PROBATE.

Most of you reading this article have likely heard this word many times before, but what does it actually mean?  In New York, probate is the process of formally petitioning the local Surrogate’s Court to accept a deceased person’s Last Will and Testament and officially appoint an executor for the estate.  Depending on the situation, the complexity and cost of probate proceedings can range from fairly simple and inexpensive to extremely complicated and costly.  In this article I will list some common red flags that may foreshadow a difficult probate, and I will describe some planning methods to avoid the need to probate.

One of the most common misconceptions I hear when I first meet with a client who was named as executor in a Will is that he or she has automatic authority to act according to the instructions contained in the Will.  This is not true.  An executor has no authority to act when the Will creator dies until such Will is admitted by Surrogate’s Court and the Court issues a document referred to as “Letters Testamentary” officially appointing the Executor.  This is the probate process.  Before a Court accepts the Will and issues Letters Testamentary, the following requirements must be satisfied:

These are the general requirements but depending on the situation and local rules there may be other requirements as well.

As you can begin to imagine, the probate process can be very expensive, lengthy, and difficult in certain situations. The following is a list of common situations where the probate process may be particularly complicated:

1. The complete class of closest living heirs is unknown and/or so remote that names and contact information for all members is unknown and/or very difficult to ascertain.  Sometimes the available information can be so scarce that a genealogist may need to be hired to recreate the family tree and locate all members of the class of closest living heirs. This can be lengthy and expensive.
2. The Will creator intends to disinherit a member of the class of closest living heirs or designate unequal distributions among such group of individuals.  Even if a member of the class of closest heirs is left out of the Will or explicitly disinherited, NY law still requires that such person receive a copy of the Will and the opportunity to contest it by simply appearing in Court in person or by written notice.  
3. The deceased individual owned real estate in multiple states.  The Court in one state does not have jurisdiction over property in another state, so the executor must commence separate probate proceedings in each state where the decedent owned property. 
4. The deceased person was a small business owner and a delay in operations would be detrimental to the business.  As noted above, the probate process can be lengthy, and the named Executor may not have authority to continue management and operation of the business until the Surrogate’s Court issues the order officially appointing the Executor.

Instead of subjecting your executor and beneficiaries to a potentially drawn out, stressful, and expensive probate proceeding, there are certain planning opportunities you can take advantage of to likely avoid the necessity of probate when you pass away.  One easy way to avoid probate for financial accounts is to name beneficiaries on each account or make the account payable on death to your intended beneficiaries.  This can be done by simply contacting the financial institution and following their procedure to designate beneficiaries.  

Another way to avoid probate is to create and fund a living trust.  A living trust, also known as an “inter vivos” trust, is a legal entity that you create by written document while you are alive.  The trust only controls assets which you transfer ownership of to the trust, commonly referred to as “funding” the trust.  There are different kinds of trusts depending on your goals, but one common benefit of all living trusts is that the assets owned by the trust do not need to go through the probate process when you die.  The individual(s) or entity that you designate as trustee has the automatic and immediate authority to carry out the instructions set forth in the trust document upon your death.  This makes a trust much more difficult to contest than a Will because the trustee is not required to notify all members of the class of closest living heirs before making distributions to the beneficiaries. 

An advantage of using a trust to avoid probate for financial accounts rather than naming beneficiaries on each account is that in a trust you can include language to control the distribution of assets beyond death.  For example, you can restrict a beneficiary’s control of his or her inheritance until he or she reaches a certain age specified in the trust.  This feature may appeal to small business owners as a way to maintain a degree of control over what happens to the business in the event of death.  Trusts are also one of the only ways to avoid probate for real estate other than adding your intended beneficiaries as joint owners on the deed for the property.  

Every person’s situation is unique.  Be prudent and meet with an experienced estate planning attorney to determine the type of planning that is best suited for you.  Your family and friends will thank you for it. 

Phillip Vacchio, Esq. is a partner at the Shivers Law Group and of Counsel to Ianniello Anderson, P.C. www.ialawny.com

The Metaverse is emerging. 

It’s a new, hybrid world that will be built on the existing infrastructure of the internet but will be much more immersive, interactive, and social than what customers are used to today. As identified by Chad Beatty in the Saratoga Business Report Q1, definitions of Web 3 vary, but feature core aspects like artificial intelligence, decentralization, and mixed reality (a combination of augmented and virtual reality). As we move further into the Metaverse and Web 3, small businesses can prepare for the unfolding digital transformation through strategic initiatives like digitization, asset management, and automation. 

