Also called a Last Will & Testament, a NY will is actually a piece of paper, hopefully drafted by and executed in front of your NY estate lawyer, directing who will control and receive the assets within your NY estate after you are gone. Absent a NY will, the assets of your NY estate pass through administration, where your next of kin are identified and who hopefully receive your wealth. Unlike the probate process, which is when there is a NY will, there are a number of issues with the administration process that are circumvented through the execution of your NY will. Passing without a will, the process of administration, requires someone of suitable age, credentials and with standing as your next of kin, to qualify as your administrator. Unfortunately, if your next of kin are minors, or worse if you have no next of kin, the public administrator is called upon to take over your NY estate. Even sadder, if your next of kin fail to agree on who shall act as your administrator, extensive litigation of that sole issue may be required which can take years, easily costing your estate tens of thousands of dollars or more. And finally, whoever is your administrator will most likely have to file a bond before the court will approve their appointment within your NY estate.
However, by drafting a NY attorney supervised will, you get to appoint your executor within the will thereby waiving the necessity of any bond and thus removing any ambiguity regarding who will control your NY estate when the time comes. Additionally, in your NY will, you can leave the proceeds of your NY estate to any individual and/or charity of your choosing. This is a tremendous advantage especially when planning your NY estate while keeping any minor beneficiaries in mind. If any beneficiaries of your NY estate are under 18 years of age, you can easily incorporate testamentary trust language into your NY will. Thereby naming a trusted individual, your trustee, to manage and provide for said minors until the age of your choosing at which time the residuary from any trust will be paid out in full to said beneficiaries.
Another advantage of drafting your NY will by a NY estate lawyer is for NY estate tax planning purposes. NY State is one of the few states in the nation that still believes in taxing the NY estates of their residents. In fact, even some of the most draconian countries in the world have completely abolished their estate tax laws as a progressive push has rendered said taxing a hinderance on economic growth. While the world adopts a more progressive view concerning the estate tax, NYS still imposes a 16% NY estate tax on any and all NY estate assets in excess of $5,740,000.00 as of the date of this article. One small detail within NYS’s estate tax is its 16% cliff as it’s called. This means that only NY estates that exceed the excludable amount of $5,740,000.00 by 5% are deemed to fall off the “cliff” and thereby subjected to the full 16% NY estate tax. In other words only NY estate’s which exceed $6,100,000.00 as of the date of this article are subjected to the full 16% estate tax liability also known as the cliff.
So how do you plan around the NY estate tax? For most New Yorkers they are well under the excludable amounts in which case they have nothing to worry about regarding NY estate tax liability. However for those individuals, at, near or just above the excludable levels of $5,740,000.00 there are a number of simple strategies you can incorporate into your NY will to avoid triggering any NY estate tax liability. One of the simplest strategies your NY estate lawyer can take advantage of is integrating the Santa Clause into your NY will. Much as it sounds, the Santa Clause simply states that any NY estate assets I may have in my NY estate over and above the permissible amount shall be distributed to the charitable organizations of my choosing. This simple clause leaves any assets over the $6,100,000.00 amount to charity thus deducting said amount from your NY estate, as all charitable bequests are deductible, and thus no longer part of your taxable NY estate. As such your NY estate would avoid incurring the NYS estate tax’s cliff of 16%.
Estate of Tim Bergling
Many of us know of Tim Bergling by his stage name Avicii. At 28 years of age Avicii was a household name globally known as a super DJ attaining levels of success within the music industry only a select few ever attain. For the better part of the last decade Avicii consistently sold out stadiums commanding as much as $500,000.00 per performance and consistently made Forbes’s list of highest paid entertainers. It is estimated that Avicii was collecting as much $20 million a year at the height of his career.
I say height of his career because after being in the lime light for less than 7 years Avicii retired from his life’s greatest passion and what made him an international celebrity in 2016. As Bergling was selling out stadiums internationally for seven years, his loyal fans did not know how uncomfortable Bergling actually was with his own success. While outwardly performing for thousands of fans until sunrise each night, Bergling was quietly succumbing to the weight of the pressures and demands of his own success. Bergling a self-described introvert by nature was propelled into the spot light along with all the responsibilities and drawbacks that accompanied it.
Emotionally conflicted, exhausted from his demanding touring schedule, suffering from severe anxiety and depression, Bergling looked to alcoholism for solace. Eventually, his coping mechanism took hold of his life and destroyed his health causing acute pancreatitis and eventually requiring removal of his gall bladder. Sadly on April 20, 2018, unable to handle the persona his incredible talent created, Avicii ended his life.
Even lesser known than Bergling’s anxiety was his passion for philanthropy. The Swedish born artist stated that after becoming wealthy he quickly learned that he could not possibly need nor spend all the money he had amassed. In fact Avicii would quietly become one of the greatest self-made philanthropists of his generation, contributing what can only be guesstimated to be tens of millions of dollars, as he often donated anonymously, to select hunger charities. When asked about his passion for philanthropy he responded, “when you have such an excess of money you do not need, the most sensible, most human and completely obvious thing is to give to people in need.”
While most of his contributions were made anonymously he did establish his own charitable organization “hunger aid”. In fact Bergling would annually hold “hunger aid” concerts generating millions of dollars, and donating all their proceeds to charity. Unfortunately, on the date of Bergling’s death he passed away without a will, spouse or children. I say unfortunate because absent a will, Bergling’s estate would almost certainly be subjected to California’s Estate Tax, of which he was a resident, as well as the Federal Estate tax of 40%. Had Bergling had a will utilizing some estate planning such as the Santa Clause, the proceeds of his estate could have passed tax free to the charities of his choosing and he could have sustained his philanthropic legacy well after his death. Instead, Bergling’s Hollywood Hills house was sold for $17.5 million dollars, and of Bergling’s estimated $50 million dollar estate, it is speculated that $25 million dollars, after estate taxes were paid, passed through administration to his parents in Sweden.
This is clear example of how a NY estate lawyer could potentially save your heirs hundreds of thousand, if not millions of dollars, in estate tax liability. If you or a loved one have questions about NY estate planning or the drafting a NY will , please call one of our NY Estate Lawyers at the Law Offices of Jason W. Stern & Associates at (718) 261-2444 for a free consultation. Our Queens estate lawyers have over 60 years of combined NY estate law experience probating the will and planning NY estates for families like yours in the counties of Queens, New York, Kings, Bronx, Westchester, Rockland, Nassau, Richmond, Orange, Dutchess as well as in the State of New Jersey.
