Advance directives for health care are legal documents that ensure an individual’s wishes are carried out if he or she cannot make decision. New York State recognizes three types of advance directives including a health care proxy, living wills, and do not resuscitate orders (DNR). Even younger and more healthy individuals should consider putting these types of directives into place in case of a serious accident or medical event.

Health Care Proxy in New York

A health care proxy allows individuals to name a health care agent who will make decisions if that person cannot make those decisions for himself or herself. Under state law, these types of decisions can take effect after two doctors examine the individual and determine that person cannot make decisions for his or her health. New York state offers standard forms for a health care proxy.

Planning your estate and having a last will and testament is important to ensuring your final wishes are carried out and your heirs receive everything you intend to pass on to them. Whether you are the testator or executor, there are many duties you will need to perform to make sure an estate passes as quickly as possible through probate court, including calculating the costs associated.

 

First and foremost, New York probate courts handling estates have a variable schedule of filing fees which depend on the size of the estate. Section 2402(7) of New York’s Surrogate’s Courts Procedure Act (SCPA) are as follows:

 

Value of Estate or Subject Matter Fee Fee Rate
Less than $ 10,000 $45.00
$10,000 but under $20,000 $75.00
$20,000 but under $50,000 $215.00
$50,000 but under $100,000 $280.00
$100,000 but under $250,000 $420.00
$250,000 but under $500,000 $625.00
$500,000 and over $1,250.00

 

Section 2402(8)(a) of the SCPA also proscribes a fixed fee for filing a petition to commence certain proceedings. These types of fees can range anywhere from $10 to $75, depending on the type of motion filed. Such petitions can include common probate proceedings such as filing wills and suspending a fiduciary.

 

What are the fees for executors in New York?

 

Under section 2307 of the SCPA, executor fees are based on the value of the estate. These fees can be between 2 and 5% of the total amount of estate money the executor receives and pays out. Executor’s fees in New York are as follows:

 

  • All sums of money not exceeding $100,000 at the rate of 5 percent
  • Any additional sums not exceeding $200,000 at the rate of 4 percent
  • Any additional sums not exceeding $700,000 at the rate of 3 percent
  • Any additional sums not exceeding $4,000,000 at the rate of 2.5 percent
  • All sums above $5,000,000 at the rate of 2 percent

 

These amounts come out of the value of the estate and in cases where multiple executors handle an estate, the split is commiserate on the amount of work performed by each individual.

 

Attorney costs for probate of a will

 

When going through probate, it is strongly suggested the executor seek help from an experienced and dedicated New York probate and estate lawyer. The fees associated with a probate attorney depend on size of the estate, work put in by the executor, and the complexity of the case.

When planning their estate, many individuals consider setting up some form of trust to avoid family squabbles over assets, particularly the home. To achieve the goal of a smooth transition of assets and maintaining family harmony, most folks choose to set up some form of trust to avoid probate and reduce the amount of time and money executors need to spend in court.

Although many may not realize the significant wealth they have accumulated over the course of their life, the reality can quickly set it when it comes time to pay estate or gift taxes when passing on a home to heirs. After decades of skyrocketing real estate prices, home that were once purchased for several thousand dollars may now be worth millions, depending on the condition of the home and location.

One way for highly wealthy people to pass on their home with as little tax liability to heirs as possible is the creation of a qualified personal residence trust. Just like any type of estate plan, there are benefits and drawbacks to consider and it is strongly advised individuals consult with an experienced estate planning attorney to draw up trusts and wills.

One of the most common estate planning goals for high net worth married couples is to reduce their estate’s tax liability by taking full advantage of state and federal estate tax exemptions. The 2012 Tax Relief, Unemployment Reauthorization, and Job Creation Act (TRA) gave couples much more leeway to plan for their state through the portability of a deceased spouse’s unused estate tax exemption.

In 2017, the estate and gift tax exemption will be $5.49 million dollars for an individual, and just under $11 million for married couples, thanks to the 2012 Act. While there are a number of ways to properly implement the portability of estate and gift tax exemptions, one of the more common ways is to create a family trust where the assets of the first spouse to pass away will be placed in under the individual’s own gift and estate exemptions.

Without portability, couples can end up leaving millions of dollars in assets subject to taxation because of improper planning. Two of the most common reasons couples fail to properly use take advantage of gift and estate tax exemptions are unbalanced asset ownership or an inefficient estate plan.

An important consideration in anyone’s estate plan is to consider appointing a trusted individual to make important health and financial decisions in any case where the testator may be incapacitated and unable to act in their best interest. One way to do this is to create a durable power of attorney in a living will which names another person as an agent or an “attorney in fact” to decide whether or not to continue with life support treatment and other important medical decisions.

In New York, Pub. Health Law §2980, et seq. Health Care Agent and Proxies details the powers of the attorney in fact, the legal requirements to create such an arrangement, when the agreement may be revoked, and the state to state applicability of the durable power of attorney. Specifically, the law allows the attorney in fact to make “Any decision to consent or refuse consent of any treatment, service, or procedure to diagnose or treat an individual’s physical or mental condition.”

