Estate Administrators and Trustees Are Responsible for Many Different Tasks

by with No Comment Estate and Trust Administration

Before you choose who will step in and make decisions on your behalf, as well as handle your estate after you pass away, it’s important to clarify that the people you have selected are comfortable in serving in this role.       
The truth is that being a trustee or an estate administrator comes with many different tasks, which can be overwhelming for a person who didn’t realize everything they had to handle prior to closing out your estate. To settle an estate refers to the winding up of all the legal, personal and financial affairs of the person who passed away. Typically, a trust trustee or the executor of a will is the person who handles all of these different tasks when a person passes away. The easier aspects of settling an estate include notifying the social security administration and post office of the death, and notifying insurance agents, service providers, physicians, employers, banks and more. Other critical issues include handling trusts, funeral and burial arrangements, veteran’s information, and anything related to other death benefits.
Distribution of the decedent’s assets is a critical step involved in this process and one that cannot be overlooked. If the decedent owned assets in their individual name, those assets have to go through the probate court proceeding. If the decedent had a trust, then the trustee appointed in that role must distribute the assets to the beneficiaries listed according to the trust directions without having to go through a court proceeding.
All of these situations can be very complicated for a person who was not aware that they were going to step into this role. Having a conversation well in advance with a person you intend to take over the role of administrator or trustee is important so that there is no confusion or unnecessary delays if you were to suddenly pass away. Schedule a consultation today with an experienced estate planning lawyer in Virginia Beach.
 
 

Tips for Choosing an Executor

by with No Comment Asset DistributionEstate and Trust AdministrationEstate PlanningExecutor

When approaching the estate planning process, your executor is the individual who has the legal responsibility to ensure that all of your estate planning intentions and plans are carried out to pay out any debts, bills and taxes, and to ensure that your assets are transferred properly. When identifying the right person to choose as an executor, you want to look for someone who is competent and trustworthy to carry through your wishes.
ThinkstockPhotos-99780257This person should also be aware of your intentions to name them as an executor so that they can accept. People often default to choosing a person in their family as their executor. However, it is important for that individual to understand all of their responsibility associated with this role as well as what will happen if this person were to suddenly pass away before you.
Trust and bank companies may also allow you to use them as your executor and attorneys can also serve in this role. Selecting someone who is geographically close to where you live may be beneficial. It is very important to determine the right person to serve as your executor.
If you’re not sure where to start, schedule a meeting with a Virginia Beach estate planning lawyer to get your questions answered.
 

More Americans Are Passing Away with Debt Than Ever

by with No Comment Asset DistributionAsset ProtectionEnd of Life PlanningEstate and Trust AdministrationEstate PlanningFamilyLegal Assistance

A recent study of 220 million consumers in Experian’s File One database, indicated that up to 73% of consumers are passing away with debt in high numbers. For those individuals who do not have a home loan, the average debt was $12,875. However, consumers with a mortgage carried approximately $61,554 in debt.
You may assume that debts are no longer your issue if you pass away, but that’s not true if there are assets inside your estate that may cover a portion or all of these debts. If you have communicated to your loved ones that you intend to give them particular assets, but those are seized and sold as part of your estate plan, you may wish to discuss your options for changing your estate plan with an experienced lawyer.
thumb_alternateThe types of debts most common included credit card balances, mortgage debt, auto loans, personal loans and student loans. Debt belongs to the deceased individual when he or she passes away. That means that creditors can pursue asset sold in the estate as part of their payment.
If there aren’t enough assets to satisfy debts, then creditors may lose out on all or some of their payments. But in the event that there are assets in the estate to pay out creditors, then your beneficiaries may actually receive nothing. This is why it may be important to discuss other opportunities such as a life insurance policy or advanced planning strategies with your knowledgeable estate planning attorney.

What You Should Know About Qualified Terminal Interest Property Trusts

by with No Comment Estate and Trust AdministrationEstate Planning

Wife showing where to sign to her husband
Flexibility is a critical component for anyone who is looking into the estate planning process. One of the most flexible tools to achieve this is a Q-tip trust, also referred to as a Qualified Terminal Interest Property Trust.
As with all trusts, it’s important to set up a meeting with a lawyer first to determine the goals you want to achieve. An attorney can help you navigate the different kinds of trusts in order to determine the one most appropriate for your goals. In your situation, a lawyer might recommend a QTIP trust.
These are for the complete benefit of the surviving spouse. The major benefit of such a trust is that depending on circumstances, these can be changed either through the election of an independent fiduciary or through a disclaimer from the surviving spouse. They can be changed into a bypass or family trust for the benefit of the decedent’s descendants or the decedent’s surviving spouse.
It is strongly recommended that anytime you consider a complicated trust like this that you consult directly with a Virginia estate planning attorney who has assisted others with this process. This will give you the best possible chance of having all of your questions answered in full and understanding your rights and responsibilities moving forward.
 

