Make Your Estate Plan Official

Two years ago, I had a consultation with a gentleman, his (second) spouse, and his grown children. The man, let’s call him Peter, had a plan. In the consultation, Peter was interviewing me for the job of making that plan a reality. Peter did not have a Last Will & Testament or any other estate planning documents, and he wanted to enact a plan that would take care of his spouse during her lifetime while also ensuring that his grown children, from a previous relationship, would receive the vast majority of his other assets. This is a common fact pattern.

What made this fact pattern worthy of being the centerpiece of this article was that Peter owned 20 properties. That’s correct: 2-0. Peter had accumulated a combination of retail properties and vacant land throughout his lifetime, and each time, he purchased them in his own name. Now, in his eighties and without a Will, Peter was in a room with me and his loved ones explaining his wishes. We went through the normal back-and-forth that comes with a consultation, and at its conclusion, I recommended using a revocable trust as the centerpiece of his plan.

Under the plan, the Trust would become the owner of all twenty properties with the purpose of achieving three main goals: 1. Leave assets to whom Peter wanted, how Peter wanted; 2. Continue to control and enjoy the assets during the rest of his lifetime; and 3. Avoid probate. In the two years that followed, Peter never completed his plan.

Earlier this year, Peter unfortunately passed away. I spoke with his surviving spouse and his children, expressed my condolences, and we started to discuss what the next steps would be. Peter did not have a Last Will & Testament at the time of his passing, so I explained to the family the New York statutes that would now dictate how Peter’s assets would pass. The statute will not consider the specific circumstances of the beneficiaries entitled to an inheritance. It will not take into account whether any beneficiaries are under a disability or are minors. It will not consider the health of the surviving spouse nor what Peter’s actual plan was. It also doesn’t consider what leases need to be renewed next month or how to pay the school taxes that are yet to be paid. Surrogate’s Court does not speed up for anyone.

In life, we all have the ability to decide how our stories will end. Who benefits from our life’s work is the meat and potatoes of estate planning, and it is what makes working in this field so special. Every fact pattern is different, and every plan is my top priority.

Peter’s plan is now in the hands of Estate Powers and Trust Law section 4-1.1. His wife is due to receive slightly more than half of his assets, and his children will split the remainder. That is a far cry from his stated wishes of providing some money to his second spouse and leaving every other asset, including all twenty properties, to his children. Perhaps the family already has plans to reconfigure the end results to follow Peter’s wishes; however, the tax and gifting ramifications that follow may replace one headache with another.

If only he had a Last Will & Testament? Well, a Will would certainly help with the end result of who gets what, but that Will would still go through Probate (the court-supervised administration of Peter’s estate), and that could take years.

The best plan for Peter was to create a trust, having an opportunity to have his cake and eat it too. He could have avoided the courts and made his wishes clear. The reason I bring up Peter’s story is that, while I would guess none of us have twenty properties, we likely all have at least one, and that is all it takes to make a living trust a part of your plan. Avoiding probate is a goal for all clients, and when coupled with the asset protection some trusts provide or the lifetime benefits nearly all trusts bring, trusts can check all the boxes clients care about.

Client consultations are a time to inform and educate, to listen, and to help clients navigate. It is incumbent on the attorney to make things clear and to lay out the pros and cons of every plan. It’s a job that I take seriously, and my goal is for every Peter to end with a plan that accomplishes their goals. Sometimes, it’s easier said than done.