New York State Adopts Electronic Wills Act Starting in 2027
A few New York State laws were enacted by Governor Kathy Hochul right before December 31, 2025. One of the most notable new laws is the authorization of electronically signing Wills for New York State residents. Before deciding that this is the right approach for you, it’s important to be aware of the requirements. If you have questions about creating and signing a Will in New York, please consider scheduling a consultation with the experienced New York estate attorneys at Abelaj Law, P.C. by calling 212-328-9568.
Effect Date of New York Electronic Wills Act
The New York Electronic Wills Act was signed into law on December 12, 2025, and takes effect on June 10, 2027. Some provisions are based on existing law, such as the timing of witnesses signing the Will, and other provisions are newly created, such as required court filings.
The electronic Will must contain audit trail data, which likely means that an e-signing platform such as Adobe Sign, Docusign or a similar program must be used. The result is that the signers would not be able to insert a type-form “cursive” signature if there is not audit trail.
The witnesses must be domiciled in one of the fifty United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, any territory subject to the jurisdiction of the United States, or as part of a federally recognized Indian Tribe. In other words, the Will cannot be witnessed by an individual who is domiciled in another country.
Electronic Signing by Testator and Witnesses
Under current law, a testator may sign their Will, with or without the witnesses present, provided the testator declares to the witnesses, and the witnesses sign, the Will within 30 days after the Testator signs the Will. The Electronic Wills Act adopts this same approach to a Testator, and to the witnesses, who sign the Will in person or electronically. This is a two-pronged consideration.
First, the testator can sign the Will in person or electronically. Next, the witnesses can do the same thing, meaning they can witness the signing, or declaration of signing, either in person or electronically. In any of these combinations, provided the witnesses sign within 30 days of the testator’s signature, the Will is validly signed under the Electronic Wills Act.
Will May be Self-Proven Electronically
Under current law, Wills can be self-proven if the witnesses acknowledge in a signed writing within 30 days of signing, usually via a notarized affidavit, that they were witnesses to the Will. For most testators, this Affidavit is usually signed by the witnesses and notarized during the Will signing meeting. This important document is provided to the Surrogate’s Court when the Will is probated.
As background, if a Will does not include a self-proving affidavit, the original Will (and not a copy) must be provided to the witnesses after the decedent’s death at which time they will sign and notarize an affidavit after death providing that they were the witnesses to the Will. As you might imagine, this creates extensive cost and delay to the Estate as the witnesses must be located and the original Will must be presented to each witness, at which time the witness must arrange for a notary to notarize the affidavit.
The Electronic Wills Act anticipated this challenge and specifically provided that the Wills may be self-proven electronically as well. This will require that a notary also be present for the electronic signing of the Will.
Prompt Filing with Surrogate’s Court Required
Once the Will is fully executed by the testator and the witnesses, the law provides that the original document MUST be filed electronically with the local New York Surrogate’s Court within 30 days of execution. Failure to do this will automatically invalidate the Will. The Will may be filed by the testator or an authorized representative.
Testators have long had the ability to file their Wills prior to death. Under current law, if a testator executes a new Will after the prior one was filed, but the prior one was not removed from the Court before the testator’s death, the individuals in the prior Will who were adversely affected must receive notice and may have the right to object to the new Will. For this reason, many testators do not file their original Wills with the Court. They retain control over the final Will that is ultimately filed upon their death and probated.
The new law may result in many situations in which individuals have a right to object to a prior electronically filed Will if a new Will was executed and they were adversely affected in the new Will. In addition, both Wills would become public record at the time of death.
Revocation of Electronically Signed Will Filed in Surrogate’s Court
Removal by the testator or an authorized person of the electronically signed Will from the Surrogate’s Court will automatically revoke the Will. In addition, executing a new Will revoking the electronically signed Will or filing a new electronically signed Will with the Surrogate’s Court will revoke the Will on file.
Language required to be included in Will
An electronically signed Will MUST include the following language for it to be valid, in twelve-point font or larger, boldface and double-spaced:
CAUTION TO THE TESTATOR: YOUR WILL IS AN IMPORTANT DOCUMENT. AS TESTATOR, YOUR WILL SHOULD REFLECT YOUR FINAL WISHES. TO BE VALID, IT MUST BE SIGNED BY YOU OR ANOTHER INDIVIDUAL AUTHORIZED BY YOU AND WHO IS IN YOUR PHYSICAL PRESENCE AT THE TIME OF SIGNING. IT MUST ALSO BE SIGNED IN YOUR PHYSICAL OR ELECTRONIC PRESENCE BY AT LEAST TWO INDIVIDUALS, EACH OF WHOM IS A DOMICILIARY OF A STATE, AND EACH OF WHOM SIGNS THE WILL WITHIN A THIRTY DAY PERIOD AFTER WITNESSING YOU SIGN THE WILL OR ACKNOWLEDGE THAT YOU SIGNED IT.
