An Estate Planning Checklist for Beginners

A house in Brooklyn passed on to a beneficiary through a probate

Preparing for the end of your life sounds challenging, but it’s something that you should do, notwithstanding. Having a well-thought-out will is not just essential for seniors but for the youth too. Life is uncertain. The best you can do for your children is to plan your estate carefully and intelligently.

Let’s cover the basics of estate planning:

Make a list of your belongings.

To get started with your estate planning, you need to begin to itemize your inventory or belongings. This may take a few days. Grab a paper and pen and start looking around for all the tangible and intangible assets you own. After you’ve enlisted the assets, you should also mention their estimated market value, date of purchase, purchase price, appraisal and valuation reports, and the number of years it’s been with you.

Your tangible assets may include real estate, property, homes, precious metals, ornaments, jewelry, antique collectibles, trading cards, cars, motorcycles, and boats. Intangible assets mostly comprise your investments, receivables, and bank accounts. Common examples of intangible assets include retirement plans (IRAs), savings accounts, mutual funds, stocks, bonds, certificates of deposits, treasury bills, and business ownership. When you’re enlisting these items, write down account details and the company/institution where your investments are held.

Consider Your Family’s Needs.

Your estate planning will also revolve around some important family decisions. If your children are still young, you need to name a guardian and backup guardian (if the primary guardian doesn’t survive). This will ensure that your children are taken care of and help avoid costly court fights. You don’t need to assume that your immediate relatives will share your child-rearing goals. Document your childcare-related wishes as explicitly as you can.

If you’ve remarried and don’t name a guardian, the child’s custody automatically goes to the surviving biological parent. If you’re not on good terms with your ex-spouse and don’t want this to happen, specify it in the will.

A probate courthouse

Review the Beneficiaries.

When you’re writing your will, don’t leave any beneficiary sections blank. In this case, when the will goes through probate, the assets will be distributed according to the estate laws. We also recommend contingent beneficiaries that get the property if the primary beneficiary dies before you do.

If you’ve remarried, you might want to update the beneficiary list. Let’s say your ex-spouse is still a beneficiary on your life insurance policy; your current spouse will not get a penny from the policy payout. The same goes for your retirement account. Keep track of and update the beneficiary designations as needed.

The last step is to select an estate executor who will in charge of administering the last testament. Choose someone competent, responsible, and possesses good decision-making ability. Your spouse isn’t always the best choice, especially if losing you takes a toll on their emotional well-being.

If the process sounds complicated, we recommend seeking help from a well-qualified estate and probate lawyer. If you’re based in Brooklyn, Queens, or Manhattan, and are looking for Queens Probate lawyer or Brooklyn Probate lawyer there is no better option than the law office of Ledwidge & Associates, P.C. We have over 20 years of experience in handling complex probate cases. You can contact online or give us a call at 347-395-4799 to arrange a consultation with an experienced New York probate attorney.


Does Life Insurance Go Through Probate?

Life insurance enables an individual to purchase a policy that, in the event of their death, will distribute financial benefits to their surviving loved ones who are named by the policyholder in the documentation. It is a popular option for persons who wish to ensure the financial security of their family or another party. Yet life insurance is not without potential complications. Among these is the possibility that the life insurance policy will have to go through a lengthy probate process before any benefits can be distributed.

The good news is that, in general, life insurance claims do not go through probate. In most cases, the money is distributed directly to beneficiaries listed in the policy, without the need for court intervention. However, there are important exceptions to this rule, and those are what we will focus on here.

Life insurance document with pen on top

Life Insurance: The Basics

A life insurance policy is fundamentally an arrangement made with an insurance company to provide a tax-free lump-sum payout—known as a “death benefit”—to certain named parties after the death of the policyholder. The insured person is required to make premium payments according to a given schedule (monthly, semi-annually, or annually) to maintain a valid life insurance policy. These policies are available in many different types; here are some of the more common options offered by insurance companies:

  • Term life insurance – This type of insurance is valid for a limited period of time, usually 5, 10, 15, 20, 25, or 30 years. It is most often used to provide financial security to beneficiaries if the insured person dies during their employment years.
  • Universal life insurance – This form of life insurances gives the policyholder wide latitude in adjusting the death benefit and the premiums to be paid. The insured person is also permitted to withdraw funds when needed. Unlike term life insurance, universal life policies are intended to cover the entire lifespan of the policyholder.
  • Whole life insurance – This form of insurance requires fixed premiums, but the value of the policy increases in a consistent manner. Whole life policies also provide annual dividends. Like universal life insurance, it covers the entire lifespan of the policyholder.

How the Death Benefit Is Distributed

Upon the death of the insured person, the value of the policy is paid out to the named beneficiaries. Some policies have only one beneficiary, while others have multiple beneficiaries. In cases where more than one beneficiary is named, the policyholder can decide how much should go to which party—the death benefit is not necessarily divided equally among the recipients. If the precise ratio of distribution is not specified, then the benefit will be divided equally.

