If you have paid life insurance premiums for years, the last thing you want to happen is for the insurance company to receive a windfall after your death instead of paying out to your beneficiaries. However, if your beneficiaries do not know about the policy, they will not know to make a claim. For this reason, part of your estate plan should include some way of letting your beneficiaries know about your life insurance policy.

New York’s Department of Financial Services strongly encourages insurers to check their unpaid premiums databases against the Social Security Administration’s records in an attempt to find unclaimed life insurance benefits that should be paid out. However, it might take months or even years for the insurance company to notice that you have passed away and that it needs to locate your beneficiaries. In the meantime, your spouse and children will not have the benefit of the life insurance policy you paid for.

You should reference all of your life insurance policies somewhere in your overall estate plan documents so that the people who need to know can tell your beneficiaries where to make a claim. It is also a good idea to store the policy information in the same place that you keep your other estate plan documents. At a minimum, make sure that your will’s executor will know about the life insurance policies as quickly as possible.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

As part of your estate plan, your  New York City estate planning attorney will draw up a wide range of documents for you. As part of the process, you will need to designate people to act on your behalf. You might need to appoint an executor, a trustee, a general power of attorney, a healthcare prox and more. You do not need to designate the same person to act in every role.

Speak with your attorney about what the people designated for each role actually do so that you can designate the most appropriate person. For example, the executor of your will has a short-term assignment. Once directives in the will are carried out, the executor’s role is over. However, a trustee may need continue administering the trust for years. Thus, you might want to consider a potential trustee’s ability to continue to act well into the future, which might not be as big of a concern for an executor.

Different considerations go into deciding who to appoint to different roles, such as appointing a power of attorney or a  healthcare proxy. An estate planning attorney will go over every role with you and has the experience to know what the most important factors are that you should consider. Make sure you ask your attorney about every role.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

A durable power of attorney allows an attorney-in-fact or an agent to make specific financial decisions on the principal’s behalf. A power of attorney document must be in writing and must comply with specific statutory formalities. Additionally, some banks may require parties to use their specific forms before they honor their power of attorney instruments. In most cases, you will have to sign your power of attorney document in the presence of a notary public and obtain the notary’s signature or seal. You may also need to sign your document in front of witnesses. You can limit your agent’s financial decision-making powers by specifying the types of actions your agent can take on your behalf. You can also further specify what types of financial decisions your agent cannot make.

Every power of attorney ends at the principal’s death. This means that if you die, your power of attorney is no longer effective, regardless of whether or not you revoked it or validly destroyed it. The termination is automatic. However, your power of attorney may also become automatically invalid if you become mentally incompetent. Unless you created a “durable” power of attorney, your power of attorney most likely ends at your mental incapacity. Although state laws may differ, most states require you to include certain words to express your intent in creating a durable power of attorney. You may need to include specific words, such as “to remain effective upon my mental incapacity” or “a durable power of attorney.”

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

Many people fear that a spouse from a second marriage will not leave assets to the children of a previous marriage. If you leave all of your assets to your spouse in a simple will, this is a real concern. The second spouse is under no obligation to leave assets to your children from a previous marriage in his or her own will. Even if you and your spouse create joint wills that leave assets to all of your children, nothing prevents your spouse from changing his or her mind after you pass away.

With proper estate planning, however, you can avoid this problem and leave assets to your children from a previous marriage. In New York, an attorney can assess your situation and find the best option for you. For example, if your spouse lives in a home that you individually own and would eventually like to see pass to the children of your first marriage, you might want to give your spouse a life estate in the property and have it automatically pass to your children when your spouse passes away. In other situations, setting up a trust or leaving your children assets in your will might be better options. A qualified estate planning attorney can determine the best options for your family situation.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

If you have a child who is not good with money or owes a lot of money to creditors, you might have a a justifiable concern that any money you leave to them in a will or trust will be quickly blown or disappear into the bank accounts of the creditors. However, this should not stop you from leaving assets to your irresponsible child. An attorney can devise a trust for you that will protect your assets from your child and their creditors.

Like most states, New York provides for trusts that allow for a trustee to have sole discretion over how the assets of the trust are used for a beneficiary’s benefit. These are known as spendthrift trusts. If your child has no control over the money in the trust, their creditors cannot make a valid claim against the assets in the trust. The trustee only has to give your child enough of the trust assets to meet immediate needs.

Spendthrift trusts need to be specifically set up. If you are considering whether it is a good idea to leave money to an irresponsible or indebted child, speak with an experienced estate planning attorney to have a spendthrift trust drawn up to protect your assets after you pass away.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

In most situations, you can disinherit your heirs by simply leaving them out of your will. However, you generally cannot disinherit your spouse by will. According to most state’s probate laws, although you can disinherit any of your other relatives by written will, you cannot disinherit your spouse. Absent a valid prenuptial agreement created before you and your spouse married, you cannot use your will to disinherit your spouse.

