If you have not looked into the subject to this point, you may have never heard anything about the process of probate. The court that handles probate matters in New York is the local Surrogate’s Court.
This court is charged with a number of different responsibilities, but we will focus on the elder law and estate planning facets in this blog post.
Adult Guardianship
In many cases, people who reach an advanced age become unable to make sound decisions on their own. If there are no incapacity planning documents in place, the probate court could be petitioned to appoint a guardian to handle financial and personal decision-making for the adult.
This is a necessary safeguard, but there are some drawbacks that go along with a guardianship, so you may want to take the matter into your own hands in advance. You can use a health care proxy to name someone to make medical decisions on your behalf.
If you use a living trust as the centerpiece of your estate plan, it would be possible to name a disability trustee to manage assets in the trust if you ever become unable to do so on your own.
Another incapacity document that is widely recommended is a living will. People can sometimes be kept alive through the utilization of artificial means for extended periods of time when there is no hope of recovery.
You can state your wishes with regard to the way that you would want medical personnel to proceed under these circumstances if you include a living will in your plan.
It should be pointed out that this court would also be involved in child guardianship proceedings, but we are focusing on elder matters here.
Intestacy
Far too many people procrastinate when it comes to estate planning, and in many instances, the unfortunate result is intestacy. This is the condition that exists when someone passes away without leaving behind legal documents to direct postmortem asset transfers.
Under these circumstances, the court would appoint a personal representative, provide supervision, and ultimately order the transfer of the assets that remain in the estate after final bills have been paid. The intestate succession laws of the state of New York would be used to determine “who gets what” at the end of the day.
Last Wills
Even if you have a last will, the probate court would be involved. You would name an executor in the document, and this individual would be required to admit the will to probate. There are some drawbacks that go along with probate, but we will do some deep digging into the subject in a different post.
Asset Transfers Outside of Probate
Generally speaking, property that was in your direct personal possession at the time of your passing would be subject to the probate process. This being stated, there are some forms of asset transfers that take place outside of probate.
We touched upon the incapacity planning value of a living trust, and another major benefit is the avoidance of probate. The trustee would be empowered to transfer assets to the beneficiaries unencumbered by the probate process.
When you open an account at a bank or a brokerage, you can add a beneficiary. This is called a payable on death or transfer on death account.
While you are alive, the beneficiary would have no access to the resources. When you are gone, the beneficiary would acquire the death certificate. It would be shown to the banking institution, and the beneficiary would take possession of the account, free of probate.
You can add someone to the title or deed of your home. This is called joint tenancy with right of survivorship. The surviving joint tenant would take total ownership of the entirety of the property after the passing of one joint tenant, and this would not be looked upon as a probate matter.
Life insurance proceeds would pass to the beneficiary or beneficiaries outside of probate as well.
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