Should I agree to Be an Executor of an Estate?

If you are asked to be an executor, you should understand some of the duties it entails before saying yes. An executor is the person named to distribute a deceased person’s property that passes under his or her last will and arranges for the payment of debts and expenses.

WMUR’s article entitled “Settling an estate” explains that if the executor isn’t willing or able to perform the role, there’s usually an alternative person named as executor in the will. If there isn’t, then a judge will name an executor for the estate.

Depending on the size and complexity of the estate, settling the affairs may be a difficult and time-consuming task. In some cases, the deceased may have left a letter of instruction or letter of last instruction to help make the process run more smoothly. This letter may set out a list of documents and their locations, contact info for attorneys and accountants, a list of creditors, login information for important websites and final burial wishes.

One of these documents is usually a last will. The executor will need to obtain the original and talk to an estate planning attorney to determine what type of probating is necessary. Probate is the process of getting a court to approve the validity of the last will. The executor will take inventory of the assets of the deceased. This may be required by the probate court. Some assets may also need to be appraised. Once the probate process is finished, assets then may be sold or gifted according to the decedent’s wishes.

An executor must also protect these assets. This could include changing the locks on properties. The executor may also be required to pay mortgages, utility bills and maintenance costs on property. Final expenses also need to be paid. The funeral home or coroner will provide death certificates that will be needed for things, such as filing life insurance claims. Other debts and taxes will require payment. Medical bills, credit card debt and taxes should be paid out of the estate.

If the deceased was collecting benefits, such as Social Security, this will need to be stopped. The executor is responsible for filing a final federal and state tax return for the deceased. An estate and gift tax return may also be necessary.

An executor has many duties. He or she must be honest, impartial and financially responsible. Estate assets need to be managed properly, and the executor has what is called a “fiduciary duty.”

All of this can be made easier with the help an experienced estate planning attorney.

Reference: WMUR (Aug. 12, 2021) “Settling an estate”

 

What Should Same-Sex Couples Know about Estate Planning?

Proper estate planning can help ensure that your wishes are carried out exactly as intended in the event of a death or a serious illness, says Insurance Net News’ recent article entitled “What Same-Sex Partners Need to Know About Estate Planning.” Having a clearly stated plan in place can give clear instructions and potentially avoid any fights that otherwise might occur. For same-sex couples, this may be even more crucial.

Your estate plan should include a will or trust, beneficiary forms, powers of attorney, a living will and a letter of intent. It’s also smart to include a secure document with a list of your accounts, debts, assets and contact info for any key people involved in those accounts. This list should contain passwords for locked accounts and any other relevant information.

A will is a central component of an estate plan which ensures that your wishes are followed after you pass away. This alleviates your family from the responsibility of determining how to divide your property and takes the guessing and stress out of how to pass along belongings. A will or trust might also state the way in which to transfer your financial assets to your children. You should also make sure your beneficiary forms are up to date with your spouse for life insurance policies, bank accounts and retirement accounts.

For same-sex couples, it is particularly important to create a clear medical power of attorney and create a living will that states your medical directives, if you aren’t able to make those decisions on your own. If you aren’t married, this will give your partner the legal protection he or she needs to make those decisions. It is important for you to take time to have those conversations with your partner, so the plans and directives are clear. You can also draft a letter of intent, which is a written, personal note that can be included to help detail your wishes and provide reasoning for the decisions.

Protecting Your Minor Children. Name a legal guardian for them in your will, in the event both parents die. Same-sex couples must make sure that both parents have equal rights, especially in a case where one parent is the biological parent. If the surviving spouse or partner isn’t the biological parent and hasn’t legally adopted the children, don’t assume they’ll automatically be named guardian.  These laws vary from state to state.

