the net estate, as augmented by so called “testamentary substitutes,” or Fifty Thousand Dollars ($50,000).

Testamentary substitutes include gifts causa mortis, gifts made in the year prior to the decedent’s death, Totten trust accounts, joint bank accounts, property held jointly or payable to another upon death, assets transferred by the decedent in which she retained the right to income for life, retirement accounts, assets in which the decedent held a general power of appointment and transfer-on-death (TOD) or payable-on-death (POD) accounts or securities. These testamentary substitutes are added back into the net estate for purposes of calculating right of election of the surviving spouse.

Cutting back certain gifts under a will when it’s necessary to meet expenses, pay taxes, satisfy debts or take care of other bequests that are given priority under law or under the will.

ADEMPTION

The failure of a testamentary gift of real or personal property due to the absence of the item given in the testator’s estate at the time of death.

ADMINISTRATOR — EXECUTOR

An administrator is a person appointed by the court to settle an estate.

An executor is a person named by the estate owner in his or her will to settle the estate.

An administrator may be appointed (1) when the deceased left no will, (2) where the deceased left a will but failed to name an executor, (3) where the executor in the will failed to qualify or refused to serve, and (4) where the executor in the will, after having qualified, fails to settle the estate.

ADVANCEMENT

Money or property given by a parent to his child, other descendant, or heir (depending upon the statute’s wording), or expended by the former for the latter’s benefit, by way of anticipation of the share which the child, for example, will inherit in the parent’s estate and intended to be deducted therefrom.

AFTER-BORN CHILD

A child born after the execution of a parent’s will.

ATTESTATION

The attestation clause is the paragraph appended to the will indicating that certain persons by their signatures thereto have heard the testator declare the instrument to be his will and have witnessed his signing of the will.

AUGMENTED ESTATE

A method used in a number of states following the common law ownership of property system to measure a person’s estate for the purpose of determining whether a surviving spouse has been adequately provided for. Generally, the augmented estate consists of property left by the will plus certain property transferred outside of the will by such devices as gifts, joint tenancies and living trusts. In the states using this concept, a surviving spouse is generally considered to be adequately provided for if he or she receives at least one-third of the augmented estate.

BENEFICIARY

A person or organization who’s legally entitled to receive benefits under a legal document such as a will or trust. Except when very small estate are involved, beneficiaries of wills receive their property only after the will is examined and approved by the probate court. Beneficiaries of trusts receive their property as provided in the trust instrument.

BEQUEST

Bequests are classified, generally speaking, as specific or general. A specific bequest is a gift of a particular specified class or kind of property as, for example, a gift of the testator’s diamond ring to a named individual or a gift of designated stock in a corporation. A general bequest is one which may be satisfied from the general assets of the estate as, for example, a bequest of a sum of money without reference to any particular fund from which it is to be paid. Since a specific bequest designates a particular item of the estate which is to be given, if that item is not in existence at the time of the testator’s death, the gift fails.

BOND

A document guaranteeing that a certain amount of money will be paid to people who lose money because a person occupying a position of trust doesn’t carry out his or her legal and ethical responsibilities. For example, if an executor, trustee or guardian who’s bonded (covered by a bond) wrongfully deprives a beneficiary of his or her property (say by blowing it during a trip in Vas Vegas), the bonding company will replace it, up to the limits of the bond. Bonding companies are normally divisions of insurance companies.

CODICIL

A supplement or addition to an existing will, to effect some revision, change, or modification of that will. A codicil must meet the same requirements regarding execution and validity as a will.

COLLATERAL RELATIONS

A phrase used primarily in the law of intestacy to designate uncles and aunts, cousins, etc., those relatives not in a direct ascending or descending line, like grandparents or grandchildren, the latter which are designated as lineal relations.

CUSTODIAN

A general term to describe a personal or financial institution that has charge or custody of property, securities, papers, assets, etc. Also, a person named to care for property left to a minor under the Uniform Transfers to Minors Act.

