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Showing posts with label Estate Planning. Show all posts
Showing posts with label Estate Planning. Show all posts

Monday, September 23, 2024

New Deed Type - Major Real Estate / Estate Planning Law - Real Property Law 424

Estate Planning , life estate
New Deed Type - Major Real Estate / Estate Planning Law - Real Property Law 424

As of July 19, 2024, there is now a new deed type in New York State and it is already impacting homeownership and estate planning.


Simply, this new "Transfer on Death Deed Law," eliminates the need for probating real estate, is much less expensive than a trust, and is revocable, unlike a life estate with a remainder interest. In fact, all it takes is a recorded deed form, that was signed before two witnesses, and notarized. The form can be found here.


By executing a Transfer on Death Deed, property owners, including individual and joint owners of real property as well as corporations, can now initiate the automatic transfer of real property upon their death without needing to execute a will, trust, or life estate deed.


Per the statue, a Transfer on Death Deed must include:


(front of form)
REVOCABLE TRANSFER ON DEATH DEED
NOTICE TO OWNER
You should carefully read all information on the other side of this
form. You may want to consult a lawyer before using this form.
This form must be recorded before your death, or it will not be
effective.
IDENTIFYING INFORMATION
Owner or Owners Making This Deed:
____________________________________________________
Printed name Mailing address
____________________________________________________
Printed name Mailing address
Legal description of the property:
____________________________________________________
PRIMARY BENEFICIARY
I designate the following beneficiary if the beneficiary survives me.
____________________________________________________
Printed name Mailing address, if available
ALTERNATE BENEFICIARY - Optional
If my primary beneficiary does not survive me, I designate the following
alternate beneficiary if that beneficiary survives me.
____________________________________________________
Printed name Mailing address, if available
TRANSFER ON DEATH
At my death, I transfer my interest in the described property to the
beneficiaries as designated above. Before my death, I have the right to
revoke this deed.
SIGNATURE OF OWNER OR OWNERS MAKING THIS DEED
____________________________________________________
Signature Date
____________________________________________________
Signature Date
SIGNATURE OF WITNESSES
____________________________________________________
Signature Date
____________________________________________________
Signature Date
____________________________________________________
NOTARY ACKNOWLEDGMENT
(insert notary acknowledgment for deed here)
(back of form)
COMMON QUESTIONS ABOUT THE USE OF THIS FORM
What does the Transfer on Death (TOD) deed do?
When you die, this deed transfers the described property, subject to any
liens or mortgages (or other encumbrances) on the property at your
death. Probate is not required. The TOD deed has no effect until you
die. You can revoke it at any time. You are also free to transfer the
property to someone else during your lifetime. If you do not own any
interest in the property when you die, this deed will have no effect.
How do I make a TOD deed?
Complete this form. Have it acknowledged before a notary public. Record
the form in each county where any part of the property is located. The
form has no effect unless it is acknowledged and recorded before your
death.
Is the "legal description" of the property necessary?
Yes.
How do I find the "legal description" of the property?
This information may be on the deed you received when you became an
owner of the property. This information may also be available in the
county clerk's office of the county where the property is located. If
you are not absolutely sure, consult a lawyer.
Can I change my mind before I record the TOD deed?
Yes. If you have not yet recorded the deed and want to change your mind,
simply tear up or otherwise destroy the deed.
How do I "record" the TOD deed?
Take the completed and acknowledged form to the county clerk's office of
the county where the property is located. Follow the instructions given
by the county clerk to make the form part of the official property
records. If the property is in more than one county, you should record
the deed in each county.
Can I later revoke the TOD deed if I change my mind?
Yes. You can revoke the TOD deed. No one, including the beneficiaries,
can prevent you from revoking the deed.
How do I revoke the TOD deed after it is recorded?
There are three ways to revoke a recorded TOD deed:
(1) Complete and acknowledge a revocation form and record it in each
county where the property is located.
(2) Complete and acknowledge a new TOD deed that disposes of the same
property and record it in each county where the property is located.
(3) Transfer the property to someone else during your lifetime by a
recorded deed that expressly revokes the TOD deed. You may not revoke
the TOD deed by will.
I am being pressured to complete this form. What should I do?
Do not complete this form under pressure. Seek help from a trusted
family member, friend, or lawyer.
Do I need to tell the beneficiaries about the TOD deed?
No, but it is recommended. Secrecy can cause later complications and
might make it easier for others to commit fraud.
I have other questions about this form. What should I do?
This form is designed to fit some but not all situations. If you have
other questions, you are encouraged to consult a lawyer.

