Assets That Do Not Pass Based on Your Will and Testament

Losing a loved one is a difficult experience. The stress caused by such a situation can be worsened by having to go through the probate process. Fortunately, New York is like many other states in that there are a number of ways in which assets can pass to another upon death without having to rely on a last will and testament. Understanding how you can structure your affairs so that your will is not the sole vehicle for distributing your wealth can ease the burden your family will face. An experienced estate planning attorney can assist you with making sure that your affairs are in order.

Accounts With Banks, Brokerages, and Similar Institutions will Pass to Another without a Last Will

Financial and investment institutions will require that you designate a beneficiary when you create your account. In the event of your death, any accounts or investments in your name will be transferred to them. This occurs outside of probate and does not involve your last will. The process for completing the transfer will depend on the policies and procedures of the institution. All such procedures typically involve the beneficiary presenting a death certificate, their identification, and completing any necessary paperwork that the financial institution requires. It is important to remember that such accounts do not transfer to a beneficiary automatically upon death; the beneficiary must be proactive and initiate the necessary process in order to effectuate a transfer.

It is important that you keep your beneficiary designations up to date as your situations change. If, for example, you have named your spouse as your beneficiary, then they will maintain that status even if you file for divorce. You will need to be proactive and contact your financial institutions and update your designations. Failing to do so can result in accounts being distributed in a way that is not consistent with your final wishes.

Life Insurance Proceeds Will Be Distributed Without the Probate of Your Last Will

As with financial institutions, life insurance policies require that you designate a beneficiary who will receive payment upon your death. Receiving the payment is a matter of the beneficiary making a claim against the policy and going through the insurance carrier’s processes. The process of making a claim against a life insurance policy and receiving the payments has nothing to do with a last will or with probate. As with banking and investment accounts, it is vital that you make sure that the designation of beneficiaries in the policy is kept up to date.

Jointly Owning Property Can Allow it to Pass Without the Probate of a Last Will

How you title your property determines whether or not your will must go through probate for the property to be transferred. If two individuals own property as “joint tenants with rights of survivorship,” then it will transfer to the surviving owner after the other passes. Titling property in this way is common when spouses purchase real estate, cars, or other items. Parties need not be married, however, to have joint title of property. Furthermore, if you own property that is not currently titled jointly, you may alter your title so that the property can pass to another automatically upon death.

Many states recognize the validity of “Transfer on Death” deeds. These types of deeds can greatly simplify the transfer of real estate after one passes away. Unfortunately, New York does not recognize these types of deeds. As such, the best way to ensure the transfer of real estate or other property, without the need to probate a will, is through joint ownership.

Utilizing a Trust Can Allow Your Assets to Pass Outside of Your Will

Living trusts are a valuable estate planning tool. These instruments allow you to place your assets inside the trust, where they will be managed by the “trustee.” An individual may name themselves as the trustee of their own trust. The trust will name an individual who will serve as trustee upon your death. The trust will also contain instructions as to how, where, and when assets are to be distributed. This distribution of assets is handled according to the terms of your trust and is not reliant on the probate of a will. Trusts provide far greater flexibility for the distribution of assets than do wills. Retaining an experienced attorney is an important step towards making sure that your trust is set up correctly.

The Importance of an Estate Planning Attorney

An estate planning attorney will assist you in the drafting of your last will and testament as well as with the formation of a living trust. They will also assist you with ensuring that your estate plan is kept up to date. Using “self-help” estate planning forms or otherwise having improperly drafted documents can result in your last will being invalidated by the Court. If this were to occur, then you would die “intestate,” and your assets would be divided in an order that is predetermined by the state. Counsel will also assist you by presenting options that you may not otherwise have known were available. Having these additional options may impact how you wish to divide your assets and can give you peace of mind in knowing that your heirs will have fewer issues to deal with.

Another benefit of retaining counsel is that they can help you understand the potential tax implications of the foregoing estate planning tools. While avoiding stress and aggravation for your heirs should always be a key priority, so should the amount of taxes which they will need to pay on an inheritance. Counsel can help you to balance these competing factors.

Contact a Long Island Estate Planning Attorney Today

If you or a family member are planning for the future, it is important that you retain a lawyer. By retaining counsel, you help to ensure that your affairs are in order. Our firm prides itself on providing the highest level of service, and we look forward to speaking with you. Contact us online or by telephone at 631-234-3030 to speak with a Long Island estate planning attorney.