I was nominated as a Personal Representative in a Will, now what do I do?

A loved one has just passed away and someone tells you the decedent nominated you as the Personal Representative of their Estate in their Last Will and Testament. What does this job entail? What authority do you have? What should be your first steps?

In a nutshell, the role of a Personal Representative (also sometimes called an "Executor") is to oversee the gathering of a decedent’s probate assets, pay all necessary creditors, and make distributions in line with the terms of the Last Will and Testament. The Personal Representative is the "manager," overseeing the entire probate process.

A Last Will and Testament should list a particular person(s) to act as Personal Representative. If a will was never executed and no other estate planning documents were completed, an interested person, usually a close friend or family member, petitions the Probate Court to be appointed.

In either case, the Probate Court determines whether to approve the individual, and if a bond will be required to be paid by the nominated Personal Representative as collateral against the value of the probate assets.

If approved by the Probate Court, Domiciliary Letters will be issued to the Personal Representative. Domiciliary Letters serve as formal proof that the Personal Representative has the legal authority to act. Often banks, credit unions, and other financial institutions require this Letter prior to releasing any information.

Throughout the process of administering an Estate, the Personal Representative will also want to keep a close eye on the deadlines mandated by the Probate Court. Deadlines often include: filing a required Notice to Creditors, filing an Inventory of the decedent's probate assets, and filing a final Estate Account listing all the expenses and payouts to beneficiaries. Sample blank forms can be found on the Wisconsin Court System website: https://wicourts.gov/forms1/circuit/index.htm

The Personal Representative is also responsible for paying any outstanding bills, selling any estate assets, submitting final tax returns, and more. There are often specific time deadlines complicating each step of the process of administering an Estate.

It is not uncommon, given the steps involved, to have a probate proceeding open anywhere from 9-15 months, or longer.

If you have questions or concerns about the probate process or your job as Personal Representative, please click here. We are more than happy to guide you through the probate administration and what to expect as a personal representative.

Do I need a Will or a Trust?

What is a will? What is a trust? How does one differ from the other? Which one do I need? Rightly so, there is a fair amount of confusion concerning wills and trusts. While there is no standard one-size-fits-all approach, understanding each document can help determine the best fit for your family.

A will is designed to instruct the probate court of your wishes on how you want your assets distributed. You can name individuals, charities, or any legal entity to receive an amount or percentage of your assets. From a cost perspective, a will is relatively inexpensive to set up on the front-end.

One drawback of a will is that it must go through probate, prior to any distribution of assets to beneficiaries. Probate involves extra costs, delays and formalities required by the court. The process typically costs several thousands of dollars and takes months or years.

So, how does a trust differ? A trust avoids court intervention and allows your assets to be distributed outside of the probate court. This allows for direct distribution of assets, no court formalities and limited or no attorney fees. A trust, however, is often more costly to prepare than a simple will.

A trust can also offer unique protections for beneficiaries that a will cannot. A trust can specify when, how much and for what purpose a beneficiary can receive assets. For example, a trust may designate that a beneficiary can receive 1/3 of their share at age 25, 1/3 at age 30, and the remainder at 35. Under a simple will, a beneficiary will receive their entire share outright unless they are a minor. This is just one of many unique legal protections trusts offer.

As with any choice there are positives and negatives to consider. A will is not for everyone. A trust is not for everyone. Discuss your goals, your specific family situation, and your concerns with your attorney. Only after weighing these factors can you achieve the best choice for you and your family.

To find out what whether a will or a trust is right for you, considering signing up for a complimentary Life & Legacy Planning Session with one of our attorneys.  We will walk through your goals and objectives to find out what is right for you!  Click here to sign up for this complimentary appointment today!

Will your loved ones know what to do when you are gone?

If you have named children, family, or friends as a successor trustee of your family trust, they likely do not know what the job entails.  Our office encourages talking with successor Trustees now to eliminate some of the unknowns about what it means to serve in this role.

In a standard revocable family trust, a husband and wife are listed as co-trustees during their lifetime.  Only when both spouses pass away, does a successor trustee step in to administer the family trust.

In a nutshell, a successor trustee's job is to secure all of a decedent's assets and distribute those assets according to the terms of the trust.  The trustee can be thought of as a "manager," who keeps an accurate account of all amounts received and any expenses paid out.