Dissolve Old Unions. There could be challenges, if you entered into a civil union or domestic partnership before your marriage was legalized. Prior to the 2015 marriage equality ruling, some same-sex couples married in states where it was legal but resided in states where the marriage wasn’t recognized. If you and your partner broke up, but didn’t legally dissolve the union, it may still be legally binding. Moreover, some states converted civil unions and domestic partnerships to legal marriages, so you and a former partner could be legally married without knowing it. If a former union wasn’t with your current partner, make certain that you legally unbind yourself to avoid any future disputes on your estate.

Review Your Real Estate Documents. Check your real estate documents to confirm that both partners are listed and have equal rights to home ownership, especially if the home was purchased prior to the legalization of same-sex marriage or if you aren’t married. There are a few ways to split ownership of their property. This includes tenants in common, where both partners share ownership of the property, but allows each individual to leave their shares to another person in their will. There’s also joint tenants with rights to survivorship. This is when both partners are property owners but if one dies, the remaining partner retains sole ownership.

Estate planning can be a complex process, and same-sex couples may have more stress to make certain that they have a legally binding plan. Talk to an experienced estate planning attorney about the estate planning process to put a solid plan to help provide peace of mind knowing your family is protected.

Reference: Insurance Net News (June 30, 2021) “What Same-Sex Partners Need to Know About Estate Planning”

 

What Emergency Documents Do I Need in Pandemic?

With the threat of COVID-19, we’ve all come face-to-face with our mortality. However, are you prepared for the worst?, asks KSAT in its January 23 article entitled, “Important documents you need to have handy in case of an emergency.”

A consumer report recently found that just 7% of those ages 19 to 29 have an advance directive for health care emergencies, and even fewer have a will. Estate planning is one of the most worthwhile things we could do for ourselves or our loved ones.

The article explains that your estate is everything you own, and if it’s not protected, it could be taken away from your loved ones.  An extremely important document to have, in addition to a will, is a living will and a healthcare proxy or power of attorney. These documents let you designate the individual who will make decisions on your behalf if you cannot speak for yourself.

In addition, a HIPAA authorization permits an individual you trust to speak with your healthcare staff and receive your personal medical information.  Another key document is a financial power of attorney. This empowers you to designate an agent to handle your debts, contracts and assets. A financial power of attorney must be signed and notarized.

You should also consider payable on death and transfer on death designations, which transfer assets to designated beneficiaries without probate.

It is important to conduct a digital asset inventory to list your entire online presence and include all accounts, logins, passwords, social media, and professional profiles, and most importantly, a list of everything you have on autopay.

Last, you need a last will and testament. This lets you to name an executor or personal representative to handle your postmortem affairs. However, a last will does not keep assets out of probate. You should contact an experienced estate planning attorney to make sure that these documents are done correctly.

One last note: you can prepare a personal property memorandum to list the beneficiaries of any sentimental, non-monetary items.

Reference: KSAT (San Antonio) (Jan. 23, 2021) “Important documents you need to have handy in case of an emergency”

 

How do I Settle an Estate if I’m Named Executor?

If you are asked to be an executor, you should learn some of the basics of the job before agreeing to the task. An executor is the individual named to distribute a decedent’s property that passes under his or her will. The executor also arranges for the payment of debts and expenses.

WMUR’s recent article entitled “Settling an estate” explains that if the executor is not willing or able to do the job, there’s usually an alternate executor named in the will. If there’s no alternate, the court will designate an executor for the estate.

Depending on the estate, it can be a consuming and stressful task to address all of the issues. Sometimes, a decedent will leave a letter of instruction which can make the process easier. This letter may address things like the decedent’s important documents, contact info, a list of creditors, login information for important web sites and final burial wishes.

One of the key documents is a will. The executor must get a hold of an original and review it. You can work with an estate planning attorney to determine the type of probating (a process that begins with getting a court to approve the validity of the will) is needed.

The executor should conduct an inventory of the decedent’s assets,some of which may need to be appraised. If the decedent had a safe deposit box, the contents must be secured. Once the probate process is finished, assets then may be sold or distributed according to the will.

