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I Am Poor, I Don't Need a Will or a Trust!
It happens all the time across the country - families already stricken with grief at the loss of a loved one are dealt a further blow when they discover the assets of the departed are now subject to seizure and repossession, and not automatically passed onto the surviving family members as originally believed. How can families make sure that the assets of a parent aren’t lost to debt collectors and nursing homes? The answer is simple – a validly executed will and/or trust.
When someone passes away without having left behind a will and/or trust, or when the will and/or a trust that was left behind is deemed legally invalid (not recognized by the courts), it is said that the estate is intestate, and different jurisdictions have different rules for the disbursement of assets held by estates deemed intestate.
Generally, and in New York, property of an intestate estate becomes subject to administrative proceedings, which is a court process that gives individuals, businesses, and governments who were owed money by the deceased one final chance to collect. Only after debts are settled will any recognized next of kin be allowed to receive benefits or inheritance from the estate. Again, this is when there is no valid will in place.
Creating a will and/or a trust that will be recognized as valid by the courts is absolutely crucial to helping surviving loved ones avoid potential legal battles over assets. Even if a person passes away in debt it may be possible to shield certain assets from foreclosure or seizure and to shield loved ones from potential collection attempts - if there’s a valid trust instrument in place.
One of the biggest mistakes anyone could make is thinking they don’t need a will because they’re too young, healthy, or poor - which are all incorrect assumptions. A person is never too young or too healthy to create a will and the trust, nor is any estate ever too small to receive the protections of a will and the trust.
If you’re the child of a parent, you need to understand the importance of a having a valid will and/or trust. In New York and in many other jurisdictions, if a parent dies with debt but without a will, and if surviving loved ones begin disbursing assets without first settling a parent’s debts, then loved ones who received disbursed assets may actually become liable to recognized debt collectors for the value of the property they received.
There are many various intestate and testate laws in place and they vary from jurisdiction to jurisdiction. Don’t be a disinheritance victim and don’t let your loved one be one, plan ahead and seeks professional legal assistance from elder law attorney who specialize in Wills, Trust and Estate Planning.