The first job of a successor trustee is to gather information about all of the assets the individual(s) owned prior to passing away.  The length and work required depends on the particular assets and how well records were kept.

To complete this job, the successor trustee will need to have a Certification or Affidavit of Trust proving that the Trust is in existence and a certified Death Certificate.

Once trust assets have been discovered, such assets will likely need to be sold or liquidated.  All proceeds should be deposited into a checking account in the name of the Family Trust.  Trust assets that cannot be sold right away should be maintained and updated.

The successor trustee should keep a running inventory of the assets coming in and any expenses paid out.  Taxes will still need to be filed, and known creditors may need to be paid.

Once all creditors and taxes have been paid and assets are liquidated, distributions according to the trust terms can begin.  The trustees should have the beneficiaries sign a form acknowledging receipt of their inheritance and releasing the trustee from any liability.

For more details on the role of successor Trustees, come to one of our future seminars.  We will be discussing these roles and more!!!  Take a look at our upcoming events by clicking the below link:  http://www.theestateplanninggroup.com/upcoming-events/

Why are Powers of Attorney so Important?

We often receive phone calls inquiring about updating their will or trust.  While undoubtedly important, these documents generally only address one event, namely what happens to your assets when you pass away.

Equally important, but often overlooked, is protecting yourself and your family from financial and health care emergencies during your lifetime.  Properly drafted, Powers of Attorney can safeguard you from emergencies that may strike when you least expect it.

 

Everyone over 18 should complete both a Health Care and Financial Power of Attorney (P.O.A.).  While surprising to most people, the Wisconsin Statutes do not make a parent, a spouse, a relative or family member the default decision maker for anyone over 18.  The only alternative is oftentimes a costly and stressful legal proceeding involving the courts.

Each Power of Attorney document, in effect, nominates another person (your "agent") to legally make decisions for you.

 

A Health Care Power of Attorney allows you to designate an agent to discuss your condition with your doctor and make medical decisions according to your wishes when you are unable to communicate those desires.

A Financial Power of Attorney names an agent who can make financial and other non-medical decisions.  An agent’s authority can be immediate at the time of signing the document or it can take effect only in the event of "incapacity"–that is, when you are unable to act for yourself.

Undoubtedly, the role of agent is an important responsibility that should not be lightly considered.  So, who should you choose as your agent?

Naming an individual who shares your same values and beliefs can help ensure your wishes are followed.  We also suggest discussing with your agent any specific health or financial priorities and wishes you may have.  This conversation helps to avoid future questions about your goals and objectives when your agent is called upon to act.

Both a Health Care P.O.A. and a Financial P.O.A. can eliminate future conflict by laying out your wishes and designating someone to make decisions when you cannot.  These should be a key part of your estate plan.

Make 2017 the Year You Complete Your Estate Plan!

The start of the New Year almost always brings with it new goals and resolutions.  So, what is the best way to meet these goals head-on and successfully complete them?  Oftentimes, the key is in not taking one giant leap, but small steps, providing us the best possible chance to succeed!

 

With estate planning, adopt a similar approach.  Taking manageable steps can make all the difference between completing your estate plan and giving yourself and your family peace of mind, and putting it off for another year, potentially putting your loved ones at risk in the event something happens to you.  Here are just a few benefits of putting an estate plan in place:

 

Nominate an individual you trust to make health care decisions:  Nominating a trusted individual who knows your health care wishes can ensure your desires are followed.  Without planning ahead, your family is likely to have to go to Court before making health care decisions on your behalf, incurring additional money and time during an already stressful period.

 

Name someone to manage your financial affairs if you are unable to do so:  Executing a Financial Power of Attorney ensures your financial affairs continue seamlessly during your life and any legal decisions can be made on your behalf.  In the absence of a Financial Power of Attorney, no one can legally make these decisions for you, whether that person is a spouse, a child, or a close friend.

 

Provide for your children and loved ones from future potential creditors, predators, and unnecessary taxes:  Protecting your loved ones from others and sometimes themselves, can ensure your desires are followed.  A proper plan promotes family harmony upon your passing by making the process proceed smoothly without undue stress and delays.