DECEDENT

A deceased person, especially one who has died recently.

DOMICILE

A person’s legal home. That place where an individual has his true, fixed, and permanent home and principal establishment, and to which whenever he is absent he has the intention of returning.

DONEE

The recipient of a gift. In the law of wills, the term is used to refer to the recipient of a power of appointment.

DONOR

A person who makes a gift. In the law of wills, the term refers to the person who grants a power of appointment to another.

ENCUMBRANCES

Debts (such as taxes, mechanics’ liens, judgment liens) and loans (such as mortgages, deeds of trust, and security interests) which use property as collateral for payment of the debt or loan. They encumber the property because they must be paid off before title to the property can pass from one owner to the next. Generally, the value of a person’s ownership in such property (called the “equity”) is measured by the market value of the property less the sum of all encumbrances.

GUARDIAN

A person named to represent the interests of minor children, whether named in a will or appointed by a court.

HEIR

Technically those persons designated by law to succeed to the estate of an intestate (also designated as next of kin).

HOLOGRAPHIC WILL

A will entirely in the handwriting of the testator. In many states, such a will is not recognized unless it is published, declared and witnessed as required by statute for other written wills.

INTESTACY STATUTES

Statutes designating the persons to whom an intestate’s property is to be distributed, and the share each is to take.

INTESTATE

Without a will. A person who leaves no will is an intestate. A person who dies without a will dies intestate.

JOINT TENANCY

Type of ownership of real or personal property by two or more persons in which each owns an undivided interest in the whole and attached to which is the right of survivorship. When two or more people own property as joint tenants, and one of the owners dies, the other owners automatically own the deceased owner’s share. For example, if a parent and child own a house as joint tenants, and the parent dies, the child automatically becomes the full owner. Because of this “right of survivorship,” a joint tenancy interest in property doesn’t go through probate. Instead, it goes directly to the surviving joint tenant(s). See also: How Property is Transferred at Death

LAPSE

The failure of a testamentary gift due to the death of the intended beneficiary during the life of the testator.

LAST WILL AND TESTAMENT

The usual term referring to a will. The phrase is an outgrowth of the old English law under which a “will” was a disposition of real estate and a “testament” was a disposition of personal property. The two terms originally meant different things. The difference is no longer recognized, however. Nothing is added by coupling “testament” with “will,” the latter being sufficiently inclusive.

LEGACY

A legacy is a gift of personal property by will. It would perhaps be proper to use the term “Bequest” to include any disposition by will, the term “devise” to cover gifts of real estate, and the term “legacy” to cover gifts of personal property. However, both at law and in common practice, the terms are not used with any great respect for this distinction and often appear more or less interchangeably.

LIVING TRUST

A trust set up while you are alive. See: What is a Trust?

NUNCUPATIVE WILL

An oral will, declared or dictated by the testator in his last sickness before a sufficient number of witnesses, and afterwards reduced to writing.

PAY ON DEATH (POD) BANK ACCOUNT

An account enabling you to name a beneficiary who will receive the funds in the account outside of probate after your death.

PERSONAL PROPERTY

Generally, all property other than real estate. Examples of personal property include cars, bank accounts, wages, securities, a small business, furniture, insurance policies, jewelry, pets, etc.

POWER OF APPOINTMENT

A power of appointment is essentially the right to designate who is to own certain specified property. See: What is a Power of Appointment?.

POWER OF ATTORNEY

An instrument in writing whereby one person, as principal, appoints another as his agent and confers authority to perform certain specified acts or kinds of acts on behalf of principal (i.e, you authorize someone to act for you). A durable power of attorney exists when a person executes a power of attorney which will remain effective in the event he or she should later become disabled. For instance, a durable power of attorney allows someone to act for you if you become disabled or incapacitated, to make financial decisions for you.