What happens if a named beneficiary dies before the insured person does? If there is a co-beneficiary named in the policy, then they will receive the portion that was to be allocated to the deceased beneficiary.

Another option with life insurance policies is to name a contingent beneficiary—i.e., a party who is next in line to receive the death benefit. If there is no primary beneficiary available to accept the benefit, then it is automatically passed on to the contingent beneficiary. This occurs without the need for probate court. That’s why it is generally advisable to name a contingent beneficiary in your life insurance policy—it can prevent a lot of trouble.

Probate form and gavel on top of it

When Do Life Insurance Claims Go to Probate?

There are cases involving the distribution of life insurance benefits that require probate court to sort out the issue. Probate court specializes in the administration of estates, the enforcement of wills, the distribution of life insurance benefits, and related matters. Whenever there is no available legal beneficiary for a life insurance policy that is due to be paid out, probate court enters the picture to adjudicate the problem.

Life insurance claims will likely go to probate if any of the following conditions arise:

  • There is no living beneficiary – If the named beneficiaries die before the insured person does, the death benefit cannot be paid out to them. Why does this happen? People often forget that they need to update their beneficiary designations if their intended recipient passes away. In these situations, the policy is sent to probate.
  • There is no beneficiary named on the policy – When no beneficiary is specified on the life insurance policy, the benefit may become part of the policyholder’s estate, which will require probate. Often, though, the insurance company will try to locate a living relative of the policyholder to accept the benefit.
  • The beneficiary refuses the benefit – Beneficiaries are allowed to refuse the money if they so desire. When this happens, the beneficiary is treated, for legal purposes, as a deceased person. The benefit would then pass on to a contingent beneficiary or another qualified party; if this isn’t possible, it becomes a matter for probate to sort out. The same rule applies if the beneficiary is presumably alive but cannot be located.
  • The beneficiary is a minor – A life insurance company will not pay a death benefit directly to an individual who is legally considered a minor. Under New York State law as it pertains to life insurance policies, a minor is anyone under the age of fourteen years and six months.
  • The estate is the named beneficiary – It is permissible for a policyholder to list their own estate as the beneficiary. This frequently happens when the policyholder wishes to increase the overall value of their estate. However, this option means that the death benefit becomes part of the estate, and subject to the oversight of probate court.
  • The beneficiary is vaguely identified – Sometimes it just isn’t clear who the beneficiary is supposed to be. This can happen when the beneficiary is identified by some potentially ambiguous label like “my neighbor” or “my cousin.” That’s why it’s best to ensure that all beneficiaries are explicitly described—by name, Social Security number, and/or any other information that makes it easy to identify them.

The foregoing is not a complete list of circumstances that can require the intervention of probate court to adjudicate a life insurance payout.

Wills and Life Insurance

Some people assume that the stipulations of their will can override the terms of their life insurance policy. They attempt to use their will to make revisions, so to speak, to their policy. They may add or subtract life insurance beneficiaries in their will, or make another type of amendment. It might seem to be an agreeably easy way to make changes to a life insurance policy without needing to fill out a lot of paperwork.

The problem with this approach, however, is that a will does not supersede a life insurance policy, which is a legal document with the force of the law behind it. To put it another way, if there is a conflict between a person’s life insurance policy and their will, the life insurance policy wins out.

Contact Joseph A. Ledwidge, P.C.

With 20 years’ experience in the field, Joseph A. Ledwidge, P.C., is the legal advocate you need on your side when it comes to navigating the New York State probate process. He is a member of the New York State Bar Association and the Queens County Bar Association. Our firm represents parties involved in many kinds of probate, estate administration, trust administration, and spousal estate rights matters. To contact a New York probate attorney, please call our office at 718-276-6656 today. A free consultation is available.

Banner of justice holding scales

What should I know about letters testamentary?

You might wonder how an executor gains the legal authority in New York to take direct charge of the finances and property of a person who has died. It is actually quite simple. The legal authority to start managing an estate comes when a probate court issues letters testamentary. Whether you are preparing to become an executor yourself or are just a beneficiary, it is important to know what part letters testamentary play in probate matters.

As Bankrate explains, after an individual has passed away, a probate court will determine the validity of the decedent’s last will and testament. Assuming that the decedent had named a person in the will to take on the duties of the executor, the court will authorize that person to act as the executor if the court rules that the will can go into effect. This authorization occurs when the court issues letters testamentary.

Letters testamentary allow a person to perform all the necessary duties of an executor. The executor is allowed to open a bank account in the estate’s name and gather the money of the estate into the account for the purposes of closing out the various matters of the estate. These can include paying off bills and taxes the decedent had still owed before passing away. Additionally, the executor is empowered to take inventory of the assets of the estate, file the final tax return for the estate, and distribute the assets of the estate.

