“Even though protecting your kids if something happens to you is one of the most important responsibilities of being a parent, too many parents find the topic confusing or intimidating, so they put it off for months or even years,” says Shannon McNulty, NYC based lawyer and author of the new book Legal Planning for New York Parents.
As there are no certainties in life, it’s important that parents ensure that estate planning tools, such as wills and trusts, are in place and updated as necessary. Before opening her own practice, McNulty practiced law at Curtis, Mallet-Prevost, Colt & Mosle and Skadden, Arps, Slate, Meagher & Flom and completed a judicial clerkship for a U.S. District Court Judge of the Southern District of New York. Now heading up her own firm, she makes it easy, walking you through all of the decisions and documents you need. We asked her about New York law and what is important when raising a family in the big city.
Is New York unique in any way with respect to wills & estate planning?
There are a few things different in New York than in some other states. One is if you are married and have kids, your assets don’t automatically go to your spouse if you pass away without a will; they are divided between your spouse and your children, even if they are minors. It’s something that surprises people and can cause a lot of legal problems. The other thing that’s unique about New York is that it has one of the highest estate taxes in the country, so families with substantial assets can end up paying millions of dollars in estate taxes to New York State, even if there is no tax at the federal level. I work with clients to implement strategies for minimizing or eliminating these taxes so that a big chunk of their kids’ inheritance doesn’t end up with the government.
What are the dangers of not having a will?
By far, the biggest danger of not having a will in place is that your kids could end up being raised by someone who is not well equipped for that role. That’s why guardianship planning should be an absolute priority for every parent. Your will should include at least one permanent guardian, and ideally an alternate guardian, to care for your children.
What’s the right time to do it? Is it ever too early or late?
Legal planning is a lot like financial planning, in that it’s something that should be ongoing throughout your life. While anyone can benefit from having their legal documents in place, the need for a good plan becomes far greater when you have children. Many of my clients come to me before or within the first few years of having their first child. We then revisit the plan periodically as their family grows and their financial situation changes. As long as you’re alive and have your faculties, it’s not too late to do your planning. I’ve seen too many cases where someone died unexpectedly and hadn’t gotten around to putting their documents in place, leaving a mess for their family. At that point it is too late.
Any specific advice for same sex couples?
Since the US Supreme Court recognized same sex marriage in 2015, estate planning for same sex couples is very similar to planning for heterosexual couples. That being said, this is a fairly recent development in the law and with the changes in the political environment that we’ve seen in the past year, it’s something that we want to keep an eye on. In New York, we’re fortunate to live in a state that provides equal rights to same-sex couples but that’s not true for some other states. And because the wishes of same-sex couples may be more likely to be challenged by outside parties, it’s particularly important for these couples to have their documents in place. One of the issues that is common for same-sex parents, but by no means unique to them, is that their children are often born through artificial reproductive technology. In these situations, it’s important to ensure that the non-biological parent will have parental rights if the biological parent passes away. The best way to do this is through a second-parent adoption.
What is the first step?
Discuss the topic with your spouse if you have one and think about who you would want to serve as your children’s guardian. Then I would recommend contacting a lawyer and setting up a consultation. The important thing is to get started. It’s human nature to assume that nothing will happen to us and put it off, but postponing the process has significant risks for your family. Some parents want to have more information about the process before they see a lawyer and for those parents, my book is a great place to start. It provides a roadmap of exactly what you need to put in place and why and offers tips for special situations like international families, divorced parents and more. It can make you feel more prepared.
Check out The Complete Guide to Legal Planning for New York Parents, by Shannon McNulty, Esq., LLM at Babesta.