PROBATE

The process of proving the validity of the will in court and executing its provisions under the guidance of the court. When a person dies, his or her will must be filed before the proper officer of the proper court, giving this court jurisdiction in the matter of enforcing the document. This is called “filing the will for probate.” When the will has been filed, it is said to be “admitted to probate.” The process of “probating” the will involves recognition by the court of the executor named in the will (or appointment of an administrator if none has been named), the filing of the proper reports and papers as required by law, determination of validity of the will if contested, and distribution and final settlement of the estate under the supervision of the court.

RESIDUARY ESTATE

The remaining part of testator’s estate, after payment of debts and requests. Wills usually contain a clause disposing of the residue of the estate which the testator has not otherwise bequeathed or devised.

TAKING AGAINST THE WILL

The choice by a surviving spouse to claim a statutorily allotted share of the deceased spouse’s estate instead of the share specified in the deceased spouse’s will.

TENANCY IN COMMON

A form of ownership whereby each tenant (i.e., owner) holds an undivided interest in property. It is a way of sharing ownership of property where the shares need not be equal. Each owner’s share can be left to whomever he or she wants.

TESTAMENTARY TRUST

A trust of certain property passing under a will and created by the terms of the will.

TESTATOR — TESTATRIX

The person who makes a will. If a man, he is a testator. If a woman, she is a testatrix.

TRUST

A legal entity created by a grantor for the benefit of designated beneficiaries under the laws of the state and the valid trust instrument. The trustee (an individual or institution) holds a fiduciary responsibility to manage the trust’s assets and income for the economic benefit of all of the beneficiaries. See: What is a Trust?

UNIFORM TRANSFERS TO MINORS ACT

A series of statutes, adopted by most states, that provides a method for appointing an adult (called a custodian) to manage property left to a minor.

WILL

A document in which an individual makes a disposition of his real and personal property, to take effect after his death.

Internal Revenue Code §2039 deals with traditional annuity contracts as well as other types of contractual arrangements under which a decedent was entitled to receive a periodic payment, effectively for life, and upon decedent’s death another party (the beneficiary) becomes entitled to continued periodic payments, or a lump sum payment.

In the case of a straight life annuity contract in which all payments terminate upon the annuitant’s death, nothing is includable in the gross estate since the contract is effectively terminated and has no value as of the date of death. Payments that continue to a survivor after the death of the primary annuitant (continued period payments under a “period certain” contract, or a lump sum (“refund”) payment) are includable in the gross estate of the decedent. Under an annuity providing for post-death payment(s) to the annuitant’s estate (rather than to a beneficiary), the value receivable would be treated as property owned by decedent, includable in the gross estate under §2033.

The contractual right of a beneficiary to receive a “survivor” benefit represents property of value effectively passing from the decedent, and thus, its value must be included in the decedent’s gross estate. For example, if under an employer’s non-qualified deferred compensation plan, periodic payments to an employee are to be continued to be made to a surviving beneficiary after the employee’s death, the value of the survivor’s benefit would be includable in the gross estate. In general, the value of such survivor benefits is includable in the decedent’s gross estate to the extent that they are attributable to contributions made by the decedent or his employer. In other words, if the annuity contract had been purchased by the decedent (or his employer, or through contributions by each), then the value of the survivor annuity or refund is includable in the gross estate. If the decedent (and/or his employer) contributed less than 100 percent of the cost of the contract, then the gross estate will include only the portion of the survivor benefits equal to the portion of the cost of the contract so contributed.

If the decedent dies prematurely, before the annuity starting date, and the contract provides for a lump sum death benefit (refund) in such event, the rules of §2033 or §2039 will also apply. If the benefit is payable to the decedent’s estate it will be includable in the gross estate under §2033; if it is payable to a beneficiary it will be includable in the gross estate in the same proportion that the decedent or his employer contributed to the cost of the contract under §2039.

