Q & A: 5 Frequently Asked Questions About Special Needs Trusts

Are you considering providing financial support to a loved one with special needs?

It’s common for individuals to name their loved ones as beneficiaries in a will, but this approach can unintentionally lead to financial turmoil. By doing so, you could inadvertently disqualify them from crucial government programs, causing them to lose vital financial and medical assistance.

In this post, we’ll walk you through the ins and outs of special needs trusts, answering the top five questions you may have. As you explore this option, it is important to note that a skilled New York special needs trust attorney can provide invaluable guidance and expertise. Don’t hesitate to reach out to a Special Needs Trust lawyer to ensure your loved one’s future is secure.

In this post, we’ll tell you how they work.

Things You Need to Know About Special Needs Trusts

Here’s how this type of trust can protect a beneficiary with disabilities.

1. What Are the Benefits?

These types of trusts give you an extra layer of protection, ensuring that the beneficiary can acquire and maintain the level of support they need. Unlike a will, they give you the ability to dictate the way your money is spent.

2. How Can a Beneficiary Access their Trust?

Giving a loved one with special needs money directly can complicate issues in a number of ways. However, doing it through a trust doesn’t mean that it’s difficult for them to access it.

If they choose, they’re able to use those funds for recreational use, as well as to pay for personal care, medical expenses, accommodation, education and transport.

3. What Should Be Included?

It’s important to go through your trust thoroughly to make sure it covers all the bases. In order to be legally watertight, it has to include specific language.

First of all, it needs to state that it’s intended to provide “supplemental and extra care” rather than basic support. This clarifies that it funds extra services that the government won’t provide to the trustee.

The trust should also explain that its an exception to the Omnibus Budget and Reconciliation Act, and include any provisions from the United States Code.

Finally, there should also be information regarding the Medicaid payback process.

4. How Do They Affect Government Assistance?

Inheritance of anything over $2,000 can cause a disabled person to lose government benefits. This means they’ll no longer have access to subsidized housing, Supplemental Security Income, or Medicaid.

A special needs trust allows you to leave them money without the risk of disrupting their current support. This is because they address the complicated needs of each individual, separating their funds from their income.

5. What Options Do I Have?

There are two main options you can choose from.

The first is a first-person trust, which makes the beneficiary completely liable in the instance of another legal settlement, such as inheritance or a compensation claim.

The second is a third-party trust, which gives parents or guardians more control over their funds. The money is used to secure the care and support their loved one needs, and anything outside of that can be allocated as they wish.

Topic	Details
Benefits of special needs trusts	Provides an extra layer of protection for beneficiaries with disabilities by allowing the trustee to dictate the way the money is spent.
Accessing the trust funds	Beneficiaries can use the funds for recreational use, personal care, medical expenses, accommodation, education, and transport.
Necessary components of the trust	The trust should state that it provides supplemental care rather than basic support, be an exception to the Omnibus Budget and Reconciliation Act, and include Medicaid payback information.
Impact on government assistance	Inheritance over $2,000 can cause disabled individuals to lose government benefits, but special needs trusts allow them to receive funds without losing support.

How to Set Up Special Needs Trust

To establish a special needs trust, a trust document must be created that outlines how assets will be managed and distributed for the benefit of an individual with special needs. Although it’s possible to create a basic trust without legal assistance, many families choose to consult with a special needs trust attorney who can help customize the trust to their specific needs.

A special needs trust attorney can provide assistance and advice throughout the process to ensure that the trust document is tailored to meet the beneficiary’s unique requirements. They can also help navigate any complicated legal or financial issues associated with the trust.

In the trust document, the individual creating the trust, known as the “grantor” or “settlor,” assigns assets to be managed by a “trustee.” Typically, the grantor will name themselves as the trustee and appoint a trusted individual as the successor trustee. The grantor will remain in this role until they die, become incapacitated, or resign, at which point the successor trustee takes over.