In the event that someone dies without a will, a court will not authorize letters testamentary. Since the decedent did not make a will and did not name an executor for the estate, the decedent’s estate is deemed intestate. It will be up to the court to appoint someone to be the executor. To authorize the executor to carry out the duties of the position, the court will issue letters of administration.

Keep in mind that this article is written to educate New York residents on probate topics. Since issues with probate take many forms, this article should not be read as legal advice.

Is there a problem if executors are slow to communicate?

It is a scenario that some people face. A family member has passed, yet the executor of their deceased loved one’s New York estate has barely reached out with news about the estate and its assets, if the executor has communicated at all. You might think something is up and are exploring legal action against the executor. However, slow communication may not be a sign that you should worry, at least not yet.

As ThinkAdvisor points out, estate administration is not a quick process . It may take months or perhaps even years to complete because of the various legal hurdles that the executor must get over, including sending the estate through probate and dealing with creditors who are claiming some of your loved one’s assets due to old debts. There might also be tax problems that could take years to resolve. All of these duties may hamper an executor from making regular communications to beneficiaries.

The range of responsibilities can feel overwhelming for some executors. In addition to the ordinarily slow process of administrating an estate, an executor may lag in talking to you due to trying to figure out how to handle the duties of the office. Some executors may be occupied seeking out help from outside parties, such as an attorney, to figure out legal and financial matters.

Nevertheless, beneficiaries of an estate will want to know that assets promised to them are in good hands. An executor, even if not ready to dispense the assets, should still let the beneficiaries know that the estate is secure. Shortly thereafter, an executor should convey a description of how the estate will be administrated and copies of the important estate planning papers. Regular communication from the executor to the beneficiaries should follow.

Since it is possible an executor’s lack of communication is not due to malice, it could be a smarter move to reach out to the executor or discuss the matter with fellow beneficiaries to decide on how to approach the executor. However, if an executor continues to remain silent or is too vague or infrequent in talking to you, you might want to see if the estate is having any problems that the executor could be covering up. Consultation with an attorney would also be appropriate.

Probate litigation can take many forms. For that reason, do not consider this article as offering any legal advice, and read it only for educational benefit.

What happens to overseas assets in estates?

Whether your will could pass through probate without your overseas assets diminished by U.S. tax depends on a variety of factors. It also is possible that you could avoid putting some of these assets in your will by establishing a trust, thereby avoiding the probate process in most cases. 

For assets you do not wish to place in trust ownership or move to the United States, you would probably want to consider a number of key points for each. It is often helpful to keep in mind that the court will likely have a different set of rules for nearly every gift you intend to bestow.

The most common concern for wills in terms of United States taxes and foreign assets is often the gift tax. Real estate, securities and other forms of wealth you intend to transfer from outside of the country may be subject to this tax if they come from certain non-treaty nations and exceed a specified dollar value. 

Only a few foreign countries hold gift tax treaties with the United States. As stated on the IRS website, these select nations include some of the USA’s most dedicated  business and trading partners :

  • The United Kingdom
  • Japan
  • Denmark
  • Australia

However, it is not always safe to assume that a court would your assets as foreign. It would be in your best interests to look at each line item in your will individually to determine the exact IRS definition under which it might fall.

Knowing the details of these treaties could be an important first step in developing a strategy for your foreign assets in an estate plan. however, laws change all the time and this should not be considered specific advice. It is only meant to inform and educate.

Student loans after death

As many students pursue their education in New York, they may accumulate debt in the form of student loans. A previous  blog discussed what might happen if someone dies while he or she is still in debt. This week’s blog will focus on student loans after a person’s death. 

The type of loans a student has determines what happens to this debt after death. According to Federal Student Aid , people usually do not need to repay federal student loans if someone dies. People typically need to submit proof that the person who took out the loan died. This can include either a copy of the death certificate or the original document. Sometimes a parent may take out loans for his or her child’s education. If this parent dies before repaying this debt, these federal student loans are also generally discharged.

If someone has private student loans, the situation is usually different.  ABC News says that people may still need to repay a private student loan, even after the student’s death. Some lenders may take the money they are owed from the estate or turn to anyone who might have co-signed this loan. This means that a student’s spouse or parents may sometimes need to pay back student loans even though the student is no longer alive.

Sometimes, though, people may not need to repay private student loans. Some lenders may have a forgiveness policy to cover situations when a student dies before he or she has repaid this debt. If people have private student loans, it is a good idea for them to look into the fine details so they know whether their lender offers a forgiveness policy. Additionally, it is important to remember that even though a student loan might be discharged, this debt may still affect the taxes of the deceased.

What happens to debt when someone dies?

