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As our parents age, it may become necessary to take on a some type of guardianship role to help them live out their golden years in comfort and dignity. Even highly functioning seniors can use a little help in certain areas to ensure their best interests are served and avoid costly mistake that can leave elders in financial and medical dire straits.

Under New York law, mentally competent seniors may willfully yield control over certain aspects of their lives to trusted friends or family to act in certain ways on their behalf. This is often referred to by the courts as the “least restrictive form of intervention” since it only gives the guardian limited power to help compensate for any limitations faced by the elder.

To achieve this type of guardianship, both parties (the elder and prospective guardian) will need to file their paperwork in the probate court where the elder lives. As long as the elder agrees and can demonstrate to the court why it is in his or her best interest to appoint a guardian, courts are generally inclined to allow this limited guardianship. Depending on the powers granted, the guardian can help their elder manage decisions related to medical care, financial management, and paying taxes.

Fair market value of assets held by the estate is key for determining tax liability of an estate. In Estate of Eva  Kollsman v. Commissioner of Internal Revenue, taxation of the sale of two 17th-century Old Master paintings was contested in federal tax court. The federal U.S. Tax Court agreed to expert analysis of the IRS’s testimony and opposition to the Plaintiff’s valuation of the two paintings sold at auction as “unpersuasive” and “unreliable.”

Appraisal Below Fair Market Value

The two paintings, Village Kermesse, Dance Around the Maypole (“Maypole”) by Pieter Brueghel the Younger, and Orpheus Charming the Animals (“Orpheus”) by Jan Brueghel the Elder or the Younger were, according to the IRS, worth more than claimed by the estate in the case. “Maypole” was later sold by Sotheby’s New York, Auction Lot. 43 in 2009 for $2,100,000 hammer price. Following Eva Franzen’s death In September 2005, Vice President of Sotheby’s North America and South America, George Wachter appraised the value of the paintings at $500,000 for Maypole and $100,000 for Orpheus, respectively. In his testimony before the Tax Court, damage caused by the decedent’s smoking was reportedly the reason for lower than fair market valuation of the paintings in the estate’s 2005 IRS tax return.

While it might not be the most important things on peoples’ minds, the truth is that all of us need a last will and testament, regardless of whether or not we think our estates are large enough to need one. Without a last will and testament or some type of trust, the assets of our estate will enter into what is known as intestacy and be distributed according to a line of succession dictated by the law, rather than what our final wishes may have been.

In New York, any assets not placed into a trust will need to pass through probate court (known as Surrogate’s Court in the state). Even in cases where the deceased created a will and specifically dictated which assets go to which heirs, the court must still hear the matter to ensure the deceased’s wishes are carried out.

However, certain assets will not pass through probate with or without a will. These types of assets include homes that are jointly owned by spouses, life insurance payouts, retirement accounts with named beneficiaries, and bank accounts set up as payable-on-death. Without a will, any other assets like personal property and savings accounts will be passed along according to New York’s intestacy laws.

Will your credit card debt haunt you when you die? Outstanding debts can be attached to an estate or trust if a creditor files a lawsuit against a decedent in court. Protect your estate and your loved ones from creditor attachment by taking precautionary legal measures to restrict debt collectors from forcing your last will and testament into probate court.

Who is obliged to a decedent’s credit card debt?

Whether a surviving spouse or other loved one is liable for the credit card debt of a deceased family member depends on signatory of creditor agreement. If a spouse or co-signing family member is participatory in a credit agreement, they will be obligated to pay outstanding debts owed on the account after the other co-signing party dies. Joint credit card accounts are the most common example of this circumstance. Authorized users of a decedent’s credit card account, however, are not necessarily liable for paying off the balance after the debtor dies. Not considered the true owner of the account, and authorized user does not have a duty to fulfill the card agreement with payment insofar that they have ceased using the card at the time of the owner’s death.

Creating a trust is one of the most common ways people use to pass on the assets without having to pass the estate through probate and deal with courts, judges, and create a public record of what the individual has accrued over his or her lifetime. Just like there are many ways to pass on an estate to heirs, there are also different types of trusts that people can use to accomplish these goals.

Picking the right type of trust for one’s estate depends on many things including the type of assets in one’s estate, the individual’s goals, and whether some of the assets might go to minor children that will be unable to manage finances for themselves. Whichever type of trust you choose to go with, it should be based on careful analysis and attention to detail to ensure that your final wishes are carried and heirs receive their due inheritance.

