Presidents, Pandemics and Planning: A look to 2021 from the Lessons of 2020-Five Ways to Add Certainty to Your Estate Plan in Uncertain Times

2021 begins in less than four weeks and the outlook on all fronts remains largely unknown.  Will there be a smooth transition from the current president to the president-elect? Will the Senate remain Republican controlled or will a 50-50 split render it a de-factor Democratic controlled chamber for the first time in six years?  Most importantly, will the Pandemic that has so fundamentally altered the world dissipate and/or disappear?

The answers to the above questions are unknown and it would be unwise to speculate.  In light of such uncertainty, finding stability in any area of life is a way to reduce stress and shield your family and assets.  The following are some suggestions to consider as we close in on the end of the year.

  1. Consider the use of a Revocable Living Trust-The current backlog in the Surrogate’s Courts has amplified existing problems with the processing of estates in New York.  Coupled with an already insufficient staff and funds, it is unlikely that the current logjam will let up any time soon.  To best allow your family to have immediate access to your assets after death, the best way to achieve this is to transfer your assets to a revocable living trust while you are alive and well.  This form of trust allows the grantor of the trust to continue to have access and use of the property in it while also titling it in such a way that allows family to access it in the event of incapacity or death without court intervention.
  2. Ensure beneficiary designations are updated on all transfer-on-death (TOD) assets-Retirement accounts, life insurance and other TOD accounts provide the easiest means of transfer for certain assets upon the owner’s death.  Failure to name initial and successor beneficiaries typically reverts the assets to a person’s probate estate, thus rendering the advantage these assets have moot. This can typically done online, cost-free and without the need to work with any advisor.
  3. Prepare/revise Power of Attorney (POA) and Health Care Proxy (HCP) documents-Because of current hospital restrictions, visitation and in-person communication with hospital patients has been limited or eliminated.  The increase of hospitalizations also leaves many individuals unable to handle their financial affairs or express their healthcare wishes.  A POA and HCP allowed a trusted relative or friend to step into the shoes of the hospitalized/incapacitated individual’s shoes to make decisions and handle the affairs of an individual while that individual is unable to do so.
  4. Finalize, update and prepare your estate plan-Confronting the need to plan for the future or the need to change previously prepared plans is never easy.  It is often times like these when the fears and anxieties about this are confronted with the reality of what happens if you do not address the underlying issues.  Removing the uncertainty of having an incomplete, outdated or nonexistent plan will remove a significant burden from your life.
  5. Stay informed and stay in touch with your advisors-Educating yourself on changes to the laws is not always the most engaging use of your time, but staying ahead of such changes will help guide you to ensured security with regard to your planning.  Alternatively, regular check-ins with your advisors is an easy and efficient way to keep informed.

William Shakespeare once wrote that “the past is prologue.”  Indeed, the immediate past of 2020 will remain with us for many years to come.  How we learn from it and make decisions from it will dictate how our lives, our families and our futures will be written.

Have a very happy and healthy holiday season and here’s to a much better 2021!-MCL

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Presidents, Pandemics and Planning: A look to 2021 from the Lessons of 2020-The Changing Face of Planning and Administering Estates in New York

One common theme across all industries and professions is that the COVID-19 Pandemic has drastically changed the way people work and do business.  By necessity, we have been forced to adjust to a world where direct, personal interactions became non-existent, limited or altered by the need to wear protective coverings and to socially distance from others.  Working in the trusts and estates field has been a typical example of this.

The entirety of my career and the careers of my colleagues have focused on personal interactions with our clients, colleagues, adversaries and court/government officials.   Few other fields of law required so much personal interaction and under the rules and laws of New York state, it was mandatory.  COVID has forced both practicing planners and the courts/agencies they work with to make alterations to how things are done which, while not illogical from a practicality perspective, have long been resisted.

Estate Planning

The execution of testamentary documents has long been a very formalized and rigid process.  To execute a will that will be accepted by the New York Surrogate’s Court, an individual was required to sign the document in the presence of two witnesses.  In addition, to avoid the need to produce affidavits from the witnesses at the time of the person’s death, a self-proving affidavit signed by the two witnesses had to be affirmed and signed by a notary public.  For non-testamentary documents, such as trusts and other agreements, a notary’s signature was also needed.

In April, in response to the continued stay-at-home order imposed by New York, Governor Cuomo issued two separate executive orders which allowed for the execution and notarization of documents using video conferencing software such as Zoom or Facetime.  The requirements of witnesses and notary acknowledgment remain, but the need for people to be present in the same place at the same time was no longer required.  These orders were a much-needed lifeline for clients and planners alike to ensure that the safety of all parties was maintained while also allowing the needed work to be completed in a timely and proper manner.

Estate Administration

A majority of courts in the Unified Court System have used electronic filing of documents for years prior to the Pandemic.  The Surrogate’s Court, with very limited exceptions, had long resisted any form of filing aside from in-person filing.  Given the importance of original documents and the need for court clerks to provide individuals with instructions on changes and/or additional documents, it was not completely unreasonable.

COVID-19 did not automatically change this.  The Surrogate’s Courts throughout New York were no less affected by the Pandemic and many petitions before the court were put on hold as in person work at the courts slowed down or stopped at the courts.  With exception of emergency filings, new filings were suspended temporarily, a huge problem at a time when the annual mortality rate was rapidly increasing.

By early summer, most New York counties began allowing e-filing of petitions and documents for the very first time.  A few courts (Rockland County most notably) did not follow suit and only allowed mailed in documents to be accepted.  While this allowed existing and new matters to resume being processed, the shutdown/slowdown caused a very long backlog for many courts.  In some counties, no new citations or court dates were being issued well into the late summer.  Additionally, the increased mortality rate from COVID has increased the number of new applications and estate.

