Attention NY Legal Professionals: Smoother Sailing Ahead for Obtaining Sworn Statements
By Gabrielle Wasenius In New York, attorneys have traditionally been permitted to submit affirmations to courts instead of affidavits, the law controlling this practice, CPLR 2106, removed the prior mandate for attorneys to acquire a notary public’s oath before presenting their sworn statements. The CPLR drafters believed that attorneys’ professional responsibilities and the potential for prosecution for false statements were adequate safeguards against dishonesty, thus eliminating the necessity for a notary public. Additionally, the law allowed specific medical professionals to affirm the veracity of their own statements. In 2014, CPLR 2106 was amended to permit affirmations instead of affidavits from individuals located outside the United States, Puerto Rico, the United States Virgin Islands, or any territory under U.S. jurisdiction. This change sometimes made obtaining a statement from someone overseas than from a person in a nearby state easier. On October 25, 2023, Governor Kathy Hochul signed two laws amending CPLR Rule 2106. Effective immediately, A06065 / S02997 expanded the scope of who can make affirmations in civil actions to include all licensed healthcare professionals. Effective January 1, 2024, A05772 and S05162 allowed affirmations in lieu of affidavits to be made by any person in a civil action. The new law applies to both new legal actions initiated on or after January 1, 2024, and to actions that are still pending as of the effective dates. Now, a statement made by any individual and affirmed by that individual as true under penalty of perjury can be used in a legal action in New York as a substitute for an affidavit, with the same legal weight. The affirmation should contain this language: I affirm this ___ day of ______, ____, under the penalties of perjury under the laws of New York, which may include a fine or imprisonment, that the foregoing is true, and I understand that this document may be filed in an action or proceeding in a court of law. (Signature) Keep in mind, the new CPLR 2106 does not eliminate the need for notarized affidavits and affirmations entirely. Notarization will still be required in cases where the law mandates the declarant to verify their identity or the document’s authenticity. Nonetheless, this amendment modernizes New York law, aligning it with practices in more than 20 other states. It will reduce the burden on litigants, witnesses, clerks, and courts. Moreover, it helps to overcome logistical and financial barriers, like trying to obtain a notarized document from a non-New York heir who is party to a New York action. Hopefully, this change reflects New York’s dedication to adapting its legal system to meet contemporary needs and challenges.
A Peaceful Way to End the Year – Checking the List
As the year winds down and we embark upon the “holidaze,” it’s a great time to take a few minutes and step back to review. \”Now?!,\” you may ask. Yes, \”now.\” Reviewing what we’ve accomplished and can accomplish before year’s end allows us to breathe a little easier as we deal with the frenzied seasonal festivities. So, the next few articles will focus on fundamentals that can bring you peace of mind and a nice deep breath before 2014. First on the list is insurance – life insurance and business insurance. If you don’t have it or enough insurance, then either purchase it by year’s end or put in the budget for Q1 ’14. However, you should be mindful that, like all important things we must buy, insurance rates are only going to increase. Thus, it may sound counterintuitive, but if your budget is a significant concern but cash flow isn’t, act now because rates will likely increase and the value of your money will decrease. Life insurance on all the working adults in one’s family is critical. Having sufficient insurance will make for a peaceful night’s rest during times when everything is fun and festive. Conversely, when unthinkable situations occur, family members can focus on the healing and comforting of each other instead of scrambling to try to find money to pay for memorial service necessities or thinking about a job search to replace income. Business insurance should be a no-brainer. Yet, thousands of smart business owners don\’t have liability insurance. America is the most law-suit crazy country in the world. I need not say more about that. However, insurance can also be of great help if a smallbiz owner becomes ill and can\’t pay the bills for a few months. Finally, keyman insurance is helpful in succession planning issues. For more information about the usefulness of insurance, check out these articles and be sure to enter 2014 on a peaceful note: Why and how to make the appropriate designations; it is not as easy as it appears. Determining the appropriate amount; and it shouldn\’t concern Jimmy Choo. Why small business success is like sushi. Happy Holidaze!
