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P: 866-817-4713
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Will You Need a Probate Attorney?
March 21, 2012
Filed under: Estate and Trust Administration — admin @ 6:15 pm
The subject of probate is one that nobody wants to learn about too early; in fact, most people would probably avoid it altogether if they could. Unfortunately, the probate process can be very confusing and frightening when you are forced to become intimately acquainted with it—especially if you have no prior experience with or knowledge of it.
For a beneficiary, probate can be lengthy, expensive and frustrating; but if you have been named as executor, probate can suddenly become an overwhelming maze of deadlines, notifications and potential liabilities. This is why many executors choose to hire a probate lawyer to help them through the process.
If you are the executor of a small estate with a straightforward will and one or two beneficiaries who are not contentious then you can probably do without an attorney. But you will want to think about hiring an attorney if you are serving as an executor under any of the following circumstances:
* There are a number of beneficiaries who are not on friendly terms, or a number of beneficiaries receiving varying sizes of inheritance.
* The decedent had large estate with many different assets, especially if the assets are not commonly held.
* The decedent was a resident in a different state than your own home state.
A large number of creditors are making claims on the estate.
* There is a disagreement about the will, or if more than one will was found.
* The will is challenged or contested.
These are only a few of the reasons why you might want to consider hiring an attorney to help you through the probate process. If you aren’t sure whether you’ll need an attorney, don’t hesitate to call our office for a consultation. We can help walk you through the process and consider any obstacles that might arise. A little bit of foresight, and knowing you have an experienced professional on your side, can make all the difference in the probate process.
Advice for Executors: How to Manage Final Medical Expenses
March 14, 2012
Most people die in a hospital; sometimes after a long and slow decline, sometimes after a quick and unexpected tragedy. If you are an executor of the deceased’s estate this is significant because it means that there are usually final medical bills to be paid. What most executors do not know is that these final medical bills are not necessarily just like all the other final expenses, especially when it comes to filing a final tax return for the estate; this article from SmartMoney.com explains why.
“…When a person incurs medical expenses and dies before they are paid, the executor of the decedent’s estate can elect to treat those medical expenses as if they were paid when incurred – as long as the estate pays the expenses within one year after the date of death. In other words, this election allows those expenses to be deducted on the decedent’s final Form 1040, even though they were not paid by the date of death.”
Many executors may not think of this because medical expenses can only be deducted if they exceed a certain percentage of the deceased’s adjusted gross income (7.5% to be exact); but health care being what it is, final medical expenses can quite often reach this point.
This sounds easy, but be careful if the deceased’s estate exceeds the $3.5 million estate tax exemption—you may want to look into other options. The article suggests that in this case it might be beneficial to “forgo the election and count the unpaid medical expenses as liabilities on the estate tax return.”
As the executor of an estate you may have more options than you are aware of when it comes to taxes, probate, and achieving the best results for the beneficiaries. If you are unsure about any of these—or other—issues, please contact our office, we can help advise you on all angles of the trustee or probate process.
What To Do After A Death In The Family
March 2, 2012
Filed under: Estate and Trust Administration — admin @ 6:45 pm
Anyone who has lost a close friend or family member knows that what a difficult, painful, and overwhelming time it can be. We are often asked to help our clients through probate process when a loved one dies, but probate isn’t the only thing you’ll have to think about; in fact, it may not even be the first thing you should think about. We know that nothing can make this process easy, but we hope this brief guide can help make the process of dealing with the death of a loved one somewhat less overwhelming.
1. The first thing you’ll want to do is call close friends and family. They will share in your grief, and they can also share the responsibility of notifying others.
2. Contact a funeral director. This person can help walk you through the process of planning a memorial, making burial arrangements, and even writing an obituary. This can often be the most overwhelming task, not because it is particularly difficult, but because it has to be done so quickly; sometimes before the reality of death has had a chance to sink in with the survivors.
3. Find out if your loved one had a will. Contact their attorney (if they had one) and make sure you have the original for the probate court. If you aren’t sure how to file with will with the probate court you can contact an attorney, or check the website of the local probate office for the deceased.
4. Order multiple copies of the death certificate. You will need these for the insurance company, as well as for some of the steps below.
5. Collect the mail and contact all utility companies, credit card companies, debt collectors, etc.; call to notify them of the death and stop services.