Both the grantor and successor trustee are legally bound to follow the terms set out in the trust document, ensuring that the assets are used for the benefit of the individual with special needs, who is referred to as the “beneficiary” within the document. With the assistance of a special needs trust attorney, families can establish a trust that effectively supports and protects the beneficiary’s interests.

Getting the Help of a Skilled New York Special Needs Trust Lawyer

Don’t leave your loved one’s financial security to chance. Seek the help of a skilled New York special needs trust lawyer who can help you navigate this complex process and create a trust tailored to your family’s unique needs. At New York Legacy Lawyers, our team of experienced New York special needs trust attorneys may be able to help ensure that your loved one receives the support and care they deserve for years to come. Contact us today at (718) 713-8080 to schedule a consultation.

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What You Need to Know About a Durable Power of Attorney in New York

You may have heard the phrase durable power of attorney.

The critical aspect of a durable power of attorney is its enduring nature. Regardless of the type of power of attorney, the term “durable” indicates that the POA remains valid even if the individual it concerns becomes incapacitated.

In this article, we will explore the implications of a durable power of attorney on the financial and healthcare responsibilities of the person requiring a POA. Don’t hesitate to consult an experienced New York estate planning attorney to help you navigate the complexities of setting up a durable power of attorney tailored to your unique needs. Call the New York Legacy Lawyers today at (718) 713-8080 to schedule a consultation.

Financial Power of Attorney

A financial power of attorney names someone to oversee your finances.  Often this instrument is used if you become incapacitated or are unable to be present to take care of a financial matter.  A lot of the time travelers, service members, students, and people in similar situations will establish a financial power of attorney to enable a trusted person to take care of business when they cannot be around.

On this point, the person you choose to have power of attorney over your finances should be someone you trust to not steal from you or let your financial obligations fail for some reason.  In short, someone very trustworthy! 

Lastly on this point, naming a financial power of attorney does not mean that you do not have control over your finances – this need not be a permanent arrangement. You can always revoke a power of attorney!

A durable power of attorney has similar obligations but stays in effect (or can be setup to go into effect) when you become unable to make your own decisions due to incapacity.  IMPORTANT – if your power of attorney isn’t durable, it wouldn’t be able to help you when you need it most – if you become unable to take care of your own affairs

Some people request a SPRINGING durable power of attorney, which would only go into effect upon certain conditions being met. Usually, it is something like two physicians state that you are incapacitated.

A durable power of attorney ends when you die, or on the date you choose. 

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Healthcare Power of Attorney

A healthcare power of attorney is called a Healthcare Proxy in New York State. It names someone to make healthcare decision for you if you become incapacitated.  When choosing someone, you want to be sure that they are aware of what decisions you would make for yourself if you are able. That person should also live near enough that they can get to the hospital quickly when the time comes for them to make medical decisions for you, or at least be easily reached by phone.   A few decisions you want to discuss with your healthcare proxy are:

• Life support measures
• CPR
• Antibiotics
• Do not resuscitate orders

In New York, a healthcare proxy only goes into effect when you are unable to make your own decisions.  And you can change it or revoke it at any time.

	Financial Power of Attorney	Healthcare Power of Attorney
Purpose	Manage finances when unable to do so	Make healthcare decisions when unable to do so
Trigger	Incapacity or absence	Incapacity
Trustee	Someone trustworthy	Someone aware of your wishes and able to act on your behalf
Duration	Can be revoked	Can be revoked
Durability	Durable or springing	Durable
Termination	Upon death or date chosen	Upon death or date chosen
Scope of authority	Financial matters such as bill payments, investments, and taxes	Healthcare decisions such as life support, CPR, antibiotics, and DNR

Durable Power of Attorney Requirements in New York

According to the New York Consolidated Laws, General Obligations Law, Section 5-1501B, a financial  Power of Attorney must:

• Be typed or printed using letters which are legible or of a clear type no less than twelve point in size, or, if in writing, a reasonable equivalent thereof.
• Be signed and dated by you, when you have mental capacity.
• Be acknowledged by you before a notary public as required for a conveyance of real property.
• Be signed and dated by the person you name before a notary public.