Charitable Trustees Beware
Cycling to the office this morning, I passed a woman jogging while pushing a 3-wheeler stroller jogger with twins in it. My mind meandered as to how challenging it must be to care for twins and let’s not even talk about triplets! But I couldn’t help it… Hope and Bill had triplets: Gray, Jay, and Faye. Bill couldn’t handle the stress of 3 terrible twosies, 3 tumbling toddlers, 3 precocious pre-teeners, and 3 hormonally tangled teenagers, so he divorced Hope when the triplets were 15 and went on a permanent excursion to chant in the Himalayas. Hope, not one to be deterred, called on her siblings, Charity and Joy. All was going well until Hope suddenly became ill and, at the young age of 44, passed away, leaving 3 teenagers with no parent. Bill had never been heard from since he left with snowshoes in hand. However, Hope left a will and a trust, naming Charity as trustee and Joy as guardian. When Hope passed on, though she didn’t have a taxable estate at $4 million, she left a considerable amount to her children and her sisters: $1 million to each child and $500,000 to each sister. After the trauma of losing their sole parent had waned to a manageable, moving forward, level, May, Faye, and Jay continued planning for college. Faye was especially excited because she had been accepted at her first choice for engineering. Well, 3 years into her engineering program, Faye and a few other classmates decided to start a small technology company. Each classmate pledged $100,000.00 as seed money and each had the means to fulfill the pledge. So Faye phoned Charity, who was vacationing in the Cayman’s, told Charity about the new venture and asked for her pledge money. She knew that her mom had left enough for her in the trust at this stage – Hope had staggered mentoring provisions in each child’s trust – to more than meet the pledge and that Charity was to invest for the purpose of conservation and then growth. What Faye didn’t know, however, was that Charity was very charitable to herself, using not only Faye’s trust, but May’s and Jay’s as a source of charitable giving. Charity told Faye that it would be a little difficult to come up with the $100,000.00 straight from Faye’s trust, but that she would borrow from May and Jay and help Faye meet the pledge. Faye, the oldest by 10 seconds, didn’t like what she heard and a heated argument ensued. It ended with Aunt Charity telling Faye to calm down or else she wouldn’t get anything because she had discretion over the distribution and there was nothing Faye could do. In fact, Charity decided to make the Cayman’s her home and wasn’t sure when she’d be returning to the states to give Faye the distribution. But Charity was wrong; Faye had the law on her side and Charity was eventually extradited to the U.S., where she faced counts of fraud and breach of fiduciary duty. Faye and her classmates’ business boomed; she eventually coupled with a partner and had a child aptly named, Prudence. The Prudent Investor Rule: A trustee administering a trust has a duty to invest and manage the trust as a prudent investor would considering the purposes, terms, distribution requirements, and other circumstances of the trust.
Essential Estate Administration Steps When You\’re Responsible for Saying Farewell
Some of my readers may know that I recently lost my father. As an estate planner, yes, I made sure a number of items were in order. However, as a daughter to a fiercely independent and private individual, I was compelled to respect certain boundaries. Another good colleague and fellow author, Lisa Lilly, who also lost her father, recently reminded me in her blog that it’s never too early to share important knowledge. So below are several tips on the very beginning activities of “estate administration.” And while I intended to write this article before my father made his transition and a little later in the year when the sky was less blue and Lake Michigan waters were much cooler, there really is no time like the present… Much of this can be applied irrespective of your relationship but for precision, this article makes the following assumptions: “The conversation” took place and there were no unresolved issues; consequently, there’s no family feud. Your loved one had a primary care physician, nurse, or hospice caregiver. You will be the one to say the final farewell. The Steps Make sure you have a couple of very close family members or friends on call for “that day,” so you will have support around you. Phone the doctor or the hospice; DO NOT phone 911 or the police. Prepare to spend a few hours waiting for the doctor or nurse to arrive to make the final pronouncement. While waiting, do what you feel you need to do. DO NOT listen to directions from other friends and family unless you want to. Be prepared to answer lots of questions about: your relationship to the departed; who found the departed, when, and how; what funeral home should be notified, even if cremation or anatomical donation are the instructions; your complete contact information. And don\’t take it personally. Be prepared to have your loved one physically removed from you permanently; this is why it’s good to have someone else with you, the emotional effect on you cannot be predicted. Be prepared to emote or manifest emotion somehow. DO NOT access any financial accounts; your loved one wouldn’t want you arrested for fraud. Contact everyone who knew the dearly departed, including church, community, and social groups. Get a couple of family members or close friends to help. Depending on the global reach of your loved one and his or her final wishes, start to think about a memorial service date that is soon or later, to allow for friends and family to make reasonable travel arrangements. Visit the funeral home asap to order several death certificates. You don’t have to start on the arrangements then. DO NOT BE PRESSURED into making decisions like date and time until you’re ready. Make sure you have all keys to everything – the house, apartment, car, safe deposit box, storage, and anything else. And LOCK UP. Complete address forwarding cards and forward the mail to you. If needed to pay for services, contact the insurance company. If not needed, then wait until the services are concluded to handle all financial matters. Write an obituary and send it to the appropriate publications: neighborhood or city newspaper and alumni magazines. Delegate. Delegate. Delegate. Carve out time for yourself. Move forward, genuinely, gently, one day at a time.
