How To Choose Your Executor or Personal Representative
June 14, 2010
Serving as someone’s executor or personal representative under a Last Will and Testament can be a HUGE job, and may not be right for the faint of heart. Although nomination is commonly considered an honor, there is a lot of work involved, and an executor must have a great capacity for organization, attention to detail, the ability to meet deadlines, and more. You may be tempted to name your favorite sibling or eldest child just to keep from hurting any feelings, but your family and heirs will not be well served if you choose your executor based on emotion rather than ability.
Keeping this in mind, here are 4 things to consider when choosing your executor or personal representative:
- Your executor should be trustworthy. Your executor will be privy to all of your financial secrets: reviewing estate assets, determining your liabilities and paying off creditors, settling outstanding debts, and making distributions to heirs. Chances are you don’t want all that information spread throughout the family or community.
- Your executor should be organized. The person you choose will be in charge of a number of detailed tasks, both large and small. He or she will be making lists of assets, working with your attorney to meet court deadlines, making timely distributions for estate taxes, and more. Missing or being late for one of these many steps can draw out the entire process, costing your heirs both time and money.
- Your executor should be financially savvy. One of the responsibilities of executor is to keep the estate viable (making sure the mortgage and fees continue to be paid) during the probate process. If you have investment accounts you’ll want to ensure they won’t languish and lose their value before they can be distributed to your heirs.
- Your executor should have heart. Although probate is a can be a difficult and detailed process, it is at its core about the people you love. Your executor should have the ability to be caring and compassionate during this emotional time.
If you don’t know anybody you would trust with all of these responsibilities don’t lose faith, there are other options. For example, you can choose a bank or financial institution as your executor, or you can ask your estate planning attorney to recommend a professional fiduciary. The goal is to find someone who will serve you well and work with your attorney to ensure a smooth probate for all involved. Another approach is to create and fund a trust, where the duties after your demise would be handled by your Successor Trustee. However, many of the same concerns that apply to your Executor (if you only have a Will) also apply to your Trustee. Talk to your attorney about choices and the difference between administering a probate estate created by a Last Will and Testament, on the one hand, versus a trust estate created by a Trust, on the other. You may find the talk very helpful.
Defining Probate
April 23, 2010
Probate: [from the Middle-English probat, from Latin probatum…] a : the action or process of proving before a competent judicial authority that a document offered for official recognition and registration as the last will and testament of a deceased person is genuine. b : the judicial determination of the validity of a will.
This Merriam-Webster definition of probate doesn’t make it sound so bad. Quite simply, it is the process by which the court determines the legal property of a person who has died, and decides to whom those assets will be distributed. It sounds like it should be simple… but somehow probate is hardly ever simple. Even in the best of circumstances there are procedures that must be followed to the letter, and the actual process (depending on the size of the estate and the laws of the state in which the property is being probated) can take anywhere from 6 months to a few years!
A good will can go a long way toward keeping the probate process on the short and easy end of the spectrum; but even with a will, much of your probate experience will depend on elements outside your realm of control. There are certain steps that must be followed to complete the probate process, including:
- the appointment of an executor or personal representative
- verification of the will
- taking an inventory of assets belonging to the deceased (which can be very difficult if good records have not been kept)
- giving notice to creditors
- paying valid claims against the estate
- preparing and paying taxes
- notifying beneficiaries (not all of whom will be easy to find)
- and eventually distributing the assets to the beneficiaries or heirs
If just reading the above takes your breath away, imagine having to actually go through all of those steps—and possibly more! The good news is that you don’t have to go through it alone, our office can help you navigate the tangled probate maze from beginning to end—from filing the first court documents to protecting your eventual inheritance—ensuring that your probate experience goes as quickly and smoothly as possible.
Do You Need A Will Or A Trust?
March 14, 2010
When it comes to estate planning there are two major vehicles for the distribution of property: A will and a trust. Both are very useful tools and can accomplish specific goals—but how do you know which one is best for your family? Which document you will need depends on a number of factors, some of which may seem completely irrelevant at first: the size of your estate, your goals for that estate, the age of your children, your marital status, your retirement account, and many, many more. But the first step to understanding which tool may be right for you is to understand what each document does.