Three Changes in Your Life That Should Prompt You to Schedule an Appointment with Your Estate Planning Attorney

by with No Comment Estate and Trust AdministrationEstate PlanningFamilyFinancesRetirement Planning

Aged copule is falling out and cannot reach the agreement
There are so many different circumstances that should warrant a meeting with your estate planning attorney. As estate laws or your individual life circumstances change, it is appropriate to update your estate planning documents to ensure that they are in line with your intentions. What follows are three of the most common changes in your life that could prompt a meeting with an estate planning attorney.
First of all, if you intend to access your retirement savings, whether it’s your 401(k) or your IRA, you should update your estate plan if these assets have previously been included in your estate planning. The second common reason that you wish to update your estate plan has to do with changing trustees or beneficiaries.
In the event that you wish to revise any of this information due to a family dispute or whether one of the trustees has passed away, you will need all of your documents to reflect these changes.
Finally, significant changes in your healthcare or the health condition of your spouse may require that you update your estate plan. Health care costs can impact your assets, so it is a good idea to review documents with the help of an experienced estate planning lawyer.

Four Things You Need to Know for Your Retirement Planning To-Do List

by with No Comment Estate and Trust AdministrationEstate Planning

As you approach retirement age, there are many different considerations you need to keep in the back of your mind in order to plan effectively for the future. These five things should never be overlooked in your retirement to-do list process.
Know the Withdrawal Rules
One you reach age 70 and a half you may be responsible for taking out money from a 401(K) and a traditional IRA.
Be Aware of the Costs of Your Retirement Lifestyle
Do you hope to stay at home pursuing hobbies or do you intend to travel the world? These will all influence the price tag of your retirement lifestyle.
Be Aware of your planned Retirement Age
You might have considered your retirement age decades ago but it may be time to adjust it to your overall financial situation.
Take a Look at Healthcare Situations
When you turn 65 you’ll become eligible for Medicare, but this does not guarantee to pay for any significant portion of long term care costs. You need an annual healthcare budget and may need to incorporate long term healthcare insurance, too.
Consider Your Estate Plans
Estate planning may involve numerous documents like a power of attorney, a will or a trust. Working directly with a knowledgeable estate planning lawyer in Virginia can be beneficial in all of these situations.

In Some States, Irrevocable Trusts Aren’t Necessarily Irrevocable

by with No Comment Estate and Trust AdministrationEstate TaxesIrrevocable Trusts
Estate tax return
Estate tax return
Irrevocable sounds so very final, but in some states, appearances can be deceiving.
According to a National Law Review article, people who created lifetime irrevocable trusts to avoid estate taxes don’t have to live with them irrevocably, in some instances.
“The assets in the irrevocable trust pass upon death free of estate tax,” according to the item “To achieve the estate tax advantages, the client needs to give up control, which necessarily means the trust is irrevocable.
However, changes in life or in the law oftentimes make the trust provisions less desirable.”
An example given in the article is if the create of the trust, for whatever reason, wants to change the trustee or even the location of the trust, along with the change in how the money will be disposed after death.
“Fortunately, a number of states now allow irrevocable trusts to be amended, even without court involvement,” the story states.
Legally acceptable means of amending provisions without court approval, called “decanting” and “nonjudicial reformation,” can change what might originally have appeared permanent.
“The dilemma is whether these changes could jeopardize the estate tax advantages the client desired and obtained at the creation of the trust,” the article goes on.
“The good estate tax news is that the IRS has issued a number of Private Letter Rulings that indicate estate and generation skipping tax advantages will still apply even if an irrevocable trust is modified. Of course, the devil is in the details, in determining what types of changes are appropriate and the method in which the changes can be done under state law. But at least in the estate tax world, what is irrevocable may be irrevocable only in part.”

Duties of Executors More Complex In Digital World

by with No Comment Estate and Trust AdministrationExecutorFinances

The roles of executors and their agents, which had remained largely unchanged for decades, are, like everything in this digital age, undergoing a transformation.