If You Have a Facebook, LinkedIn, Twitter Account …
A recent case, Ajemian v. Yahoo!, Inc., came to my attention because it involved access to a dearly departed brother’s Yahoo! email account. A recent change to Yahoo!’s terms of service includes the following: You agree that your Yahoo! account is non-transferable and any rights to your Yahoo! ID or contents within your account terminate upon your death. Upon receipt of a copy of a death certificate, your account may be terminated and all contents therein permanently deleted. (Emphasis added by The Shark Free Zone.) Therefore, siblings, who were administrators of the brother’s estate and despite providing a death certificate, could not even access the content of their brother’s Yahoo! account. This case highlights the fact that, if any information that is useful to an estate’s executor or administrator, e.g., a username change, bank or utility online statements, or the names of online accounts that the user had were provided, upon proof of a loved one’s death, the Yahoo! account may be frozen and the information not transferred but destroyed. That means that the executor or administrator will have to go through the departed’s mail, papers, or even underwear drawers, to contact the institution and perhaps wait days or weeks for final account information to be provided. Ouch! The above is also another reason why I’ve said it before and will keep on saying it: Property powers of attorney should authorize access and control of digital accounts and assets. Equally important, a list of user names and passwords, at least for email and financial accounts, should be provided to your designated executor or one or two loved ones. If you bank and enter into other financial transactions online, such as paying a utility bill, without usernames and passwords your power of attorney agent can\’t properly manage your affairs. Arguably, providing the agent under a power of attorney could be construed as “transferring” the rights, but your agent is acting on your behalf, so the transfer is actually what we call a “legal fiction.” But death is death; no fiction that can undo that. So even if you didn\’t take care of the matter while you were on Twitter, if you didn\’t at least authorize your executor to obtain and use this information, then your family will experience even more emotional angst than necessary after your final tweet. What was the ruling on the case? It was remanded back down to the court from which it came to make the decision from a state law perspective, since the deceased was a Massachusetts resident. The Court decided that the selection of law that Yahoo! tried to impose – California was improper given the decedent user lived in Massachusetts and that state would have a decided interest in the case. Maybe this is also another reason for us to be more careful about what we post; it could end up in the hands of a stranger or a loved one who we unduly and harshly criticized. Double ouch!
7 Money-Savers before Googling, Binging, or Yahoo!ing \’Wills\’
This sucks as a topic sentence but the truth isn’t always tasty, so here goes: Contemplating death is not something most folks like to think about. Yet, if you want your transition to be as smooth as possible for your loved ones, recognizing the emotional turmoil they will undoubtedly be experiencing, having your affairs in order is a loving and thoughtful way that can prevent further turmoil. However, before you Google “wills,” take the time to consider what you want for your family in the event of an unexpected tragedy or the inevitable. Taking sufficient time to thoughtfully deliberate about your intentions before you meet with an attorney will also save you money on attorneys’ fees, and who doesn’t want to save money these days? Your considerations should probably start with your loved ones: If you have minor children or dependents, then they will need a guardian. If you have a pet or pets, then you should consider who would be best and willing to care for your cockatoo or kitty. If you own a home, then who should pay the mortgage? Are the beneficiary designations on your retirement accounts accurate? What should happen if 1 of your 2 children becomes disabled? Should the distributions still be absolutely equal? What type of gift should you consider for your niece or best friend’s daughter who’s also like a daughter to you but you have 2 other children? Who gets your favorite blue sweater? Many questions that we need to have answers for to get our affairs properly situated, don’t involve money. Still, the sooner we can answer, “What if?” and “Who?” the sooner we can create a sustainable peace of mind over both our financial and personal affairs.