WITHIN THIRTY DAYS AFTER THE ELECTRONIC WILL IS EXECUTED, IT MUST BE ELECTRONICALLY FILED WITH THE NEW YORK STATE UNIFIED COURT SYSTEM. YOU MAY REVOKE YOUR ELECTRONIC WILL AT ANY TIME. YOU MAY DO SO BY EXECUTING A SUBSEQUENT WILL OR SEPARATE WRITING CLEARLY INDICATING YOUR INTENT TO REVOKE ALL OR PART OF YOUR ELECTRONIC WILL, OR BY REQUESTING ITS REMOVAL FROM THE NEW YORK STATE UNIFIED COURT SYSTEM. ONCE YOU HAVE REMOVED YOUR ELECTRONIC WILL FROM THE NEW YORK STATE UNIFIED COURT SYSTEM, IT IS REVOKED.
Before Deciding to Electronically Sign Your New York State Will
The New York State Electronic Wills Act is a great step forward in meeting the digital reality in which we currently live. This will create options for testators who might be immobile or have difficulty in attending a live signing.
However, being aware of the logistical arrangement, filing requirements, and potential for adversely affected individuals to object to a Will may impact your decision on whether this is the ideal approach for you.
Talk with an Experienced Estate Planning Attorney
If you are considering estate planning, legal guidance may be beneficial. An experienced estate planning lawyer can make sure all documents are in order and help individuals determine the signing method that would best fit their needs. Consider visiting with the estate planning lawyers at Abelaj Law, P.C. at 212-328-9568 to learn more about how to determine whether electronically signing your Will is right for you.
How Your Estate Planning Can Help Charities You Care About
Making a gift to a charitable organization is a meaningful and impactful decision – one that can benefit both the causes you care about and your financial and estate planning goals. While the decision of how and when to give is personal, it can play a significant role in shaping your legacy. Below are some common ways your estate plan can help support the charitable organizations you care you.
Common Ways of Giving to Charities
There are numerous ways to give to charity, both during life and after your death. The approach that works best for you will be unique to your needs, including the value of the intended gift, the type of asset being donated and your tax situation. It’s important to work with an attorney experienced in charitable estate planning to determine the approach that works best for you. The attorneys at Abelaj Law, P.C. have helped many individuals incorporate charitable planning in their estate legacy and we can assist you in this process. Contact us today to get started.
Testamentary Gifts in a Will or Trust
A common way to support a charitable organization in estate planning is through a bequest in a will a trust. This is also known as planned giving. A person can specify a dollar amount, percent of estate, or specific asset (such as stock or real estate) to a charity. There is no federal limit on the number of charitable bequests an estate plan can have, which can allow for a donor to support multiple organizations.
The bequest can be outright or have restrictions on how the funds are used. A Trust or endowment can include instructions on how the funds are to be used by the charity over a long period of time.
Name a Charity as Beneficiary
Charities can be named as beneficiaries of your retirement assets, annuities or insurance policies. This can allow the donor to support specific organizations while also reducing estate taxes. A benefit of this approach is that it avoids probate and allows the charity to receive the bequest promptly.
Create a Donor Advised Fund
While a Donor Advised Fund, commonly known as a “DAF”, is not technically part of an estate plan, it allows a donor to contribute assets during their lifetime, take an immediate tax deduction, and recommend grants to charities over time. Donors can contribute to the funds as frequently as they like and then recommend grants to charities at a later date. This approach works well for donors who would benefit from a large charitable deduction in one year without immediately having to choose a specific charity to receive the funds.
Charitable Remainder Trust
A charitable remainder trust (“CRT”) is an irrevocable trust that allows a person to donate assets to charity and draw annual income for life or for a specific time. A CRT can offer financial benefits such as allowing a donor to plan major donations to charities, allow a donor to defer income taxes on the sale of assets transferred to the trust, and may allow a donor a partial charitable deduction based on the value of the charitable interest in the trust.
How to Get Started
As you consider including charitable donations in your estate planning, start by reflecting on the types of charities you have supported in the past, the types of assets you have contributed, whether you want to make an unrestricted gift or include certain parameters, and when you want the charity to receive the gift.
Identify the Causes You Care About
Think about the issues or organizations that have had a meaningful impact on your life. These could be nonprofits you’ve supported in the past or causes that reflect your values. There are many organizations out there doing meaningful work that would appreciate your donation.
Review accounts and documents
Review your estate documents every 3-4 years to ensure these documents reflect your intentions. If there is a charity you want to add as part of your estate documents or want to look at more robust options to support causes you care about, reviewing your documents is a great way to start.
Talk With an Experienced Estate Planning Attorney
For many families considering charitable giving as part of their estate plan, legal guidance may be beneficial. An experienced estate planning lawyer can make sure all documents are in order and help families determine the types of charitable giving that would best fit their needs. Consider visiting with the estate planning lawyers at Abelaj Law, P.C. at 212-328-9568 to learn more about how to integrate charitable giving into your estate plan.
