What happens if I die without a Will in place?
If you die without a will as a resident of New York, you are said to have died intestate. If an account is co-owned, or has a beneficiary, it will automatically pass to that co-owner or beneficiary, however, assets titled in your name alone without a beneficiary will pass through an Administration proceeding and go to the heirs specified by New York law which are as follows:
• If you leave behind a spouse and no children, your spouse will inherit everything
• If you leave behind children but no spouse, your children will inherit everything (If a child has predeceased you, their share would go to their children, your grandchildren)
• If you leave a spouse and children, your spouse will get one-half of your estate and your children will get one-half with the first $50,000 going to your spouse
• If you leave no spouse nor children, your parents or surviving parent will inherit your entire estate
• If both of your parents are also deceased, your siblings will inherit everything (If a sibling has predeceased you their share will go to their children)
• If you have no siblings, or children of siblings, your estate will go to your grandparents or your aunts and uncles if your grandparents have predeceased you or the children of your aunts and uncles, your first cousins. Lastly if all first cousins have predeceased, then the estate passes to their children, your first cousins once removed.
If your personal representative is unable to locate any of these relatives, your entire estate will escheat (pass) to the State of New York. Without a properly executed will in place, your hard-earned assets may pass to distant relatives that you do not wish to receive your assets or possibly to the State of New York.
Does the state take my house if I end up in a nursing home?
To qualify for Medicaid as a single individual or surviving spouse, you can have no more than $15,850 in assets.
Your house is not an exempt asset and will surely put you over the $15,850 threshold. Although a nursing home or NYS does not “take your house”, you are ineligible for Medicaid until the value of the house is spent down.
It is certainly worth discussing your options to protect your home and other assets with a qualified Elder Law attorney.
Will my heirs have to pay estate taxes?
For those decedents with dates of death after January 1, 2020, the New York Estate Tax exemption is $5,850,000 and the Federal Estate Tax exemption is $11,580,000.
This means if your estate is under the above referenced exemption amounts, your heirs will not pay Estate Tax. If your estate is over the NYS or Federal exemption amounts, taxes can be minimized or eliminated with the use of proper tax planning in your plan.
Do I need a trust?
The type of estate plan which is appropriate depends on each client's particular situation: their goals in planning, their family dynamics and the nature and size of their estate.
There are many reasons that one chooses to create a trust. The use of a living trust is beneficial because it can avoid probate not only in NY but also in other states in which you own real property.
Avoiding probate is especially important if it is possible that an heir would contest the wishes in your will. A living trust is also useful in blended families as it can be used to ensure children from previous marriages will receive the share intended.
In addition, if you have a taxable estate, the use of disclaimer trust can minimize or eliminate estate tax.
Does my Will have to go through probate?
Assets which have a co-owner or beneficiary designation pass automatically by operation of law and do not pass through the will.
Examples are jointly owned property, proceeds of life insurance, retirement accounts or other accounts in which a beneficiary has been designated. If the assets that must pass through the Will are $50,000 or greater, a probate proceeding is required. If the estate is under $50,000, a small estate proceeding is required.
What is the look-back period for Medicaid?
To be eligible for Medicaid in a nursing home, an applicant must provide financial statements for all accounts owned by that applicant for the previous 5 years (60 months).
Medicaid looks at all transactions during this period to make to make sure you have not gifted or transferred any assets, as gifts would create a penalty period where you are ineligible for Medicaid for a determined period of time.
The penalty is calculated based on the value of the gift or transfer and the cost of care in your region. Beginning October 1, 2020, the lookback period for Community Medicaid or care in the home is 2 ½ years (30) months.