16. Form of revocation. The following form may be used to create an
instrument of revocation under this section. The other subdivisions of
this section shall govern the effect of this, or any other instrument
used to revoke a transfer on death deed.
(front of form)
REVOCATION OF TRANSFER ON DEATH DEED
NOTICE TO OWNER
This revocation must be recorded before you die, or it will not be
effective. This revocation is effective only as to the interests in the
property of owners who sign this revocation.
IDENTIFYING INFORMATION
Owner or Owners of Property Making This Revocation:
____________________________________________________
Printed name Mailing address
____________________________________________________
Printed name Mailing address
Legal description of the property:
____________________________________________________
REVOCATION
I revoke all my previous transfers of this property by transfer on death
deed.
SIGNATURE OF OWNER OR OWNERS MAKING THIS REVOCATION
____________________________________________________
Signature Date
____________________________________________________
Signature Date
SIGNATURE OF WITNESSES
____________________________________________________
Signature Date
____________________________________________________
Signature Date
NOTARY ACKNOWLEDGMENT
(insert notary acknowledgment here)
(back of form)
COMMON QUESTIONS ABOUT THE USE OF THIS FORM
How do I use this form to revoke a Transfer on Death (TOD) deed?
Complete this form. Have it acknowledged before a notary public. Record
the form in the public records in the county clerk's office of the
county where the property is located. The form must be acknowledged and
recorded before your death, or it has no effect.
How do I find the "legal description" of the property?
This information may be on the TOD deed. It may also be available in the
county clerk's office of the county where the property is located. If
you are not absolutely sure, consult a lawyer.
How do I "record" the form?
Take the completed and acknowledged form to the county clerk's office of
the county where the property is located. Follow the instructions given
by the county clerk to make the form part of the official property
records. If the property is located in more than one county, you should
record the form in each of those counties.
I am being pressured to complete this form. What should I do?
Do not complete this form under pressure. Seek help from a trusted
family member, friend, or lawyer.
I have other questions about this form. What should I do?
This form is designed to fit some but not all situations. If you have

other questions, consult a lawyer.



 


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Wednesday, December 16, 2020

New York is Really Tired of Banks and Title Companies Not Accepting Powers of Attorney

banking , Estate Planning
New York is Really Tired of Banks and Title Companies Not Accepting Powers of Attorney

Governor Cuomo has signed into a law Assembly Bill A5630A which aims to simplify the statutory short form power of attorney and increase its acceptance by third parties (looking at you title insurers and banks). 

Previously, a power of attorney could be void because it did not contain the "the exact wording of the form set forth in Section 5-1513". This strict language caused many third parties relying on the form to refuse to honor powers of attorney not prepared using their own templates out of fear that the form they were unfamiliar with had a small technical error rendering it invalid. 

Now, a power of attorney is valid so long as it "substantially conforms to the form required pursuant to Section 5-1513" even if it contains insignificant mistakes in "wording, spelling, punctuation, or formatting, or the use of bold or italic type... or uses language that is essentially the same as, but not identical to, the statutory form." Even more, "failing to include clauses that are not relevant to a given power of attorney shall not in itself cause such power of attorney to be found to not substantially conform with the requirements of such form." Long story short, the statute now gives much more leeway in the preparation of the form, hopefully avoiding the voiding of powers which in all fairness should have been valid for the purpose intended. 

To promote acceptance of more powers of attorney, the new bill bakes in protections for third parties relying upon powers, as well as penalties for third parties that unreasonably reject powers. 