When you live in New York and someone gives you the responsibility of handling his or her affairs after he or she passes, you will need to take certain steps to do so while you manage your loved one’s estate. This might include paying off debts, making distributions to beneficiaries and so on, but what happens when the person who dies leaves considerable debt behind?

According to U.S. News & World Report, one out of every five Americans has  credit card debt he or she believes he or she will never be able to pay off, and that means more and more U.S. residents are dying without covering their debts. If your loved one had enough to cover those debts tied up in other assets, it should not be difficult to pay that debt off, but when someone dies with debt he or she cannot cover, what happens next depends on the type of debt accrued.

If your loved one left behind substantial credit card debt, for example, and he or she does not have other assets to help cover the debt, you should not have to worry about being responsible for it in most cases. There is, however, an exception to this. If you co-signed on the credit card, you may be on the hook for the balance, but otherwise, think twice before letting credit card companies guilt or pressure you into paying.

If your loved one passed away and left behind, say, automotive debt, you can either take over the payments for the vehicle or let the bank take it back. In the case of mortgage debt, you may be able to hang on to your loved one’s property by taking over the payments yourself. Otherwise, the bank will typically foreclose on the property eventually.

This information about what happens when someone dies with debt seeks to inform you, but it is not a replacement for legal advice.

Should an estate executor proceed quickly?

After the death of a New York resident, it is incumbent upon the executor of the estate to oversee the assets of the deceased until the estate goes through probate and the assets are ready to be distributed to the heirs. Some executors may want to pass along the assets as quickly as possible. However, there are important reasons not to rush matters when it comes to overseeing an estate.

As Bankrate points out, as an executor, you have legal responsibilities to carry out. You might overlook important legal steps if you rush the process. At best, you could delay the probate process a little. However, at worst you could be held personally liable if the missteps are severe enough. If anything should happen to the assets of the estate or if there is mismanagement of the estate, it could give the heirs cause to challenge the executor’s fitness in court.

Instead of worrying about finishing the asset distribution quickly, an executor should prepare for a possible lengthy tenure if the probate process should drag out. Fortunately, keeping the records of the estate organized can help prevent unnecessary delays. Additionally, an executor should consider hiring a qualified probate attorney to provide counsel on legal matters and to prevent probate steps from being overlooked.

It is tempting for an executor to want to pay out the assets to heirs as quickly as possible, particularly if there is disharmony among the heirs. Some executors have to deal with arguments among heirs, which can slow down probate. Sometimes an attorney can successfully mediate the matter, while in other instances a judge may need to step in. In any case, the executor should keep the assets secure until the matter is resolved.

Because legal matters concerning probate can vary widely, this article should not be taken as legal advice. It is only intended to educate New York residents on the subject of probate.

A quick look at the probate process

Losing a friend or loved one can be emotional. It is during this hard time that people are forced to make crucial decisions regarding a person’s estate. In some cases, the estate will need to go through the probate process , which helps to settle matters, such as ensuring the will is valid and that the estate assets and property gets to the beneficiaries named in the will. If an estate administrator or executor of the will is named within the document, that person is responsible for seeing the will through the probate process.

The first step is to file the last will and testament along with a copy of the death certificate and an application for probate. These documents should be submitted to the Surrogate’s Court located within the county where the deceased lived. From there the administrator must located all property and assets in the estate and determine the value. Any remaining taxes and debts owed by the deceased are then paid out of the estate’s assets. Throughout the probate process, the administrator must protect the property from vandalism and make sure nothing is taken from the estate. Once everything is paid, the remaining property and assets are then distributed to the rightful heirs.

Not all estates are required to go through probate. Estate’s that value less than $30,000 may avoid the procedures, as well as estates that are put into a revocable living trust. Once property is put into the trust, the trustee may distribute that property out to the beneficiaries without waiting for probate.

What should I consider when choosing an executor?

As you are planning your estate in New York, one big decision you will have to make is who will be your executor. This is a very important choice that can have a far-reaching impact. The executor will ensure that your wishes are carried out after you are no longer around to see to them. Choosing the right executor can make things go more smoothly for your heirs.

According to Kiplinger, there are some important considerations to keep in mind as you choose your executor . These things will help ensure that you choose someone who will handle the estate properly and in the way you wanted.

One of the top things to think about is if the person you choose has a good relationship with your heirs. The person does not have to be friends with them or even know them, but it is important that there are no bad feelings there. If the person and your heirs have issues, it could lead to arguments and trouble during the process.

You should make sure the person you choose is responsible and will be able to carry out your wishes. It is also good to make sure the person is financially stable so there is no risk that he or she may not be able to get bonded or insured, which is often required by the court.  

It is also a good idea to ensure the person will be around after you die. So, choosing someone who is younger and in good health is a good idea. This information is for education and is not legal advice.