Asset protection is critical and may mean changing the locks on property. The executor may be required to pay mortgages, utility bills and maintenance costs on any property. He or she must change the name of the insurance on home and auto policies. Any brokerage accounts will need to be re-titled. The final expenses also need to be paid.

The funeral home or coroner will provide death certificates that will be needed in the probate process, and for filing life insurance claims.

If the decedent was collecting benefits, such as Social Security, the agency will need to know of the decedent’s death to stop benefits. Checks received after death must be returned. The executor will file a final federal and state tax return for the decedent, if necessary. There also may be an estate and gift tax return to be filed.

There’s a lot for an executor to do. It can be made easier with the help an estate planning attorney.

Reference: WMUR (Dec. 23, 2020) “Settling an estate”

 

How Can I Avoid Family Fighting in My Estate Planning?

It’s not uncommon for parents to modify their first estate plans when their children become adults. At that point, many parents’ estate plans are designed to help efficiently transfer assets to the surviving spouse and ultimately to the adult children. However, this process can encounter a number of hiccups and headaches.

Forbes’ recent article entitled “Three Steps To Estate Planning Without The Family Friction” explains that there are a number of reasons for sibling animosity in the inheritance process. The article says that frequently there are issues that stem from a lack of communication between siblings, which causes doubts as to how things are being done. In addition, siblings may not agree if and how property should be sold and maintained. To help avoid these problems, use this three-step process for estate planning.

Work with an experienced estate planning attorney. Hire an estate attorney who has many years of working in this practice area. This will mean that they’ve seen—and more importantly—resolved every type of family conflict and problem that can arise in the estate planning process. That’s the know-how that you’re really paying for, in addition to his or her legal expertise in wills and trusts.

Create a financial overview. This will help your beneficiaries see what you own. A financial overview can simplify the inheritance process for your executor, and it can help to serve as the foundation for you and your executor to frankly communicate with future beneficiaries to reduce any lingering doubts or questions that they may have, when they’re not in the loop. Your inventory should at least include the following items:

  • A list of all assets, liabilities and insurance policies you have and their beneficiaries
  • Contact information for all financial, insurance and legal professionals with whom you partner;
  • Access information for any websites your beneficiaries may need for your online accounts; and
  • A legacy letter that discusses non-financial items for your children.

Hold a family meeting. Next, conduct a family meeting that includes the parents and the children who will be inheriting assets. Some topics for this meeting include:

  • The basics of your estate intentions
  • Verify that a trusted person knows the location of your important estate documents
  • State who your executor and other involved people will be and your rationale
  • Make certain that all parties value communication and transparency during this process; and
  • Discuss non-financial legacy items that are important for you to give to your children.

This three-step process can help keep your children’s relationships intact after you are gone. Hiring an experienced estate planning attorney, creating a clear financial overview and communicating what’s important to you are critical steps in helping to keep your family together.

Reference: Forbes (July 2, 2020) “Three Steps To Estate Planning Without The Family Friction”

 

What are the Main Estate Planning Blunders to Avoid?

There are a few important mistakes that can make an estate plan defective—most of these can be easily avoided by reviewing your estate plan periodically and keeping it up to date.

Investopedia’s article from a few years ago entitled “5 Ways to Mess Up Estate Planning” lists these common blunders:

Not Updating Your Beneficiaries. Big events like a marriage, divorce, birth, adoption and death can all have an effect on who will receive your assets. Be certain that those you want to inherit your property are clearly detailed as such on the proper forms. Whenever you have a life change, update your estate plan, as well as all your financial, retirement accounts and insurance policies.

Forgetting Important Legal Documents. Your will may be just fine, but it won’t exempt your assets from the probate process in most states, if the dollar value of your estate exceeds a certain amount. Some assets are inherently exempt from probate by law, like life insurance, retirement plans and annuities and any financial account that has a transfer on death (TOD) beneficiary listed. You should also make sure that you nominate the guardians of minor children in your will, in the event that something should happen to you and/or your spouse or partner.