Section 5-1504 of the General Obligations Law is amended to contain a presumption that a duly acknowledged (notarized) power of attorney is genuine and valid. It also is amended to provide for a mechanism to release a third party relying upon a power of attorney from liability after reasonable acceptance. The third party may "request, and rely upon, without further investigation" (1) an agent's certification under penalty of perjury any factual matters relating to the power and (2) an opinion of counsel (from the principal is fine) as to any matter of law concerning the power. There are strict time limits (10 business days) in which the third party must reject a power of attorney together with a written explanation given to the principal and agent, and then either reject or honor the power after receipt of written explanation received from the agent/principal (7 business days). Most importantly, if the agent receives an acknowledged affidavit from the agent stating that the power is in full force and effect, the third party must accept the power of attorney except for reasonable cause, which is enumerated in the statute. If the third party and agent/principal follow all the steps in this dance, the "third party shall be held harmless from liability for the transaction." 

But what if your bank or title insurer still won't accept your power of attorney? A special proceeding may be commenced against the third party refusing to honor the power, awarding damages (including reasonable attorney's fees and costs) if the third party acted unreasonably in refusing to honor the power of attorney. 

Time will tell if these changes, coupled with the elimination of the statutory gift rider, will result in more widespread use and acceptance of powers of attorney. Banks and title insurers are notorious for avoiding risk when it comes to the use of powers of attorney and the State's attempts to promote their acceptance has bordered on Sisyphean. 




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Friday, April 10, 2020

Spousal Refusal in Medicaid Planning

#listentolieb , #realestateinvestingwithandrewlieb
Spousal Refusal in Medicaid Planning
Do you need Medicaid and can’t wait for a 5-year lookback to qualify?

Then, consider Spousal Refusal, which with the Reverse Rule of Halves, represent 2 options to avoid the 5-year lookback requirements.

Spousal Refusal means that assets are transferred from the Medicaid applicant to such applicant’s spouse (the community spouse or the spouse not receiving Medicaid). Luckily, these transfers of assets to a spouse are exempt from the five-year look back period and thus, don’t trigger a penalty period.

Under Medicaid law, the community spouse can sign a Spousal Refusal which states that the community spouse refuses to make their income and resources available to the Medicaid applicant. This can be done especially when the community spouse may have assets over Medicaid’s allowable recourse limit or in excess of the income allowance.

In New York, Social Services Law §366(3)(a) provides that if the community spouse refuses or fails to provide the applicant with the necessary care and assistance, the medical assistance furnished to the applicant creates an implied contract with the community spouse. The cost of the medical assistance then may be recovered from the community spouse. However, this takes a lawsuit, which is often settled for far less than what was transferred, if the lawsuit is pursued in the first instance. Also, if repayment is pursued, the repayment rate is only based on the Medicaid reimbursement rate, which is significantly less than the private pay rate so there is very little to lose for a spouse to claim Spousal Refusal when they cannot plan in advance of the 5-year lookback.

Regardless, those needing Medicaid often have unique circumstances and everyone should get tailored legal advice on any strategy they seek to pursue before effectuating such strategy.


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The Reverse Rule of Halves in Medicaid Planning

#listentolieb , #realestateinvestingwithandrewlieb
The Reverse Rule of Halves in Medicaid Planning
Medicaid provides a penalty period for the transfer of assets for less than its fair market value within 5-years of an individual’s application for Medicaid. The penalty is calculated by taking the amount of the transfer and dividing it by the average cost of one month of nursing home care in the region where the applicant resides.

A strategy used to maximize an applicant’s excess assets is the Reverse Rule of Halves. Essentially, this strategy allows the applicant to retain at least half of his excess assets and to become eligible for Medicaid sooner. When using this strategy, the Medicaid applicant gives 100% of their excess assets to a family member or multiple members. As this transfer may be a violation of Medicaid’s look back rule, a penalty period of Medicaid ineligibility will result. The family member, however, can return half of the gifted assets in installments back to the Medicaid applicant through a promissory note, so that the penalty period is also cut in half. The applicant, then, can use the returned assets to pay for care during the penalty period.