Health Law §2980 requires individuals to fill out Standard Form §2981 and name a competent adult to the position. Additionally, the form must be signed in front of two witnesses and indicate the principal wishes his or her agent be able to make healthcare decisions and that this authority begin when an attending physician decides to a medical degree of certainty the principle cannot act on behalf of himself or herself.

If you are in sole proprietorship of your business, you have a number of options to hand over your company when it comes time to retirement or pass away unexpectedly. If you do not have partners in your business, you are generally within your right to hand over the entire company to any person you may see fit to do and avoid estate taxes up to a point if you plan ahead of time.

One option to hand over a business to another and avoid some state and federal gift taxes is to gradually gift over percentages to the benefactor overtime before you pass away. If you do die before the entire transfer is complete, the heir may be on the hook for exorbitant estate/gift taxes. Currently, the estate tax exemption is $5.49 million over the life of one individual and up to $11.98 million for couples.

If you do have partners and you would like to retire or sell you your stake in the company, you may consider writing a  buy-sell agreement into the language of your partnership agreement. These buy-sell agreements may be mandatory with the full understanding you intend to sell of your stake in the company to another or they may allow only the right of first refusal for the partner to buy the stake or pass and allow an other interested party to buy in.

Saving for retirement just became more difficult for thousands of Americans relying on the Treasury Department’s myRa retirement savings account as the agency recently announced it would wind down the program. In a statement released on the Treasury Department’s website, the agency said the $70 million in costs since 2014 became too costly to the taxpayer and could no longer justify the program’s expense.

“The myRA program was created to help low to middle income earners start saving for retirement. Unfortunately, there has been very little demand for the program, and the cost to taxpayers cannot be justified by the assets in the program. Fortunately, ample private sector solutions exist, which resulted in less appeal for myRA. We will be phasing out the myRA program over the coming months. We will be communicating frequently with participants to help facilitate a smooth transition to other investment opportunities,” said Jovita Carranza, U.S. Treasurer.

The myRA program functioned as a Roth IRA account with no fees, minimum balance, and non-deductable to help middle and lower income Americans without access to employer sponsored retirement plans like a 401(k) plan and save for their retirement. Participants under 50-years old could contribute up to $5,000 to their account every year while those 50 years and older could contribute up to $6,500.

In New York, estates with real property valued at less than $30,000 are considered “small estates” and may be able to pass through probate court much more quickly than larger estates, if the executor handles the process correctly. Although small estates can pass through a simplified probate process, executors will still need to perform some of the duties as if he or she were overseeing a much larger estate and will even need to file certain paperwork with the court.

Ordinarily, probate proceedings in New York Surrogate Courts can be lengthy and time consuming processes but with a simplified estate, moving the last will and testament through court can be much more expedient. Although the asset threshold may appear very small, as even a modest mode and possessions will easily be valued at well over $30,000, there are scenarios where even seemingly large estates could pass through.

Only property solely owned by the deceased counts towards the small estate threshold. This means assets like homes, vehicles, and family businesses in two people’s names will not count towards the $30,000 limit. This can be especially helpful when there is a surviving spouse named to the title of homes and real estate.

When people learn they are going to be the beneficiaries of someone’s estate and will inherit property, many of them often wonder whether it will actually cost them money to do so. We often hear about raising or lowering the federal and state estate tax, sometimes referred to as “the death tax” and all this talk can be quite confusing. While every situation is different and the tax code itself is quite complicated, there are a few basic principles beneficiaries should be able to rely on.

To start, New York is one of only a handful of states with a state inheritance tax but there are exceptions to the rule and that amount has increased substantially over the past few years. As of April 2017, the exemption on inheritance tax in New York is $5.25 million, meaning beneficiaries will only be taxed for assets worth more than this amount. The tax rate for inherited assets above $5.25 million is five to 16 percent, much lower than the federal inheritance tax rate of 40 percent.

Unlike other states with inheritance taxes, New York has a “tax cliff,” meaning if your inherited assets are greater than the tax exemption then the entire value of the asset is taxed. By contrast, other states with inheritance taxes only tax at the value above the exemption threshold. New York is one of the only states to institute its inheritance tax rate this way and although this may seem steep, the current tax rates are much more fair than they used to be.

A last will and testament spells out the final wish of the deceased, including how he or she wishes to allocate assets amongst friends and family. However, there are certain limitations to the extent deceased spouses may effectively cut out their surviving spouse from a will. Under New York estate laws, like so many other states, surviving spouses have certain claims to assets that cannot be undone by a will.

If an individual attempts to leave his or her spouse completely out of a will or only leave the surviving spouse a small amount, New York probate courts, known as Surrogate Courts, will step in and apportion a large part of the estate regardless of the text of the will. This is because just like in divorce, spouses have certain rights to community property like homes, cars, and bank accounts.

When someone passes away, with or without a will, all heirs with legal claims to the estate like spouses and children must be notified by the court. Next, the executor of the estate will need to find these persons and ask each of them to sign a waiver giving up their right to challenge the estate. Typically, this is no problem since close family members with estate claims are usually already mentioned in the will and the estate is apportioned fairly.

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