Category: Estate Administration

New York Compulsory Accounting Proceedings—A Valuable Tool to Provide Transparency or a Means to Extort a Settlement

Post author By Blank Rome LLP
Post date July 30, 2024

Most states provide a mechanism by which a beneficiary or other person interested in a trust or an estate may petition a Court asking the Court to order a fiduciary to account for his, her, or its actions and proceedings. This process is intended to provide the beneficiary with sufficient transparency regarding the fiduciary’s actions typically when the fiduciary has failed to provide such information to the beneficiary upon request. However, this process is often abused by aggrieved individuals (whether or not such grievance is legitimate) in an effort to extort a settlement. Courts must act as gatekeepers to limit the misuse of these types of proceedings.

Tags account for judicial settlement, fiduciary, New York Surrogate’s Court Procedure Act, SCPA, SCPA 2205

Estate Administration Estate Planning Estate Tax State Tax

Making Sense of New York’s Estate Tax “Cliff”

Post author By Blank Rome LLP
Post date June 11, 2024

Andrew M. Nerney —

In addition to the federal estate tax, which may be levied upon a decedent’s estate, New York imposes a separate state estate tax regime. Generally a decedent’s estate is subject to the New York State estate tax if such decedent dies a resident of New York, or if the decedent dies a non-resident but leaves behind real or tangible property physically present in the state.

Before legislation was passed in 2014, New York had a one-million-dollar exclusion amount (that is, estates would only be liable for State estate tax if the New York taxable estate was greater than one million dollars). If an estate was subject to the New York estate tax, the tax would only be charged against the portion of the estate exceeding the exclusion amount—meaning that before the new legislation went into effect, the first one million dollars was exempt of any State estate tax.

Tags estate tax cliff, exclusion amount, New York, New York State

Asset Protection Estate Administration Estate Planning Family Law Matrimonial Law Spousal Rights

Confronting Cognitive Abilities in Well-Rounded Estate Planning

Post author By Blank Rome LLP
Post date February 22, 2024

Alan R. Feigenbaum —

Ask anyone how they would define “trusts and estates law” and the odds are the answer will uniformly focus on the act of making the plan as to who will receive a person’s assets when he or she dies.

What happens, however, when the person who makes the so-called plan loses the cognitive ability not only to plan, but further, to carry on with the tasks of ordinary daily living. When that happens, the person we expect to be planning may be taking actions that unbeknownst to him or her are, in fact, jeopardizing the financial well-being of the estate in question and the ultimate inheritance that he or she intends for his or her loved ones to receive upon his or her death.

A recent decision from the Supreme Court, Suffolk County (Acting Justice Chris Ann Kelley), In the Matter of the Application of T.K., 2024 N.Y. Slip Op. 50045 (Suffolk Cnty. Sup. Ct. 2024), illustrates what can happen when the person whom we expect to make the estate plan is no longer competent to protect the very assets contemplated for disposition under that plan.

Tags cognitive ability, competence, property management guardian

Capital Gains Tax Estate Administration Estate Planning Estate Tax Income Tax

Avoiding Zero Basis for Inherited Assets

Post author By Blank Rome LLP
Post date February 13, 2024

James R. O’Neill —

Practitioners involved with the administration of trusts and estates of a decedent may be confronted with the issue of dealing with one or more assets of a decedent discovered after the administration is believed to have been concluded. Consideration of timely reporting of those assets for estate tax purposes may be essential to avoiding assignment of a zero basis to such assets.^[1]

The recipient of property from a decedent generally takes a basis equal to the fair market value of the property at the time of the decedent’s death (or the alternate valuation date (i.e., six-months after the decedent’s date of death)) pursuant to Section 1014(a) of the Internal Revenue Code of 1986, as amended (the “IRC”). However, under Proposed Regulations issued in 2016 addressing the so-called consistent basis reporting rules, the basis of inherited property may unexpectedly be determined to be zero.

Tags after-discovered property, inherited assets, zero basis

Estate Administration Estate Planning Litigation Probate Surrogate’s Court Practice

No One Can Contest a New York Will If It Includes an In Terrorem Clause. Right? Right?!?!?!!?

Post author By Blank Rome LLP
Post date December 5, 2023

Sara K. Osinski —

Unfortunately, including an in terrorem (“no contest”) clause in your Will does not make it impenetrable under New York law.

Although New York law recognizes in terrorem clauses as valid,[i] they are narrowly construed by the courts. An in terrorem clause in a Will threatens that if a beneficiary challenges the Will, such beneficiary (and, typically, all of his or her descendants) will be treated as if he or she predeceased the testator, thereby disinheriting the beneficiary. The purpose of an in terrorem clause is to discourage litigation and ensure that the testator’s intentions are carried out.

Tags in terrorem clause, New York, no contest clause, Will