To utilize this strategy, the assets must be accessible either through a competent individual’s signature, joint ownership, or a Durable Power of Attorney. The return of assets will need to be done through a Deficit Reduction Act (DRA) compliant promissory note. To determine the value of assets that can be preserved with this strategy, the following factors are considered: 
  1. Total value of the applicant’s assets that constitutes excess resources for Medicaid purposes;
  2. Total monthly fixed income of the applicant;
  3. Actual private monthly cost of the nursing home that the applicant will be entering or is in; and
  4. Average monthly nursing home cost figure used by the Medicaid district in which the applicant resides to calculate transfer penalty periods.

While there is a specific procedure calculating the maximum amount, the amount gifted is usually approximately equal to the maximum value of assets that can be protected. To determine whether this applies to a specific applicant’s circumstances and to determine whether using the Reverse Rule of Halves is the best strategy for their specific needs, applicants are encouraged to retain counsel as early as possible.


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Tuesday, April 07, 2020

Deeds & Estate Documents - Electronic Witnessing Now Permitted

#listentolieb , #realestateinvestingwithandrewlieb
Deeds & Estate Documents - Electronic Witnessing Now Permitted
Through Executive Order 202.14 and effective from April 7, 2020 to May 7, 2020, the act of witnessing as required in signing a will, healthcare proxy, disposition of remains, recording of instruments regarding real property, power of attorney and living trusts may now be done through audio-video technology.

To do so, the following requirements must be satisfied:
  • The person requesting that their signature be witnessed, if not personally known to the witness(es), must present valid photo ID to the witness(es) during the video conference, not merely transmit it prior to or after;
  • The video conference must allow for direct interaction between the person and the witness(es), and the supervising attorney, if applicable (e.g. no pre-recorded videos of the person signing);
  • The witnesses must receive a legible copy of the signature page(s), which may be transmitted via fax or electronic means, on the same date that the pages are signed by the person;
  • The witness(es) may sign the transmitted copy of the signature page(s) and transmit the same back to the person; and
  • The witness(es) may repeat the witnessing of the original signature page(s) as of the date of execution provided the witness(es) receive such original signature pages together with the electronically witnessed copies within thirty days after the date of execution.

Similarly, video notarization has been permitted since March 19, 2020 through Executive Order 202.7, which we blogged about HERE.

This is one major step closer to remote real estate closings and estate planning.

Now, the NYS legislature needs to make this permanent and not let Coronavirus innovation be a wasted opportunity.


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Tuesday, March 31, 2020

Executing a New Will While in Quarantine? Avoid Will Deals That Seem too Good to be True

#listentolieb , draftsmanship
Executing a New Will While in Quarantine? Avoid Will Deals That Seem too Good to be True
COVID-19 uncertainty is causing many people to rethink their wills and advanced directives.

With the acceptance of video notarization, which we blogged about HERE, many attorneys are advertising remote will execution ceremonies that remove the traditional requirement that the testator execute their will in a room with two witnesses and an attorney. The seeming ease of a remote will execution has caused a race to the bottom as attorneys compete on price for business. Things have gotten so desperate that I've seen an attorney advertise a will for $100.00. Is it too good to be true?

While the availability of remote notarization does make remote will execution ceremonies possible, it is important not to forget the fundamental requirements of a will signing. If your will is rejected by the Surrogate's Court because you failed to conform to the requirements of EPTL §3-2.1 all of your estate planning and forward thinking may have been for nothing. Avoid the nightmare scenario of your well-intentioned plans falling apart. 

The following is a list of some considerations which your attorney should be addressing when deciding how they are going to conduct a remote will execution ceremony:
    1. Your attorney must draft a will that conforms to your intentions.
    2. You must execute your will in the presence of two witnesses, or your signature must be acknowledged to the witnesses after it has already been affixed. Your remote execution procedure must qualify as "in the presence of". 
    3. Your witnesses must sign the will itself within thirty days of one another. 
    4. Your witnesses should sign affidavits attesting to the proper execution of your will. 
    5. Your attorney should sign an attorney draftsman's affidavit. 
    6. Your witnesses' affidavits should be notarized, and your attorney draftsman's affidavit should be notarized. 
    7. Your original signature, the witnesses' original signatures, the attorney draftsman's original signature, and the notary's original signatures should all be combined into one original document which can be presented for probate. 