New York has created a financial power of attorney form as well as a healthcare power of attorney form that needs to be filled out and signed by both you and the person you name. 

You do not have to use the same person for both your financial and medical power of attorney.  They can be two separate people. Further, on the financial power of attorney, you can have more than one person serving at the same time.

It is a great idea to download the healthcare proxy form and follow the directions to fill it out and have it properly witnessed. But if you are thinking about doing the same thing for the Durable Power of Attorney…

Do Spouses Automatically Have Power of Attorney?

Even if you’re married, it’s crucial to understand that spouses don’t automatically have power of attorney. Without establishing a power of attorney, you leave the door open for strangers to make critical decisions on your behalf.

Should you become incapacitated without a power of attorney in place, your spouse will face the daunting task of going to court to obtain legal authority to act for you. This process is time-consuming and expensive, causing additional stress during an already difficult period.

Marriage alone doesn’t grant your spouse the right to act on your behalf. In the absence of a power of attorney, they must apply to the Court of Protection. This court determines mental capacity, makes decisions regarding health, care, property, and finances, and appoints a deputy to act for the incapacitated person. Unfortunately, you cannot choose your own deputy, and their authority will be limited by the court’s decision.

Don’t let uncertainty define your future. Consult with an experienced estate planning attorney today to establish a power of attorney, ensuring that your interests are protected, and your decisions are made by someone you trust. Call the New York Legacy Lawyers today at (718) 713-8080 to discuss your options and secure peace of mind for you and your loved ones.

Hang on a Second Before You Download Those Forms

It is highly recommended that you use an estate planning attorney to prepare the durable power of attorney.  First of all, it is very easy to make a mistake – New York law drastically limits the authority that is granted under the basic power of attorney form. To give your agent the ability to create trusts, transfer assets, change beneficiaries, make gifts, etc. – all the things that you may actually need them to do if you become incapacitated, the basic form must be heavily modified and you need to add a special Rider.  We’ve seen lots of cases where a huge amount of time, stress, and money were lost because an inexperienced person forgot a few words or to “Initial Here” in one spot. Moreover, there are other things you need to consider when planning for your financial and health future.  Namely, a Last Will & Testament, a trust, estate taxes, and a couple of other things we’d love to tell you about.

If you are ready to set up a durable power of attorney of any type, please contact us today! Get the support you need from our New York legacy lawyers.

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Living Trust vs. Will: What’s the Difference? Which Is Right for You?

Facing the reality of death or incapacitation may be challenging, but it’s essential to have these conversations, especially if you have young children or a non-traditional family structure. Ensuring your wishes are respected and your loved ones are protected is where estate planning comes into play.

Both a will and a living trust can help you manage your estate and medical concerns in case you’re no longer able to do so yourself. But how do you know? Is a living trust right for you, and do you need one? How do you set up a will? Can a will and living trust be used together?

To make an informed decision and navigate the complexities of estate planning, consider reaching out to an experienced estate planning attorney in New York. At New York Legacy Lawyers, our team of skilled New York estate planning lawyers may be able to guide you in choosing the most appropriate option and help you create a comprehensive plan tailored to your needs. Call us today at (718) 713-8080 to schedule a consultation.

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Complexity

Living trusts and wills do not have to be terribly complicated. In many states, handwritten wills are acceptable (though not advised). They become more complicated if you have significant assets such as property, vehicles, stocks, or multiple potential family and friends who believe they are entitled to your assets.

There are two forms of living trusts, irrevocable and revocable. Irrevocable trusts aren’t as popular because once the papers are signed, they can’t be changed. They typically function as a means of protecting assets from a lawsuit or taxes.

A revocable trust can be changed if you change your mind or as your financial situation necessitates.  It offers benefits toward reducing the complexity of distributing assets after the death of the holder.

Privacy

A revocable living trust is a private contract between the trust entity and trust holder. It helps your beneficiaries by enabling them to avoid probate, the court process in place to distribute the assets after the death of the estate holder.  In addition to the protection from probate, trusts are private matters and not a matter of public record.