Inter vivos trusts

Creditor attachment of an estate to satisfy outstanding debt may subsequently involve those assets in a bankruptcy. Depending if debts are attached to estate property that is involved in a Chapter 7 (personal) or Chapter 11 (business) related bankruptcy, the court will appoint a trustee to oversee and administer the process.

The Bankruptcy Trustee’s role and responsibilities.

Before a bankruptcy petition is submitted to federal court, the bankruptcy trustee is responsible for the documented accuracy of liquidation transactions to meet court requirements for debt dilution (11 U.S. Code § 704 – Duties of trustee). Trustees receive a percentage of assets sold, as well as a fee for service for performing those transactions. Petition for Chapter 7 or Chapter 11 bankruptcy must be accompanied by the estate transaction record. The bankruptcy trustee must review all records involving an estate’s assets, including market value appraisals, and income tax returns. After the record substantiating the bankruptcy petition has been verified by the trustee, court filing may proceed.

A last will and testament is an incredibly important document that needs to be kept safe and help ensure that when your estate passes through probate, New York courts will allow your executor to carry your final wishes and disperse assets to your heirs. After taking all of the important steps like consulting with family members, working with a trust and estate attorney, and finally drafting the last will and testament, great care needs to be taken in storing the original copy of the will to make sure the estate can pass through probate courts as quickly as possibly and make the job of the executor that much easier.

To preserve the original copy of their last will and testament, testators (the person creating the will) have a number of options to preserve the original copy of their executed will. Many people elect to keep their executed will in a safe deposit box at a bank or other secured facility. It is important to note that no matter where the document is kept safe, the executor must know the location of the last will and testament to pass the estate through probate.

New York probate law holds that if the original executed copy of the last will and testament is lost, the probate court will presume the testator meant to revoke the document and proving anything to the contrary can be a difficult, time consuming, and expensive endeavor. Even if a bona fide copy can be produced, New York probate courts will likely not accept the document and enter it as a copy of the will.

Nowadays, almost all of us have some kind of social media account, online banking profile, or us a cloud-based system to store data and conduct various forms of business. Just like any other asset in our estate, we need to create a plan that allows a trusted friend or family member to take over these accounts after we pass away and ensure that our final wishes are carried out.

Fortunately, New York state laws understand the changing times and make estate planning for digital assets much easier than it was in years past. New York is one of several states which passed the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). As with the remainder of our estates, the law allows individuals to appoint an executor to manage digital assets upon the death of the testator.

Under the RUFADAA, electronic communications are considered digital assets that require strong privacy protections because they are often private correspondence between one persona and another. To give access to these sensitive communications, testators need to give explicit permission, even for seemingly harmless social media accounts like Facebook or Twitter.

From the 1980s forward, patrimony laws have impacted major museum institutions around the globe. As source countries filed lawsuits against the cultural agents of former colonial empires, requesting return of antiquities and other cultural property, the response to due diligence by those foreign jurisdictions continues to be uneven. Conflicts over the rightful ownership of cultural property can also affect estate planning and probate proceedings. Beneficiary cultural institutions responsible for the accession, preservation, and management of those rare cultural objects can also decide to deaccession those gifted assets after the death of an estate holder, further complicating a matter.

Legal Definition of “Cultural Property”

Cultural property is distinct from personal or other forms of property within federal law. The United States recognizes the cultural property of sovereign tribal or foreign nations based on legal claims of territory, identity, or moral right. Rights to the ownership of registered cultural assets is considered a “superior claim” within international law; and supersedes “good faith” monetary transactions by collectors or museums.

Although none of us expect that we might not be able to manage our affairs later on in life, it is still important to plan out a contingency just in case circumstances like old age, a catastrophic injury, or loss of mental capacity takes over our abilities to act for ourselves. One important piece of planning folks can engage in is making sure they have a power of attorney in place to allow a trusted individual to manage their finances for healthcare and lifestyle decisions to ensure they live our their golden years with dignity.

By creating a financial power of attorney, one can allow another person to act on his or her behalf in a number of different ways including making deposits or withdrawals at the bank, manage Medicare and other government benefits, and look after financial investments. Because income and finances are such an important part of our lives, these areas need constant oversight to make sure there are no disruptions that could negatively affect our standards of living.

Under New York law, competent individuals are allowed to act on behalf of someone else to help manage finances. While it is an added benefit that the person with financial power of attorney have legal or financial management experience, the law does not require these skills as a prerequisite and one need only choose a trusted individual to act on his or her behalf. Furthermore, the parameters of the power afforded to the person with the power of attorney will be entirely spelled out in the document granting such control.