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In addition to the property owned outright at the date of death the gross estate for federal estate tax purposes includes certain other property with which the decedent was connected, as discussed in the following blog posts:

Property Transferred With Retained Life Estate – I.R.C. §2036

Transfers Taking Effect at Death – I.R.C. §2037

Revocable Transfers – I.R.C. §2038

Annuities – I.R.C. §2039

Jointly Owned Property – I.R.C. §2040

Property Subject to General Power of Appointment – I.R.C. §2041

Proceeds of Life Insurance – I.R.C. §2042

Gifts Made Within Three Years of Death – I.R.C. §2035

A trust exists when a grantor transfers the legal title to the trustee who is to hold that title for the benefit of the beneficiary (the beneficial owner). The trustee is responsible for carrying out the instructions of the grantor as set forth in the trust agreement.

The Trustee is responsible for the marshaling and safekeeping of trust assets. The successor trustee is responsible for being sure the predecessor trustee has delivered all trust assets to him or her.

When assets are received, the trustee should be sure they are properly secured and are identified as belonging to the trust. For example, in the case of cash or securities, the trustee should establish a bank or brokerage account in the name of the trust. The trust can be identified in any number of ways, but the following example is typical:

John Doe, Trustee or any Successor Trustee, of the John Doe Irrevocable Trust dated December 5, 2020. You may find that a particular insurance company, bank or other financial institution may require slightly different wording, but as long as the trust is clearly identified by the following three key parameters: (1) name of trustee, (2) name of trust, and (3) date of execution of the trust, such slight variations should cause no concern.

When opening an account at a bank trustees should be aware that bank personnel sometimes get confused when you seek to establish an account for a trust. Remember… You are not asking the bank to create what is often known as a “trust account.” That is, the account itself does not create a trustee/beneficiary relationship. Rather, you are asking the bank to make a trust is the owner of an account. Certain trusts require a tax identification number.

Investment of Trust Assets: The trustee must review trust investments immediately upon receipt and continually thereafter. If the trust permits, the trustee may delegate investment management to a professional investment adviser… but the trustee must regularly review the professional’s actions.

Understand the Terms of the Trust: The trustee should review the trust instrument with a competent Trust & Estate attorney to familiarize himself with the document as soon as possible.

Get to Know the Beneficiaries: The trustee must fully understand the circumstances and needs of the beneficiaries. Trusts often have multiple beneficiaries. The trustee must be fair to all of them.

Trust Administration and Record Keeping: The trustee is responsible for administering the trust accurately and skillfully. Generally speaking, all beneficiaries of the trust are entitled to a complete review of all trust transactions. Thus, accurate and thorough record keeping is essential. Trust records should be kept in a secure place. Even after the trust terminates, trust records should be archived and kept for many years thereafter.

Artists and collectors should keep a comprehensive inventory of their works with detailed information about each work. A useful inventory lists the name of each work and the date it was created and fixed in a tangible medium. The medium, the dimensions, and any historical information should be included (for example, when and where the work has been exhibited and any catalogs in which the work was published or offered for sale). If a work was produced in a limited edition of multiple copies, the inventory should state how many copies were produced and whether the plate or cast was destroyed. The inventory should note the appraised values for insurance purposes.

In the case of a very valuable collection the artist or collector should consider whether life insurance (structured to be owned by an irrevocable life insurance trust) is necessary to provide liquidity for estate taxes.

After the death of the artist or collector the executor of the estate (or the trustee of any applicable trust) should make sure all works are insured, inventoried, and securely stored.

Any records regarding copyrights, transfer of copyrights, licenses, registration, renewals, and exercise of termination rights should be reviewed and recorded. If works of art are on loan, the executor (or trustee) should notify the borrower of the estate’s (or trust’s) intent to preserve its interest in the works and, if circumstances dictate, demand return of the works. If the works are to be auctioned through an auction house, the executor should negotiate the terms of the sale with the auction house.

Typically, a charitable remainder trust provides that the non-charitable beneficiary (the grantor) receives payments, at least annually, during his or her life or for a pre-determined number of years, and the charity receives whatever trust assets remain at the end of the trust term (i.e., after the grantor’s death or selected term of years).

