Estate Planning Isn’t Just For The Elderly

Happy, smiling couple in their sixties.

Understanding the Consequences of not having a Last Will and Testament

By: Anthony J. Enea, Esq.

While the merits of having a Last Will and Testament versus a Revocable Living Trust are often debated, the consequences of not having a Last Will and Testament are less frequently discussed.

It should be remembered that a Last Will only disposes of assets one has in their name alone on their date of death. The Last Will does not dispose of assets that are titled jointly with another, with rights of survivorship, assets or life insurance that have named beneficiaries (as “in trust for “accounts” payable on death” or “transfer on death” accounts, or retirement accounts (IRAs, 401K, etc.) that have named beneficiaries. A Last Will allows one to specifically state how and to whom one’s solely titled assets (estate) are to be disposed of upon their demise. The Last Will can provide that the assets be disposed of outright to the beneficiary or that they remain in trust for the beneficiary until a specific time (age) or event has occurred. Additionally, one can nominate the individual(s) or corporate entity (Bank or Trust company) that one wants to manage the assets in their estate (Executors and/or Trustees). Once the Last Will has been admitted to Probate by the Surrogate’s Court in the County of the decedents residence, the nominated Executor(s) receives letters testamentary.

Once appointed by the Court (the Last Will has been admitted to Probate); the Executor(s) can then marshall the estate assets, pay any outstanding bills (funeral, medical, credit card, etc.) or taxes due by the decedent (personal and/or estate taxes). Once all assets have been marshalled, bills and taxes paid, then the Executor(s) can make the distribution of the assets to the named beneficiaries

However, if one dies with assets in their name alone (not joint and with no named beneficiary) and does not have a signed Last Will, a completely different outcome will result, without a Last Will the  decedents assets will pass according to the laws of intestate distribution in New York, pursuant to the provisions of New York’s Estates, Powers and Trusts Law (EPTL) S 4-1.1 . The decedent has totally lost the ability to decide whom and in what percentage one’s friends and loved ones will receive from the estate. For example, under (EPTL) S 4-1.1, if one dies with a surviving spouse and children, the spouse receives the first $50,000 and one-half of the balance and the children would receive the balance in equal shares. Thus, if the decedent had always expressed the desire that a sibling and/or friends were to receive part of their estate, that wish would not come to fruition. Additionally, if one dies without a Last Will and has no family surviving, then in that event the decedent’s estate will “escheat” to New York State. Thus, if you don’t have any family and don’t have a Last Will, New York State becomes your beneficiary, an outcome that the vast majority of New Yorker’s would be horrified by if they knew this would occur.

It should be noted that adopted children are treated the same as biological children under the rules of intestate distribution. (New York Consolidated Laws S 7-4.117 (1)(C)). Stepchildren and foster children do not receive an intestate share.

As if losing the ability to choose whom is to receive your estate and in what amount is not bad enough, when one dies without a Last Will, under New York’s Surrogate’s Court Procedure Act (SPCA) S 1001, the person given priority to be appointed the Administrator of the estate is to be determined by law. For example, the order of priority is as follows:

  1. Surviving spouse;
  2. Children;
  3. Grandchildren;
  4. The father or mother;
  5. Siblings; and
  6. Any persons who are distributees (would inherit) and also are eligible and qualify, with preference to the person(s) entitled to the largest share in the estate. If there are eligible distributees equally entitled to be appointed the administration, for example, more than one child surviving and no spouse, then the Court can grant letters of administrator to one of more said persons.

Thus, as can be seen from the above, the consequences of not having a properly drafted and executed Last Will are significant. One totally loses the ability to decide who will receive their estate and in what amounts; as well as who will be given the authority to manage and dispose of your estate upon your death. In conclusion, it is imperative that every adult have a Last Will and Testament.

Anthony J. Enea is a member of Enea, Scanlan and Sirignano, LLP of White Plains and Somers, NY. He focuses his practice on Elder Law, Wills, Trusts and Estates. Mr. Enea is the Past Chair of Elder Law and Special Needs Section of the New York State Bar Association (NYSBA). He is the current Chair of the 50+ Section of the NYSBA. Mr. Enea is the Past President and Founding Member of the New York Chapter of the National Academy of Elder Law Attorneys (NAELA). Mr. Enea is the President of the Westchester County Bar Foundation and a Past President of the Westchester County Bar Association. He is also a Certified Elder Law Attorney as accredited by the National Elder Law Foundation. He is fluent in Italian.

Mr. Enea Can be reached at (914) 269-2367 or at [email protected]

Enea, Scanlan & Sirignano, LLP