Lousy Recordkeeping. There are few things that your family will like less than having to spend a huge amount of time and effort finding, organizing and hunting down all of your assets and belongings without any directions from you on where to look. Create a detailed letter of instruction that tells your executor or executrix where everything is found, along with the names and contact information of everyone with whom they’ll have to work, like your banker, broker, insurance agent, financial planner, etc.. You should also list all of the financial websites you use with your login info, so that your accounts can be conveniently accessed.

Bad Communication. Telling your loved ones that you’ll do one thing with your money or possessions and then failing to make provisions in your plan for that to happen is a sure way to create hard feelings, broken relationships and perhaps litigation. It’s a good idea to compose a letter of explanation that sets out your intentions or tells them why you changed your mind about something. This could help in providing closure or peace of mind (despite the fact that it has no legal authority).

No Estate Plan. While this is about the most obvious mistake in the list, it’s also one of the most common. There are many tales of famous people who lost virtually all of their estates to court fees and legal costs, because they failed to plan.

These are just a few of the common estate planning errors that commonly happen. Make sure they don’t happen to you: talk to a qualified estate planning attorney.

Reference: Investopedia (Sep. 30, 2018) “5 Ways to Mess Up Estate Planning”

What’s Everything I Need to Know About Wills?

Writing a will is a critical part of estate planning. A will contains your legally binding directions for the distribution of your property and responsibilities, when you pass away.

Like the title says, Money Check’s recent article, “Guide to Writing a Will: Everything You Need to Consider,” sets it all out—from soup to nuts.

Do it myself or hire an experienced estate planning attorney? It’s wiser to hire a qualified estate planning attorney to help you draft your will. There are many heartbreaking stories of people who decided to do it by themselves and missed important steps. If that’s the case, the probate judge will not recognize the will and will take control of the estate. Don’t let this happen to your family. Use a legal professional.

Name Your Heirs. List all of the people you want to include in your will. You can omit or include anyone you want. If you do want to leave out a certain family member, be sure you clearly indicate that in the will. You don’t have to explain why you decided to include or exclude family members from your will.

Name an Executor.  Select your attorney or a close family member as the executor.

Select a Guardian for your Children. Name a responsible and willing guardian for your minor children. You should also be sure to discuss your decision with the potential guardian.

Be Clear on the Assets Beneficiaries are to Receive. Avoid vagueness or questions in your will. Clearly explain who gets what. This will help avoid confusion and disputes among family. A thoroughly crafted will prevents stressful and upsetting situations from happening to your family, after your passing.

Include Your Final Wishes with the Will. You can leave your will and a final letter to your family with your executor. This is also called a letter of last instruction.

Get Your Witnesses. When you’re ready to sign your will, be sure to sign it in the presence of a notary public (your estate planning attorney). get a witness (or two depending on your state’s laws) of legal age, over 18-years old and not a family member or relative, to sign the documents.

Keep Your Will Somewhere Safe and Accessible. Store your will in a safe place, where your family can get to it when you die.

Reference: Money Check (October 23, 2019) “Guide to Writing a Will: Everything You Need to Consider”

 

What Do I Need in My Estate Plan in Addition to a Will?

American Legion’s recent article, “Planning beyond the will” says that it’s important that your estate planning papers are synced with your wishes and the current law, but you should also look at some items outside of the fundamental documents:

Beneficiary designations. This includes life insurance policies, IRAs, current and former employer retirement plans and annuities. A beneficiary designation supersedes any instructions in a will or trust. As a result, it’s important that your designations reflect your current wishes and are synced with the rest of your estate plan.

Property title. Be sure that you know how your property is titled. If the family home is titled as joint tenants with rights of survivorship then it will pass seamlessly to the surviving owner. There are also potential income-tax implications. Ask your estate planning attorney about this and the best way to address title concerns.