Digitization

When embarking on a digitization initiative, consider three main factors: what assets to digitize, how to digitize them, and where to store them. A digital asset can be anything from a three-dimensional model or environment to an audio file or document. You should ask yourself: Does this asset have a legacy or potential future value for my company? While this can be tricky to sort out, your decisions can, and often should, be informed by business strategy, direct customer feedback, or market response. It’s also vital to consider the importance of digitizing assets from a compliance and regulatory standpoint for business records and certain assets. Digitized and born-digital assets are fundamental content resources that power products and services for Web 3. Without digitized assets, a small business cannot optimize opportunities that save money and time while elevating customer experiences.

As digitized assets become increasingly commonplace, especially within born-digital companies, it can be easy to overlook physical assets that can be digitized for the Metaverse. Lingering analog processes and assets exist in both digital-born and not natively digital companies. Undigitized assets could include paper business records, promotional product giveaways, signage, trade show booth exhibits, and products. Professional services may also unduly rely on physical processes and travel, which can lead to higher costs, delays, and inefficiencies. 

Small business owners face many demands of managing a company with a small, dedicated team of colleagues and family or just “me, myself, and I.” It can be difficult to find time and resources to implement new processes without an immediate perceivable return on investment. But indefinitely delaying digitization or abandoning assets undermines a company’s ability to adapt in the future. Ignoring digitization leaves companies open to risks posed by natural events, public health, safety, theft, and deterioration over time. The digitization process comes with its risks and challenges, but the benefits of organizational resiliency and future readiness often outweigh the costs. 

Asset Management

As digital transformation advances and more businesses are conducted in Metaverse environments, having a well-managed system of digital assets will become increasingly crucial. Digital assets, also known as digital twins, represent what might also be physical products that customers can interact with and deploy in online environments. This can include assets like a 3D rending of a product that a customer can view in virtual reality and then buy. 

It’s essential to know what assets are available for what purpose and how a particular digital asset type may aid or limit your business and customers. Metaverse business readiness includes a centralized digital and physical asset management strategy. This empowers your company to effectively distribute, sell, and track products on the blockchain. In addition to having an asset management system, a company may also need the legal and technical personnel to create, implement, and manage necessary policies and procedures for good practice governance and security.

Much of Web 3 focuses on the decentralization of assets on the customer side. Small business owners will have to support the underlying technologies of the Metaverse, like digital currencies and wallets, so that transactions are completed securely and successfully. While a company may choose to sell some products and services on the blockchain, licensing and other forms of agreement will continue to be fundamental in leveraging assets. 

To set up your business for success in the Metaverse, your company needs to be positioned to develop, make, and sell digital goods to customers. This may require you to retrain existing staff, learn new skills, hire contractors, and purchase new software and hardware. These elements contribute to a steady product pipeline that’s ready to meet customer demand. The future of Web 3 relies on customer confidence and trust. Satisfied customers are inspired to come back and participate in these new economies. Asset management sets up a company to satisfy its customers.

Automation

Like assets, work processes can also be digitized and then shifted to function automatically. Leveraging automation and AI are other key elements in preparing for the Metaverse. Utilizing automation creates spaces where customers can be responded to swiftly and frees up team members to work on other tasks. Many business processes are still done manually despite the opportunities to automate them. Automation opportunities for Web 3 include chatbots, generative media, and smart contracts.

Chatbots, hosted in a third-party or self-hosted platform, are tools for customer or community management. Chatbots can be truly available to you customer 24/7 and used to answer FAQS, gather necessary information for support teams, and provide just-in-time and scheduled notifications about product releases. 

Generative media is content created by artificial intelligence algorithms within the parameters defined by a programmer. These algorithms can be tuned to aid your creative team by generating content that is diverse, attractive to your customers, and can require minimal editing or revision. This can save time and money by having the first, if not final, draft of such assets be AI-generated rather than by hand. 

Smart contracts are agreements exchanged and transacted between parties through code, which can be done on the blockchain. These enable a smooth and transparent record of exchange and rights. Early adoption and investment in digital transformation and legal policy is the best way for a small business to utilize these technologies.

The rapid innovation of digital technologies will increase because of automation. It’s vital to stay tuned into how new economic and technological environments, like Web 3 and the Metaverse, can impact a company’s competitive advantage and place in the market. When prudently applied, automation can help small businesses better leverage their products and services. But it takes an investment to be successful. It would be a mistake for small businesses to ignore automation as a dynamic and powerful force. When coupled with digitization, asset management, and other strategic priorities, automation will have important implications for a company’s future. The future of your company’s business operations, products, and services should be powered by a combination of humans and machines.