 

Protect your assets, both during your lifetime and after:  Planning ahead can make all the difference in protecting your most cherished assets for yourself and your family members.  Advanced planning options to protect assets in the event of a need for advanced health care expenses may be warranted to protect your assets.

 

To take the first step toward giving yourself peace of mind and a lasting legacy come to our free educational seminar being held in the Village of Hilbert Community Room on Saturday, February 4th at 10:00 AM.  We will be providing an overview of how a properly drafted comprehensive estate plan can save your family time, money, and promote harmony among your beneficiaries.  Please call or e-mail our Client Services Director Sandie at sandie@epgwi.com to reserve your spot today!

 

 

For more information about this seminar and our upcoming events, go to www.TheEstatePlanningGroup.com today!

Protecting Your Minor Children from the Unexpected

Parents often cite a child’s birth as one of the happiest days of their life.  The child will bring many moments of happiness to your lives and undoubtedly a few trying moments, too.  However, as parents, you also need to consider who would care for your child if you no longer can.  Estate planning can offer some valuable assistance.

A simple will executed by each parent is a common method used to protect minor children.  A will is the only legal avenue (without court intervention) where parents can nominate a legal guardian for children under 18.

So, who should you nominate as a guardian?  Beyond recommending someone you trust and respect, here are some other factors to consider:

·         Guardian’s Location—Will a guardian’s location require a change of schools for your children; will the location allow your children to remain close to existing friends and family?

·         Guardian’s Values—Does the guardian share your core beliefs, a similar philosophy in raising children, religious views, etc.?

·         Guardian’s Suitability—If a guardian has children of their own, could they care for your children too; does the child already have a good relationship with the prospective guardian?

Once a guardian is chosen, the next question is how financial assets should be held to best benefit your children.  A testamentary trust, formed in a parent’s will, is a great tool to hold such assets.

This type of trust secures assets left for your children and can specify an age or ages for asset distribution.  Many parents distribute a percentage of a child’s share every few years, minimizing potential excessive spending of an inheritance at one time.  Without a testamentary trust, all assets are distributed when the child is no longer a minor.  To oversee this trust, you may nominate the above-named guardian, a financial institution, or an entirely different person/entity.

Protections for younger children are absolutely vital. Whether that means completion of a simple will or other estate planning options, this issue deserves consideration by you and your family.

Timing is Everything in Legal Life Planning!

With Christmas fast approaching and the New Year practically upon us, discussions of goals and resolutions for the upcoming year frequently come up.  Invariably, when legal life planning is discussed, many times a "We'll do that next year" approach is adopted.

The legal life planning process, though, can only fully use all available tools if sufficient time exists.  Adequate preparation can mean the difference between having options and protecting your assets versus facing additional expenses and headaches down the road.

One of the best ways to plan ahead is to formally nominate someone to make health care and financial decisions for you when you are unable to communicate those desires.  Failing to execute Health Care and Financial Power of Attorney documents can result in your loved ones being forced to go to court, spending time and oftentimes thousands of dollars, to gain such authority.

Planning ahead about how best to pass your assets can also help ensure a smooth process for your chosen beneficiaries, while minimizing administrative costs.  Wills and other non-probate tools, like a payable-on-death (POD) designation or a life estate deed are often used, but other legal options, like a revocable trust, may deserve consideration too.

When attempting to protect assets from a future need for a nursing home stay and qualify for the government program that pays for such care ("Medicaid"), planning ahead is especially critical.

If you have gifted or sold any assets for less than fair market value within 5 years of trying to qualify, the Medicaid system requires the difference to be repaid before you qualify (the "5-year look back period").  Putting in place legal tools now to safeguard those assets before a need for nursing home care arises can avoid this issue.

Timing is everything in legal life planning!  Protections to put in place now to protect yourself and your loved ones will be discussed at our first seminar of the new year on Saturday, January 14^th at 10:30 a.m.  This seminar will be held at the Weyers-Hilliard Library in Green Bay.  More details can be found here:  http://www.theestateplanninggroup.com/event/life-and-legacy-planning-weyers-hilliard/

From all of us at Davidson Law Office and The Estate Planning Group, we wish you a Merry Christmas and a safe and happy New Year!