If you think your attorney can do all of that for $100.00, it's probably too good to be true.


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Friday, May 12, 2017

Top 5 Estate Planning Considerations for the Effective Transfer of Real Estate Ownership

Andrew Lieb , Dan's Papers
Top 5 Estate Planning Considerations for the Effective Transfer of Real Estate Ownership
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Monday, August 01, 2016

Top Five Real Estate Trusts Used by East Enders

Andrew Lieb , Dan's Papers
Top Five Real Estate Trusts Used by East Enders
The East End is a legacy community where families summer by the ocean, bay and wineries for continual generations. These families engage in strategic succession planning, whereby a trust, as an essential planning tool, is generally the best vessel to pass one’s Hamptons or North Fork real estate onto the next generation. A trust can address both federal and New York State estate tax issues, which can be crippling if ignored.

New York State taxes estates valued over $4,187,500 in 2016 at a rate that can reach up to 16%. In addition to New York State’s estate tax, the federal government taxes estates over $5,450,000 in 2016 at a rate that can reach up to 40%. So all individuals who don’t want their family’s summer home to fall victim to the tax collector must consider how best to pass their legacy onto the next generation.

Even with lower real estate valuations, trusts remain an essential succession-planning tool because they can prevent creditors from seizing certain properties and can control future generations from engaging in an undesired liquidation of the family’s home. 

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Tuesday, July 28, 2015

Here’s Why to Secure Your Original Will

Estate Planning , tips
Here’s Why to Secure Your Original Will
Having an Attorney prepare your Will allows you to control the way your assets are distributed upon death. If you have a Will prepared, it is imperative that you secure your original Will in a safe location so that it may be produced for the Court following your death. Failing to do so may result in a Court making the rebuttable presumption that your Will has been revoked or terminated. See In re Fox’s Will. In other words, unless it is proven otherwise, the Court may conclude that you intentionally destroyed your Will while you were alive so that the Will could no longer be enforced.

Recently, the Courts reminded us why this principle is important in the Matter of the Estate of Robyn R. Lewis. In that case, the decedent (i.e. the person who passed away) had more than one original Will but not all of the original Wills were produced for the Court. As a result, the Court found that the decedent may have revoked the Will, even though that may not have been the decedent’s intent.  

Therefore, it is wise to only have one original Will, so that you only have to worry about securing that one Will for later production in Court. Options to secure a Will include, but are not limited to, leaving your Will at your Attorney’s Office, keeping your Will at your home, or filing the Will with the Court pursuant to Surrogate’s Court Procedure Act §2507. Do not keep your Will in a safety deposit box because it may be difficult or even impossible to access it after your death.

A person spends time and money to have a Will prepared, and all of that work may be undone due to a simple mistake, such as neglecting to tell someone where the original Will is located. If you want your friend to get that piece of jewelry you promised her in your Will, then you need to make sure you secure your original Will so that it may be enforced upon your death. 
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Wednesday, January 14, 2015

Lieb School is Back in NYC with Estate Deals CE on 2/12/15

Estate Planning , Lieb School
Lieb School is Back in NYC with Estate Deals CE on 2/12/15



Estate Deals

Instructor: Andrew Lieb, Esq., MPH

 CE Credits: 3

 Price: Free

 Date: February 12th, 2015 at 12:30pm on 51st (between 5th and 6th)

 Estate sales offer a unique opportunity to help the grieving by doing your job professionally. Starting with speaking the language of the Surrogate’s Court, this course will empower the real estate broker / salesperson to assist the Executor / Administrator in liquidating real property in order to satisfy debts of the estate. Additionally, disputes between beneficiaries and with the fiduciary, sales forced by the court, and foreclosures incident to the probate process will be discussed. Lastly, the student will be exposed to the overlay of brokerage and executor’s commissions where an Executor / Administrator is expressly exempt from the Real Estate License Law for Brokerage.