Blood or Money? Making Fiduciary Designations that Maintain Family Harmony
Tons of articles have been published advising individuals and couples about what to bring to or how to prepare for a meeting with your estate planning attorney. Most of these articles provide the typical list: financial statements, copies of tax returns, mortgage statements, retirement information, and so forth. Not surprisingly, few articles discuss the “hard list”: names of successor guardians for the children, names of successor trustees – particularly if the children have trusts, how special gifts will be distributed, and who should hold title to the home for asset protection purposes. A previous post discussed guardians but another issue that couples may want to consider is how to maintain family accord for the children’s benefit when a member from one spouse’s side of the family may be emotionally closer to the children than a member from the other spouse’s side, but both families want to be involved in the event of an emergency. Under those circumstances, the harmonious decision to name Uncle Louie Guardian and Uncle Gus as Trustee, for example, may be not-so-harmonious. Baby Gina’s and Big Brother Brett’s Uncle Louie on Mama’s side and Uncle Gus on Papa’s side may in fact have a great relationship. However, designating one guardian and the other trustee may place a strain on the relationship that would cause Robin to reconsider his relationship with Batman. Consequently, designating one person as both guardian and trustee would probably be more prudent. Plus, Uncle Gus might even appreciate it once you shared with him the critical and long list of duties a trustee must agree to undertake. Still, what if Uncle Gus is a control freak and would wreak havoc on the rest of you and your spouse’s living days if some authority wasn’t given to him? In that case, you could make Uncle Gus the Executor of the estate. But what if that wasn’t enough? Perhaps he would be satisfied with being the successor trustee of the family trust funds that remained after the children’s trust was fully funded. And if Uncle Gus wasn’t satisfied with that and Uncle Louie refused to switch places? Then consider the following 2 options: Creating a solid co-trustee agreement between the 2 uncles; or Designate a corporate trustee to manage the children’s trust. Sometimes to maintain family accord, retaining a reasonable corporate trustee is the only option. Yes, money leaves the estate but at least it\’s money and not blood.
A Fiduciary\’s Lesson on IRS Pre-emption
On April 11, 2012, the Second District Appellate Court of Illinois filed an Opinion emphasizing the importance of a fiduciary’s role in trust and estate planning. As a fiduciary, an executor or trustee typically has the responsibility to ensure items such as the estate’s value and the relevant taxes are calculated correctly and, subsequently, paid. Accordingly, it is important for individuals to select appropriate fiduciaries. It is equally important for those approached to be fiduciaries to understand the scope of duties involved and the consequences if those duties are not performed properly. Case on point: People of Illinois v. Kole, No. 09-L-892. The Lay of the Land In 1993, Anthony F. Crespo named Julius Kole as executor and successor trustee of the Anthony F. Crespo Living Trust. Crespo died in 2002 and Kole paid $127,000 in Illinois estate taxes. Kole also filed a request for an extension to file the Illinois estate tax return, which was granted. Six months later, he filed the Illinois return reporting an approximate $81,000 estate tax liability. The Illinois Attorney General’s office received the return and issued a “Certificate of Discharge and Determination of Tax,” stating that, based on the information provided, the estate taxes were fully paid and, therefore, the estate was clear of any liens from the State. The Certificate of Discharge also relieved Kole from any personal estate tax liability for the Crespo estate. However, an IRS audit of the federal estate tax return reported in 2006 a revised value of the estate, increasing the value from more than $2.1M to $4.4M. This, of course, increased the Illinois state tax liability. Consequently, Illinois sued Kole, personally, seeking the additional estate tax owed plus penalties and interest, amounting to more than $300,000. The Arguments Kole first argued that the plain language of the Certificate of Discharge had relieved him of the obligation to pay additional taxes. The State replied that the Certificate of Discharge was routinely issued upon initial filings, which were based on the information provided at the time. So the initial issuance did not negate the need for supplemental filings if new information resulted in additional taxes owed. Kole’s response to the State, however, was enough to cause this reader to question her eyesight: “[Kole] admitted that the estate never paid any additional tax to Illinois or filed a supplemental return, but he then objected on hearsay grounds to the contents of the IRS Report.” Commentary and Conclusion To use the common vernacular, “Hearsay? Really?” Kole’s argument about the Certificate of Discharge’s plain language meaning at least had some merit, but arguing that an IRS Audit Report is hearsay was quite colorable. Even non-lawyers have watched enough Law & Order to learn the public records and business records hearsay exceptions. The trial court, however, agreed with Kole’s plain language argument. The Illinois AG appealed and the Appellate Court reversed the trial court’s decision (see Lesson #2, infra). Lessons Choose a fiduciary who will obtain a correct valuation and pay the appropriate taxes due – whenever they\’re due; A Certificate of Discharge isn\’t really final until the IRS says so; and Take great care in accepting a fiduciary role.