Conversely, when a will is filed with the court to begin probate, it becomes public record. The assets and finances changing hands are open for anyone to see.

Health

A living trust manages your financial affairs during the end of your life and after death. A will handles affairs when you are gone. Those of advanced age or suffering from illness may consider a living will.

A living will handles your medical affairs should you be unable to advocate for yourself. You can designate whether or not you want to receive life-saving treatments like life support or CPR. This is the only time a living will is necessary.

A living trust allows you to name a successor trustee in the event you become mentally incapacitated. If you have a same-sex partner, this gives your partner rights to advocate for you and your estate. This also applies if you are unmarried but want to designate a friend or non-family member as your advocate.

If you only have a will, the court designates someone to handle your affairs. You can file for a power of attorney to avoid this.

Matters Involving Children

Living trusts allow you to leave property to children. It is illegal for children under 18 to own property so you will have to designate a manager. Only a will allows the estate holder to arrange for their children’s guardianship and property.

Your Estate After Death

To designate property in a living trust, you must transfer the property into the trust. For many items, making a list and attaching it to the trust document is all that’s required. Larger items that have a title document require that you rename the title to the name of the trust.

You will need to name someone to wrap up your estate affairs after you die. In a will,  this person is called an executor. They are in charge of managing your assets and distributing them after probate. In a living trust, the successor trustee manages the assets that are only in the trust.

Most estates will require an executor even if most of the property is transferred to the trust. The executor of the will and a successor trustee can be the same person.

Factors	Living Trust	Will
Complexity	Two forms: irrevocable and revocable. Revocable trusts can be changed while irrevocable trusts can’t be changed once papers are signed.	Handwritten wills are acceptable, but not advised. It can become complicated if there are significant assets or multiple potential beneficiaries.
Privacy	A private contract between trust entity and holder, and helps beneficiaries avoid probate.	Becomes public record when filed with the court for probate.
Health	Manages financial affairs during the end of life and after death. Allows naming of successor trustee if mentally incapacitated.	Handles affairs after death. Living will necessary for medical affairs if unable to advocate for oneself.
Matters Involving Children	Allows leaving property to children, but requires a designated manager as children under 18 can’t own property.	Only a will allows for arranging children’s guardianship and property.
Your Estate After Death	Property must be transferred to the trust. Large items require renaming of the title to the trust’s name. Successor trustee manages assets in the trust.	Executor manages assets and distributes them after probate. Most estates require an executor, even if property is transferred to the trust.

Living Trust vs. Will

The proper planning of your estate will protect your assets and your loved one’s rights. Leaving it to the court will often end in disappointment for all parties.

A living trust will help your family maintain privacy. It will also protect the rights of non-traditional family members. Trusts are often a little more difficult to contest in a lawsuit should an issue arise.

A will allows you to make arrangements for young children after your death. You can also designate a manager for any property left to them.

The answer to which you should choose between a living trust vs. will?

A combination of both will provide you with the best options for caring for your estate and your family.

Don’t wait until it’s an emergency to plan your estate. Get started with us today.

Can You Have Both a Will and a Living Trust

Many individuals wonder if they can incorporate both a will and a living trust in their estate planning strategy. The answer is affirmative, and it can even be advantageous in specific situations. By combining a will and a living trust, individuals can ensure that their assets are distributed according to their preferences and their loved ones’ future necessities are fulfilled.

A living trust can provide more security to those who wish to evade probate or have minor children who might not be capable enough to manage their inheritance prudently if they receive it as a lump sum at a young age. On the other hand, a will permits the nomination of a guardian for underage children, which is not possible with a trust.

A suggested approach is to use a will to finance the living trust with any assets that were not previously included in the trust before death. A “pour-over” will directs that any assets outside the trust at the time of death be shifted to the trust, which will be supervised by a successor trustee for the beneficiaries’ advantage. This strategy guarantees that the assets intended for children are managed according to the creator’s directives.