Estate Planning When Your Spouse Isn’t On Board: What to Do
If you are ready to begin estate planning, but are getting resistance from your spouse, you may be wondering if you should go it alone. Although addressing your combined estate and goals is helpful, you can take control of your estate planning on your own.
Open and Honest Discussion
Spouses often complete their estate planning together. However, it is not unusual for one spouse to avoid the topic. Estate planning comes with difficult emotions and important decisions. It’s not surprising that someone may not want to deal with this head-on.
Discuss with each other the reason that one is resisting this project. If the topic is emotionally heavy for your spouse, ask why and what might help to reduce the emotions. Did your spouse experience the aftermath of a difficult estate administration? Are they worried about not being alive at key moments of their loved ones’ lives?
Getting to the heart of their reluctance is important information for you to understand if you will be able to convince them to engage in estate planning with you, or if you need to take on this matter for yourself.
Your Individual Estate Plan is a Gift to Your Loved Ones
Estate planning for a couple may include joint decisions on desired bequests to loved ones, guardianship appointments of minor children, tax benefits and combined legacy goals. If your partner does not want to engage in the process, you can still make many of these key decisions on your own.
We often work with one partner in a couple, usually a woman, whose partner does not want to engage in estate planning. We provide you with an outline of what estate planning powers you have alone and how it might be different if your spouse joined in the planning. You will be aware that you have much ability to direct the disposition of your estate.
Your individual documents will express your wishes to ensure that your loved ones have a seamless plan to administer your estate. By planning ahead, it will allow your loved ones to focus on your shared memories and not on the complexity of administering an intestate estate.
Intestacy is Your Default Estate Plan Where Distribution is Governed by the Law
Without an estate plan in place, you will be considered intestate at your death. The result is that the law will govern who receives your estate, who is your estate’s administrator, and who is your children’s guardian.
In New York, the estate of a person who dies with a spouse and no children passes entirely to the spouse. If the person dies with a spouse and children, the first $50,000 passes to the spouse, plus 50% of the residuary, with the other 50% to the children.
In New Jersey, the distribution is more nuanced. As a comparison, if a person dies with children and no spouse, the children receive the entire estate equally. If a person dies with a spouse and children all born of the marriage, the spouse receives the entire estate.
Intestacy requires additional Court oversight and does not allow for deviation from the law of descent and distribution. Your estate administrator may have to file a costly bond if there are minor children. If most of your relatives are estranged, your estate administrator may have to hire a genealogist to identify which of them are automatically entitled to your estate assets. If you have a taxable estate, your heirs will receive a lower bequest because you did not proactively take steps during your lifetime to create lifetime trusts.
By creating an estate plan, you will be able to override most of the default laws and avoid the extra costs and delays in an extended court proceeding.
Moving Forward Confidently on Your Own
The law does not require that spouses engage in estate planning together. If you have attempted to convince your spouse that estate planning is important to you, and they have not agreed, it may be time to forge ahead on your own.
The process is empowering as you will have the opportunity to discuss your goals with an attorney, understand the options available to you, and improve the outcome for your loved ones. You will feel relieved to know that you have taken control over your estate plan and that your legacy goals will be realized.
At Abelaj Law, PC, we are committed to assisting individuals and families with all of their estate planning legal needs so they can feel confident that their final wishes are honored. Contact our experienced legal team today at 212-328-9568 for a free introductory call to learn more.
Estate Planning For Embryos Under New York State Expanded Bill of Rights
If you are a New York State resident and who has obtained medical care to expand your family via assisted reproductive technology, you should be aware of the revision of New York State’s Equal Rights Amendment. The Amendment expands civil rights for purposes of reproductive healthcare, but leaves ambiguity as to whether stored genetic material is covered under the law.
The recent National election results may also create uncertainty on your individual bodily autonomy and privacy in managing your reproductive healthcare. Without getting into Constitutional law, this article provides insight on how to plan for your genetic material following the new State Civil Rights law and existing statue in New York State. If you need assistance on estate planning for your genetic material, please contact an experienced attorney at Abelaj Law, P.C. at 212-328-9568.
New York State Expands Civil Rights to Include Reproductive Healthcare, but Does Not Address Stored Embryos, Oocytes
On November 5, 2024, New York State voters approved the Equal Rights Act, which expands the definition of individual civil rights within the state to include, in part, “pregnancy, pregnancy outcomes, and reproductive healthcare and autonomy.” Individuals cannot be discriminated against based on these, and other, characteristics. It’s important to note that the language does not provide clear guidance on how it applies to resulting genetic material.
Although the text appears to be clear, the interpretation of what is considered “reproductive healthcare and autonomy” will be determined by the Courts as cases arise to clarify scope and meaning. In order to appreciate the uncertainty, it might be useful to describe ART and the resulting genetic material.
