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.

The Top 6 Estate Planning Myths Debunked

Put simply, a Living Trust ensures that once you’re gone your final wishes will be known and properly implemented. What surprises many young people and elders alike is how many families can benefit from having a Living Trust.

Below I debunk six of the most common myths about Living Trusts.

  1. Estate Plans don’t need updating. There are dozens of reasons your Living Trust could become invalid or outdated over time. For example, your asset schedule could be out of date, there could be changes in family status, financial status, name changes, dead executors or beneficiaries, new grandchildren and many more changes that can affect your estate plan. It’s a good idea to review your Trust with an Estate Planning attorney every five years.
  2. Estate Plans are only for rich people. A Living Trust is much more than a plan for how to divvy up your estate, it leaves instructions for loved ones on who will be responsible for taking care of minor children, who will take care of your affairs should you become incapacitated and who will get your prized possessions. A Living Trust can even protect your assets from nursing home expenses and protect your heirs from creditors. It’s also a good idea to leave instructions to survivors about how you want your social media accounts managed and by whom. As you can see, nearly everyone can benefit from a Living Trust, not just rich people.
  3. Estate Planning is to be done as part of your retirement plan. Many of the clients we meet for the first time are preparing their Living Trust as part of their retirement plan. Waiting this long can be a huge mistake for your family! The best time to create your first living trust is when you first start a family, as a trust is the best way to protect your children in case of your incapacity or death.
  4. Estate Planning is only for old people. As I stated in #3, Living Trusts safeguard young families should the unthinkable happen. Think of a living trust as your voice after you’ve passed away or become unable to make decisions for your children, finances or your own healthcare. Having a valid Living Trust in place will prevent your loved ones from having to make difficult decisions – guessing at your intentions- should something happen to you. It also can prevent lengthy, drawn out, expensive and contentious court battles over things like custody, debt, inheritance, etc. Most people don’t actually want a young person to control a lot of money – with a trust you can appoint a responsible person or bank to manage the finances of your children (or grandchildren) until they are older and more responsible.
  5. Estate Plans, Trusts and Wills are expensive to set up and maintain. Living Trust estate plans are normally set up for a modest, fixed fee. There is no annual maintenance fee. This cost is nominal compared to the cost of probate. Probate is the process surviving family members and loved ones must go through to settle your estate in court in the absence of a valid estate plan. This process can take years and can cost tens of thousands of dollars. In some circumstances trusts can also reduce or eliminate capital gains taxes, gift taxes, and offer other protection for your assets.
  6. Trusts don’t come in pretty colors (true story!). Living trusts aren’t pretty, quick, fast or as easy as some online estate planning services would lead you to believe. A Trust is perhaps the single most important legal document you will every create. Do you really want to leave that to chance, working with a faceless chat box on an estate planning website, a paralegal or other non-attorney? Sure it may seem like a good idea to save a few bucks, but in the end, it could cause years of hardship, expense and legal battles for your surviving loved ones. Don’t be fooled by showy online resources that over-promise and under-deliver. Hire an attorney who is a State Bar Certified Specialist in trusts.

If you have questions about getting started with a Living Trust, Estate Plan or Will in California or would like your existing plan reviewed contact us to schedule a consultation.

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!

The Truth About Living Trust Fees

One concern that may be holding you back from creating a Trust – or worse – leading you to one of those online legal services or a document preparer, is the idea that it may be expensive to create and maintain one through a real Attorney. The fact is, it’s probably more affordable than you think.

To help you take that step to plan for your family’s future once you’re gone, here is a breakdown of what you can expect to invest in creating and maintaining a Living Trust:

Creating the Trust

The only expenses in creating a trust are the Attorney fees associated with creating it and a small recording fee for new property deeds. The cost for an attorney to draft a living trust can range from $1,500 to $2,000 for individuals and $2,000 to $2,500 for married couples. Simple or complicated plans can affect this estimate. The cost of recording property transfer deeds is approximately $20 per deed. Note that living trust estate plans always include a back-up or “pour over” Will, financial power of attorney, advance health care directive, and other related documents.SeniorMoney-262x300

Changing the Trust

Events like marriage, divorce, death of a spouse, beneficiary or trustee, changes in financial or residency status and new tax laws can affect your Living Trust and require changes. Changes are usually billed hourly by your attorney. Basic changes to asset and gift schedules can sometimes be done by you, so long as your share your changes with your attorney.

Reviewing the Trust

It’s a good idea to review your trust with your attorney at least every five years, unless one of the changes listed in #2 occurs, then you should get it reviewed at the time of the event. Reviews, like changes are usually billed by the hour.

If you have an old Trust or Estate Plan and would like to have an Attorney review it – or if you don’t have one yet, contact the Law Offices of Joel Harris and schedule your consultation today.

5 Important Reasons to Review Your Estate Plan

Despite the world still having 100% mortality rate, planning for the inevitable is rarely something we look forward to. No one wants to think about their own mortality – and our families can be even worse; choosing to bury their heads in the sand rather than think about losing us.

Senior couple doing the income tax declaration online

That’s why many put off estate planning – or worse – never get to it at all.  And for those who do it, oftentimes, it gets done, you think it’s over and you shove it in a drawer and never think about it again. Sound familiar?

Not reviewing your estate plan on a regular basis can be almost as bad as not having one at all. Changes in your family, finances, investments, and laws can make the best laid estate plans, wills, and trusts, moot. Leaving your family with exactly what you wanted to avoid; questions, confusion – and worse, lengthy and costly probate.

Here are 5 reasons you need to review your estate plan:

1.   Family changes. It may be obvious that if you get a divorce, lose a spouse or child, or adopt a child (or disinherit one) that an estate plan review is in order. But did you know that this also applies to your children and other heirs?  If THEY get married, change their names, get a divorce, adopt children, or have any other changes in their family, it might be a good idea to take a look at your plan and see if any changes need to be made. This is also true in the case of incapacitation of a spouse (yours or your heirs’).

2. Changes in income. Whether it’s retirement, bankruptcy, inheriting money, winning the lottery (nice problem to have!), buying investment property (especially if it’s out of state), this is a huge reason to get your plan reviewed.  If it’s not included in your plan it opens your family up to expensive probate and other problems once you’re gone. 

3.  Changing state of residency. Trust and estate planning laws can vary by state – especiSenior couple in love during retirement - Happy elderly conceptally if moving from a common law to a community property state. So if you move be sure to contact your estate planning attorney for a review. 

4.  Changes in the law. You can’t possibly know every law and how it    affects your estate plan, and you especially aren’t expected to keep up  on changes in the law! A good estate planning attorney will do that for  you – and should contact you for an estate plan review if changes in the  law affect you.  We update our clients by email.  If you would like to add  yourself or your friends and family to the list, please click here.

5.  If you’re in doubt. If you are ever in doubt about anything, it’s best to check with your estate planning attorney to find out if you need to review your plan. It’s always better to be safe than sorry.