6. Go through the deceased’s files and paperwork. This can be tedious, time-consuming, and confusing, depending on how organized your loved one was. This is important information you (or the executor or trustee) will need to file final tax returns and pass on to the probate court, so don’t be afraid to ask for help when you need it.
Dealing with the death of a loved one is one of the most difficult and overwhelming things you may ever have to do. If you are having a particularly hard time with the grieving process don’t be afraid to ask others to help with the more difficult items, or to hand the list over entirely to someone else if you feel unable to cope. This is when your own probate or estate planning attorney (or the deceased’s attorney, if they had one) can be especially helpful.
Although it sometimes feels as if time should stand still when someone we love passes away, life does go on, for better or worse. But the world is full of caring and knowledgeable people to help you through the process… if you only know where to look.
5 Basic Tips for Trustees
February 13, 2012
Naming someone as trustee of your living trust is quite possibly one of the most difficult decisions you’ll ever make. The trustee is involved in just about every aspect of the administration of a trust; and although it is considered a great honor, it can also be a great responsibility.
Most people choose someone close to them to serve as trustee: a best friend, son or daughter, brother or sister. Choosing someone who knows you and your family to serve in this role can be beneficial in many ways, but if that person doesn’t have a financial or legal background the responsibilities can be overwhelming! It is important that the person you nominate as trustee knows not only what is expected of trustees in general, but also knows what you expect of them as a trustee. For this reason, you may want to consider giving your nominated trustee these 5 Basic Tips for Trustees—and don’t forget to add your own personal requests as grantor.
1. Make sure you read and understand the entire trust document. If you don’t have a legal background it is okay (preferable, in fact) to ask for help from an attorney.
2. Always remember that the beneficiaries of the trust are your first priority and responsibility. Once you are trustee you have what is called a “fiduciary duty” to always act in the best interests of the beneficiaries.
3. Make sure that the trust has its own separate checking account. If the trust is a living trust you as trustee will likely be the person who creates that separate account after the death of the grantor. Under no circumstances should a trustee mingle personal finances with trust finances.
4. Maintain regular contact with the beneficiaries; not just to provide them with regular accountings of trust activity or investments, but also so you yourself can remain aware of the lifestyle, needs, and feelings of all the beneficiaries.
5. Be sure you have a support team that will benefit the trust and the beneficiaries. Get investment advice from a financial professional; have a trusted attorney help with any legal questions you might have; hire a mediator to help if there are irreconcilable differences amongst the beneficiaries. The goal here is not to spend the trust funds frivolously, but to protect and preserve trust assets as the grantors would have wished for their beneficiaries.
Speculation About the Estate of Steve Jobs Continues
December 2, 2011
The public has been curious about the estate of Steve Jobs ever since he passed away in early October, but with his assets wisely protected with a trust, his family’s privacy regarding the distribution of inheritance has remained intact. (Privacy is only one of the many benefits of using a trust as part of your estate plan.) However, what is not a secret is that Mr. Jobs’ significant investments in both Disney and Apple stock will pose some interesting questions for his advisors and heirs. Whatever the family chooses to do, it’s clear that estate tax and capital gains tax laws will have to be taken into consideration.
This article in Investment News discusses what Jobs’ trustees or heirs might choose to do with his valuable investments. According to the article Jobs had billions of dollars invested in Apple and Disney stock. Now, “under the U.S. Tax Code, his heirs may sell shares of Apple and Disney, and avoid $867 million in capital gains taxes. If Apple’s late co-founder left his estate to his wife, Laurene Powell Jobs, the family won’t be liable for the 35% estate tax until she dies or gives money to others, according to estate planners.”
An executor or trustee has a responsibility not only to follow the wishes of the grantor of the trust, but also to look out for the best interests of the beneficiaries; which in this case may include selling or diversifying investments Jobs had chosen to hold onto for sentimental reasons.
Additionally, any executor or trustee will have tax laws to consider–not only the laws in place right now, but any changes to the estate or capital gains tax laws being considered by Congress for 2013. “The capital gains tax is set to rise to 20% in 2013, from 15%, and high-income Americans also will be subject to a 3.8% levy on unearned gains.” This means that advisors and heirs won’t want to wait too long before making any decisions.
The estate of Steve Jobs may be larger than most, but the same issues and questions will face the executors, trustees, and heirs of estates of all sizes. Whether you are a grantor, executor, heir or trustee, our office can help you through any questions or concerns you may be facing. Don’t be afraid to contact us.
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