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The Consumer Financial Protection Bureau (CFPB) recently released a set of helpful guides to help individuals manage the financial affairs of loved ones or others who are unable to do so and require a fiduciary to take of such matters. The guides cover multiple topics to help fiduciaries, including how to spot financial exploitation and avoid scams as well as a “Where to go for help” section with a list of relevant resources for more information.

One of the guides included is “Help for agents under a power of attorney” which lists the four basic duties that fiduciaries with a power of attorney need to keep in mind when managing the affairs of another. Those include to act only in the beneficiary’s interest, manage the beneficiary’s property and money carefully, keep the money and property of the beneficiary and fiduciary separate, and to keep good records of all transactions.

Another helpful guide included in the series is “Help for court-appointed guardians of property and conservators” which someone the court names to manage money and property for someone else whom the court has found cannot manage it alone. This can also apply to instances where a fiduciary is named to act in the interest of another person as a guardian, managing that person’s healthcare and other personal decisions. Other times, a court may be appointed to manage the governmental benefits of an individual and the CFPB also provides outlines for these responsibilities too.

A Kings County Surrogate’s Court judge recently removed the executor to an estate without a hearing over the individual’s failure to comply with the court’s order to properly account of the estate’s assets. The case is a prime example of how and why someone can be removed as the executor from estate if he or she fails to comply with their fiduciary duty to faithfully discharge the responsibilities of the executorship.

The petition to remove the executor was brought by a co-beneficiary to the estate, the sister of the former executor, after the executor failed to open a separate trust account and to file federal or state income tax returns for the trust. Additionally, the petition charged that the respondent’s neglect of the real property held by the limited liability company caused it to sell for a price much less than two previous offers to purchase the real estate, which the executor had rejected.

Prior to suspending the executor from his role of managing the estate, the co-beneficiary filed two-petitions with the Surrogate’s Court. The first, seeking the executor’s removal from management of the estate and the second asking the court to compel the executor into account and file the estate. The court subsequently issued a 45-day order for the executor to account for the estate and file the necessary paperwork.

A King County Surrogate’s Court judge recently handed down a significant ruling in the case of a caretaker who appeared to marry her elderly patient in his final days in an effort to claim part of the deceased’s estate. The judge hearing the case decided the woman forfeited her statutory share of the estate because she knowingly married the deceased while he was alive and mentally incapacitated.

The ruling came down after a 37-day trial and nearly 12-years of litigation surrounding the $5 million estate of a successful businessman who was 100-years old when he passed away in 2006. The now deceased married his caretaker in secret in from of the New York City Clerk’s Office, without the knowledge of his two adult sons who brought the challenges to the estate.

The judge said he found it impossible that the deceased’s wife did not know her husband was mentally incapacitated when they married just a year before the man’s death.. “The evidence presented shows consistent, insidious and duplicitous conduct that led to” the wife’s “clandestine marriage” to the deceased, the judge said.

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.

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.

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

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.

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.

In New York, the law allows individuals to create what are known as “advanced directives” to help ensure that person’s end of life decisions are carried out in the event he or she is incapacitated or otherwise unable to make that choice. Advance directives are important for any individual, including young people, concerned about the medical state they may be left in following a serious accident, adverse medical event, or cognitive impairment brought on by alzheimer’s disease or dementia.

One of the three end of life directives legally recognized by New York law is the health care proxy which allows someone to appoint an agent to act on his or her behalf in cases where that person cannot make decisions for himself or herself. Health care proxies can be created using standard forms available from the New York State Department of Health and take effect when two doctors determine the testator is incapacitated.

Health care proxies can be either permanent or temporary, depending on the type of situation laid out in the documents. For example, a temporary health care proxy would ideal for someone going under general anesthesia and allow the proxy to make decisions quickly, if necessary. On the other hand, permanent health care proxies may be better suited for those facing long term risks due to dementia or alzheimer’s.

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