Known as elective or forced shares statutes, surviving spouses have legal rights to minimum bequests. For example, your state most likely has a probate law allowing your surviving spouse to “elect” a minimum statutory share of her deceased spouse’s estate, instead of taking her testamentary bequest. This means that if you decided to leave your spouse a share of property below your state’s minimum elective statutory share, your spouse can reject the share under your will in favor of the minimum statutory share. In other words, your spouse most likely has a legal right to claim a third or other fraction of your estate.

Can you disinherit your other relatives, even though you may not be able to disinherit your spouse? Generally, you can in most states. This means that you can specifically omit your children as your legal heirs by stating such or not mentioning them. However, your state’s law may limit the disinheritance to existing children and not to children born after you created your will.  Its important to consult with a qualified estate planning attorney to make sure that your intentions are properly carried out.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

In most situations, a stepchild will not inherit property from a step-parent after the step-parent dies. The step-child does stand to inherit from his or her biological parents, but all inheritances are dependent on the laws of the state in which you live. Talk to a your estate planning attorney for more detailed information.

• Intestacy: When you die without will, your stepchildren are very unlikely to inherit anything at all. In some states, step-children have no intestacy rights, while in others, a step-child is the last person who stands to inherit from a step-parent before the state does. This essentially means that if there is no spouse or biological relatives of the step-parent that survives him or her, the step-child inherits. If there is no step-child, or offspring of that child, the property goes to the state.

• Wills and Trusts: If you create a Will you can choose to leave as much property to your stepchildren as you like. Similarly, if you create a trust you can choose to name your stepchildren as beneficiaries so they can receive the benefit of the property you transfer to that trust. A person creating a Will can also choose not to leave anything to his or her children, including step-children.

• Adoption: While a step-child’s rights to inherit from a step-parent are much more limited than the parent’s children, a step-child that a step-parent adopts has the same right to inherit as any other child. State inheritance laws do not differentiate between children and adopted children, even if the adopted children are former step children.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

State Requirements: Each state has its own set of rules about how a living will must be written. They also have different rules about how they are used and who can create them. While some living wills made in one state will be enforceable in another, this isn’t always true. It’s important that if you move, you talk to a lawyer in your area and create a new living will that complies with the laws of your new state.

State Restrictions: Even though the vast majority of states allow for living wills, there are a small number that do not recognize them at all. If you move to one of these states you’ll have to enact other advance directives that will enable you to ensure your health care decisions are honored. States may also place different limits on when you can use a living will that other states may not have.

Other Directives: A living will is not a substitute for other types of health care directives, so even if you move and create a living will, you may also have to create a health care proxy. Living wills are great for putting your choices in writing, but in your health care proxy you designate an agent who will stand in for you and make the decisions you cannot, communicate directly with your doctors, ask questions, review your medical records and take other actions that your living will cannot.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

Few phrases that include the word “fatal” ever promise a positive outcome, and “fatal errors in execution” is no different. When you’re developing an estate plan, a fatal error in execution can throw significant problems in your estate’s way when it comes time to distributing estate property. Let’s take a look at the term in more detail.

• Execution: The execution of a Will is the formal signing of the document. This signing must comply with state laws and includes various elements in order to be successful. For example, all states require that both the testator and two competent witnesses sign the document. But does the testator sign first? What if the witnesses sign first? Do the witnesses have to sign in each other’s presence or in the presence of the testator? All of these questions can impact the validity of the execution and, if not properly accounted for, can lead to a fatal execution error.

• Fatal Error: A fatal execution error is an error during the execution process that invalidates the will. This means that even if you’ve created a Will and stated in detail all of your preferences, if a court later finds a fatal execution error it will determine the Will is invalid. It will then disregard your Will and your choices will have no impact on how your estate is distributed.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.

As discussed in the last two blogs, the New York Estates, Powers and Trusts Law sets forth the statutory procedures for personal representatives and executors when suing other parties for wrongfully causing a decedent’s death. If your estate’s personal representative files a wrongful death lawsuit on your behalf, the EPTL sets forth specific defenses that a defendant charged with wrongfully causing your death may use.

Pursuant to the EPTL, a defendant can use a contributory negligence defense as a legal defense to a wrongful death lawsuit alleging negligence. Contributory negligence is a legal claim asserting you were also negligent in causing your own death. However, contributory negligence is an absolute defense only for suits that arose before Sept. 1, 1975. For cases arising on or after Sept. 1, 1975, contributory negligence is no longer an absolute defense.

If your personal representative refuses to bring a wrongful death action on a decedent’s behalf, the EPTL allows the beneficiaries or distributes of a decedent’s estate to request an appointment of a substitute administrator or personal representative who will maintain the action. To further understand your legal rights to sue for wrongful death on an estate’s behalf, contact us today.

Davidov Law Group is a member of the American Academy of Estate Planning Attorneys.