When Is the Best Time To Make or Review Your Will?

If you have been asking yourself these questions, the answer is likely “now.”  There are several reasons why you may not want to wait.  The most obvious one is that tomorrow is promised to no one.  The second reason is that it is a good practice to review the terms of your Will on a yearly basis to assess the consequences of changes in family composition, financial updates, and changes in the tax law that may affect your estate.  The third reason is one that is often overlooked, that you may not always have the testamentary capacity to make a Will.   I have covered this topic in a previous post.

Making or changing a Will is a serious endeavor, and it should never be undertaken for negative reasons, such as to spite a relative or friend.  In New York, the making of a subsequent Will executed with all required formalities constitutes a revocation of any previously executed valid Wills and their codicils.  In New York,  a partial revocation by physical act, such as words added to a Will after it has been signed and witnessed, is not recognized and will have no effect on the Will.

A Will can also be revoked if it is destroyed by a physical act.  If the subsequent Will is later destroyed by a physical act, such as cutting it up or burning it or crossing out the testator’s signature, the prior Will that it replaced will not be revived in New York.  The earlier Will is legally invalid, and the decedent will have died intestate.

The case of Mabel Waingrow of Blooming Grove, New York provides a cautionary tale.  The owner of Town & Country Coffee Shop on Route 94, Waingrow died in 2003 at the age of 99 leaving an estate valued at $990,000.  She had outlined her husband, her son, and her siblings.  Her closest relatives were her five great-nieces and -nephews whom she never knew because they lived abroad.  A diligent attorney who prepared Waingrow’s Will in 2000 had discovered the distant relatives.

Waingrow had closed her coffee shop when she had turned 90, and without the constant social interaction she soon became a lonely recluse, beset by thoughts that people were trying to steal from her.  To her rescue came Nick Stagliano, a former criminal investigator for the Orange County District Attorney’s Office who befriended her and took care of her.    According to a story in the local Times Herald-Record, Stagliano was the only one present for her 99th birthday.

In 2001 Waingrow, who had a habit of writing a new Will to benefit whoever was friendliest to her and to spite those who had “unfriended” her, executed a new Will naming Stagliano as the sole beneficiary of her entire estate.  The next day, the Orange County Court named him Waingrow’s legal guardian because she could no longer take care of her affairs.  Her great-nieces and -nephews were not informed of this appointment.

Five years after her death, one of her grand-nieces filed suit contesting the Will claiming undue influence . The case was settled shortly after the trial began.  Waingrow’s five great-nieces and nephews received at least $500,000 of the estate, with the remainder going to Stagliano.  Stagliano also agreed to give up his role as executor of the estate.

In her multiple executions of Wills, Waingrow chanced revoking a valid Will because her failing mental health made her capacity to execute a valid Will questionable.  Had her 2001 Will been declared invalid  at trial due to undue influence, then she would have been deemed to have died intestate.

When a person dies without a Will, New York uses as its default an intestate distribution system called per capita (“each head”) at each generation. In this system, each person is weighed equally. By virtue of their presence on the family tree, no one can be disinherited.

New York also has a “laughing heir” statute (EPTL §4-1.1(6)). A “laughing heir” is someone entitled to inherit by law who is so remotely connected to the deceased that he or she would not feel any sorrow at hearing of the death. To prevent this occurrence, New York cuts off heirs at the grandchildren of the deceased: “For the purposes of this subparagraph, issue of grandparents shall not include issue more remote than grandchildren of such grandparents.” No one more remote, such as a great-grandchild, may inherit. After that, the property of the deceased escheats to the State.

Since Waingrow had no grandchildren, and since her siblings had predeceased her, her surviving grand-nieces and -nephews risked having the entire estate escheat to the State if they pressed having Waingrow’s Will declared invalid because of undue influence on the part of Stagliano.  The prior Will executed in 2000 could not be revived under New York law.   Thus the only way that the grand-nieces and -nephews could be certain to receive any money from the estate was to settle with Stagliano.

The case of  Mabel Waingrow points out once again the necessity of working with an attorney who will  draft your Will and tailor it to your individual needs. Though it may seem contrary to nature, children at times do predecease their parents, as Mabel’s son did, and this reality must somehow be accounted for in your Will.  Your attorney will work through some scenarios with you to make sure that all of your wishes are met and executable. No boilerplate form can do this kind of reasoned and careful drafting befitting your individual needs.  

It is also a good practice to make a yearly appointment with your attorney to review your Will.  Things in your life will surely change from year to year, and it is a good practice to get in the habit of talking through those changes with your attorney. Your attorney will be able to advise you as to any impact on your estate plan.

If you would like to discuss your own personal situation with me, you can get a free 30-minute consultation simply by filling out this contact form.   I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Sign me up!” under Email Subscription on the left-hand side of the page so that you can receive a notification when the next installment has been published. Thank you.

Single Persons and the Special Power of Appointment: The Stuff of Your Life

Space is decidedly the “final frontier” for New Yorkers.  We measure ourselves by the sum total of our square feet of space, and that may include a self-storage unit somewhere in commuting distance.  In our precious space, we store the stuff of our lives.  Some of us get very creative and use our kitchens for extra storage space!

