Estate Planning FAQ

Frequently Asked Questions

Estate Planning Frequently Asked Questions and Answers

Estate planning encompasses the review of estate documents (wills, trusts, medical directives and living wills, and powers of attorney), as well as the drafting and execution of these documents.

Absolutely! Complete estate planning helps ensure that your assets pass to those people and in the manner that you want and that none of your assets escheat to the state.  Estate planning documents also allow you to name guardians over your person and anyone over whom you have guardianship, so as to prevent the courts or government from determining who will care for you and your loved ones.

Yes.  Even if you do not own any assets outright and in your own name, often times some circumstance arises which makes having a will less expenses and more expeditious than if you did not.

Your “estate” is everything you own and in which you have a beneficial interest at your passing.

Your “probate estate” is any asset you own in your own name, which does not pass by beneficiary designation or other operation of law.

Your “taxable estate” is what the Internal Revenue Service refers to as everything you own and in which you have a beneficial interest at your passing, which it uses to determine whether you owe any transfer taxes at your death.

If you own assets in your own name that do not pass by beneficiary designation or other operation of law mechanism, then your heirs will be forced to file intestate probate to transfer assets to themselves (there are limited exceptions). Also, if you have minor children or care over an incapacitated or elderly person and did not otherwise make accommodations for guardianship, failure to designate the same in a will gives the courts control over this decision.

Anyone may draft his own will; however, remember that you only get one chance.  If it is not correct, there is no means of making such corrections after your passing.  Specific language must be included and the documentation must be executed with certain legal formalities.

Trusts can be used for many purposes, most generally being management of assets and avoidance or reduction in tax liabilities. The decision of whether or not to use a trust should be made on a case by case basis.

Absolutely!  Although a pet may not be the beneficiary of any assets under a will, providing for the care and management of a beloved pet is recognized and accepted.

The United States does not tax inheritances, rather it taxes certain transfers of assets from one party to another for less than adequate consideration.  Generally speaking, if your gross taxable estate is less than $10 million, planning for gift and estate is less of a concern.  Note, however, that the gift and estate laws could change with any political administration, and, as such, any individual with a taxable estate of greater than $3 million should occasionally reach out to a professional regarding potential alterations in the estate plan.

A power of attorney is a document which gives certain powers during specific times periods to another person.  A power of attorney may be “durable”, which generally means continuing and broad spectrum; or “limited”, which is generally initiated for a particular purpose.

No.  Powers of Attorney are only applicable during the grantor’s lifetime and naturally terminate at the grantor’s passing.

Of course!  This can be done through the will or a third party contract that takes place outside of the will.  The states encourage philanthropic giving.  Note, however, that if a person’s will is changed to favor a charity over legal heirs soon before his passing, the court may find either the bequest or the will to be invalid.

If heirs are aware of a will and fail to file it with the court within a proper time, they are guilty of a misdemeanor.  If they probate the will and act in contravention thereto, they are liable to all creditors, including other heirs of the estate, for all improper acts.  Of note is that all of the legal heirs of the decedent may come to an agreement which is in contravention to the will, as long as they comply with certain prerequisites of the court.

A guardian is the individual who can make legal decisions over a “person” rather than a person’s property.  Thus, a child’s natural guardians are his parents.  Thereafter, guardianship is either elected by an individual or designated by a court.  If a child’s parents die, then a guardian will need to be designated by the court.  If the parents name a guardian, then the court will typically respect such designation.  If the parents fail to name a guardian, the court uses information otherwise provided to it by the parties seeking guardianship or the state.  Guardianship may also be necessary when a person becomes incompetent (a mental illness, disease, or other injury which makes it difficult or impossible for an individual to perform the activities of daily living).

A conservator is the individual who can make legal decisions over a person’s property rather than the “person”.  Thus, a child’s natural conservators are his parents.  Thereafter, conservatorship is either elected by an individual or designated by a court.  If a child’s parents die, then a conservator will need to be designated by the court.  If the parents name a conservator, then the court will typically respect such designation.  If the parents fail to name a conservator, the court uses information otherwise provided to it by the parties seeking conservatorship or the state.  In the case of children, the guardian and the conservator are usually the same person.  Conservatorship may also be necessary when a person becomes incompetent (a mental illness, disease, or other injury which makes it difficult or impossible for an individual to timely address all liabilities and maintain a household).

If you have a spouse and/or minor children, you may not divert funds from such spouse and/or children.  If you have a spouse and adult children, they may be able to claim a forced share under state law if a testator disinherits them.  With regard to leaving everything to pets, pets may not be the recipient of any assets; however, a caretaker may be the recipient for the benefit of the pets.  In any case, the courts would not look with favor as to an individual disinheriting spouses and children, but circumstances may vary resulting in such an outcome.

Generally, always; however, consider:  marriage, death, birth of a child, divorce, acquisition of notable wealth.

A properly drafted will prevents a party from laying claim to an asset that you designate; however, nothing can ever prevent heirs from being petty over assets/money.  All we can do is provide penalties for undesirable acts.

Funeral planning is not part of a will; however, it is almost as important.  As with any planning, the more you address prior to need, the easier your family is able to proceed after your passing. Funeral plans are typically included in a will; however, the will tends not to be seen until after the funeral.  Therefore, parties should make funeral plans accessible to family members, along with account and insurance information.

The executor is the person named under the will as personal representative to manage the probate estate.  The administrator is the person the probate court names to manage the probate estate when the decedent either failed to name someone, did not name someone who is qualified to serve, or did not properly draft and execute a will.

If no executor is named, then the probate court will name an administrator to manage the probate estate.

No, unless a divorced spouse names the other in his or her will.

The probate estate typically takes 8 to 14 months to administer, primarily due to the statutory time in which publication must run and final income tax filings.

The personal representative under the will must diligently gather, preserve the assets; satisfy liabilities; and then distribute the remaining assets in accordance with the terms of the will.  Although specific times are not provided for final distribution, reasonable and diligent management is required.

Then the bequest will “fail”.

Typically, heirs do not have access to the estate funds prior to incurring funeral and related expenses of the decedent.  Therefore, family members will usually pay the funeral expenses and then be reimbursed out of the probate estate.  This reimbursement is treated as a priority payment to a creditor.

Whenever anyone disputes the ownership of an asset or propriety of distribution of an asset, he must petition the court regarding the ownership and distribution of such asset(s).

Typically, heirs do not have access to the estate funds prior to incurring legal fees arising out of probate.  Therefore, family members will usually pay the initial legal fees and then be reimbursed out of the probate estate.  This reimbursement is treated as a priority payment to a creditor.  Although the estate typically pays for probate fees and expenses, including payment to the personal representative for services rendered, the personal representative may be called upon by the probate court to refund amounts determined not proper to the personal representative.

Yes; however, there are serious considerations to naming an attorney as executor.  You should discuss the consequences and implications with legal counsel.

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