A Will: A will is a formal declaration of your wishes. It is a document you create to declare the extent of your privately held property (it does not cover jointly owned property) and what your wishes are for the distribution of that property. You name an executor to carry out your wishes, and you can even include a nomination of guardian for young children in your will. A will does not go into effect until after you die; before then it is simply a piece of paper containing your private wishes. However, once you have passed away your will no longer remains private, it now becomes a matter of public record, available to anybody who would like to view it, and overseen by the court in a sometimes lengthy and expensive process called probate.
A Trust: A trust is a far more extensive tool than a will. In fact, there are many different kinds of trusts, each of which may be used for specific situations. Most trusts created for estate planning purposes are revocable living trusts (or RLTs.) An RLT is a document created not simply to distribute your property, but to own your property on your behalf, to be invested and spent for your benefit or the benefit of your named beneficiaries. As such, a trust takes effect as soon as you sign it and your property is protected by and subjected to the trust parameters as soon as you place them in the name of your trust. There is a lot of flexibility available with a trust, and yours can be created to fit your unique situation. Most RLTs name the trust creators as the initial trustees, nominating individuals or banks to take over as trustee when the creator becomes incapacitated or passes away. The benefit of a trust is that when the creator passes away, property is not merely distributed and that’s the end of it; the creator can instruct the trustee to distribute the money slowly and in any number of ways, even to the extent of creating new trusts for each beneficiary. Trusts can last for generations, as evidenced by the enduring Kennedy trusts.
Wills and trusts are necessary tools in estate planning, each one working in unique situations. Your attorney will be able to tell you which one is best for your family.
The Importance of Being Earnest
January 27, 2010
Do you have a will or a trust?
Has your will or trust been reviewed or updated in the past 3-5 years?
If you answered yes to these questions then you are two steps ahead of 2/3 of the rest of Americans. But the next question is the big one:
Does your family or executor know where your legal documents are stored, and are they able to access them?
Having a will or a trust is essential, but it doesn’t do any good if nobody can find it after you’re gone. Olympic medalist Florence Griffith Joyner (“Flo-Jo”) supposedly had a will when she tragically passed away at the age of 38, but because her husband was never able to locate the original document, a neutral administrator had to be appointed by the court to execute the estate; and whether her estate was executed according to her wishes is anybody’s guess.
A will or a trust often contains sensitive and emotional information, and for that reason many people (understandably) want to keep these documents private; but spending any amount of time or money on your estate planning documents won’t help your family if they can’t locate—or don’t have access to—those documents after your death.
We suggest having an earnest conversation with your family (or one or two select members at the very least) about the existence and location of your personal documents. Although they don’t have to know what is in your will or trust, knowing where those documents are can ensure that the time and money you spent creating them isn’t wasted.
The Shortest Will: It May Hold the Record, But It Won’t Hold Water
December 12, 2009
Have you ever wondered just how little you could get away with in your last will and testament? Aletta Stager of Brooklyn, NY holds the distinction of having executed one of the shortest wills on record—a mere 2 lines long!
“Nov. 29, 1895. I give to my cousin, Nettie M. Cowan, all money that I have in the Bowery Savings Bank.
Aletta Stager, 131 Berkeley Place, Brooklyn, N.Y.”
Of course, things have changed in the probate and estate planning world in the one hundred plus years since Ms. Stager executed her will. A glaring omission from the two lines above is the nomination of an executor. If you don’t nominate an executor in your will the court may choose one for you. Also, even if you have only one person in mind as your beneficiary, you’ll want to include secondary beneficiaries, who can include charities and non-profits if you don’t have any family or friends to whom you’d like to leave your estate.
Even back in 1895 Aletta Stager’s property ended up going to the state of New York when no heirs—including the named beneficiary—could be found. Perhaps if Ms. Stager had included a couple more lines in her will her estate could have gone to benefit her favorite charity instead of being swallowed up by the state.
What is REALLY Behind a Contested Will?
August 14, 2009
Tolstoy said that “happy families are all alike; every unhappy family is unhappy in its own way,” but sometimes even the most stable and happy of families can turn angry and litigious when death and property are involved. It never ceases to be surprising how many seemingly strong family relationships devolve into backbiting and grudge-holding when a loved one dies and the Last Will and Testament does not live up to expectations.
When a will, or a Trust, is contested by an angry beneficiary (or someone who thought they should have been a beneficiary), the core motivation is often more about emotion than finances. Unfortunately, however, a will contest (if the contest is deemed valid)—and the ensuing litigation process—will delay probate considerably and make it significantly more expensive.