Genetic Material Resulting from Assisted Reproductive Technology
According to the Department of Health and Human Services, in 2021, approximately 2.3% of all infants born in the United States were conceived through the use of ART, which includes in-vitro fertilization (IVF) or intra-uterine insemination (IUI). According to DHS, “the reasons that cause an individual to obtain medical assistance for conception are numerous, including age, health conditions, and for couples who are same sex or individuals without a partner and cannot otherwise conceive. In addition, some couples experience unexplained infertility where tests reveal no obvious causes of infertility.” Among the states with the highest rates of ART are New York and New Jersey.
ART requires a patient to be under the care of a reproductive endocrinologist or medical facility. ART allows a patient to plan and preserve the opportunity to have a child at a later time. The process frequently includes specialist consultations, costly prescription medications, and medical procedures, which are not always covered by insurance, for the important goal of obtaining eggs, sperm or reproductive tissue for purposes of conceiving. A patient may require more than one round (or attempt) of ART before they are able to conceive. One round of ART may result in genetic material that is not initially used but is instead preserved for later use.
The Food and Drug Administration regulates human reproductive tissue and governs disposition of donated genetic material. It does not, however, govern the disposition of genetic material created by the intended parent or genetic material purchased by a potential parent.
Rights to Genetic Material After Death Based on Contract Law
Since 2014, New York State law provides a framework on the disposition of genetic material resulting from IVF and the rights of a child born after the death of an intended parent by the use of ART. Section 4-1.3(j) of the Estates, Powers and Trusts Law provides that disposition of genetic material is “subject exclusively to the provisions of this section and to any valid and binding contractual agreement between such person and the facility providing storage of the genetic material and may not be the subject of a disposition in an instrument created by the person providing such material or any other person.”
To simplify, New York State’s position is that disposition of genetic material is a private matter that is governed by a contract between the “owner” of the genetic material and the facility storing the genetic material. For this reason, it is critical that if you execute the appropriate documents with your storage facility on how to dispose of your genetic material following your death.
Take Charge by Reviewing Your Written Contract and Alerting Your Estate Fiduciaries
Ensuring that your genetic material is disposed of according to your wishes requires that you review the written agreement you signed with the storage facility. If you are unsure of what you initially requested or would like to make a change, contact the storage facility directly.
If you are looking to dispose of your genetic material prior to your death, you must contact the storage facility. Be prepared for a potentially lengthy delay between your request to dispose of, or destroy, your genetic material and the time when it is actually completed. The process usually requires multiple reviews by various doctors and clinicians at the storage facility which may result in a six-month wait before your request is finalized. In order to ensure that your written agreement is honored at your death, consider including a provision in your will that refers to your remaining genetic material. Ensuring that your wishes are honored requires that your fiduciary be aware that you have provided written instructions.
Contact Us for Assistance
At Abelaj Law, PC, we are committed to assisting individuals and families with all of their estate planning legal needs so they can focus on their family and health priorities. Contact our experienced legal team today at 212-328-9568 for a free introductory call to learn more.
Pets And Estate Planning
Pets have become an important part of our families today, many owners putting their love and care a top priority. Whether someone is single or has a family that includes children, pets contribute to our quality of life by providing companionship and unconditional love. They may go along on the family vacation, accompany us on a morning run, or just tuck in on the sofa while watching a favorite movie or television show. Many animal lovers who are passionate about their furry family members are curious about pets and estate planning. Is there such a thing, and what should you know? Those with questions may want to consider reaching out to the experienced estate planning attorneys at Jennifer V. Abelaj Law Firm at 212-328-9568 to learn about all of their legal options.
Pet Ownership in the United States
According to the Insurance Information Institute, Inc. (III) approximately 70% of households in the United States include pets. A survey conducted by the American Pet Products Association found that more than 90 million families owned pets during 2021. This increase is partially due to the COVID-19 pandemic when more people brought pets into their homes for companionship and comfort. Of pet owners, 69% of households had a dog, while 45% had a cat. Many pet owners assume that if something were to happen to them, a family member would take over the care of a pet. Unfortunately, many end up in shelters where they may or may not be adopted.
Why Include a Pet in Your Estate Plan?
Just as people create a Last Will and Testament or estate plan to plan for the future of their loved ones upon their passing, many want to make provisions for their dog, cat, or other pet in the event of their death. It is possible to designate who will be responsible for providing shelter, care, nourishment, and for the other needs of a pet. However, it is important to consider who would be trustworthy and responsible in carrying out your wishes. Surveys conducted in recent years indicate that millennials are significantly more interested than baby boomers in having provisions for pets in their estate plans. Ultimately, when there are no provisions outlined in a will concerning the future care of a pet, it may be considered property. This means the future of a pet may depend on a state’s intestacy laws. The simplest thing to do is designate who you want to care for a pet in a will, however there are other options such as pet trusts.
Pets and Estate Planning Options
There are a few options when it comes to providing for a pet’s future or seeking medical care for a pet in some circumstances. Some of the options include:
- Informal agreements
- Letters of instruction
- Pet trusts
- Durable power of attorney for pet care
Those with questions regarding the various estate planning options for pets may want to consider visiting with Jennifer V. Abelaj Law Firm to learn more.
