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.

Do I Have to Put All My Assets in My Trust?

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.

10 Warning Signs Your Trust Won’t Work the Way You Intend

As an Estate Planning and Trust Attorney who’s been helping families preserve their legacies and avoid probate for over twenty-five years, I’ve seen it all; family squabbles turned to drawn-out legal battles; grieving children having to deal with lengthy and costly probate and surviving spouses left with the results of a bad or outdated Trust.
I cannot stress enough the importance of not just having a Trust, but having one that’s accurate, up to date and valid. If you or a loved one has Living Trust, these 10 warning signs that it may not work as you expect are a must read:
1. The Trust names dead beneficiaries or trustees – you can’t just write a Trust (or Will) and never look at it again! We have seen many trusts that name beneficiaries who have died and the owners of the trust never made updates. To Do: Look at your trust now and make sure all the beneficiaries and trustees and alive and well. This is also a good time to confirm that your trustees are still willing and able to act for you.
2. There is no “pour over” Will – a Living Trust Estate Plan should always include a back-up Will that directs all your assets to your Trust in case something is left out. The backup Will may still require probate, but at least the assets will go into the trust, and be available to your designated beneficiaries. This also allows for any special provisions or restrictions in your trust to take effect.Reviewing an old estate plan
3. The Trust has a bad asset schedule – one key to a smooth Trust administration is a current, signed and dated asset schedule for the trust. This allows your successor trustee to know what assets are in the trust. This also helps avoid a full probate for assets that are listed in your Trust, but not actually owned by the Trust. A complete asset schedule is not enough by itself – your Trust must also be on title to your real estate, bank accounts and investments (but usually not tax-deferred retirement accounts). To do: Look at your Trust now and be sure all your assets are listed!
4. The Trust is not funded – assets (real estate, bank accounts, stocks, bonds, mutual funds, etc.), that are left out of your Trust may have to go through probate, and may not even go to the same beneficiaries if you don’t have a “pour over” Will. In our experience, when the time comes to administer the trust, we find that most Trusts are missing assets. We have seen many more empty trusts than full ones!
5. The Trustees don’t get along – if you have appointed co-trustees and they cannot work well together, administering a trust can be a nightmare. Even if they work well together, if they live far apart this can be challenging.

6. The Trustees are incompetent – not everyone is competent to handle your affairs. Be sure to select successor trustees who understand how to manage assets, sell property, etc. If you have picked someone who is very good at this, but they become ill, aged, or move away, they may not be competent to handle your trust. Trustees should also be United States citizens. Executors of Wills are required to be citizens.
7. The family can’t find the Trust, or doesn’t know it exists – your Trust (or Will) won’t help your family if they cannot find it when you die. Locking it up in a safe deposit box can be just as good is hiding it away, as banks may require a probate court order to transfer the contents of the safe deposit box! To do: call your successor trustee (or Executor) and let them know where they can find your Estate Plan and be sure they can access it!
8. The Trust is in an old A-B format – older trusts, especially “AB” format trusts, may no longer work well due to changes in the law. If your trust was done before 2012, you may have some work to do. To do: if your trust was created before 2012 contact your Estate Planning Trust attorney and schedule a review.
9. The Trust wasn’t created by an attorney – sorry, if you did your own trust, went to an online Estate Plan Trust service, had a document preparer or other unskilled labor help you, it is probably not going to work the way you would wish.
10. The Trust isn’t signed – We have seen trusts, Wills and powers of attorney that were not signed, witnessed and/or notarized properly, causing the documents to fail. One of the jobs of an estate planning attorney is to make sure this does not happen! To do: Go find your Trust right now and make sure it’s signed! Please!
The death of a loved one is hard enough without inheriting a legal mess. Please, look at your Trust (or Will) now, make sure it is up to date and still makes sense, and contact us if you need a review, or even a second opinion. We’re here to help!

6 Easy Tips for Protecting Your Finances in Your Golden Years

Protecting your finances is critical to ensuring your retirement remains as stress free and comfortable as possible. Maintaining your desired lifestyle while living on a fixed income, and managing medical expenses can be challenging. With this in mind we have 7 tips that can help you protect your finances after retirement:

1) Decide if you need help from an expert

Consider seeking help from a financial planner. Financial planners are trained to deal with many personal financial concerns, they can help you set financial goals and priorities, then recommend the steps to take in order to meet them. senior finance

You may, however, get to a point where you or your family feel you can no longer manage your on your own. Some folks turn to a trusted family member or loved one for the help they need. If this is the case, I strongly encourage you to speak to an attorney who can help you decide if you should obtain a legal document known as a power of attorney (POA). A POA would allow you to designate one or more people to make decisions with as much of your financial or personal life as you choose.

2)Research any financial advisors or attorneys before you hire them

It’s wise to research any expert before hiring them.  FDIC Community Affairs Specialist Ron Jauregui cautioned that “before you follow the advice of a supposed ‘expert’ who claims to have special credentials for advising seniors, research what that title may or may not mean and the advisor’s background.” When researching an attorney you can use tools such as www.Avvo.com where attorneys are rated by past clientele as well as other professionals. Yelp is also a great place to look for reviews. And don’t forget to ask friends who they use. Sometimes the best professionals come from referrals from people we trust.

3) Know the signs of senior fraud

Financial fraud is any crime that targets your money through bank accounts, credit cards, or investment accounts. It can be likened to the modern-day equivalent of a pickpocket! Many con artists will ask for personal or financial information over the phone or email. BEWARE!   Your bank or financial institution will never call or email you asking for personal information or details about your bank accounts, passwords, credit cards, social security number, etc. Be cautious and always err on the side of caution. Don’t be afraid to say no. If you ever have doubts call your financial institution directly (using the number you have on record or on their website- NOT the number provided by the caller or emailer) and ask if they’ve contacted you.

4) Use credit cards wisely

Although retirees should avoid taking on more debt, when used wisely, credit cards can be very helpful. Some of them offer cash back as well as fraud and purchase protection. However, before making purchases using your credit card, it’s important to consider the ability to pay your balance in full when the statement arrives to avoid paying for the costly interest.

5) Plan for your future and your family’s future – what if you become incapacitated.

The first step in planning for incapacity is to think about the issues that may arise. How do you want your assets managed? What medical treatment would you allow or not allow? Whom do you trust to make decisions for you? Meet with your family to discuss these and/or document your decisions. You can also seek help from an attorney to have the proper documentation in order to assure your wishes are honored.

6) Organize all your important paperwork and keep it someplace safe

>Make sure all your important documents are organized and placed in a safe location. Besides having a hard copy of all of your documents you may think about making a digital copy by scanning all your documents and placing them on a cd-rom or thumb drive. Either way, it will set your mind at ease knowing that everything is filed, in a specific location, and kept safe for the future.