 Register For This Class Here
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Monday, November 03, 2014

10 Surprises When Inheriting Real Estate

Estate Planning , huffington post
10 Surprises When Inheriting Real Estate
Following the death of a loved one, you may become the recipient of an unexpected parcel of real estate. Yet, with every windfall comes great obligations, so be prepared for the surprises you may encounter when inheriting property.

 Andrew Lieb's latest article featured in The Huffington Post includes the following topics:
  1. Mortgage Transfer
  2. Reverse Mortgage
  3. Rental
  4. Homeowners Insurance
  5. Testamentary Substitutes
  6. Estate Tax
  7. Capital Gains Tax
  8. Probate
  9. Heirs at Law
  10. Right of Election
You can view the article by clicking here. 
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Thursday, May 22, 2014

New Tax Laws And Its Impact On Estate Planning

Estate Planning , Legal Updates
New Tax Laws And Its Impact On Estate Planning
Updates to the tax laws of New York are available here and are effective as of April 1, 2014!

New changes in tax laws that affect a person’s estate that you should be aware of:
  1. Changes on estate tax exclusions rising substantially (to eventually match federal estate tax exclusion). See NY Tax Law section 952(c);
  2. Reforms on gifts given prior to death. See NY Tax Law section 954(a); and
  3. Repeal of the New York Generation Skipping Transfer tax. See Part X, Section 8, repealing article 26-b).

On March 31, 2014, Governor Cuomo signed legislation that makes broad changes to the New York State Estate and Gift Tax Laws, as well as some technical changes to certain trust income tax rules. 

Pursuant to New York Tax Law §952(c), estate tax exclusions will be rising dramatically each year from the current New York State amount of One Million Dollars ($1,000,000.00) to Five Million Two Hundred Fifty Thousand Dollars ($5,250,000.00) by 2017, which is the current federal estate tax exemption amount. Estate tax exclusion means the dollar amount a person’s estate can pass free from New York Estate Tax. More specifically, for individuals dying on or after April 1, 2014, and before April 1, 2015, the estate tax exclusion amount will be Two Million Sixty Two Thousand Five Hundred Dollars ($2,062,500.00). For individuals dying on or after April 1, 2015, and before April 1, 2016, the estate tax exclusion amount will be Three Million One Hundred Twenty Five Thousand Dollars ($3,125,000.00). For individuals dying on or after April 1, 2016, and before April 1, 2017, the estate tax exclusion amount will be Four Million One Hundred Eighty Seven Thousand Five Hundred Dollars ($$4,187,500.00). Lastly, for persons dying on or after April 1, 2017, and before January 1, 2019, the estate tax exclusion amount will be Five Million Two Hundred Fifty Thousand Dollars ($5,250,000.00).

Pursuant to New York Tax Law §954(a), gifts made by a New York resident within three (3) years of that person’s death on or after April 1, 2014, and before January 1, 2019, will be added back into that person’s estate. Bringing these gifts back into the deceased person’s estate will now increase that person’s gross estate and this may make those gifts subject to the New York Estate Tax now, depending on the size of the estate, as discussed in the previous paragraph.

Pursuant to Part X, Section 8 of the new tax laws, the New York State Generation Skipping Transfer Tax is repealed. Prior to its repeal, this tax imposed a generation-skipping transfer tax on outright gifts to persons who are two (2) or more generations below the transferor, or on distributions from certain trusts that are held solely for the benefit of said persons.

These are only a few changes to the current New York State laws that are affecting estate planning in the future. To summarize, these new laws will narrow and ultimately eliminate the estate tax exclusion gap between the New York and Federal estate tax exclusion amounts. For the next five years, however, as the tax estate exclusion amount increases and the taxable gift laws apply, estate planning will become more complex.

See all the recent changes in the New York State laws, effective April 1, 2014, on page 488. 
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