Informal Agreements
Informal agreements are common and often involve a close friend or family member who is reliable and trustworthy. A person can request that if they become ill or pass, this person will care for the pet. Informal agreements are fine for their purpose, however it is important to consider that whoever is chosen to provide care can do whatever they please. For instance, someone who moves into a retirement home and places the care of their pet to a son or daughter will have no control in what happens once the pet is in their possession. Therefore, it is critical to choose someone who is highly trusted when using an informal agreement.
Letters of Instruction
A letter of instruction is not submitted to a probate court and is designed to work in unison with a will, trust, or other estate planning device. Letters of instruction are often left behind for family members, and are information, instructions, or express wishes concerning what you do and do not want. Letters of instruction are not legally enforceable and have little impact on assets or property. Many pet owners use letters of instruction to outline their wishes regarding their pets, how the pet should be cared for, who should take care of it, and more. Letters of instruction can be modified or updated at any time, which makes this option easy for many pet owners.
Pet Trusts
A pet trust makes it possible for a pet owner to name a caretaker that will provide for a pet in the event the owner becomes incapacitated or passes. The designated caretaker is under a fiduciary obligation to care for the pet as outlined in the trust. Pet trusts typically provide funds that will be used to take care of the pet which are disbursed to the appointed caretaker by the trustee. These funds are used for food, veterinary care, and other costs.
Pet trusts also make it possible to designate successive caretakers should the primary caretaker have a change in life circumstances or another event that makes it impossible for them to continue caring for the pet. A pet trust ensures that a pet does not become the legal property of someone who is not trustworthy or responsible, or someone of your choosing. With a pet trust it is possible to maintain control over caregivers. This gives the most peace of mind to many pet owners who want to ensure their pets are in good hands.
Durable Power of Attorney for Pet Care
Some pet owners want someone who can act on their behalf when their pet needs medical care and they are on vacation or away on business. A durable power of attorney for pet care authorizes another person to seek medical care for a pet and specifies the extent to which the agent may act on the pet owner’s behalf.
Consider Visiting with an Experienced Estate Planning Attorney Today
Pets and estate planning are more common than ever before today. Each year more than 500,000 pets are euthanized because their owners could no longer care for them according to the American Bar Association. While humans have many others they can rely on for their needs, pets have only their owners. They rely on their “humans” for food, shelter, love, and care. Those with dogs, cats, or other pets who are considering planning for their pets’ futures may want to consider visiting with Jennifer V. Abelaj Law Firm today at 212-328-9568.
Inherited Property: What is Step Up in Basis? Discussion with Cherie Williams, CPA of The Little CPA
Jennifer collaborated with Cherie Williams, CPA, founder of The Little CPA, on the topic of inheriting assets. Cherie created The Little CPA to empower purpose-driven professionals to make wise financial decisions that build diligent wealth.
Inherited Property: What is Step-Up in Basis? – The Little CPA
(The Little CPA empowers purpose-driven professionals to make wise financial decisions that build diligent wealth.)
Jennifer V. Abelaj, Guest on the Inside BS Show Podcast, hosted by Dave Lorenzo: The Right Way to Plan Your Estate and Gifts to Charitable Institutions (Show 97, originally aired 06-29-2022)
I enjoyed my recent discussion with Dave Lorenzo, who is the host of The Inside BS Show podcast about The Right Way to Plan Your Estate and Gifts to Charitable Institutions.
Dave’s daily podcast includes informative discussions with professionals in the spaces of marketing, sales, business strategy and all the big secrets THEY don’t want you to know. The show will entertain you with great interviews, help you make more money, and give you the inside scoop on all the best secrets most people never share.
I’m so pleased to be a guest on this show and provide information about estate and philanthropic planning. I had a great time chatting with Dave, who is an excellent podcast host and an expert in sales techniques.
Below is a bio for the show, as well as a link to the audio and YouTube. Hopefully you get to learn more about Wills, Trusts and my passion for philanthropic planning. Let me know what you think!
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The Right Way to Plan Your Estate and Gifts to Charitable Institutions
This show is important for anyone who cares about his/her family. Today Dave Lorenzo has a conversation with Jennifer Abelaj, a New York Estate Planning Attorney.
Join us!
Creating A Business Succession Plan
Starting and building a business is a work of a lifetime that requires making unsaid compromises and facing unknown hardships. Yet, when it comes to planning a future for their businesses, most business owners do not have a legal plan in place. The United States Small Business Administration reports that around 70 percent of privately owned businesses, with an estimated worth of $70 trillion, will change hands in the next 10–15 years. Yet, as reported by the National Association of Corporate Directors, only one in four private companies opt to have a formal succession plan in place. If you want to know more about creating a business succession plan for your business and about the legal process involved, consider contacting the experienced New York estate planning attorneys of Jennifer V. Abelaj Law Firm today by calling 212-328-9568.