To identify the best course of action for one’s unique circumstances, it’s recommended to seek guidance from a competent estate planning attorney in New York. They can help navigate the complexities of wills and trusts and create a plan that meets both the individual’s and their loved ones’ requirements. Contact us today at (718) 713-8080 to schedule a consultation.

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Here’s What You Should Know About a Trust & How to Set One Up

Without proper planning for the transfer of your assets before your death or incapacitation, you relinquish control over who inherits your estate, potentially causing your loved ones to bear the financial burden.

Fortunately, there are several strategies to prevent this all-too-common scenario, and one vital component of a well-rounded estate plan is setting up a trust.

In this article, we delve into essential information about trusts and offer guidance on incorporating them into your estate planning. Don’t miss the opportunity to take control of your assets and secure your loved ones’ future – consult with a skilled New York trusts lawyer for tailored advice on crafting a trust that suits your unique circumstances. Call the New York Legacy Lawyers today at (718) 713-8080 to schedule a consultation.

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A Quick Primer on Trusts

Trusts are a tremendous tool you can use in addition to your Last Will & Testament.  Fundamentally, a trust is an estate planning tool which helps to manage the distribution of your property by transferring your estate into a separate entity and then to your beneficiaries (which may include yourself) when certain pre-defined conditions have been met.

Reasons to Create a Trust

A Trust is set up to protect and manage a family’s assets for the benefit of both current and future generations. There are many reasons to create a trust some of which include

• Creditor protection: Property which is managed by a trust is no longer owned by the settlor or the beneficiaries, so it cannot be claimed by future creditors. This gives the settlor an opportunity to venture into higher risks without risking the trust assets.
• Relationship Property Claims Protection: Relationship property laws permit the partners of your children to have access to the property that you gifted them during your lifetime, in case their relationship comes to an end. Placing these properties in a Trust, instead of under your children’s names will ensure that your children continue to benefit without these assets being part of their personal property.
• Protecting Family Members with Special Needs: A family trust is ideal if you want to protect children or family members with special needs or those who require medical care. You can make provisions in the trust to protect these people against other family members who may want to control the family assets for themselves in the event of your death.

There certainly are more reasons to establish a trust.  Connect with us to see if your individual situation can be or should be addressed via trust establishment.

Reason for creating a trust	Benefits of creating a trust
Creditor protection	Assets managed by the trust are protected from future creditors
Relationship Property Claims Protection	Protects the assets from the partners of your children in the event of a relationship breakdown
Protecting Family Members with Special Needs	Protects family members with special needs from other family members who may want to control the assets

Establishing a trust

The basics of creating a trust require the settlor, who is the property owner, to transfer legal ownership of the property to the trustee, who can be an individual or an institution (including the settlor). The trustee then manages the property for the benefit of the beneficiary.  A fiduciary relationship is created by the trust, running from the trustee to the beneficiary. Therefore, the trustee must work for the best interest of the recipient when managing the trust property.

In some cases, the settlor may act as the trustee and retain the ownership of property instead of transferring it, in which case, they must act in a fiduciary capacity. The settlor is also allowed to name themselves as one of the beneficiaries of a trust.

How Long Can a Trust Remain Open After Death

A trust can remain open for varying durations after the death of the grantor, depending on the trust’s purpose, type, and the beneficiaries involved. The time frame for a trust to remain open can range from a year to several decades, or even for the lifetime of a beneficiary.

Trusts often stay open for extended periods when beneficiaries are minors. In such cases, the trustee may be tasked with distributing funds carefully and periodically, ensuring the beneficiary receives the money and property when they reach adulthood.

Certain trusts, such as qualified perpetual trusts or dynasty trusts, are designed to continue beyond a year and can last for several decades. These trusts are often established to preserve family wealth across multiple generations.

Special needs trusts cater to beneficiaries with disabilities, providing financial support throughout their lives, far longer than the 21-year rule applied to some trusts. These trusts can remain open for the beneficiary’s lifetime or until funds are depleted. 

