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Questions & Answers
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Wills

What happens if I die without a Will?

State law provides for the distribution of your assets. In New York State, if you are survived by a spouse and children, your spouse will receive a portion of your estate and your children will receive a portion as well. If you wanted your children to receive your assets only after both spouses are deceased, a Will can help you accomplish this. [Note: If you are not married and wanted to leave your assets to a friend, a partner, or to a charity, your Will can designate these beneficiaries. Under New York State law, if you were not married and had no children, your beneficiaries are your parents or your siblings if your parents were deceased.]

Who can be my executor?

You may select a family member or a friend. If you are choosing among several people, consider selecting the person who is fair, honest, reliable, and organized. The person should have good judgment and have the time to handle your estate matters.

Trusts

What does a trustee do?

A trustee holds the property of another person in safekeeping for one or more beneficiaries. A trustee is responsible for administering the trust in accordance with the terms of the trust. A trustee will keep trust property separate from his/her own property, invest the property, protect the property, keep accurate records of income and expenses, deal impartially with all beneficiaries, and seek the advice of experts, as needed, in investing and managing trust property.

If I have a revocable living trust, do I need a Will?

You need a Will even if you have a trust. Possibly all of your assets are not placed in your trust so your Will covers the distribution of these items. Also, you may receive a gift or inheritance and not put this property into the trust. Again, your Will covers the distribution of these assets. [Note: Be wary when one suggests that all your problems will be solved by establishing a trust. A trust can be a valuable estate planning tool in the appropriate circumstances.]

Estate Planning

What does it mean to make a bank account "in trust for" another person?

You have designated a beneficiary of your bank account, and this can be changed by you at any time. The designated person has no rights to your account during your lifetime and is only able to withdraw funds after your death. This is not a trust account but merely an arrangement to make your account "payable on death" to the person named.

Is life insurance an asset in my estate?

If you are the owner of a life insurance policy, the proceeds paid upon death are part of your total estate. You may determine who will receive the proceeds by designating a beneficiary of your policy. If you do not designate a beneficiary or if you designate your estate as beneficiary, the proceeds will be distributed to the beneficiaries you named in your Will.

What is the difference between joint tenants and tenants-in-common on a Deed?

Joint tenants co-own the property in equal shares with rights of survivorship. When one tenant/owner dies, the property is owned by the survivor(s). Tenants-in-common co-own the property but each tenant/owner can leave his/her share to anyone he/she chooses.

Estate Administration

What does an executor do?

After being appointed by the court in accordance with the terms of a Will, the executor sets up a bank account for the estate. Money received by the estate will be deposited into the account, and expenses will be paid from it. The executor will keep an accounting of all of these transactions handled for the estate. The executor also collects all of the assets of the estate and obtains appraisals and values for these assets. The executor will pay all bills, any claims, and any taxes. Distributions are then made to beneficiaries and receipts are obtained from each recipient of property.

Is an executor paid?

An executor may receive a commission for serving as a fiduciary to the estate. The fee is determined by state law, and the executor must report the amount received as taxable income. Some family members who are appointed waive the fee and choose not to receive it.

What happens when there isn't enough money in my estate to pay my debts?

Creditors have a right to be paid before any money or property is distributed to beneficiaries. Some creditors, such as funeral homes, have priority over others, and remaining creditors are paid on a pro-rata basis.

Elder Law

Will Medicare cover the cost of a nursing home?

Medicare is the federal government's health insurance program for the disabled and those 65 years old and over. Medicare does not cover custodial care, nursing home care without prior hospitalization, and nursing home care after 100 days.

What is long-term care insurance?

This is private insurance designed to help pay for nursing home care or home health care. You pay a premium to an insurer in return for protection against the costs of long-term care. Premiums can vary depending on your age and the level of benefits you buy.

Taxes

Do I have to report my inheritance from my parent on my income tax return?

An inheritance is not considered taxable income. [Note: If you received a gift, this amount is also not considered taxable income.]

Will there be taxes on the sale of my parent's home?

If your parent is still the owner and the home has been the principal place of residence for your parent for at least two of the past five years, the gain realized on the sale is generally excluded from income up to $250,000 (Gain = Sale price of home - cost of home). If you now own your parent's home, you will report the realized gain as income since the home is not your primary residence. [Note: Your cost in the home is the same as your parent's when you receive the home during your parent's lifetime. However, when you receive the home upon your parent's death, your cost in the home is the fair market value of the home at the time of death. In this case, the gain is likely to be diminished since you will sell the home for fair market value and your cost ­is set at fair value,' therefore, the gain is nominal, if any.]




The information in this site is for general purpose only.
You should consult a qualified professional for specific recommendations appropriate to your individual situation.
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