Transfer On Death and Estate Planning in New York

Losing a loved one is difficult for any friend or family member. The grief and aggravation can be made worse by having to endure a contentious probate. Fortunately, there are mechanisms that can be utilized to ensure that you or your heirs can possibly skip the probate process. These mechanisms include instruments that transfer ownership on death as well as proper estate planning.

The Importance of Avoiding Probate

The probate process can be both lengthy and messy. Even if there are no disputes among the heirs, it can take significant time to properly account for the estate, make any necessary liquidations, settle the testator’s affairs, and distribute the assets. If disputes do arise, the heirs may be required to pay extensive legal fees and expend additional time dealing with the matter. Fortunately, proper planning can help to ensure that much, if not all, of an estate can pass outside of probate.

Assets Which Transfer on Death Will Not Be Part of Probate

There are many types of assets that automatically pass to a named beneficiary or a spouse upon an individual’s death. These assets are not part of the probate process.

Accounts With a Named Beneficiary Will Transfer On Death

There are several types of accounts that will automatically transfer to a named beneficiary upon an individual’s death. These can include bank accounts, brokerage accounts, and other investment instruments. When such accounts are opened, an individual will typically be required to name a beneficiary. Upon the person’s death, the beneficiary may have the account transferred into their name. The procedures for initiating such a transfer will depend on the institution. Such procedures will typically involve producing a death certificate, the beneficiary’s identification, completing any paperwork which the institution requires, etc. Such transfers are handled completely outside of the probate process.

Social Security and Pension Benefits Can Transfer on Death

Social security and some pensions can provide ongoing benefits to spouses after an individual’s death. Also, these entities may provide one-time death benefits to children or other family members in the event that an individual dies prematurely. The procedures for seeking such benefits will depend on the entity which you are dealing with. As opposed to dealing with banks or investment funds, however, the process of applying for these survivor benefits can be lengthy. It can also take a substantial amount of time for the benefits to be awarded. Any payments made will not be part of the probate process.

Real Estate Held as Tenants in Common Can Avoid Probate

Real estate can pass outside of probate when it is deeded to tenants in common with rights of survivorship. An example of this can include two spouses who purchase a home together as such spouses will typically deed their property in this way. If one spouse were to pass away, the home would automatically pass to the surviving spouse outside of probate. It is important to understand, however, that property is not always deeded in this way. This is especially true when dealing with investment properties or commercial real estate.

Proper Estate Planning Can Simplify or Eliminate Probate

The best way to ensure that probate is simplified, if not eliminated, is to have a proper estate plan. The two primary methods for doing so will be to have a last will and testament as well as a living trust.

A Last Will and Testament Ensures That Assets Pass In Accordance With Your Wishes

Having a valid final will allows for your assets to pass in the way which you desire. The will can also dictate who will serve as executor of your estate. This can prevent potential disputes over whether or not someone should be an heir and who it is that should be handling your final affairs. It can also avoid disputes over how particular assets or pieces of property should be divided amongst the heirs. Having an attorney assist you with the preparation of your will is strongly suggested as doing so can help to prevent omissions and ambiguities which can lead to problems. 

A Living Trust can Help Your Heirs Avoid Probate Entirely

Trusts are instruments that can be used to hold your assets. They will be overseen by an individual whom the asset owner designates as the trustee. The management of a trust, and any distribution of its assets, occur outside of probate. This means that through proper estate planning, your loved ones may be able to skip the probate process entirely. Also, a trust can provide greater flexibility as to how your assets are distributed, as opposed to simply having a will that requires that all of your assets be distributed at once.

The Importance of Keeping Your Estate Plan Up To Date

It is important that your estate plan be kept up to date after it is created. Life is constantly changing. You may buy or sell property and potential heirs may enter or leave your life. If assets are not included in your estate plan, then they can complicate the probate process and possibly pass in a way that is inconsistent with your final wishes. If your list of heirs is not updated then individuals whom you wished to disinherit may receive a portion of your assets while your current loved ones are cut out. Staying in regular contact with your attorney, and keeping your plan up to date, can avoid such issues.

Call a Long Island Estate Planning Attorney Today

An experienced lawyer can assist you with ensuring that your later years are spent with loved ones as opposed to worrying about how your affairs will be handled. Our firm focuses on this area of law so that you may focus on your family. We will take steps to fully understand your situation and we will present options that best suit your particular needs. Contact our Long Island estate planning attorney by telephone at (631) 234-3030 or schedule a consultation online.