A charitable trust is sometimes referred to as a “split interest trust”. This is because the beneficial interests in the trust are “split” between the non-charitable beneficiaries and the charitable beneficiaries.

A charitable remainder trust may be considered when a charitably inclined individual wants to diversify a highly appreciated portfolio, while generating cash flow and an immediate income tax deduction. The grantor funds the charitable remainder trust with the highly appreciated assets. When the charitable remainder trust sells the highly appreciated assets, the charitable remainder trust itself is not subject to capital gains tax, thus allowing for the full value of the appreciated assets to be reinvested in a diversified portfolio. The capital gains taxes are in effect deferred and will be spread out and payable as the grantor receives payments from the charitable remainder trust.

See also: The Charitable Remainder Trust and the Wealth Replacement Trust.

Executing a durable power of attorney is a serious matter since the person you select as your agent will have legal authority to act on your behalf. It is imperative that your agent be trustworthy and that you have no doubt that they will act in your best interest.

A durable power of attorney is especially important in the event of the principal’s incapacity. If a valid durable power of attorney exists prior to the principal’s incapacity, then the agent has full authority to make decisions on the principal’s behalf (to the extent they were granted in the power of attorney document).

You must file a gift tax return if you elect to split gifts with your spouse.

If a gift is of community property, it is considered made one-half by each spouse. For example, a gift of $100,000 of community property is considered a gift of $50,000 made by each spouse, and each spouse must file a gift tax return. Likewise, each spouse must file a gift tax return if they have made a gift of property held by them as joint tenants or tenants by the entirety.

Only individuals are required to file gift tax returns. If a trust, estate, partnership, or corporation makes a gift, the individual beneficiaries, partners, or stockholders are considered donors and may be liable for the gift tax.

The donor is responsible for paying the gift tax. However, if the donor does not pay the tax, the person receiving the gift may have to pay the tax. If a donor dies before filing a gift tax return, the donor’s executor must file the return.

If the only gifts you made during the year are deductible as gifts to charities, you do not need to file a gift tax return as long as you transferred your entire interest in the property to qualifying charities. If you transferred only a partial interest, or transferred part of your interest to someone other than a charity, you must still file a return and report all of your gifts to charities. If you are required to file a return to report non-charitable gifts and you made gifts to charities, you must include all of your gifts to charities on the return.

What Types of Transfers are Subject to the Gift Tax

The federal gift tax applies to any transfer by gift of real or personal property, whether tangible or intangible, that you made directly or indirectly, in trust, or by any other means.

The gift tax applies not only to the free transfer of any kind of property, but also to sales or exchanges, not made in the ordinary course of business, where value of the money (or property) received is less than the value of what is sold or exchanged. The gift tax is in addition to any other tax, such as federal income tax, paid or due on the transfer.

Bonds that are exempt from federal income taxes are not exempt from federal gift taxes.

Transfers not subject to the gift tax include:

• Transfers to political organizations,
• Transfers to certain exempt organizations,
• Payments that qualify for the educational exclusion, and
• Payments that qualify for the medical exclusion.

Political organizations. The gift tax does not apply to a transfer to a political organization (defined in section 527(e)(1)) for the use of the organization.

Certain exempt organizations. The gift tax does not apply to a transfer to any civic league or other organization described in section 501(c)(4); any labor, agricultural, or horticultural organization described in section 501(c)(5); or any business league or other organization described in section 501(c)(6) for the use of such organization, provided that such organization is exempt from tax under section 501(a).

Educational exclusion. The gift tax does not apply to an amount you paid on behalf of an individual to a qualifying domestic or foreign educational organization as tuition for the education or training of the individual. The payment must be made directly to the qualifying educational organization and it must be for tuition. No educational exclusion is allowed for amounts paid for books, supplies, room and board, or other similar expenses that are not direct tuition costs. To the extent that the payment to the educational organization was for something other than tuition, it is a gift to the individual for whose benefit it was made, and may be otherwise offset by the gift tax annual exclusion.

