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Four Tips For Effortless Estate Administration
Being put in charge of a loved one’s estate doesn’t have to be stressful. If you are the executor of an estate or successor trustee of a trust, then you have a legal responsibility to manage the assets of the trust or estate in accordance with both the will/trust and applicable State laws. According to Judy Martel at Bankrate, “The executor’s natural inclination is to “make everyone happy and distribute the assets . . . but if the executor rushes and misses some crucial legal steps, he or she could be found personally liable. This is where having an attorney who knows the rules will help.”

 

Since this can be a difficult task for anyone, here are our Four Tips for Effortless Estate Administration:

One: Locate and Protect All Assets


According to Foxbusiness The very first thing an Estate Executor or Trustee should do is determine, locate, and protect all assets. Assets can be property, artwork, bank accounts, and more. This is most likely the first thing your attorney will ask you for.


Two: Decide Who Gets What


Deciding who gets what is often the most stressful part of this process, because often times people have vested interests in certain things due to nostalgia, or value. Bankrate says It’s important to remain impartial to all parties involved and follow the guidelines of any wills or trusts. Identify and inventory the decedent’s property, and have that property appraised, Pay debts and taxes, and Distribute the remaining property according to the terms of the Will or Trust.  If there is no Will or Trust you must use your State’s laws of intestate succession (this is usually supervised by the probate Court).


Three: Take Your Time


You don’t have to rush this process. According to HanleyLaw, the Executor’s [or Trustee’s] natural inclination is to “make everyone happy and distribute the assets.” However be sure that while doing this you follow the proper legal guidelines in the proper order. Take everything a step at a time. It’s easy to become daunted by how much there is to be done. Divide everything into small steps, and focus on one step at a time.


Make sure to use due diligence with each step in order to make the entire process go as smoothly as possible. Expect there to be a few hiccups along the way, that’s just a part of the job, and prepare accordingly.


Four: Seek Professional Advice


You can avoid mistakes by consulting with an estate attorney who is a State Bar Certified Specialist in Estate Planning, Trust & Probate Law.  Your financial advisor and CPA can also provide expertise. We encourage you to reach out to the Law Offices of Joel A. Harris for any Estate Administration needs.

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The primary purposes of a Living Trust are to protect your assets from court, taxes, and young or foolish heirs. Trusts can protect the inheritances of problem children and the disabled and also protect their inheritances from lawsuits and creditors.  Trusts can eliminate capital gains taxes, family feuds, and public spectacles.  But to accomplish this, your trust must own your assets.

 

You may be tempted to leave some of your assets out of your trust. Maybe you’ve secretly been hoarding a bank account for a favorite relative, or think that little condo in Hawaii that no one knows about should stay with its current occupant. Or, maybe you’ve just forgotten to include something, no big deal, right? Wrong!

 

Trust me, once you die, there are no secrets.  Uncle Sam or a meticulous family member will find all of your “secret” assets, subjecting them to lengthy and expensive court battles. It’s best to put them all in your trust, list them as trust assets, then clearly state who gets them on your death.

 

Real Estate

Nothing will change by adding your real estate holdings to your trust.  The title will transfer from your name to your trust’s name; with you are trustee.  As you are the owner of the trust, it’s still your property and you still have complete control.  Because a normal living trust is revocable, transferring real estate to your trust should not disturb your current mortgage or property taxes.

 

Property without a Title

Personal belongings like your coin collection, sports memorabilia, jewelry, electronics and art should also become part of your trust so that you can leave binding directions on how they should be allocated. Placing them in the trust ensures your wishes will be unequivocally carried out. This is done by simply assigning these items to the trust, normally as part of your trust asset schedule. A trust should always have a current, signed and dated, asset schedule!

 

Bank and Brokerage Account

The owner of all bank and brokerage accounts should be your Trust if you want to ensure that the funds will be available, upon your incapacity or death, to cover your expenses, then distributed per your wishes.

 

Items You May or Must Leave Out of Your Trust

 

 

Automobiles

In most states, automobiles are exempt from probate and can easily be transferred upon your death, so it’s best to leave title in your name(s) unless they are very valuable and substantially increase the value of your estate.

 

 

Retirement Accounts

For tax purposes, you should normally always name your spouse, then competent adult heirs, as beneficiary of tax deferred accounts, to avoid having these accounts taxed, upon your death. Normally a trust will only be a beneficiary of you have age restricted or handicapped heirs.  Your attorney and financial advisor will assist you with designating the proper IRA beneficiaries.

 

Life Insurance

Life insurance is normally not owned by a revocable living trust, but should almost always name the trust as the primary beneficiary.  Annuities often follow the same rule, but are more complicated, and should be discussed with your financial advisor before naming beneficiaries.

 

Assets You Don’t Own

It’s not uncommon for people to make gifts of assets they don’t own, naming them as gifts in their trust, because they feel that they morally have a right to the asset.  This is usually not recommended.

 

If you have further questions  or need help with your Trust, contact us for a consultation today at 925-757-4605 or email us.

 

 

 

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Having an Estate Plan is the best way to insure that your family is protected from probate, taxes, and the unexpected upon your death.   Your Estate Plan will direct how your assets will be divided -and if done right – will leave provisions for covering debt and other expenses, and avoid family fights and other problems.

 

Marriage and divorce significantly affect your Estate Plan if you have one, and make estate planning even more important if you do not.  However, even happily married couples often procrastinate creating an Estate Plan thinking their spouse will automatically get everything – including the responsibility of managing the estate. Here are some things every couple needs to know about marriage, divorce and estate planning.

 

Getting Married

Marriage proposal. Man with boquet of flowers kneeling and give engagement ring for his girlfriend

First, both newlyweds will need to change the beneficiary on their insurance policies, existing wills or trusts, retirement accounts and health savings accounts.  You both will also need to decide if you want to designate a secondary beneficiary in case you both die, or if you want to leave more detailed instructions in a will or trust.

 

Next, you will need to update any existing wills or trusts. Or, if you don’t have one, this would be the perfect time to get one.  It’s important for your new spouse and you to know how you want your assets allocated should anything happen to you both, how much you want parents and children to get and who should oversee your matters should you both become incapacitated. If you have a prenuptual agreement, a new Estate Plan will probably be required to follow the requirements of the prenup (normally there is always a prenup for second or later marriages).

 

As part of your Estate Plan, you will also need to create financial and medical durable powers of attorney, otherwise your spouse will not be able to handle your individual affairs should you become too ill to do so -being married is not enough in California.  Powers of attorney are even more critical for unmarried couples, as you will have no rights to take care of each other without them.

 

Getting Divorced

Once the divorce process is started, you are restricted from making changes to your Estate Plan, assets and beneficiaries. Your divorce attorney will explain this to you.  However, it is important to start updated your Estate Plan, starting with your powers of attorney.  You probably don’t want your soon-to-be former spouse able to make your financial and medical decisions during the difficult divorce process.

 

After divorce, you will need a new Estate Plan. You will replace your old marital Will and Living Trust, update beneficiaries, nominate Guardians for minor children of your choice, determine who will handle your affairs upon incapacity or death, and otherwise insure that your “new” affairs are in order.  We cannot count how many times a family has come to us upon a loved one’s death only to learn that their former spouse is still the beneficiary of old life insurance polices and retirement plans – don’t be that person!

 

Are you getting married or divorced? Or do you just have questions about your Estate Plan? Contact us today to schedule your consultation or Estate Plan review.