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Now That You Have A Will, Where Should You Put It?

Posted: December 18th, 2013

Well, it’s about that time for New Year’s resolutions. Hopefully one of them is to do a Will. But once you do the Will, where do you put it? A safe deposit box seems like the perfectly logical place to store a Will and other estate planning documents. They are probably the most important documents you will ever have, so shouldn’t they be kept in the safest place?But is it a safety deposit box the best place? Or should you keep it in a fireproof safe in your home? With your lawyer? The court? Or somewhere else altogether?

One thing that I state now, and I’ll state it again (because it’s just that important): Whatever option you choose, make sure your executor knows what you did!

Although clients often instinctively want to put Wills in a safe deposit box, I personally prefer not to have my clients put their important estate planning documents there.

The problem arises with the fact that most banks seal a safe deposit box when informed of the death of the owner, and a court order must be issued to request that the box be opened to search for the Will. The banks will do this even if there’s a joint owner on the box. Although probate courts will generally issue this order “immediately,” in practice there is still a delay until the request is made to the court and the order is actually granted.

In New York, documents that are allowed to be released from the box are the original Will, any deed to a cemetery or burial plot and any life insurance policy for the named beneficiary. Everything else is inventoried (by the attorney and a bank official) and returned to the box.

The bank will typically then require Letters Testamentary or Letters of Administration (each being a letter allowing an executor or administrator to act on behalf of the decedent’s estate) before allowing access to the safe deposit box to remove all the other items. So, even if it turns out that there is no probate estate, you get to go to court anyway.

As you can see, there are administrative hassles involved with storing a Will or other estate planning documents in a safe deposit box. That said, for individuals who do not have another safe place to store a Will or prefer the safety of a safe deposit box, it may be the best choice.

Another option is to keep a Will with the attorney who drafted it. Again, this may or may not prove as easy as it sounds. For example, what happens if the attorney retires or dies? You also now have to remember to tell the attorney every time you or your executor moves. In addition, offices may move or close, and if you do not keep careful records, it may be difficult for your heirs to locate an original Will when the time comes.

The Internet does help in this regard, but it is not foolproof. What would happen if the attorney with your Will was nowhere to be found? Your heirs would have only a copy (if that) to submit to the court versus the original. That is more open to being contested and requires additional proof to be probated.

Finally, if the lawyer is not responsive for whatever reason, executors or others seeking to obtain estate planning documents from the attorney may also need to obtain a court order to compel production.

On the other hand, a lawyer’s office may be the best place to store a Will, depending on your circumstances. As long as the attorney has the Will and not you, it can never get “lost” or “destroyed” by a disinherited or disgruntled heir. You should weigh all factors for and against before making a decision.

Another option is you can file your Will with the court, which is also a safe option, but means that your Will becomes an official document, not a private one. If you decide to change the terms of your Will, you cannot get it back, so beneficiaries and former beneficiaries can see how their respective inheritances have changed (or been removed) during successive revisions. On the contrary, if a Will is a private document, you can destroy the original and all copies, and would be heirs who have fallen out of favor are none the wiser.

In addition, if you move out of the jurisdiction of the court, out of state or even out of the country, your court filed Will does not come with you. There can only be one original of your Will. That means if you drafted a Will while living in Westchester County, New York, and filed it with the Surrogate’s Court in White Plains, your executor and beneficiaries would need to obtain it from that court, even if you or they have since moved to Denver, Denmark or beyond.

It may be, after considering other options, that you decide to keep your Last Will and Testament in a fireproof safe in your home. This is often a good option and normally the one I recommend, especially if you have a safe that cannot easily be removed from the premises by anyone seeking to tote off valuables. In that case, if you also have a safe deposit box, I would recommend keeping a copy of the Will in there (clearly marked COPY, with instructions on where to find the original), in the unfortunate circumstance that the original can’t be readily found. Be careful not to create too many copies, since you may later revise important provisions of your Will and do not want multiple prior copies floating around that a beneficiary with a reduced share tries to “prove” is your correct and valid last Will. This can happen even among otherwise friendly parties, such as children and grandchildren.

What I don’t suggest you do is to put your Will in a shoebox or the freezer or in that special place that only your spouse would know. It almost shouldn’t need to be said but, those are not safe places. You don’t want to have your executor or heirs tearing apart your house looking for your estate planning documents.

As said earlier, regardless of the option you choose for storing your Will, make sure that your executors know what you did. The best estate plans only work if the right people know how to follow them and where to locate essential documents when the time comes.