For this reason, if you are named as the executor of a will, it is important to know what the legitimate grounds for will contests are, and to have a trusted attorney to whom you can turn if and when surprises occur. Serving as executor of a will can be stressful enough when everything goes as planned; dealing with the unexpected—especially when those surprises come from hurt or angry relatives—can take over every part of your life and have a lasting effect on family dynamics. A trust may also be contested, on most of the same grounds.
We hope you will never have to deal with a will contest in your family; but if you do, we hope you will let our firm help you make the process as fair and as painless as possible.
Dad Died and I’m His Executor… Now What?
August 8, 2009
Dealing with the death of a family member—especially when that family member is a parent—can be fraught with confusion and emotion even under the best of circumstances. Being named as the executor of a family member’s estate (although often considered an honor) means that you have to have a clearer head and more patience than everyone else during an already difficult time.
If you have been named as the executor of the estate it means that most likely a Will has been found. Remember: a Will ususally requires probate, unlike a Trust. (If the deceased did not have a Will, then the estate will be distributed according to the state probate code. In that event, a representative called an ”administrator” will have to be appointed by the court, but it does not mean that probate can be avoided. Preference in appointment is usually given to family members, in an order specified by statute.) Once you have been appointed the executor or administrator you are considered the responsible party during the probate process and can be held accountable by the beneficiaries. As the executor or administrator, the following is a partial list of your responsibilities:
- Reviewing the estate assets.
- Creating an accounting of the deceased’s assets and liabilities.
- Giving notice to potential creditors.
- Settling outstanding debts.
- Making distributions for estate taxes.
- Making distributions to heirs.
- Filing a final accounting with the court to close the probate process.
In addition to the above responsibilities, it will be your responsibility to keep the estate viable (making sure the mortgage and fees continue to be paid) during the probate process. Probate can often be a lengthy process, so you may petition the court to release short-term supply funds for this purpose while proceedings continue.
If you are thinking that this sounds like no easy job you’re absolutely right! Executors and administrators are entitled to compensation from the deceased’s estate, although — if an immediate family member – some choose not to accept compensation. You should also remember that being executor or administrator does not mean that you are personally responsible for the debts of the deceased. All debts, taxes, legal fees, etc. should be paid from the estate of the deceased, not your own pocket.
If this all seems overwhelming, there is good news: You don’t have to go through all of this by yourself. The court can appoint someone to oversee the process (although these appointees often oversee a number of probate cases at a time and may be very busy) or you can find an attorney experienced in the probate process. If you find yourself in this situation, feeling confused and overwhelmed, please call our office. We understand, and we can help.
Will You Leave A Gift—Or A Mess?
April 14, 2009
Do you consider yourself an organized person? It seems that when it comes to organization some people have the gift for it and some people simply don’t. If you’ve ever had (or have currently) the overwhelming job of sorting through the estate of a deceased loved one, you know how very grateful you can be if that loved one had that gift for organization. If, on the other hand, you find yourself sorting bewilderedly through the estate of a less organized loved one, do not despair—Suzanne Barlyn of the Wall Street Journal has some advice to help you through it in her article, “The Mess They Left”.
The truth of the matter is that you can be a wonderfully organized person in life and still inadvertently leave a mess for your heirs simply because you don’t know what will be important after you’re gone. Here a few tips that will make a world of difference to the executor of your estate:
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Keep all of your estate planning documents (will, trust, powers of attorney, etc) together in one place, and make sure your executor knows the location.
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Keep updated lists of assets with your estate planning documents—including life insurance policies, retirement and investment accounts, bank accounts, property, etc.
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Make it as easy as possible for an executor to find any remaining debt you may have. File your bills in a tidy and logical location.
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Make a list of personal property and your wishes for it; this may be the hardest thing for you, but it will prevent emotion-driven bickering among your heirs. You would be surprised at what kinds of trinkets people will fight over.
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Don’t be secretive about your advisors. The people who advised you in life can be of invaluable service to your executor after you’ve passed away.
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Give the name and contact information of your estate planning attorney to your heirs ahead of time. The world of probate or trust administration can be strange and entangled, and your Estate Planning attorney can serve as a guide to your loved ones who may still be confused and in shock.
Whatever your natural tendencies may be, a little organization can be one of the greatest gifts you leave behind for your heirs. An hour or two you spend now getting your paperwork in order can save your executor weeks—or even months—after you’re gone.
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