While we are busy collecting stuff, we rarely have time to reflect upon the unintended consequences of this accumulation.  When we die, who will dispose of our stuff?  And to whom will it go?  These questions are particularly significant for singles who do not have a Will.  In New York, the statute that governs the distribution of the estate of a person who dies without a Will is EPTL § 4-1.1. For example, if you are single with no children and you die without a Will, New York State will award your property to your parents. If your parents are deceased, then your property will be divided among your siblings and their heirs. If you have no siblings, your property will go to the State of New York.

With a Will, a single person can create a special power of appointment that will allow him or her to control the disposition of his or her belongings.  For instance, you may give a special power of appointment to a close friend or relative to distribute your belongings to your then surviving family members, with any remainder going to a charity named by you.  The person holding the special power of appointment then has the discretion to choose who gets what. 

There are two benefits associated with a special power of appointment.  First, it prevents family squabbles over the division of your belongings.  The person holding the special power of appointment makes that determination.  Secondly, if a beneficiary refuses a gift for any reason, the gift reverts back to the estate to be distributed to other surviving family members.  And your book collection or your collection of porcelain statuettes can be kept intact and given to a family member who will cherish it.

Having a Will with a special power of appointment will provide a single person with peace of mind, knowing that there will be a smoother distribution of their belongings lovingly acquired during their lifetime.  An attorney can assist you with drafting a special power of appointment in a Will to suit your specific needs.

If you would like to discuss your own personal situation with me, you can get a free 30-minute consultation simply by filling out this contact form.   I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Sign me up!”  under Email Subscription on the left-hand side of the page so that you can receive a notification when the next installment has been published.  Thank you.

I am Single: Do I Need a Will?

If you are currently single, you are not alone.  Over 40% of all adults 18 years and older are single.  And if you live in Manhattan, you live in the borough with the most singles in New York City (61.4%).  Chances are that you are working, have a 401(k), some assets, and maybe a pet or two.  Chances also are that you don’t have a Will.

Why is this an important issue?  Because the percentage of single people in this country is rising faster than the percentage of married persons. According to a 2008 U.S. Census Bureau report, singles in this country break down statistically into the following groups:

95.9 million:  Number of unmarried Americans 18 and older in 2008. This group comprised 43 percent of all U.S. residents 18 and older.

53%:  Percentage of unmarried Americans 18 and older who were women.

61%:  Percentage of unmarried Americans 18 and older who had never been married. Another 24 percent were divorced, and 15 percent were widowed.

15.8 million: Number of unmarried Americans 65 and older. These older Americans comprised 16 percent of all unmarried and single people 18 and older.

87:  Number of unmarried men 18 and older for every 100 unmarried women in the United States.

52.9 million:  Number of households maintained by unmarried men or women. These households comprised 45 percent of households nationwide.

32.2 million:  Number of people who lived alone. They comprised 28 percent of all households, up from 17 percent in 1970.

Source for statements in this section: America’s Families and Living Arrangements: 2008

In an article titled “Single New Yorkers, Ahead of the Pack,” the New York Times tacked the issue of what “single” means today (it is an especially relevant term as we all fill out our Census forms).  In New York City according to the American Community Survey conducted between 2005 and 2007, the Times reported the following numbers of singles by borough:

  • Staten Island is 41.0 percent single with 26.5 percent never married.
  • Queens is 46.3 percent single with 30.9 percent never married.
  • Brooklyn is 52.4 percent single with 37.0 percent never married.
  • The Bronx is 57.6 percent single with 41.6 percent never married.
  • Manhattan is 61.4 percent single with 45.9 percent never married.

Many single people do not have a Will. That may be because they believe that their worldly possessions will go to their families; that one should draft a Will only if there is a spouse or a child involved; or that they do not have enough assets to make a difference. And while these assumptions may be true in many cases, many singles have not considered the consequences of dying without a Will (intestate) on their families. Writing a Will may be one of the kindest acts that one can do for one’s family.

So why is it so important for a single person to have a Will?   In New York, the statute that governs the distribution of the estate of a person who dies without a Will is EPTL § 4-1.1.   For example, if you are single with no children and you die without a Will, New York State will award your property to your parents.  If your parents are deceased, then your property will be divided among your siblings and their heirs.  If you have no siblings, your property will go to the State of New York.

But is that always the best result?  Let’s imagine some scenarios for Client X, a single person living in New York, with two siblings and both parents living.  Let’s say that one of Client X’s parents becomes seriously ill requiring nursing home care.  The ailing parent meets the Medicaid income eligibility standards for nursing home care.  The non-ailing parent goes to live with Client X’s eldest sibling.  Client X dies without a Will, leaving behind substantial savings that get awarded to Client X’s parents.  As a result, Client X’s ailing parent may now be required to contribute towards the nursing home costs.  Instead, Client X could have left his savings to his siblings in his Will,  with a greater share to the sibling taking care of the non-ailing parent.