Around the Appellate Bench

Posted: December 9th, 2013

By Patrick McCormick

In a decision dated November 13, 2013, the Appellate Division, Second Department decided a case involving a contractor, Matell Contracting Co., Inc., who performed work for a commercial tenant, attempting to enforce a mechanic’s lien against the owner of property, Fleetwood Park Development Co. 1

Fleetwood leased certain property to a new tenant and, pursuant to an agreement with the new tenant, permitted the tenant to renovate the leased property for use as a supermarket. The tenant retained Matell Contracting as general contractor. The tenant failed to pay $1,800,000 allegedly due for work performed by Matell and Matell filed a mechanic’s lien against the property. Matell then commenced an action to foreclose the mechanic’s lien against, inter alia, Fleetwood Park. Fleetwood asserted several affirmative defenses including that it did not consent to the subject work. Matell moved for summary judgment on the complaint on the ground that Fleetwood consented to the work and to dismiss several affirmative defenses asserted by Fleetwood Park. The Supreme Court denied the motion and Matell appealed.

In affirming that portion of the order denying Matell’s motion for summary judgment on the complaint and to dismiss the affirmative defense relating to consent, the Appellate Division examined the knowledge required of an owner before the owner will be liable for work performed for a tenant. The Appellate Division confirmed that Matell “presented evidence showing that Fleetwood Park had knowledge of, and acquiesced in, the work performed to convert the leased property into a supermarket . . .” But, of primary importance, the Appellate Division determined that Matell nevertheless failed to make a prima facie showing that Fleetwood Park actually affirmatively consented to the subject work. The Court confirmed the distinction between the situation where an owner has simply approved or agreed that the work be performed and where the owner affirmatively gave consent for the specific work directly to the contractor. It is this specific consent by the owner directly to the contractor that is required to be proved by a contractor attempting to hold an owner liable in connection with the foreclosure of a mechanic’s lien.

The second appellate decision comes from the Appellate Term in New World Mall, LLC v. New World Food Court, Inc2. and addresses whether a sublease is subject to a conditional limitation clause contained in a master lease.

The facts in New World are straightforward. Sublessor alleged that the sublease terminated following its service of a 10-day default notice on subtenant alleging nonpayment of late charges and electric charges. Sublessor alleged that it had the right to terminate the sublease because the sublease incorporated by reference all the terms of the master lease including the conditional limitation clause contained in the master lease. It should be noted that this type of incorporating by reference language is typical in subleases. The master lease required the tenant (sublessor) to pay certain “Minimum Rent” in the amount of $2,500,000 annually commencing on a specified date and “Interim Rent” of $60,000 per month before that specified commencement date. In contract, the sublease provided for the payment of “Basic Rent” of $110,000 per month for the first three years of the sublease plus other charges specifically designated as additional rents. The sublease did not contain a conditional limitation provision for a default in paying the Basic Rent or the additional rents.

The conditional limitation clause contained in the master lease provided that a default occurs: “If Tenant shall fail to pay (a) any Interim Rent or Minimum Rent when the same shall become due and payable, and such failure shall continue for ten (10) days after Landlord shall give notice of the failure to Tenant, or (b) any other charge required to be paid by Tenant hereunder, when the same shall become due and payable, and such failure shall continue for thirty (30) days after Landlord shall give notice of the failure to Tenant.” Despite the fact that the sublease incorporated by reference “the terms, covenants, conditions and other provisions” of the master lease, the Appellate Term determined that the default provision of the master lease “is not subject to incorporation into the sublease . . .”

The Court’s rationale was quite simple: the default clause in the master lease referenced defaults in payment of rent due under the master lease-specifically “Interim Rent” and “Minimum Rent.” The Court held that those terms had no “application” to the amounts due under the sublease “which are defined in other terms.” While somewhat troubling, the remedy is simple-either the terms, definitions and relevant default clauses in a sublease should mirror the same terms, definitions and clauses used in the master lease or, instead of taking the easy way out by simply incorporating the master lease into a sublease by reference, the sublease should contain any relevant or necessary term as if it were a stand-alone document.

1 Matell Contracting Co., Inc., v. Fleetwood Park Development, LLC, 2013 WL 5989744 (2d Dep’t 2013)
2 2013 WL 6098424 (App. Term 2d Dep’t 2013)

November 2013 Legal Brief – Firm Newsletter

Posted: November 28th, 2013

Benefits of Copyright Registration

Posted: November 24th, 2013

Tags: intellectual property

Many artists, especially entrepreneurs who are just starting off, often start talking to others about their work without realizing that they may be disclosing too much. Their creative ideas or works are assets, and if they do not establish ownership of these assets, the assets could be lost.

Artists often do not realize how important it is to establish ownership over their works, before displaying or disclosing them to the public.

Generally, copyright attaches automatically the moment the original work is created and “fixed” in a tangible medium. Copyright owners possess the right to prevent others from copying and selling the copyrighted work. However, in addition to those rights, the U.S. Copyright Act provides additional rights and protections to registered copyright owners.

First, copyright registration establishes a public record of the copyright ownership. This puts the public on notice of your ownership of the work. It also allows you to affix the copyright notice © to your work.