Medical exclusion. The gift tax does not apply to an amount you paid on behalf of an individual to a person or institution that provided medical care for the individual. The payment must be to the care provider. The medical care must meet the requirements of section 213(d) which defines medical care for income tax deduction purposes. The medical exclusion does not apply to amounts paid for medical care that are reimbursed by the donee’s insurance. If payment for a medical expense is reimbursed by the donee’s insurance company, your payment for that expense, to the extent of the reimbursed amount, is not eligible for the medical exclusion and you are considered to have made a gift to the donee of the reimbursed amount. To the extent that the payment was for something other than medical care, it is a gift to the individual on whose behalf the payment was made and may be otherwise offset by the gift tax annual exclusion.

Attorney Adler focuses his practice on estate planning, wills, trusts and estates. He can be reached at 212-843-4059 or 646-946-8327.

(1) to leave your property to those about whom you care in the manner and proportions you choose;

(2) to choose the person(s) you want to handle your estate (i.e., executors and trustees);

(3) to name a guardian for your minor children;

(4) to determine how assets will be administered for the benefit of a surviving spouse and other heirs (whether outright or in trust);

(5) to structure a plan that minimizes state and federal estate an income taxes.

What is the best way to make a will?

Making the best estate plan and the best will takes knowledge and expert advice. For example, do you know that property held jointly with another may not be distributed by will? Or that life insurance may or may not be distributed by will depending on who is named as a beneficiary? Or that the same can be said of individual retirement accounts, 401(k) plans, pension plans and other assets? Or that a spouse has a right to a share of your property no matter what your will says?

To create the best will and estate plan for you and your family it’s important that you work with a qualified attorney.

Estate Planning Steps at Adler & Adler, PLLC

Step 1 – Initial consultation — Our estate planning process begins with a free initial telephone consultation. The initial consultation provides an opportunity for us to get to know each other and determine the type and scope of planning that is best for you and your family. Call us today at 212-843-4059 or 646-946-8327.

Step 2 – Planning stage — We will gather information, discuss options for organizing and managing your affairs, and design an estate plan that reflects your wishes and meets your objectives. The number of meetings depends on the complexity of your situation.

Step 3 – Drafting stage — We will create the legal documents (wills, trusts, etc.) necessary to implement your plan.

Step 4 — Document Review — We will thoroughly review your draft documents with you and advise you of any additional steps that you need to take to assure your estate plan operates correctly, such as changing beneficiary designations on insurance or retirement benefits, and (where applicable) the funding of trusts. The number of meetings depends on the complexity of your situation.

Step 5 — Document Execution — We will meet to execute (sign) your documents and assure that all legal formalities are met.

What will it cost?

There is no charge for the initial telephone consultation. In a majority of cases we work on a fixed fee basis. In more complex situations, we may propose work on an hourly basis or a combination of fixed fees and hourly charges.

Attorney Adler focuses his practice on estate planning, wills, trusts and estates. He can be reached at 212-843-4059 or 646-946-8327.

“Estate planners” during this period assisted titleholders in avoiding the payment of a heavy tribute by passing the title to a carefully selected person, in whom the titleholder had complete trust, with the understanding that the titleholder could use the land during his lifetime. When the titleholder died, the use of the land would be allowed to pass to one or more persons named by the titleholder. This transfer of uses was the beginning of our modern application of trusts. The concept of designating persons to be granted the use of property was the Middle Ages’ equivalent of the power of appointment technique so commonly used in today’s estate planning. Moreover, from this transfer of the privilege of use emerged a clearly defined objective of estate planning still appropriate today: To so arrange the distribution of property from one generation to another as to incur a minimum tax burden, both at death and during life and to fulfill the estate owner’s non-tax objectives.

