What,Happens,Assets,After,Deat law What Happens to Assets After Death

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A question I hear often from clients is: What will happen to my assets when I die? This sobering question is important not just for the person asking it, but also for the loved ones that they leave behind. The person making the inquiry wants to make sure that his family will be able to receive their inheritance in a quick, efficient, and inexpensive manner as possible. As a licensed estate planning lawyer in Brooklyn & Queens, I would like to answer the question of what happens to one assets when they pass. First off, we need to look at the most common ways of owning property in New York:Tenants by the Entirety:Home ownership rates, especially in areas such as Long Island, Brooklyn, and Queens, is quite high. Consequently, the most valuable asset in a person estate is their home. A married couple usually owns their home jointly, as tenants by the entirety, which means that after the death of the first spouse, the home automatically passes to the other spouse. Only married couples may take title by tenants by the entirety. While this may make estate administration easier by avoiding probate, there are certain drawbacks to this approach. First, it does not allow the deceased spouse to fully utilize their New York lifetime estate tax credit amount which may cause higher estate taxes after the second spouse passing. Second, the surviving spouse may be, or may soon be, on Medicaid, and owning the home in their names may subject them to Medicaid liens or Medicaid estate recovery. Additionally, when the second spouse passes away, the property will have to go through the probate process (see below) unless a joint owner is added to the deed. An estate attorney should be consulted in each situation.Joint Ownership:A second way of holding title is by joint ownership or joint tenancy. This is similar to tenants by the entirety except that it lacks some protections which are outside the scope of this article. Real property can be held as a joint tenancy with rights of survivorship (JTWROS) which means that when one joint owner passes, their share automatically transfers to the other remaining joint owner(s), avoiding probate. At the death of the final joint owner, the property passes under his will or through intestacy and necessitates the probate or estate administration process. Bank and brokerage accounts can also be held jointly. This type of ownership, common among spouses, means that each co-owner has the full right to use the assets during his or her life, with the balance going to the surviving joint account holder at his or her death. Owning assets jointly may be convenient, but it also opens up all the joint owners to liability based on the acts of one joint owner.Beneficiary Designations:Another common way of passing assets is by designating a beneficiary. Many financial products allow for the designation of a beneficiary. Examples include bank accounts (POD or ITF), life insurance policies, and IRAs. When you list a beneficiary, that person will be able to collect the funds without going through a court process. That individual will simply present a death certificate to the financial institution and fill out the necessary paperwork. This is a great way to pass money to people to help pay for immediate expenses associated with the funeral. There are some issues which need to be considered with beneficiary designations, however. First, a minor should not be listed as a beneficiary since the money will not be accessible until he or she turns 18 or 21, depending on the state. Consequently, it is advisable to name a trust or a custodian as the beneficiary to hold the money for the benefit of the minor. Second, if the beneficiary is receiving governmental benefits such as SSI or Medicaid, he or she may lose their benefits upon receiving the funds. In this situation, it is advisable to establish and name a supplemental needs trust for the benefit of the beneficiary. Third, if you own a life insurance policy on your own life, your heirs may have to pay an estate tax on the proceeds. To avoid this result, ownership may need to be changed and an irrevocable life insurance trust may be necessary. Assets in a Trust:Assets which are titled in the name of the trust pass under the terms of the trust and avoid probate. Commonly, a pour over will is also executed to transfer anything not titled in the name of the trust. A trust can allow for asset protection, preservation of Medicaid and/or SSI benefits, and distribution to minors.    Sole Name with No Beneficiary:A person may simply own property in his own name without any joint owner or beneficiary. In such a case, except for certain property passing to his or her surviving spouse or minor children, the property will have to pass through probate (if there was a last will and testament) or administration (if there was no will). Probate, as you can read about here, is an expensive and time consuming process. You will likely require the assistance of a probate attorney to deal with the Surrogate Courts in the county where the decedent was domiciled, whether it be Brooklyn, Queens, or Nassau.