Client Y is single and an only child whose parents have predeceased her.  Client Y owns her home.  If she dies intestate, the home will escheat to the State of New York.  But Client Y is a loyal alum of Education University (EU) and attends every alumni function.   Instead of her home going to the State after her death, she can gift her home to EU as a charitable bequest in her Will, and designate that any proceeds from the sale of her home after her death be used for student scholarships.

As these two scenarios illustrate, a single person should draft a Will with the assistance of an attorney to take into account the best interests of loved ones left behind.  Your attorney will assess your individual needs and draft a document that will suit your interests and the interests of those who remain after your passing.

If you would like to discuss your own personal situation with me, you can get a free 30-minute consultation simply by filling out this contact form.   I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Sign me up!”  under Email Subscription on the left-hand side of the page so that you can receive a notification when the next installment has been published.  Thank you.

Prenuptial Agreements and Wills: Loving Acts for a Stable Marriage

As I emphasized in a prior posting, the prenuptial agreement has gotten some bad press because it has been portrayed in celebrity divorces as a way to shield assets from one’s spouse in the event of a divorce.  As a result, many couples shy away from prenups because they see them as signs that the couple is already planning for a divorce even before they are married.  But a prenuptial agreement can be just the opposite:  a foundational element for long-term marriage stability.  In this post, we will look at how incorporating into a prenup an agreement to draft Wills makes sense to protect the couple’s estate, family, and wishes.  Having such a provision in a prenup can bring great peace of mind.

Domestic Relations Law (DRL) 236[B](3) is the statute that controls prenuptial agreements in New York.  The statute states that a prenuptial agreement may include (1) a contract to make a testamentary provision of any kind, or a waiver of any right to elect against the provisions of a will.  We will examine in detail what this provision means to you.

A prenup may include a provision to make a Will (this is called a contractual Will) or, in some cases, not to revoke a Will.   In New York, a contractual Will must contain an express statement in the Will that its provisions are intended to constitute a contract between the parties.  Contractual Wills may be revoked by an agreement of the parties.

Having a Will is not only a good idea, it is a loving act.  According to a 2007 article in Forbes, a survey done by Harris Interactive found that 55% of the general population had no Will.  If you die without a Will (i.e., intestate) in New York, New York State has a default plan for your estate, but you may not like the plan.  New York’s Estates, Powers and Trusts Law (EPTL) § 4-1.1 governs the distribution of estates from persons who die without a valid Will.  This chart summarizes the law:

 

As you begin to have a frank conversation about how you want your estate distributed in the event of your death or the death of your spouse after marriage, it is a good idea to begin by having each of you fill out a family tree, like this one provided by New York State.  You will want to update this family tree yearly, and you will want to bring it with you for your attorney during your yearly visit to review your Will and estate planning.   And if you have not done so already, you will want to have a frank discussion about any known congenital diseases that are present on your family tree.  By being honest and open about your family tree issues with each other, you will build invaluable bonds of trust that will support your marriage when the difficult times come.

Each of you may also want your Will to reflect a gift to a favorite charity or non-profit organization, like a college or university.  That charitable gift will have to be expressed in your Will.  Likewise, there may be heirlooms or other family memorabilia that you would like kept in your family of origin.  Your Will is the place where you will want those exclusions made known. 

The prenup is the place where you can agree to include in your Will an added provision specific to your future spouse after the marriage takes place.   For instance, you might include a bequest to your spouses’s alma mater creating a scholarship fund in his or her name.  When the gift is one of tangible property, during your yearly review with your attorney you will want to make sure that the promised item still exists as part of your estate.  If the item has been lost or destroyed, the gift is said to adeem.  But this situation can be easily rectified by modifying the prenup as we discussed in a prior post. 

The statute also says that either party can waive any right to elect against any provision of a Will.  Here the statute is referring to the elective share statute (EPTL § 5-1.1-A).  The elective share statute protects against disinheritance by either spouse by giving the surviving spouse a minimum share of the decedent’s estate.  In New York, the elective share amounts to the greater of 50K or 1/3 of the net estate after the payment of debts, but before the payment of estate taxes.  In a prenup, either party can waive their right to the elective share.  One reason to exercise this waiver might be to protect children from a prior marriage.  Whether to waive an elective share in a prenup is a decision that must be made carefully and with full disclosure of the salient facts, including full financial disclosures. 

One advantage of drafting a prenup is that it encourages financial disclosures before marriage.  It will also encourage discussions about the emotional aspects of money (saving and spending habits, attitudes concerning debt, and issues surrounding dependency, control and self-image).   Each party should fill out a personal statement of net worth, such as this example by the Small Business Administration.  Getting into the habit of talking about financial issues before and during the marriage will go a long way in building trust in the relationship.

If you would like to discuss your own personal situation with me, you can get a free 30-minute consultation simply by filling out this contact form.   I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Sign me up!”  under Email Subscription on the left-hand side of the page so that you can receive a notification when the next installment has been published.  Thank you.