States Control Estate Transfers

Contrary to popular belief, no individual has a natural right to transfer property to others at his or her death. Estate transfer is a privilege granted by the state, not a right. This is partly because the state has a primary and superior right to property owned by its citizens (a concept known as “sovereign right”) and has the right to take private property for public purposes (termed the right of “eminent domain”). The force of these rights allows a state to prescribe the conditions, terms and limits under which its citizens can transfer property at death. The primary five conditions are as follows:

1. The writing of a valid will, by which an estate owner directs how his or her property is to be transferred. If a will does not exist, ownership and transfer of the property is controlled by the state and the state will determine how it is distributed. The orderly disposition of even the most modest estate requires a valid will.

2. A formal administration of the estate, through which the personal assets of the estate owner are collected and itemized for ultimate distribution. The state’s estate administration laws must be followed.

3. The payment of claims and debts for obligations that were incurred while the estate owner was alive. Furthermore, most states reserve the right to prioritize claims against an estate when its assets are insufficient to cover them all.

4. The payment of a state estate tax, a state inheritance tax or both. Some states levy an estate tax, levied on the right to transmit property at death, which is measured by the value of the estate. An inheritance tax is levied on the right of the heirs to receive property from an estate and is generally measured by the share each heir receives and the degree of relationship.

5. For larger estates, the payment of the federal estate tax. This tax, levied by the federal government, is imposed on the value of the property transferred by the deceased estate owner.

When a person dies without having executed a valid will, that person has died intestate. When this happens, the intestacy laws of the various states prescribe who the heirs shall be, and what portion of the decedent’s property each heir receives.

Attorney Adler focuses his practice on estate planning, wills, trusts and estates. He can be reached at 212-843-4059 or 646-946-8327.

A testamentary trust is part of a will. And, the person creating the will appoints a trustee to manage the funds in the trust for the benefit of the beneficiary. A testamentary trust only comes into existence after the death of the will-maker and it lasts as long as its terms provide.

While one of the primary purpose of a living trust is to avoid probate, testamentary trusts, unlike living trusts, which are created during the lifetime of the trust-maker (also known as as the grantor or settlor) do not avoid probate. A will must go through probate before the testamentary trust can come into existence. The executor will probate the will and create the trust in the process. Thereafter, the trustee may need to go to probate court and have the trust examined on a periodic basis.

See also: What is a Trust?

• The will-maker, if not personally known to the witnesses, must present valid photo ID to the witnesses during the video conference, not merely transmit it prior to or after;
• The video conference must allow for direct interaction between the testator and the witnesses, and the supervising attorney, if applicable (e.g., no pre-recorded videos of the testator signing);
• The witnesses must receive a legible copy of the signature pages, which may be transmitted via fax or electronic means, on the same date that the testator signs the Will;
• The witnesses may sign the transmitted copy of the Will’s signature pages and transmit the same back to the testator; and

The witnesses may repeat the witnessing of the original signature pages as of the date of execution provided the witnesses receive such original signature pages together with the electronically witnessed copies within thirty days after the date of execution.

A spendthrift clause is simply a provision in a trust intended to thwart these operations. It prevents the beneficiary from alienating his or her interest in the trust, whether voluntarily or involuntarily (thereby prohibiting creditors from attaching the interest).

State Law Enforceability of Spendthrift Clauses

But in order for spendthrift clauses to be effective, they must be enforceable under applicable state law. Virtually every state recognizes spendthrift clauses as valid in some form. About half the states have a statute legitimizing spendthrift trusts; the others have recognized them by judicial decision.

The effect of spendthrift clauses may be eroding to different degrees in the various states, but the spendthrift trust remains a powerful planning tool. In view of the complications, as spendthrift law continues to develop, individuals are strongly urged to work with an attorney experienced in their state’s law in this matter.

Learn how to avoid the three year rule problem when a new life insurance policy is involved and how to properly plan for mitigation of potential three year rule impact when an existing policy is to be transferred. See Article.

Attorney Adler focuses his practice on estate planning, wills, trusts and estates. He can be reached at 212-843-4059 or 646-946-8327.