August 10, 2017

An Executor Is Powerful, So Choose Wisely

This key position determines if the estate is handled well.
An executor needs to be chosen carefully, according to the Wills, Trusts & Estates Prof Blog in "Selecting an Executor for Your Estate."
While there are others who will have a hand in determining how the estate administration goes, the executor with handle most of the decisions.
It is the executor who will have to make the biggest decisions and, unless someone complains, there will be little oversight from busy probate courts.
You need an executor who is trustworthy, understands financial matters, has the time to do the job properly, is willing to do the job, is patient and will seek the advice of experts, when necessary.
Finding someone who meets all of those qualifications, can be a challenging task for many people. However, it is necessary, if you want your estate to go smoothly.
Fortunately, if you do not have a friend or family member who fits the bill, there is someone you probably know who can help steer you in the right direction.
An estate planning attorney can guide you in creating an estate plan that fits your unique circumstances. They can also advise you on a good choice for an executor.
Reference: Wills, Trusts & Estates Prof Blog (July 13, 2017) "Selecting an Executor for Your Estate."

August 7, 2017

Options Are Important When Inheriting an IRA

Americans hold a lot of wealth in IRAs. However, do you know the tax consequences?

Forbes recently discussed some possibilities for beneficiaries of IRAs, including the good deals and the bad deals in "What To Do If You Inherit an IRA."
While inheriting an IRA account can be great news for some, it can also turn to bad news, if the beneficiaries make the wrong decisions about what to do with those accounts.

The single most important thing to keep in mind is that an inherited IRA can be the source of lifetime payments or it can be a source of a very large and immediate tax bill.

If you are smart, then you will want it to be the former, unless you absolutely need a large sum of money right away.
The general rule of thumb is that you should never take more out of an inherited IRA than you are absolutely required to take by law. It is recommended that you take no more than the required minimum distribution.
Exactly how much that is, will depend on several factors.

Before you make a decision on an inherited IRA, it would most likely be beneficial to consult an attorney.
Reference: Forbes (July 10, 2017) "What To Do If You Inherit an IRA."

August 4, 2017

Parents of High School Graduates

If you are the parent of a recent high school graduate, then you should consider getting your child an estate plan.
When our children are young and growing up, we try to teach them how they should act later in life. Every parent knows that the lessons they give to their growing children, can have a tremendous impact on how their children will behave in the decades to come.
It is a heavy burden that most parents take on.
Parents must teach their children how to behave toward others.
Parents have to teach their children about how they should handle money. Parents also have to teach their children about the value of hard work.
It is tempting for some parents to breathe a sigh of relief and think their work is done when their child graduates from high school and becomes an adult. However, there is at least one last thing parents should do as Iris recently discussed in "Estate Planning for Your High School Graduate: That's Right, Your Babies are Adults Now!"
Now that your high school graduate is an adult, he or she needs to have an estate plan.
There are many financial reasons for you to help your child get one now. The most significant is that it will teach your child the importance of estate planning and make them more likely to continue to do it as their lives advance.
However, there is a more immediate practical reason for estate planning.
Once your child is an adult, you are no longer automatically able to make decisions for him or her, should there be a medical emergency.
If your child has an accident while away at college and has a medical emergency, doctors do not have to ask your opinion about what kind of treatment your child should receive. To get around that, you need your child to have an estate plan that includes an advanced medical directive giving you that legal authority.
Reference: Iris (June 27, 2017) "Estate Planning for Your High School Graduate: That's Right, Your Babies are Adults Now!"

August 3, 2017July 13, 2023

Yes, Estate Planning Is for You

No matter who you are, how much money you have, or any other factor, estate planning is something you should do.

Everyone who has ever worked in an estate planning attorney’s office, has experienced the following scenario at least once. It is likely they have experienced it dozens and even hundreds of times.

The phone rings and the person who works in the estate planning attorney’s office picks it up. The person on the other end of the line immediately launches into a very long story about their life situation. They talk about their family, their job, their bank accounts and perhaps what their retirement plans are.

All of this information the employee dutifully tries to jot down on a notepad. However, the reality is that the employee does not need to do that, because the employee knows the question that is eventually coming and the answer to that question.

The question is “Do I need to have an estate plan?”

The answer, as the Casper Star Tribune recently pointed out in “Estate planning is for everyone,” is “Yes.”

Indeed, the answer to that question is always “Yes.” It’s not just “Yes” because the estate planning attorney’s office is a business that needs people to get estate plans to stay open.

Everyone really does need an estate plan.

It does not matter how much money a person has. It does not matter whether a person has any other family members. It does not matter if the only thing the caller has is the proverbial dime to put in a pay phone to make the call. The answer is “Yes”, because everyone deserves to have a say in how anything they do have, will be distributed to others after they pass away.

The way to do that is by getting an estate plan.

Reference: Casper Star Tribune (June 30, 2017) “Estate planning is for everyone.“

August 2, 2017

Filing a Claim Against an Estate

When a person passes away owing debts, it is important that creditors follow the proper procedures to make their claims against the estate.

Most types of debt do not die with the debtor. If there are any assets in the estate, then the estate is responsible to pay those debts.

The executor of the estate is required to notify any known creditors that the debtor has passed away and then to pay the debt, if possible.

However, no creditor should ever rely on an executor doing so. The debt might not be known or the executor might not know what his responsibilities are.

Creditors who learn that a debtor has passed away, should take affirmative steps to file a claim against the estate, which must be done following proper procedures. Things can get even more complicated, if the deceased put all of his or her assets in a trust, leaving nothing in an estate.

Under such circumstances the creditor needs to file against the trust, as the NWI Times points out in "Filing claims against a trust."

Filing a claim against a trust, can be even more complicated than filing against an estate, or maybe not.

It depends on the state. Every state has its own laws and procedures that need to be followed for a creditor to properly file a claim to receive the debt of a debtor who has passed away.

For this reason, it is extremely important for creditors to contact a local estate attorney to help them with the process. This is something that must be done without delay, since the statutes of limitations for these claims are often very short, again depending on the state

Reference: NWI Times (July 2, 2017) "Filing claims against a trust."

August 1, 2017

Burial for the Indigent

The high costs of funeral services creates a problem, because many people pass away without having the means for their own burials. Their remains still have to go somewhere.

Every year, thousands of people with very little money pass away. Sometimes, it is not even known who these deceased people were in life.

While this might seem like a minor issue and something that has always been the case, it creates an increasing burden on local governments. They must determine what to do with the bodies of deceased people, who either cannot be identified or whose families do not have the money to afford burial or cremation.

It is not a minor expense, since the costs of disposing of a deceased body continue to rise.

One county in Florida had such a significant problem that they purchased a cemetery, as the Tallahassee Democrat reports in "A priceless burden: Indigent burials at Leon County's 'pauper's cemetery'."

The cemetery previously belonged to a hospital, but the county purchased it to dispose of the remains of the indigent as cheaply as possible. Graves are marked with the most basic of markers and no actual funeral services are allowed at the cemetery.

The deceased are buried as quickly and with as little fuss as possible.

This is an issue that could get worse before it gets better.

Elderly people are living longer and in greater numbers. That makes it likely that many more elderly will pass away in the future, after they have run out of their own money.

The burden to bury them will be on the government. Elder law advocates may need to address this problem in the near future.

Reference: Tallahassee Democrat (June 24, 2017) "A priceless burden: Indigent burials at Leon County's 'pauper's cemetery'."

Building Legacies that Last Estate Planning and Elder Law

Month: August 2017