Trusts can end sooner than the time frames mentioned above, often dissolving shortly after the grantor’s death. Once the assets and property within the trust have been distributed to the beneficiaries, the trust is terminated after signing a trust dissolution form.

In some cases, it is in the beneficiaries’ best interest for an irrevocable trust to end relatively quickly, such as within a year. This can avoid annual accountings and trustee fees that may reduce the trust’s assets. Additionally, a trust that remains open for too long may create opportunities for disputes among beneficiaries, potentially leading to legal action against the trustee.

Next Steps

Trusts are a great way to safeguard your estate for the benefit of your loved ones.  However, there are several more parts of a fully developed estate plan.  If you’re serious about getting your assets and estate in order, including setting up a trust, then you should speak to an estate lawyer.

We provide assistance with estate plans, including establishing trusts, for clients in Brooklyn, NY.  Please contact us today!

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Three Fundamentals of Estate Planning in NY

Estate planning law encompasses drafting of wills, trusts, guardianships and other documents that facilitate the transfer and management of property after death.

In the absence of a plan, the distribution of a loved one’s assets after death can sometimes get very challenging!

At New York Legacy Lawyers, our team of skilled New York estate planning lawyers’ goal is to help you to get ahead of these challenges by laying out the best possible plan for managing your assets in life and transferring them in death or incapacitation. 

Please continue reading to see how Wills, Guardianships, & Trusts form the essentials of any estate plan.

Estate Plan Fundamental #1: Draft a Last Will and Testament

A Will is a legal document used to outline your preferences regarding how your estate should be handled after your death. A will is very important to your heirs as it eases the transfer of property quickly and helps the survivors avoid unfair tax burdens. It is also a way of expressing your deepest sentiments to your loved ones.

Depending on the estate size and preferences, a will can be a simple single-page document or a large detailed volume. A will should describe your estate, the people who will receive specific properties, instructions about care of minors, or disinherit people expected to get the property.

Wills requirements in Brooklyn, New York, state that a testator (the person making the will) should be an adult of sound mind. The will should be written and signed by the testator, unless they are unable to do so in which case, the testator must appoint another person to sign it before a witness, and the signature witnessed.

A will may have legal limitations which may restrict the testator from giving the full effect of their wishes. It’s best to discuss these points with an estate planning attorney directly.

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Estate Plan Fundamental #2: Plan for Guardianship

Your estate plan must address the issue of caring for your children in the future in case both parents are deceased (or unfit). Though no one wishes to die and leave their young dependent children, it can happen, and you need to be prepared for this. Your estate planning should include Guardianship provision, which is a legal relationship established by a court of law to give the responsibility of care and protection of minors to someone other than the parents. The court gives legal authority to the appointed guardian to make decisions concerning the child.

In Brooklyn, New York, the guardian must be 18 years and above, and a citizen or legal resident of the United States. Guardianship provisions should be included in your will alongside your other instructions upon death. You can also appoint a guardian for your minors in your will. When you include guardianship provision in your will, you will be at peace knowing that your children will be well taken care of in case of your death.

If you leave out a guardianship provision in your will, or have not established guardianship provisions, a judge will appoint a guardian for your children (without your input). You might imagine, this could end up very messy!

Estate Plan Fundamental #3: Establish a Trust

In estate planning there are several different types of trusts, but at that root they all function is similar ways.  When you establish a trust, you are creating a separate legal entity that you will then transfer some, or all, of your assets to.  When creating the trust, you will decide on a means for distributing the assets and you will designate a beneficiary of that trust.

Sometimes it’s easier to describe something like a trust by giving an example.

John and Kate set up a trust naming themselves as trustees.  They transfer their assets into the trust and still retain access to all the assets they owned before the trust was established).  They designate that upon their passing, the successor trustee will be their daughter Lisa and the assets in the trust shall be disbursed according to their wishes.

If you need other examples, please connect with us and we will walk you through all sorts of different trust types and which one best applies to your situation.

Estate Plan Fundamental #4: Get an Estate Planning Attorney

While estate planning is critical, it is quite complex, and you will likely need an estate planning attorney to help navigate the details and provide you with advice specific to your situation.