What Is Business Succession Planning?
In simple words, business succession planning means preparing in advance for a change in the ownership of the business. This involves identifying the events that may cause the ownership change, establishing certain timelines and standard operating procedures, and identifying potential successors or key employees.
Unforeseen and unfortunate events, such as a family feud, death, severe illness, or disability, may require a sudden change in business ownership and management. Having a proper succession plan for a business is like having a will for a person. When a person prepares a will, that person decides what will happen to his or her wealth and property after he or she dies. Similarly, having a business succession plan in place ensures that the business has an exit or a transfer per the owner’s wishes.
Benefits of Having a Business Succession Plan
Creating a succession plan for one’s business has many benefits. Some of these benefits include:
- Smoothing the transition
- Maximizing value and minimizing loss
- Training future leaders or employees
- Identifying weaknesses
- Retaining key employees or creating roles
Smoothing the Transition
If the business is to be transferred to a family member, a succession plan enables a smooth and clear transition and avoids a potential family feud. Rather than leaving it to the court to decide what happens to the business, the decision is made by the business owner in advance when a plan is in place.
Maximizing Value and Minimizing Loss
If the business is to be sold or transferred to a third party, a pre-determined plan about how that transition will be handled helps to maximize the value of the business. Having a succession plan in place also helps to avoid a last minute or sudden sale below the market or fair value.
Training Future Leaders or Employees
Whether the business is to be transferred among family members or to a key employee, identifying the potential successor or successors allows time for sufficient training.
Identifying Weaknesses
While planning in advance, the owner may identify loopholes or inefficiencies in the business and will be able to make a plan to address those weaknesses.
Retaining Key Employees or Creating Roles
Certain employees are important to the success of the business. Further, a business owner may want to involve certain family members in the business. With succession planning, the business owner has the opportunity to retain those employees and create roles as needed for family members.
If you have been thinking about creating a business succession plan but are not sure about the best options for your business, a skilled estate planning attorney at Jennifer V. Abelaj Law Firm can help you better understand the steps involved in creating a sound business succession plan.
Steps To Create a Business Succession Plan
Creating a business succession plan involves considering multiple factors. Some of the most important steps involved in creating a business plan include the following:
- Identifying future goals
- Identifying potential successors
- Conducting a business valuation
- Completing estate and tax planning
- Making necessary changes to governing documents
- Selecting an exit option
- Selecting a team of professionals
Identifying Future Goals
While creating a business succession plan, the business owner needs to identify personal goals are and desires for the business. This includes retirement planning and, if the business is a family business, choosing whether to transfer the business to family members or opt for an exit strategy.
Identifying Potential Successors
A business owner must initiate an honest conversation with family members and identify who is most capable of running the business. Additionally, determine whether the family member is actually interested in running the family business in the future. Sometimes, however, a key employee may be best suited to run the business through an Employee Stock Ownership Plan. If there are no potential candidates, the business owner may consider selling the business.
Conducting a Business Valuation
Conducting a business valuation through an appraiser is important to the process of creating an appropriate business succession plan. A business valuation is done on the basis of revenues, potential incomes, debt, assets, pending litigation, and current market value.
Completing Estate and Tax Planning
Estate and tax planning is one of the most important steps in a business succession plan. Failing to plan these well can lead to unnecessary expenses. However, proper planning can minimize taxes.
Making Necessary Changes to Governing Documents
Making corresponding changes in the organization’s governing documents will ensure that those documents align with the succession plan. Any contrary terms or clauses in the company’s partnership agreement or shareholder agreement may later create a hurdle if not changed accordingly.
Selecting an Exit Option
Typically, business owners select one of four modes of exiting their own business:
- Transferring to a family member
- Making a sale deal with a key employee or a business partner
- Selling the company to a third party
- Closing and liquidating the company
Selecting a Team of Professionals
A good business succession plan addresses the multiple factors that impact the value and longevity of the business. Therefore, it is important to select a team that can handle the many aspects of succession planning.
Contacting a Business Succession Planning Attorney
Creating a business succession plan is a challenging and multidisciplinary task. One needs to consider family relationships, personal future goals, taxes, and other legal matters involved while making a solid succession plan. To learn more about your legal options and how you can create a succession plan for your business, consider contacting an experienced New York estate planning attorney at Jennifer V. Abelaj Law Firm today by calling 212-328-9568 to schedule a consultation.
Valuation Of Hard To Value Assets
It is difficult to determine the value of hard to value assets, hence their name. Hard to value assets, also referred to as HTVAs, can make appraisals in estate planning and business valuation more complicated and time-consuming. There are different methods for valuing hard to value assets, but the appropriate methodology depends on the type of asset and the circumstances surrounding the valuation. A consultation with a knowledgeable estate planning attorney may be beneficial for a proper and accurate valuation of hard to value assets. At the Jennifer V. Abelaj Law Firm, we assist clients in New York with a wide range of estate planning needs. You can request more information by calling 212-328-9568 and scheduling a consultation.