Second, the certificate of copyright registration serves as evidence in court of the validity of the copyright and your ownership. This is also helpful when a copyright owner seeks swift action and a response from an infringer. With a copyright registration, the effect of a “cease and desist” letter is stronger on an infringer who understands the consequences of a legal action.

Further, in a legal action, a registered copyright owner can obtain statutory damages — without having to prove actual damages, legal costs and attorneys’ fees. The range of statutory damages is between $750 and $30,000 per infringed work, which is discretionary upon the court. In addition, if the copyright owner can show willful infringement, the available damages may increase up to $150,000 per infringed work.

Copyright registration is easy and inexpensive, and offers considerable benefits to copyright owners. Failure to obtain timely copyright registration can also result in significant consequences, which can include theft and infringement. The application for copyright registration should be filed immediately upon the work’s creation, but in no event later than disclosing the work to the public.

For artists, or for those who have created any work that they do not others to copy, copyright registration should pay a fundamental role in helping to establish and maintain the value of your work. Failure to register your work can potentially leave you without the additional rights, protections and benefits under the U.S. Copyright Act, and without an effective means to pursue an infringer.

The Most Important Part of an Estate Plan is the Memories

Posted: November 23rd, 2013

By: Martin Glass, Esq. email

Tags: elder law, estate planning

This month I completed the sale of my parents’ co-op in Queens. This is the apartment that I grew up in. The process of emptying the apartment (which I discussed back over the summer) has finally been completed. Most people, when they design their estate plan, think primarily about the large financial assets: real property, bank accounts, investment accounts, family businesses, etc. But let me tell you from personal experience, the most heart-wrenching decisions are who gets the “stuff.” I’ve found in my practice that family rifts and disputes are not over money, but over the little things that end up having little or no monetary value at all.

The family bible, the photo album, Mom and Dad’s wedding bands, Grandma’s heirloom hope-chest. These are the items that end up costing families more in harsh words, hurt feelings, and legal fees than any expensive property or valuable bank account. This is because these are the items that, although they may have a low financial value, have a high emotional value for families — a fact that many parents or grandparents do not consider when they are making out their Wills or Trusts. Luckily for me, living in an apartment didn’t give us the luxury of saving a lot of “memories.” If it wasn’t used, it didn’t stay.

Even though the Executor may be in charge, typically the heirs get to decide among themselves (or more commonly: fight among themselves) after your death as to who gets the crystal vase, jewelry, dining room furniture and handmade artwork. Instead, consider talking to the kids and grandkids about these memorabilia and emotional heirlooms right now. Keep in mind that this might not be an easy conversation to initiate. Most kids are reluctant to talk about, or even think about, their parents’ eventual passing. Believe it or not, many parents have found that they have to broach the subject more than once before their kids are willing to talk about it.

If you’re planning on giving your personal items to people other than your children, it is best to privately make up your own list of which heirlooms you’d like to go to which heir. After the list is written and signed, show it to your heirs ahead of time. This gives them the opportunity to voice their preferences or concerns while you’re still alive. In many cases simply knowing that you put time and thought into the giving of each heirloom makes heirs more likely to accept and appreciate your gifts when the time comes to receive them.

But know your heirs. If letting them know beforehand will cause arguments and them putting pressure on you, don’t show it to them. Who gets what should be your decision, not theirs. Although this list does not have the same legal significance as a Trust or Will, few heirs will not abide by it after your death. If it is that important that someone gets a particular item, then maybe that should go into your other estate planning documents such as your Trust or Will. If it’s an item that you no longer use, then maybe think about giving that item to that heir while you’re alive. I’ve seen it more than once where two (or more) people are claiming that Aunt So-And-So promised them the china. It’s not always easy to remember what you promised to whom. Remember, though, if there may be any hint of a disagreement, write it all down.

Well Settled Legal Principles and Proof Required to Prevail

Posted: November 10th, 2013

By Patrick McCormick

Three recent appellate decisions, each sparse on fact, nevertheless remind us of the relevance of well settled legal principles and confirm the proof required to prevail on each.The first, Tewksbury Management Group, LLC v. Rogers Investments NV LP¹, involves application of the doctrine of res judicata; the second, Bonacasa Realty Company, LLC v. Salvatore², discusses the concept of piercing the corporate veil; and the third, MH Residential 1, LLC MH v. Barrett³, inter alia, discovery.

In Tewksbury, the commercial tenant commenced an action against its landlord claiming landlord breached the lease by failing to obtain a valid certificate of occupancy, remove building violations that allegedly interfered with tenant’s use of the premises, to provide heat and to deliver possession of the entire premises. By order entered April 19, 2012, the Supreme Court granted landlord’s motion to dismiss the complaint.