How To Prepare

The Metaverse is emerging. This immersive, hybrid world is connecting us in new ways. In the Metaverse, people will interact with one another and digital objects as part of their daily lives for business, connection, and entertainment.

If your small business is not prepared for the Metaverse, you risk being left behind. But don’t worry; help is available. Take action. 

Remember to be ready for the Metaverse:

• Digitize your assets and operations
• Manage your library of digital and physical assets
• Automate your workflows and asset distribution

Seek out expert advice from strategic advisors and consultants who are immersed in these issues and technologies now. Be prepared to protect the interests of your business, assets, and people.

The Metaverse is emerging. Prepare your small business now! 

The technology corridor running straight through Saratoga County has grown steadily for two decades, stretching from its Capital Region/Hudson Valley birthplace to New York State’s northern and southern borders.

Tech Valley’s success can be attributed to many sources, but none so much as the halls of higher education institutions, such as Hudson Valley Community College, which operates the TEC-SMART facility in Malta, New York. TEC-SMART is home to the Clean Technologies Early College High School, which is one of New York State’s Pathways in Technology (NYS P-TECH) programs sponsored by the college and Ballston Spa Central School District.

The six-year program prepares students for STEM careers through its partnerships between Ballston Spa high school, Hudson Valley Community College, and local industries such as GlobalFoundries.

Eligible students begin in the ninth grade and can earn both a high school diploma and an Associate of Applied Science degree in a STEM field. The program has been very successful and educates students from 19 school districts throughout the region.

Adrienne Snow, Associate Principal of Early College High School Programs with Ballston Spa Central School District, heads the P-TECH program at TEC-SMART. Having been an assistant principal at a traditional high school, she understands the needs of students today and the pressure they feel to meet the frequently changing needs of tomorrow’s workforce.

“I came to the TEC-SMART campus in 2015,” Snow says. “I enjoy being able to interact with students who come here from widely diverse backgrounds all over the state. Here, we provide state-of-the-art classrooms and laboratories. We connect them to real-life work situations and feed their natural curiosity while teaching them the skills they need for their futures.”

Deborah Shoemaker is the Associate Dean of Community & Educational Partnerships for Hudson Valley Community College. She works with Snow to get students registered, troubleshoots any issues that may arise during the school year, and coordinates with Snow on any new pathways that are added to the programs.

“These high school students must manage their secondary classwork while simultaneously stepping into the college experience,” Shoemaker says. “It is a challenging program.  I support Adrienne and the students to make sure that they have every opportunity to succeed from day one. I have seen amazing work from the P-TECH students at TEC-SMART. It’s remarkable to see these 17- and 18-year-old students making their end-of-year presentations with a level of polish and professionalism that many adults struggle to achieve.”

“Collaboration is key,” adds Snow. “Our partnership with Hudson Valley Community College and local businesses helps us better build our students’ skills and knowledge base. When you think about a traditional college with big lecture halls, I don’t think you would see as close a relationship between professors and students as you see here. We’ve had consistency in our professors since I’ve been here, which promotes a safe environment for students to stretch and grow.”

In addition to Hudson Valley Community College, the program partners with the Saratoga County Chamber of Commerce, which helps with funding, events, and mentorship experiences, as well as workplace tours. GlobalFoundries sets up job shadow experiences for high school juniors through the program, as well as paid summer internships for seniors.

“Businesses provide us with feedback on what they are looking for in terms of future employees,” Snow says. “We use that information to prepare our students for the skills they need. Recently, we had partners from solar industries listening to our students pitch their solar-ideas projects. They received real-world advice from industry experts. This is how a student transforms into a professional, by learning they can’t just throw an idea out and think it will happen. They are learning how to research their ideas and how to do the legwork that will make them successful in their fields.”

Shoemaker adds, “Part of our mission here at HVCC is to make sure we are in touch with workforce needs, and we do that through business partnerships. Many of our graduates from the P-TECH program have job offers before they graduate. We are always looking for mentors for our students and businesses to give feedback on projects. Fostering those relationships is key.”

Companies that make Tech Valley their home know they can count on continuing access to some of the smartest minds in the country to join their teams, well-versed in science, technology, engineering, and mathematics, right here in Tech Valley. For more information about P-TECH at TEC-SMART, visit www.hvcc.edu/tecsmart and www.bscsd.org/Page/11993.