We help people just like you create all these documents and more with our support.  Contact us today for assistance. Seek legal guidance from our New York legacy lawyers.

LIVING WILL VS. LAST WILL AND TESTAMENT

A living will and a last will and testament are two essential legal documents of an individual’s estate plan. Although these documents share similarities in that they provide instructions for the management of a person’s affairs, they have distinct differences in focus, duration, and revocability. 

An advance directive, commonly referred to as a living will, is a legally binding document that allows people to express their medical treatment and decision-making preferences in case they become incapable. The document typically encompasses directions for life-sustaining measures, organ donation, and other medical interventions. It is a critical tool for ensuring that an individual’s wishes regarding their medical care are respected and followed, even if they are unable to communicate them at the time. A living will only goes into effect if the individual becomes incapacitated and can be revoked or revised at any time while they are still alive. 

Alternatively, a last will and testament is a legal instrument that specifies an individual’s desires for the allocation of their assets following their demise. It includes the designation of an executor to manage the distribution of assets and naming of beneficiaries. A last will and testament only goes into effect after the individual’s death and can only be changed by creating a new will or adding a codicil, which is an amendment to the existing will. 

Despite these differences, a living will and a last will and testament are crucial components of an individual’s estate plan. They ensure that a person’s medical and financial wishes are followed and can provide peace of mind for themselves and their loved ones. At New York Legacy Lawyers, our team of New York estate planning lawyers may be able to guide you in creating a comprehensive estate plan that includes both a living will and a last will and testament. Contact us today at (718) 713-8080 to schedule a consultation.

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Executor vs Administrator: What Is the Difference in New York?

Estate planning in New York is a very involved process. When an individual passes away, their estate would have to pass through a court process before the beneficiaries can have access to their inheritance. Overseeing the inventory, verification, and division of the individual’s estate is not an easy undertaking.. Managing the estate through probate or administration is a very important role fulfilled by either an executor or an administrator. 

Being the executor or administrator of an estate is not a role to be taken lightly. Nonperformance of your duties can result in penalties. You may also be required to deal with will contests and creditors who make claims against the estate. A skilled estate planning lawyer can help you understand and assist you in performing your duties. Our experienced New York estate planning attorneys at New York Legacy Lawyers are experienced in assisting executors and administrators through the often complicated probate process. To learn more about how we can help, contact our office today at (718) 713-8080 or fill out our online form.

What Is an Executor vs. an Administrator?

In New York, when someone passes away (sometimes called a decedent) and leaves behind an estate, the matter of managing their assets and liabilities, paying off creditors, and distributing what’s left to the beneficiaries is not handled by the court directly. Instead, it is up to an executor or an administrator to oversee this process.

An Executor is a person or entity that a decedent names in their last will and testament.  It may be an individual, a trust company, or a bank.. Multiple executors can be appointed simultaneously and work together to administer the estate. 

When a person dies without a will (dying intestate) or if the person’s will did not declare an executor, the court will appoint an administrator to take over the role of managing the process of estate. New York law lists the order in which different relatives have priority to serve as administrator of an estate.

Executors and administrators are responsible for gathering and creating an inventory of the property a decedent left behind, paying off any taxes or other bills due, receiving and validating any claims from creditors, and distributing any remaining assets to the beneficiaries. 

What is the process of appointing an executor or administrator?

In order to be appointed, the nominated executor or the proposed administrator often hires an attorney to guide and advise them. First, a petition must be prepared that lays out the information about the decedent. This petition must list anyone who would be affected by the proceeding, such as the heirs or distributees of the decedent. These groups can include people who are going to inherit under the will, people who would have inherited if not for the will, and people who would have inherited under an older version of the will. There are also additional documents and affidavits that must be prepared and filed with the Surrogate’s Court.