As it turns out, several years earlier in 2008, landlord commenced a nonpayment proceeding against tenant. That proceeding ended with a consent judgment of possession and judgment for rent arrears. In affirming the dismissal of tenant’s claims upon the doctrine of res judicata, the Appellate Division held that tenant’s claims were “inextricably intertwined with defendant’s claims in the summary proceeding” and could have been raised by tenant in that summary proceeding. Obviously, tenant’s claims, if proved, would have provided a defense to landlord’s claims for possession and rent. Having failed to raise the claims in the summary proceeding and, more importantly, having consented to a judgment for rent arrears and possession, tenant necessarily acknowledged rent was owed, thus precluding its claim that landlord breached the lease. If you represent a tenant and have claims that could provide a defense to a claim of nonpayment and that would also result in an award of damages, the claim must be raised in the summary proceeding or it may be forever lost.

In Bonacasa, tenant vacated the demised premises prior to the expiration of the lease. Landlord thereafter commenced an action against the corporate tenant for rent due and owing and also asserted claims against the corporation’s principal. Landlord alleged that the corporation was a sham corporation “formed solely for the purpose of leasing the premises” and the individual defendant exercised dominion and control over the corporation and thus sought to pierce the corporate veil. In affirming the dismissal of the claim against the individual defendant, the Appellate Division found the evidence supported the finding that the individual “executed the lease in his corporate capacity as a principal of [the corporate tenant] and that he did not exercise dominion and control over [the corporation] to commit a wrong or injustice against the plaintiff.” The Court further found that “a simple breach of contract, without more, does not constitute a fraud or wrong warranting the piercing of the corporate veil.”

Finally, MH Residential 1, LLC, involved protracted residential holdover proceedings. Tenants filed two motions for leave to conduct various discovery. In affirming the denial of the first motion, the Appellate Term noted that the motion was made eleven months after an unappealed order denied a prior motion for similar relief and tenant had not shown a “material change in circumstances.” As for the second motion, the Court determined movant had not demonstrated “ample need” for the discovery sought. These standards for obtaining discovery are well known, but need to be remembered as litigation progresses.

¹ 2013 WL 5712338, ___N.Y.S.2d___ (1st Dep’t 2013)
² 109 A.D.3d 946, 972 N.Y.S.2d 84 (2d Dep’t 2013)
³ 41 Misc.3d 24,___N.Y.S.2d___(App. Term 1st Dep’t 2013)

CBS and Time Warner Negotiations

Posted: November 9th, 2013

By: Joe Campolo, Esq. email

Tags: negotiation

On Aug. 2nd, CBS-owned stations in New York, Los Angeles and Dallas went dark on Time Warner Cable systems after talks between the companies broke down. Time Warner also removed Showtime and three other cablers from lineups nationwide in the dispute.

The blackout was a result of a dispute over CBS’ request for higher fees from the cable company to retransmit CBS stations.They ended their one month battle/contract dispute, with CBS winning not only a significant financial increase for its programming,but also its stake in the digital future. The outcome should set a precedent for cable companies and their view of blackouts as a viable negotiation tool. Last month, Time Warner Cable reported a huge quarterly loss of television subscribers, the largest in its history: 306,000 of its 11.7 million subscribers dropped the company. While CBS has came out unscathed.

Harvard Law School’s Program on Negotiation published an article written by Katie Shonk entitled “The CBS – Time Warner Cable Dispute: Making a Bad BATNA Even Worse.” She discusses how the CBS/TWC standoff is a perfect example of how attempting to punish a negotiation counterpart into conceding often backfire. As Time Warner played hardball with CBS in an attempt to frighten the network into conceding, they lost focus on how the standoff would impact its customers and ultimately lose subscribers. Time Warner’s BATNA — its “best alternative to a negotiated agreement” with CBS — was a bad one from the start.

To read the full article, click here .

Dec 2 – CMM Ronkonkoma Exec Breakfast

Posted: November 4th, 2013

December 2, 2015

Tax Update
Presented by Robert Quarté, CPA

As 2015 draws to a close, join us to learn year-end tax tips and strategies that will help you minimize any tax season surprises and start your business off on the right foot for 2016. Robert Quarté of Albrecht, Viggiano, Zureck & Company, P.C. (AVZ) will share strategies on individual, business, and retirement planning, the Affordable Care Act, filing deadlines changes, FBAR’s and college savings plans. With the new year upon us, now is the perfect time to get your business in order and plan for a successful new year.

EVENT DETAILS:

8:30am – 9:00am
Arrival and Breakfast

9:00am – 9:45am
Presenting Speaker

9:45am – 10:00am
Q&A and Discussion

REGISTRATION: All events are FREE but registration is required. Complimentary breakfast will be served.

LOCATION: CMM’s Ronkonkoma office, 4175 Veterans Memorial Highway, Ronkonkoma.

October 2013 Legal Brief – Firm Newsletter

Posted: October 30th, 2013