Methods for Valuing Hard to Value Assets
The methods for valuing HTVAs differ from one case to another. Choosing the appropriate methodology requires a thorough understanding of appraisal regulations and available valuation approaches. When selecting the method for a valuation of hard to value assets, it is vital to consider the purpose of the valuation, the asset’s competitive properties, and the nature of the local market. When valuing HTVAs, appraisals need to apply a comprehensive framework, follow the accepted guidelines, use professional judgment, and consider all factors to ensure an accurate valuation.
A Guide to Valuation of Hard to Value Assets
As mentioned, the appropriate method for valuing hard to value assets depends on the type of asset and reason for the valuation. For example, is the valuation necessary as part of a sale, gift or death. What follows are general guidelines for valuing these HTVAs:
- Real estate and automobiles
- Stocks
- Bonds
- Life insurance
- Annuities
- Business
- Personal property
- Debts
Real Estate and Automobiles
Often, people seek the help of an experienced real estate agent to estimate the value of their real property. An agent who knows the local market will be able to provide a rough estimate. However, this approach may not work with hard to value real estate. Similarly, certain automobiles, such a collectibles or rare versions, may have a value which depends on whether it is part of a collection. If the asset requires a more thorough analysis, the owner of the property will most likely have to hire an appraiser and collect all available information about real estate and any automobiles in order to obtain an accurate valuation.
Stocks
Valuing closely-held stocks often involves computing the company’s price-to-earnings ratio. However, an amateur may not be able to determine the value of stocks accurately. If the owner of stocks dies, the personal representative of the decedent’s estate may choose to get in touch with the company that managed the decedent’s stocks or consult with a financial expert well-versed in stock valuation. Title 26 of the Code of Federal Regulations (CFR) § 20.2031-2 provides guidelines for the valuation of stocks and bonds based on selling, bid, and asked prices.
Bonds
The approach to valuing bonds is similar to the method for valuing stocks. Determining the value of a bond usually involves calculating the bond’s cash flow and face value. The individual or firm performing a valuation of a bond may also need to add accrued interest that has not been paid after the decedent’s death.
Life Insurance
When determining the value, the appraiser may calculate the policy’s face value and cash value. The policy’s face value is the amount of money beneficiaries of the policy receive upon the owner’s death. The cash value, on the other hand, is the accrued amount that can be accessed outside of the death benefit. For life insurance that is part of a gifting transaction, sometimes the value is based on the interpolated terminate reserve (ITR). The ITR is similar to the cash value, but the calculation is based on various other factors.
Annuities
A valuation of hard to value assets may also include valuing annuities if the decedent owned any. In order to determine the value of annuities, the personal representative of the decedent’s estate may need to contact the company that sold the annuities to valuate them as of the date of the owner’s death.
Business
Often, determining the value of a business is the most challenging part of valuing hard to value assets because businesses may include both tangible and intangible assets and liabilities. A business is also difficult to value if the deceased person was not the only owner of the business. In this case, the personal representative of the estate may need to contact a certified public accountant to estimate the value of the deceased person’s interest. However, business and other valuations may be easier if planned in advance. At the Jennifer V. Abelaj Law Firm, we offer estate planning and business succession planning services tailored to each client’s needs.
Personal Property
Certain types of personal property may be considered hard to value assets. Common examples of HTVAs among personal property include cryptocurrency, digital assets, works of art, jewelry, and antiques. While many people choose to visit eBay and similar platforms for estimating how much personal property is worth, it may be necessary to reach out to an auction house, art museum, gemologist, or other expert who specializes in valuing antiques, artworks, and jewelry.
Debts
According to the Federal Trade Commission, the personal representative of the estate is responsible for settling the deceased person’s debts. Once the valuation of hard to value assets is complete, it is essential to identify all debts that the debtor owes and determine their value. Common types of debt include mortgages, credit cards, loans, and debts associated with the deceased person’s medical treatment prior to the death.
Is an Appraisal Necessary for a Valuation of Hard to Value Assets?
An appraisal may be necessary for some of the hard to value assets mentioned above. Usually, people choose to hire a professional appraiser for an accurate appraisal. It is recommended to request the appraisal as soon as possible after the decedent’s death. A valuation of hard to value assets can become even more difficult if a significant amount of time has passed after the owner’s death. The Date of Death Appraisal is necessary for several purposes, including taxes. The appraisal will be used to establish whether an estate tax should be paid to the Internal Revenue Service (IRS) and to determine the amount of estate tax if any.
Contacting an Estate Planning Attorney
For assistance with the valuation of hard to value assets, consider seeking legal guidance from an estate planning attorney at the Jennifer V. Abelaj Law Firm. We help executors and personal representatives of estates in the efficient settling of the decedent’s affairs, including valuation of the assets. We also assist people with creating a comprehensive estate plan that takes into account the hard to value assets in order to protect them and minimize taxes. To schedule a case review, call 212-328-9568.