Financial data analyzing
Financial data analyzing
“Being named an executor by a family member or close friend is an expression of the highest regard and trust, and it is generally regarded as an honor,” according to a recent article on the website ustrust.com
But, like many honors, it brings with it significant responsibilities and, often, unexpected challenges. “Serving as executor is one of the most complex financial roles anyone can undertake. The responsibilities are extensive and often highly technical, and the commitment of time and energy can be daunting. The role demands custody, investment, fiduciary, administrative, accounting, legal and tax expertise and capabilities. Emerging issues related to digital property, not to mention increasingly intricate family structures, add challenges for the executor.”
The site goes on to point out that at one time the search for important documents relating to an estate was largely confined to a few filing cabinets in the home of the deceased or perhaps a safety deposit box at the individual’s bank.
“But today, important papers may have been sent and stored solely in digital forms, which can muddle the search for important information,” according to the piece by Chris Heilmann, chief fiduciary executive for U.S. Trust, and Colin Korzec, U.S. Trust national executive for estate settlement. “And, even if all of these digital locations are known, does the executor have current usernames and passwords to access the information?
“There are also potential legal issues, since most state laws are unclear as to an executor’s ability to gain access to a deceased individual’s digital property. User agreements for online services tend to be equally murky. What about access to email accounts? Can an executor access these accounts without violating the provider’s terms of use agreement? All this is really just the tip of the iceberg when it comes to grappling with digital assets as an executor.”
One solution for dealing with a particularly difficult and complicated situation, the authors suggest, is to find a co-executor so that the potentially cumbersome tasks can be shared out.

Choice Of Executor Vital Part Of Estate Planning

by with No Comment Estate and Trust AdministrationEstate TaxesExecutor

Making a will and keeping it up to date are only part of what people need to do to ensure their wishes are properly carried out after death.

Wife showing where to sign to her husband
Wife showing where to sign to her husband
Selecting the right executor for an estate is also vital.
That message was brought home in a recent Forbes magazine article, which the writer referred to as a “tale of caution.”
“The cast includes a 73-year-old high-school-educated homemaker named executor of a nonagenarian cousin’s will, an attorney who was battling brain cancer, seven distant relatives and three charities all due a piece of a $12.5 million estate, and an Internal Revenue Service bill for $1.2 million in penalties and interest for failure to file an estate tax return and pay taxes on time levied on the estate,” according to the story. “In an appeal to the U.S. Court of Appeals for the Sixth Circuit filed in February, the executor is trying to recover the $1.2 million. The question at hand: was her failure to file the return and pay the tax on time due to reasonable cause and not willful neglect?”
“What’s the lesson? Even if you have an expert, you have to pay attention to the matters at hand,” the article quotes Jon Hoffheimer, a lawyer who the court appointed to administer the estate as a co-fiduciary with the executor in question after it became clear that she wasn’t up to the task.
Most people, the story goes on to point out, choose a friend or relative as executor, while relying on an estate attorney to ensure a proper will is on file.
“But it’s the executor who bears the ultimate responsibility to make sure it’s done, on time,” the article notes.
The best approach, professionals in the story advise, is to clearly list all the duties of an executor under the terms of the will and have that person sign the document long before these actions have to be taken.

Irrevocable Trust Could Have Saved Fuss Over Novelist’s Estate

by with No Comment Estate and Trust AdministrationEstate PlanningEstate TaxesFamilyProbateTrusts

The late Tom Clancy’s novels showed he had a remarkable grasp of military strategy.

His muddled estate shows he did not bring the same kind of acumen to his own personal financial affairs, according to a recent article on the website insurancenewsnet.com.
Clancy passed away in Baltimore on Oct. 1, 2013. He was 66. Even after his death, the writer’s estate continued producing bestselling books and video games.
It also produced a great deal of rancor among his survivors, some of which could have been avoided by better estate planning, according to the article.
“Less than a year after Clancy passed away, a heated battle over his estate unfolded in a Maryland probate court,” states the story. “The estate, which is estimated to be worth $83 million and could gain even greater value as Clancy’s works continue to be produced and sold, is being contested by Clancy’s widow and his adult children who were born to his former first wife. Among the probate issues being deliberated in court, there’s a monetary amount adding up to $18 million in state and federal taxes, which Clancy’s widow is petitioning to transfer over to the late author’s four adult children.
“Furthermore, The Wall Street Journal reported on the existence of a family trust set up by Clancy to leave his widow about 66 percent of his estate. However, Clancy’s widow claims that the wrongful execution of the estate caused a miscalculation that called for $6 million in taxes assigned to the family trust. There also appears to be will left by Clancy as well as a codicil executed a few months before the author passed away. Apparently, Clancy’s widow also sought to replace the executor of estate, who in Maryland court is known as a personal representative, since the current attorney serving in that capacity wishes to spread the tax burden equally amongst all heirs.”
“It seems as if Tom Clancy did not plan his estate as carefully as the highly organized military operatives in his novels,” Rocco Beatrice, Managing Director of Estate Street Planners, LLC, a financial planning firm focusing on asset protection, wealth management and estate planning, was quoted as saying. “It appears that Clancy left a will that created separate trusts for his widow and his four children from his first marriage, and the presence of a codicil suggests that he may have changed his mind at one point. With this in mind, it is not too surprising to learn that the Clancy estate is now going through probate.
“The fact that there is probate battle over estate taxation tells us that Clancy did not use an irrevocable trust, which could have prevented the current courtroom fight and the unwelcome media attention into his family’s finances.”