Certain classes of people must either sign a Waiver and Consent if they do not object to the appointment of the nominated executor or proposed administrator. After notice has been issued to those entitled to inherit, the Surrogate’s Court will hear any complaints or contests to the appointment of the potential administrator or executor. If there are no objections, the heirs or distributees would have to submit a waiver indicating their consent to the appointment of the executor or administrator.

Executors are issued Letters Testamentary to indicate their authority while administrators receive Letters of Administration. The court can also issue official documents to the executor or administrator of an estate to help them in mustering the assets of the decedent.

Estate executors and administrators are entitled to be compensated for their work, the amount of which depends on the size of the estate. This is called a commission and is calculated based on a formula. However, some executors choose to forgo commissions, especially if they are a close friend or family member of the decedent. Banks or trust companies may actively seek compensation and may reject the role of executor if the size of the estate does not meet their requirements.

An executor needs to follow the wishes of the decedent as written in the will and the administrator must manage the estate according to New York’s intestacy laws. Both executors and administrators have a fiduciary duty to perform their roles properly. They are legally required to put the best interests of the estate over their own or risk having a complaint filed against them in the Surrogate’s Court. 

It’s important to remember that while executors and administrators can perform the same function, there are some key differences between the two.

Who is Eligible to be Appointed?

As mentioned, an executor is a person nominated under a will to oversee the management and distribution of the estate. Not just anyone can be appointed as an executor. New York law mandates the following requirements before a person can be accepted by the Surrogate’s Court as the executor of an estate:

• At least 18 years old
• Has not been declared incapacitated by the court
• No history of felony convictions (although there is some flexibility to this now)
• either a U.S. citizen or a non-U.S. citizen living in New York, unless you also name a coexecutor who is a resident of New York and the judge approves
  • Additional restrictions for those with a history of substance abuse, financial mismanagement, and fraud may also be applied

An administrator is usually appointed through a more complicated process. However, if the estate is valued at less than $50,000, the Surrogate’s Court may approve a simplified Voluntary Administration process. If the next of kin of the decedent cannot be established or is too distant, the Public Administrator of the relevant county will oversee the distribution of the estate.

In cases where the next of kin is interested in acting as administrator, they would need to provide the Surrogate’s Court with a Kinship Affidavit, also called an Affidavit of Heirship, determining their relationship with the decedent. They must also submit additional documentation to show their eligibility to be the estate’s administrator.

Being the executor or administrator of an estate is a significant responsibility. Even though an executor has been named in a person’s will they cannot be coerced into taking on the duty. The probate process can take months, even years. The management of the estate is also subject to additional scrutiny from the Surrogate’s Court which can make the process daunting.

Checks and Balances

Despite the fiduciary obligations executors and administrators have to the heirs and to the estate, there are still instances where mismanagement happens. To prevent this, the Surrogate’s Court can restrict the authority of administrators and executors when collecting or selling off assets and property.

Even if a will explicitly states that an executor does not have to pay a bond to act in their responsibility, the court can still impose the bond requirement if it judges that it is necessary. While a bond can be optional for executors, an administrator is usually required to submit a bond to act as insurance in case the administrator engages in ruinous activities that jeopardize the estate and to cover potential losses.

The Surrogate’s Court also hears any contests to the appointment of an executor or administrator. 

Whether you have been nominated as the executor or are planning to apply as the administrator for an estate, getting the help of an experienced New York probate attorney is beneficial. 

A skilled attorney can assist you in performing your duties, help you understand New York’s probate law, and keep updated with the legal processes involving the management of the decedent’s estate. 

Our team of estate planning attorneys at New York Legacy Lawyers, led by top-rated New York probate attorney Yana Feldman, has provided quality legal assistance to individuals maneuvering the probate process. We can assist you through your duties and responsibilities and help you facilitate the probate process as smoothly as possible. We can also represent and defend your rights from potential legal challenges. 

Schedule a consultation today with experienced New York probate attorney Yana Feldman. Contact New York Legacy Lawyers today at (718) 713-8080.

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from New York Legacy Lawyers by Yana Feldman and Associates https://yanafeldmanlaw.com/executor-vs-administrator-what-is-the-difference-in-new-york/