Estate Planning that Keeps the Caregiver Out of Jail
Recent news stories abound about individuals who were caregivers for aging loved ones, and found themselves in court because they cared too much…about the loved ones’ bank accounts. But we really don’t need to go online or read the papers to hear about Aunt Abby’s favorite nephew, Jonathan, who changed the beneficiary designations on all of his aunt\’s retirement accounts and life insurance policies, naming Jonathan as the single beneficiary. Sometimes family members who spend significant time as the sole or primary caregiver are resentful and feel entitled to the funds because they sacrificed their careers or lifestyles to ensure the dearly departed’s final years or months were comfortable. On other occasions, family members are just plain old everyday crooks. Then on rare occasions, we have the family murderer. To prevent family members who were or will be primary caregivers from feeling resentful and taking nefarious steps toward their “fair share,” perhaps a family meeting should be held once the loved one at issue passes a golden or silver milestone. The meeting should cover 3 primary stages: (1) current living, (2) future living, and (3) postmortem needs. The agenda should also review needed resources and arrangements and pre-existing arrangements: money, physical assistance, companionship, time, estate planning documents, government benefits, and insurance, for example. Once the family determines the relevant needs for the appropriate stages, family could decide together who among its members is willing, able, and competent to manage the tasks and which resources could make tasks more manageable. Furthermore, if one person becomes a primary caregiver, the family should also determine how much that person should expect as compensation from the family and/or the loved one for his or her efforts. Maybe the loved one is disabled too, requiring even more assistance from the family caregiver. Individuals hear this and often say, “But this is family. You shouldn’t have to be paid to take care of your elders. After all…” Well, that is typically said before those individuals have helped elders out of bed, into the bathtub, driven them to and from, prepared their meals, and cleaned their homes. Example: Uncle Teddy is 78 years old. He lives in a 2 bedroom apartment he adores. The building has all of the amenities one really needs – cleaners, laundry, small supermarket, parking, doorman, and even a “wellness checker.” Uncle Frank has 2 children: a daughter who is a single parent with a high school teenager and another child in college, and a son who’s married, without children, and lives in a nearby state. Uncle Teddy’s siblings and parents are dead. However, he has a favorite niece, Martha, who visits him monthly and phones weekly. Uncle Teddy is fiercely independent but his health is declining. Currently, he performs most of his errands, cooks, and drives himself to the doctor. A cleaning person comes in once weekly. He also has life insurance, a will, and Martha as an authorized user on his primary checking account. In a year or 2, Uncle Frank’s mobility will dramatically decrease. However, will still need bills paid, meals prepared, personal grooming, and doctor visits. When he passes away, memorial services will need planning and implementing, his estate will need administering, and before that, his apartment will need cleaning and inventorying. There’s something for every family member to do to help Uncle Teddy now and then. Powers of attorney could also help currently and in the near future. Now, for family members who want to skip stage 2 and help the loved one to the post-mortem stage, like many states, Illinois has a “slayer statute” where family murderers can’t inherit the family home.
Dodge Probate and Keep the Car…No Pun Intended
A popular reason people use trusts as estate planning tools instead of wills is because a properly constructed trust will typically avoid probate. As mentioned on my web site, probate can be lengthy, costly, and just plain unpleasant. Still, having a trust prepared, for some individuals, is like taking a bath when all they need to do is wash their hands. So over the next few weeks, I’ll add to last week’s commentary about how to avoid probate using tools other than a trust, which can also be costly. All of us don’t have Warren Buffett’s money and keeping up with the Joneses is getting difficult even for the Joneses. In addition to the Illinois Transfer on Death Instrument, or TODI, another tool that may allow heirs to avoid probate is the Illinois Small Estate Affidavit, established by Article XXV (25) of the Illinois Probate Act. The Small Estate Affidavit allows a decedent’s personal estate to be distributed if certain criteria are met: The estate is no more than $100,000 in total value. No real property is included in the estate. No contested claims exist on the estate. The person filing and completing the affidavit is called an “affiant,” and upon signing the document swears under penalty of perjury that the statements made, boxes checked, or information provided in the affidavit is true. One may still use a small estate affidavit if there is a will; the will simply must be valid. Additionally, the affidavit cannot be used to bypass the terms of the will. It is inadvisable to use a small estate affidavit if one or more of the heirs is a minor or disabled. However, if a person simply needs to retitle Aunt Bee’s Coronado, the Small Estate Affidavit will probably do the trick.