What Now?

It is unclear of these recent changes will remain once the Pandemic has subsided and in-person business becomes more prevalent.  Beyond the mechanics of how business is done, the state of the world and the court system makes planning in 2021 and beyond a larger challenge than it has been in previous years.  As the means of planning and administering estates has changed, so too must the strategies we employ to ensure individuals and families are properly protected.

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Presidents, Pandemics and Planning: A look to 2021 from the Lessons of 2020-Elections Have (Possible) Consequences

The election of 2020, both at the federal and New York level, provided a glimpse into where our country and state will be heading as we enter the third decade of this century.  At both levels, the most immediate and pressing concerns are the containment of the COVID-19 pandemic and repairing the economic damage that came with it.  This will require additional spending and adjustments to the respective tax systems to make up for the substantial shortfalls in revenue that have or will occur over the next few years.

The structure of the Federal and New York governments have both changed and additional changes may come depending on the outcome of the two runoff Senate elections in Georgia in January.  Pending those results, it is impossible to be certain of the possibilities, but with the positions from those whose elections are already certain, we can speculate as to where things will be heading.


At the end of 2017, with control of the Presidency and both houses of Congress, soon-to-be-ex-President Trump signed into law the Tax Cuts and Jobs Act.  Significant cuts were made to the income tax, capital gains tax and corporate tax rates.  Most significantly for estate planners, the estate and gift tax exemption were more than doubled from the previous base exemption of $5 million to $11 million per person and $22 million per married couple (the exemption has since increased annually by a cost of living adjustment increase).  This drastically shrunk an already small number of estates subject to federal estate tax.

President-elect Joe Biden has proposed substantial rollbacks of many of Trump’s tax policies including reducing the estate and gift tax exemption to the 2009 amount of $3.5 million.  This would be even lower than the amount than President Obama agreed to in 2012 as part of the Fiscal Cliff deal.  Both income tax and capital gains tax rates would also be increased for individuals who make over $400,000 a year.

Trump’s tax changes were enacted using Budget reconciliation, a process which allows for economic related laws to pass with a mere majority and not the filibuster-proof threshold of 60 votes.  Given the current makeup of the US Senate, it is certain that if President-elect Biden chooses to tackle tax policy before the mid-term elections in 2022, he will have to use this process as well.  This would also require Democrats to win both seats in the Georgia runoffs and garner support from all Democratic (and Independent) Senators to allow Vice-President-elect Kamala Harris to break the tie. 

If Democrats cannot successfully establish an even split in the Senate, Biden may choose to either forego tax changes or focus solely on economic recovery policies.  Alternatively, he can chart a less progressive path and attempt to garner support from the small pool of moderate Republican Senators.  After 2022, tax policy will become more important as many of the provisions of Trump’s tax law expire in 2025.

New York

Presidential and federal elections often obscure the important of state-wide elections, but the 2020 New York election was fairly notable due to its results.  Beginning in 2021, the Democratic Party will have a super-majority in both the Assembly and State Senate.  This will the legislature to override any vetoes by Governor Cuomo on any legislation he may differ from them on.  Tax policy is an area where it is very conceivable that a conflict may emerge

Under Governor Cuomo’s tenure, the state estate tax exemption has risen significantly from $1 million in 2014 to $5.93 million in 2021.  This has exempted many more estates from state estate tax while also increasing the tax burden on those estates that exceed 105% of the applicable exemption.  While it is likely that both the legislature and Cuomo will seek to continue to place this burden on the very wealthy, it is quite possible that the exemption will be reduced to cover the state’s budget shortfalls.  New Yorkers would likely be much more tolerable of an estate tax increase than an increase to income or property taxes especially in light of the federal income tax treatment of the SALT deduction already increasing many New Yorkers taxes.

Budget shortfalls and additional spending are almost inevitable given the current economic problems at both the federal and state levels.  One way or another, the money for this will have to be raised.  Increased taxes are coming.  By whom and from whom remains to be seen.

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Presidents, Pandemics and Planning: A look to 2021 from the Lessons of 2020-Introduction

When historians study the 21st century, it is almost certain that the events of 2020 will be seen as a major moment in time.  At all levels of society throughout the world and here at home, the world has been forced to rapidly change due to this first pandemic of most people’s lives.  While there is some hope that the cure/vaccine for COVID-19 is imminent, the long-term effects of this event will be with us for many years and perhaps decades to come.

For trusts and estates practitioners, we have seen the way we work both in the planning and administration of estates significantly change over the last twelve months.  These changes are likely to increase as we determine how best to serve our clients and how the recent changes made by New York state and the New York Surrogate’s Court will affect our means of advising and assisting clients beyond the end of the pandemic.

In addition, with the recent Presidential election bringing a new party to the Executive Branch and potentially to lead Congress, changes to federal laws may usher in a new series of challenges regarding estate, gift and income tax planning.  The change of political party atop our government comes at a time when additional revenue will have to be generated to help the United States recover from the pandemic as well as the ensuing economic decline.

Over the next few days, I will discuss how to approach 2021 with the lessons of 2020 in mind.  First, I will discuss how the 2020 Federal and New York elections may reshape the tax implications for estates, trusts and individuals.  Next, I will look at how the COVID-19 pandemic has fundamentally changed estate planning and estate administration in New York.  Finally, I will discuss the long-term implications of the events of 2020 with an eye to mapping out planning strategies for 2021 and beyond.