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How to provide for your heir while keeping control of your home in NY

Are there alternatives to a will?

I received a call from Doris- (not her real name) regarding an estate recently.
She had lived with her mother in her mother’s house for her entire life, the last few years totally taking care of her mother. Last year her mother had executed a Last Will and Testament naming her attorney as the Executor of her estate. Doris had an adult sister with a disability who was on Medicaid and was living in an adult home. The Will left everything to Doris and nothing to the sister. Medicaid would have taken the money left to the sister so there was no issue with that part of the Will.

Why did the attorney in Bronx insert himself as the Executor?
Did he suggest to the mother that Doris would be a better choice to be the Executrix? The consequence of the attorney being the Executor was that the attorney will be collecting a statutory commission on top of his legal fees. This double dip while appropriate with the proper documentation, leaves a bad taste in the mouth of the survivors. Watching as much as ten percent of an estate evaporate in fees should leave a bad taste.

For many years there has been a way to avoid the Probate Process entirely and it is often appropriate for this situation.

This process involves creating and executing a Deed to the Daughter but retaining a Life Estate for the Mother. On death the house is the daughters. No Probate or Administration is necessary. So long as the daughter survives the mother, everything would pass to the daughter on death. A simple Will would deal with what happens in the unlikely event the daughter predeceases the mother.

A second method (and currently more popular way, although more costly) would have been setting up a Family Trust and Deeding the house to the Trust.

Both have advantages regarding Medicaid and are part of Estate Planning.

NO solution is for everyone and I recommend each client consult with their CPA before executing any Will or Trust as there are tax consequences with all transfers of property.

Clearly what happened in this case was not optimal. It may have been that the mother just trusted her family attorney to handle the Probate properly and was willing to have him double collect on fee and commission but since the mother did not execute any affidavit or instruction letter other than the Will we will never know.
I do not charge for consultations and encourage my clients to ask questions before we go ahead with preparation of a Will. Sometimes the Life Estate Deed is an inexpensive way for a person to retain control of their home as the client can not be forced from their home while they are alive. After all, once you lose control it is difficult or impossible to regain.

In other situations the Family Trust is the optimal solution. For those with large portfolios, taking advantage of the gift tax limits and establishing Life Insurance Trusts may also be a part of the solution. Every situation is unique.

Do not hesitate to email me at evan@rogersandrogersesq.com to set up a consultation if you live in the State of New York. Although my office is located in the northeast Bronx I serve clients in the entire metropolitan area,

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Address:
4419 White Plains Rd.
Bronx, NY 10470

Phone: (718) 994-1640

Fax: (718) 325-7439

Email:
Evan@RogersAndRogersEsq.com

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