If you have been named the executor of someone’s estate or the Trustee of a Trust, you may be unaware of all the details this responsibility entails.  Most parents name a child as an executor, but seldom do children then do the necessary research to see what estate administration is all about – and when it comes time to take over these responsibilities, they panic or miss important deadlines and details.

Immediately following the death of the estate owner or trust grantor, executors/trustees should:

Secure tangible property.  It’s amazing how many things “walk away” from a decedent’s home right after they die.  Someone may feel that Aunt Betty would have “wanted” them to have the silver collection, so they just take it.  So it is important that executors secure all tangible property – especially if that property may require an appraisal – so they can plan for the distribution of the property as outlined in the decedent’s will.

Take your time.  After you have secured the tangible property, take a little time to grieve before worrying about most financial matters.  You will probably want to pay bills, but these can wait a month or two without repercussion.  However, you do need to notify Social Security within 30 days of the death. 

Talk with your attorney.  Meet with your Personal Family Lawyer® to receive the guidance you need to properly administer the estate.  Any fees incurred will be paid out of the estate, not your pocket.  And the advice you get will be invaluable.  If you have prepared a plan with us and you are on one of our VIP Membership programs, your executor will have a no-charge meeting with us after your passing and then we will support with administration of the estate and trust at a discounted rate.

Here are some general rules, which vary from state to state, for estate executors regarding the steps that need to be taken to properly administer the estate:

1. Notify probate court.  You must file the will and petition at the probate court to be officially recognized as executor.  If there is no will, the heirs must petition the court to be appointed administrator.

2.  Inventory the assets.  You will need to compile a list of everything the decedent owned and provide that list to the probate court. 

3.  Open a checking account.  You will need to open a single checking account on behalf of the estate to pay bills and taxes.

4.  File tax returns.  You must file a final income tax return for the decedent.  If the estate has any assets that earn interest, you must file an income tax return for the estate.  If the estate exceeds $5.12 million, you will need to file a federal estate tax return within nine months of the date of death.

5.  Distribute property.  After any creditor claims are satisfied and bills paid, you will need to distribute the remaining property to heirs.

6.  File a final account.  You must file a final account with the probate court in order to close out the estate.

If you would like to have a talk about estate planning and administration, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.

For many people, the basics of estate planning are simple enough, but for those families with loved ones who are disabled or have special needs, the estate planning process is more involved – and definitely more critical.

The latest statistics show that five percent of minor children have some sort of disability, and the burden of caring for these children make estate planning essential.  In addition to specialized health care, these children usually need special schooling and intensive therapy, all of which comes at a cost. 

Here are some tips for parents facing the need to plan not only for their own financial future, but for that of a special needs child:

Deal with expectations.  Parents need to think about the kind of life they envision for their child.  Will the child have a shorter life span?  Will he or she be able to work or live independently?  The answers to these questions will form the foundation of your plan.

Determine eligibility for public benefits.  In order to meet eligibility requirements for Medicaid and Social Security Supplemental Income programs, a person with special needs or other disabilities cannot have more than $2,000 in assets.  This makes it imperative that a child who could benefit from these services not have any assets titled in his or her own name – meaning they should not be listed as beneficiaries on life insurance policies, retirement accounts or plans, in trusts, wills or pensions. 

Consider a special needs trust.  Assets placed in a third-party special needs trust are not counted as assets toward public benefit program eligibility, but these trusts are governed by strict rules so the counsel of a Personal Family Lawyer in establishing this trust is necessary.  Parents who are unable to fund a special needs trust with cash while they are still alive can do so through life insurance proceeds after they die.

If you would like to have a talk about protecting your family through estate planning, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.

We are fast approaching the holidays, when travel is the busiest and careful planning is necessary to nab the best airfare or book that New Year’s beach cottage before it slips away.  One thing that is probably not on your travel to-do list is estate planning, but it should be so you can travel with peace of mind.

Here are some tips to pack away your worries before you board that flight:

Complete your estate plan.  If you’ve been putting it off, now is the time to complete your estate plan.  If money is a consideration, then start with those the most important items: a will, power of attorney and advance health care directives.

Update an existing estate plan.  Has something changed in your life since you last updated your estate plan?   A birth, a death, a marriage, a divorce?  Each of these triggers your need to update your estate plan.

Establish guardianship for minor children.  If you have ever gotten a nagging fear about what would happen to your children if something were to happen to you, then use that fear to follow through on naming a guardian for raising your minor children.  If you have young kids, there is never an excuse for you to neglect this important step.

Review beneficiaries.  Beneficiaries of your retirement accounts, life insurance and other assets must be kept current or your assets will not pass to them upon your death.  If you have minor children, you will need to set up a trust and name the trust as beneficiary so your assets can pass without court intervention.

Review/update incapacity documents.  Two very important health care documents – a durable power of attorney for health care and a HIPPA Authorization – will determine who can make medical decisions for you and who has access to your medical records in case of incapacity.  Be sure you have these documents before you travel and that the person/people named are still valid.

Review/update insurance.  Does your life insurance coverage still meet your family’s needs?  If not, it is time to update your insurance policy before you hit the road.

In addition, you need to be sure you have an organized file of all your accounts and estate planning documents and you need to tell your family where they can locate the file if and when it becomes necessary.

The time to create a plan that spells out how you will pass on your values, beliefs and your money to your children is now.  You can begin by calling our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.