Personal property plans. This could be as simple as giving your trustee or executor the authority to make decisions designating instructions with respect to specific property in your will or trust, or incorporating a personal property memo into your plan. The guidance you give can alleviate major problems when you’re no longer around to settle disputes.

A continuity book. In the military, it’s common that just as you’re getting used to your responsibilities, it’s time to PCS (Permanent Change of Station) or switch jobs. Many leaders require a continuity book that helps bridge that knowledge gap so your successor has an idea of what to do. You can adopt this practice in your personal affairs. This can include an inventory of your assets, liabilities and insurance policies. This “continuity book” should also include your social media account passwords, key contacts, funeral wishes and the location of your key estate planning documents and list your estate planning attorney. This is an important resource for trustees and executors as they assume their duties.

Enjoy the holidays and this year work on making sure that your family spends many more happy holidays together.

Reference: American Legion (October 18, 2019) “Planning beyond the will”

 

What Are The Essential Estate Planning Documents?

Forbes’ recent article, “Retirement, Estate Planning: Documents You Should Have,” says that in this time of life, while emotions are running high, it’s critical to be make sure your financial and legal matters are in order.

Putting together a well thought out financial plan and creating an estate plan lets you be certain that personal, financial, and health wishes will be carried out the way you want. Managing your estate, regardless of the size, starts with working with an experienced estate planning attorney who will help give you greater control, privacy and security of your legacy. Here are the documents you need to get started:

Will. This is a legal document that is used to detail your wishes regarding the distribution of your assets and property, as well as the care of any minor children, by naming a guardian in the event your pass away while they’re still young.

Durable Power of Attorney. This is a written authorization that gives a trusted family or friend the authority to act on your behalf in business, legal, and financial matters, if you’re unable to act for yourself due to a mental or physical disability. The requirements are different in each state, so ask your attorney about the right form and language to include.

Health Care Proxy. This is also known as a living will. It is another legal document that states your health care preferences in case you become incapacitated or unable to speak for yourself. It also allows you to say how you’d like your end-of-life care to be handled.

Information Document. Another important part of your estate plan is a document that contains bank account information, passwords, insurance policies, contact information for attorneys, financial planners and any other significant data regarding your personal estate and final wishes. It provides important information to family in the event of an emergency.

Plan for the future, by making certain that your loved ones know and are able to carry out your final wishes.

Reference: Forbes (August 28, 2019) “Retirement, Estate Planning: Documents You Should Have”

 

How Can Dads Make Sure Their Families are Protected?

Forbes’ recent article, “How Fathers Can Make Sure Their Families Are Financially Protected” suggests that fathers consider taking the following steps to ensure their families are protected. The same advice applies to mothers too.

Do you have enough life insurance? Be sure you’re adequately insured, so your family won’t struggle to pay the bills without your income. Many employees only have enough life insurance from work to cover a year’s worth of salary, which may be enough for some families. However, if your spouse can’t make the mortgage payment on their own, and if they would be unwilling or unable to sell the home, you might want to at least make sure you have enough life insurance to pay off the mortgage. Once you know how much you need, buy a low-cost term policy for the maximum length of time you might need the coverage.

Are your beneficiaries updated on retirement accounts, annuities and life insurance policies? This is an often overlooked issue. An outdated beneficiary designation could result in your ex-spouse inheriting most of your assets, your latest child being disinherited, or your family having to pay higher taxes and probate fees than is necessary.

Is your will drafted?  You need a will to name a guardian for your minor children in most states. It’s a good idea to have an experienced estate planning attorney  help you.

Are you organized? Keep a record of where everything and everyone is. You can draft an “In Case of Emergency” folder that has copies of your will, revocable trust, life insurance policy and a summary of brokerage and bank accounts. Let your family know where to find it. You should also share your passwords to your digital accounts.

As a parent, you have an obligation to care for the financial well-being of your family. Part of this is making sure they’ll be protected, even if you’re not around.

Reference: Forbes (June 16, 2019) “How Fathers Can Make Sure Their Families Are Financially Protected”