Estate Planning for a Single Person
Many people believe that estate planning for a single person is not a priority, but this approach fails to understand how comprehensive estate planning can actually be for an individual. In fact, if you are a single person, your estate plan may be even more important in terms of guaranteeing that your legacy is dealt with in accordance with your wishes and that your healthcare decisions are honored in the event you are not able to address them yourself. If you are single, your estate plan matters, and the experienced estate planning attorney at the Jennifer V. Abelaj Law Firm (212-328-9568; abelajlaw.com) in New York has the experience and legal insight to help.
Recognizing Decision-Making Authority
If you are single (unmarried and without children), you are unlikely to have anyone whom the State of New York will readily recognize – absent an advance directive – as having the authority to make healthcare decisions on your behalf (in the event you are incapacitated). The same is also true of any financial decisions that need to be made in the course of your incapacitation. While a spouse or child can fill this role for married individuals, you face unique challenges in terms of estate planning for a single person. This makes establishing both a financial power of attorney (as defined by the New York State Bar Association) and a healthcare proxy paramount for those who are single. If you cannot make primary decisions regarding your health and/or finances on your own (due to incapacitation), you want someone whom you trust to do so on your behalf – in accordance with your wishes and with your best interests in mind – and this can be addressed in your estate planning efforts.
Dying Intestate (Without a Will)
If you were to pass away without a will in place, your assets, which amount to your financial legacy, will be distributed by the court in accordance with state law. If you are married with children, this distribution is likely to align with your basic wishes, but if you are single, this is not necessarily the case. New York intestacy laws, which guide how assets are distributed when there is no will or estate planning document, dictate that the assets of single people who have no children are distributed as follows:
- Your assets (in their entirety) will pass to your parents.
- If you do not have a living parent, your assets (in their entirety) will pass to your siblings.
If neither of these applies in your situation, your estate will likely be divided between your mother and father’s relatives, including distant cousins. In other words, estate planning for a single person is exceptionally important, and the practiced estate planning attorney at Jennifer V. Abelaj Law Firm in New York is well positioned to help you address your unique estate planning needs.
Taking Important Steps Forward
It is easier for single people to ignore the matter of estate planning, however taking the time to solidify your wishes now can provide you with considerable peace of mind moving forward. Further, if you are inching toward retirement age, the time for estate planning for a single person is now. In addition to setting up a financial power of attorney (POA) and a healthcare proxy, there are a variety of important steps you should take.
Make Your Will
One of the most important aspects of your estate plan involves making your will, which names your estate’s executor – who will be imbued with the authority to engage in all the following:
- Attending to your affairs (in accordance with your wishes) after your death
- Probating your Will (if the need arises)
- Paying both your income and estate taxes
- Allowing for estate tax planning
In order to streamline the process of passing your assets on, the best course of action is generally making a revocable trust (created during your lifetime) the beneficiary of your will.
Create a Revocable Trust
Over the course of your lifetime, you may have built a financial legacy that continues to grow, and upon your death, you want your assets to flow to your loved ones – and/or to charities that are meaningful to you – in accordance with your wishes. A revocable trust provides you with the tools necessary to do so. For example, if you have a significant other to whom you are not married, including his or her name as a specific beneficiary of your trust will ensure that he or she receives those assets that you want him or her to have. Further, you may want him or her to remain in your home until his or her passing – when the property may move on to a relative (or someone else of your choosing) – as identified in your revocable trust. Setting up a revocable trust is an excellent way to specifically address the unique challenges that are often part of estate planning for a single person.
Fund a Trust Today
The importance of funding a trust throughout your lifetime cannot be overstated. If you are incapacitated at a later date, your trust’s successor trustee can use the funds therein to pay for your healthcare needs (in accordance with your specific wishes). If you have not successfully completed the steps of setting up a trust and funding it, those who are closest to you may be required to have a guardian or conservator appointed on your behalf, which can be a lengthy and complicated process. By funding your trust now, you accomplish both the following:
- You control who will be managing the assets you have included in the trust.
- You ensure that the assets you have included in the trust avoid the probate process.
Estate Tax Planning
For a single person who has assets that have a total value that is greater than the New York State or Federal Estate Tax Exemption, they must take deliberate steps to address minimizing estate taxes. A married person may take advantage of the unlimited marital deduction for assets that pass to a surviving spouse. However, a single person does not have this deduction available. This is most pressing for single persons who have a partner (or children), and who will bear the estate tax burden. Options might include charitable bequests, gifting during life, or creating irrevocable trusts that remove assets from your estate. This can only be done with advanced estate planning.
Reach Out to an Experienced New York Estate Planning Attorney Today
Estate planning for a single person is extremely important. In fact, you could be facing challenges that married individuals with children do not. Whatever your unique estate planning needs are, the experienced New York estate planning attorneys at the Jennifer V. Abelaj Law Firm can help. To learn more, please do not wait to contact or call us at 212-328-9568 today.