We often see and hear that everyone needs to have a will, but what exactly is a will and what does it entail? A will or testament is a legal document that expresses a person’s wishes as to how they want their property to be distributed upon their death, and as to who will manage the property through its final distribution. I often meet people who are pretty relaxed and consider themselves to have a solid estate plan if they have an executed will, but is having a will enough?
Estate planning is very subjective, each client is unique and each client’s case is unique. We here at Sishodia PLLC recommend consulting with our knowledgeable estate planning attorneys to look at your particular case to achieve your distinct estate planning goals. Let’s look at what happens to the ownership of your property or shares of the stock in a coop situation. A will by itself does not have any effect on the ownership and it has to go through the probate. New York Law does not require you to hire an attorney to start a probate proceeding as some other states do. It is possible that your assigned executor may handle probate herself or himself, however, most of the probate matters are challenging and require the help of a New York probate attorney in order to save time and aggravation.
What Happens When a Real Estate Property Goes Through Probate?
Regardless of the fact if the decedent (the person who has passed away) had a will or not, the probate or administration (in case there is no will) process is an important step to settle the estate that assures all debts and taxes are paid by the decedent’s estate.
During probate, the court accounts for all of the assets that make up a recently deceased person’s estate. The personal representative of the estate publishes notices that the estate is open for probate and sends them directly to known creditors and the decedent’s relatives. Creditors, disinherited family members, and everyone else with reason to do so have a chance to try to claim money from the estate or even to argue that the will is invalid if they have evidence of this. Before the estate settles, the personal representative must also file a tax return for the estate. After the debts and taxes have been settled, there may be a lot less money left than when the estate opened.
After all the debts are paid, the judge will rely on a will to determine how to distribute the balance of the assets. As for houses, the best-case scenario is that the house is still there for the beneficiaries to inherit at the end of probate. Sometimes, though, the court orders the personal representative to sell the house to pay the decedent’s debts. If there is not enough money in the estate, then your loved ones may just receive the leftover funds after the payment of all the expenses instead of a family home. This is a stressful, conflict-ridden process, as the beneficiaries and personal representatives must agree on a sale price.
With NYC coops inheritance, it may get even more complicated as requesting coop shares in a will does not guarantee that the beneficiary can live in the coop. The beneficiary has to qualify for the coop and be approved by the coop board or will be forced to sell the shares. So in a scenario when you just have a will, your loved ones will not automatically receive your family home, they will most likely get stuck in court for about four to nine months and will incur unnecessary stress executing an estate and expenses associated with an execution.
Without proper estate planning, the value of your assets can diminish substantially by the time probate is finished and your estate has settled. When you think about how much work and negotiation went into buying your house, imagine that multiplied tenfold, which is virtually how complicated it can be for the beneficiaries to inherit your home at the end of probate. Why would you want to risk your family, or your loved ones to go through the hassle of will probate when by proper estate planning, you can spare your family a lot of this stress. Contact the New York real estate attorneys at Sishodia PLLC to find out more about making the best choices regarding your home in your estate plan.
Transferring Assets Outside of Probate
Our estate planning lawyers can help you to set up an estate plan whereas many assets as possible can go to the beneficiaries without going through probate.
Some assets, like the proceeds from retirement accounts, proceeds of an insurance policy, a 401k and IRA, and other accounts with a named beneficiary, property, or shares on the stock certificate owned by parties as joint tenants with a right of survivorship are not subject to the probate process and they pass to the named beneficiary or surviving tenant.
If you and your domestic partner have rights of survivorship in your home, then the surviving partner keeps the home when the first partner dies. In the case of a legal marriage if the title is held by spouses as tenants by the entirety or as “husband and wife”, in the case of the death of one spouse there is an automatic transfer of ownership to the surviving spouse. For someone besides your spouse to inherit your home without it going through probate, the best choice may be to set up a living trust and transfer ownership of the home to it. The main advantages of putting your home into trust are avoiding probate, saving on estate taxes, and even protecting your home from certain creditors.
New York Probate Process
The probate process involves several steps. The court must first receive the original will of the deceased along with a petition for probate. After receiving notice from the court, anyone with an interest in the will be notified. A guardian ad-litem may be appointed by the court for minors or those with incapacity.
After the court has established that New York State is the valid jurisdiction and the will is in a valid form, it will issue the decree or court order granting probate. Letters testamentary will be sent to executors named by the deceased.
Executors have the power to manage and take care of the estate. The executor is also responsible for identifying and making an inventory of all the assets of the deceased, paying taxes and debts, as well as distributing the property according to the will.
A relatively simple probate process may take only a few days. In some cases, however, probate can take longer. In cases when a relative or another person is incompetent or contests the will, this can be especially true.
Good estate planning can help you avoid having your family members go through probate to distribute your assets. Many estate planning tools allow you to remove assets from probate so that they do not go through this process.
A trust is a common method to avoid probate in New York. The trustee will manage the trust property on behalf of your beneficiaries. The property becomes part of your probate estate once it is placed in trust.
Contact Sishodia Law PLLC About Your Estate Planning
A real estate lawyer can help you make provisions in your estate plan to pass your properties to the intended beneficiaries without unnecessary expenses and the stress of probate. Contact Sishodia PLLC in New York City or call (833) 616-4646 to discuss your estate planning options.