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Friday, January 3, 2014

One Does Not Simply Inherit Assets in New York

I am in the midst of one my of my more difficult estate administrations in New York, and I thought it would be worthwhile to remind everyone how important it can be to set up a revocable trust in situations where you are leaving your estate to someone other than your next of kin.

In the matter I am working on now, the decedent (let's call her Jane) passed away leaving everything to her long time boyfriend and one other person.  Jane was not married and had no children, but she did have many siblings and nieces and nephews.  Even though Jane had a Will, the State of New York is requiring that we get each of Jane's surviving siblings to sign an affidavit approving of the probate of the Will. (This is known as a Waiver of Process; Consent to Probate Form.) 

Jane also had one sibling (Fred) who died before her.  So we have to get this form signed by all of Fred's children as well.  Should I bother mentioning that everyone has lost contact with one of Fred's sons?

Unless EVERY one of Jane's next of kin signs this form, the proposed executor has to go through extra steps to start his or her job.  This means the bills don't get paid, real estate can't get sold, and money can't be transferred to the people named in Jane's Will.

The need to have this form signed will wind up costing the estate a lot of time and money as the Executor must make diligent effort to track down this missing nephew.  It will also complicate matters if any of Jane's siblings or Fred's children does not sign and notarize the form required by New York.  Other than doing the right thing, none of Jane's relatives has any incentive to sign this form.  In fact, if any of Jane's relatives believe that Jane's boyfriend shouldn't inherit, they can certainly make it a difficult and expensive process.

If Jane had properly titled her assets in the name of a revocable trust and named beneficiaries on her IRA and life insurance policies, she could have helped her loved ones avoid the probate process.  By avoiding probate, all of these steps become unnecessary and would have saved everyone time, trouble and money.