Tips for Sorting Through Finances After You Have Lost A Loved One

Resolving finances of a loved one who has recently passed away can be especially complicated, particularly if you were not looped in on that person’s individual plans well in advance. Thankfully hiring knowledgeable professionals such as an estate planning attorney can help you to resolve finances after a loved one has suddenly passed away. 

If your loved one made it difficult to find the relevant documents or store these with a code, it could take you months or even years to figure out what they intended. First of all, it can be difficult to move through this process while also coping with grief if you do not have the support of outside professionals. Don’t make any emotional decisions when you are in the immediate aftermath of coping with a loved one’s death. You can ask for help from a financial advisor or an estate planning attorney who should be knowledgeable about the probate process.

If your family member already had a financial advisor or an estate planning lawyer, this individual should be the primary point of contact. This person can be significantly helpful in tracking down hard to find accounts or coordinating with other professionals while you sort through your emotions. It is recommended that if you are serving as the personal representative or helping to close out the estate, you get multiple copies of the death certificate.

The funeral home handling arrangements can help you with this and it is recommended that you ask for at least a dozen but preferably 20, since you will need to provide these original death certificates to insurance providers, financial institutions and more. The human resources department of the person’s employer should be notified if the deceased was working at the time of his or her death. Ask whether or not there are any life insurance policies that were active or whether any benefits coverage could continue for family members.

The name of the company that administers the retirement plan should also be discussed at that point in time. The original will and trust, where applicable, should be identified as soon as possible because this can help to address many of the most common questions surrounding the probate administration process and closing out the estate. The support of a lawyer will help you during a time when you already have enough to worry about and when you are concerned about being able to address all of these issues effectively.

Does it Really Take a Year to Settle an Estate?

Understanding how long it could possibly take to settle an estate is an important issue that must be taken under consideration by anyone who is chosen to serve in the role of personal representative. A personal representative could even be held accountable for issues of personal liability if he or she is not careful in the way that they approach this individual role. 

Real estate agent working in the office and piles of paperwork, model house on the foreground and mortgage loan documentation

The support of an experienced estate administration or probate administration attorney is recommended for anyone appointed as a personal representative. Before you name your own personal representative, you should inform this individual about the responsibilities associated with it and the potential issues that he or she might face when handling the end of an estate.

Closing out an estate requires many different administrative duties and some of these can be overwhelming or confusing without the insight of an attorney. When there are many different assets included inside an estate, even if appropriate estate planning has been done, there are many different aspects of closing out an estate and verifying that all relevant issues have been addressed. This includes creating an inventory of all of the assets, reviewing the necessary documents, notifying creditors, paying off taxes and then distributing the remaining assets to the loved ones. A proposed executor will also have to file all necessary paperwork and ensure that the relevant details have been recorded appropriately. If he or she fails to do so or is accused of violating existing laws, that person could be held personally accountable. You deserve to have the insight of an attorney who is thoroughly experienced in this area of the law, and who can advise you about what to anticipate so that you can minimize the personal representative’s issues and concerns about serving in such a role. A personal representative is an important role, but it is also one that must be handled with careful detail and organization. A person chosen to serve in this particular capacity must be comfortable with doing so.     

Be Prepared to Tell Your Representatives What Is involved in Settling an Estate

Are you thinking about appointing someone to handle your estate after you pass away? This is a wise decision and one that should be discussed directly with your estate planning attorney, but it is equally important to sit down with the person you intend to appoint and to figure out whether or not they are clear about the many different tasks involved in settling an estate. Settling an estate means concluding the legal, financial and personal affairs of the person who passed away. NJ-estate-lawyer

Typically, a trustee of a trust or the executor of a will is the person in charge of the relevant tasks when someone passes away. Some of the more immediate needs that must be handled by this person include locating paperwork including trusts, burial and funeral arrangements, wills and any veterans’ information that could be connected to benefits. Furthermore, the social security administration and post office must be notified in addition to friends and family members.

Distribution of the decedent’s assets happens by inventorying and then titling the assets. If the decedent also had a trust, the trustee is responsible for distributing assets amongst the beneficiaries, according to the directions listed in the trust.

This is done without the interference of a court proceeding. An administration proceeding administrator, will executor, or trustee has to figure out all of the assets linked to the decedent to protect and manage those estate assets, to pay out any debts and taxes, and to distribute any remaining assets to beneficiaries regarding any specific wishes that were shared about personal or household items. It is very important that the person who steps into this role is prepared to do so and is detail oriented.

 

What to Do If You’re Stressed Out by Receiving a Large Inheritance

 

If you find yourself overwhelmed and with some anxiety after receiving a large inheritance, you’re not alone. This can be a stressful situation for many people because the influx in assets could be the biggest sum of money that they’ve ever had to be individually responsible for. There are some things you must consider in order to put those assets to work as effectively as possible. 

The first is to set aside a cash cushion for emergencies. In addition, you’ll also want to think about the benefits of estate planning. There’s a good chance that the inheritance you just received is due at least in portion to well-prepared estate planning and now is a great time to ensure that these assets continue on if something were to happen to you before these assets can be used.

If you have not yet put together a trust or a will, now is the appropriate time to do so. If you already do have estate planning, receiving a large inheritance should encourage you to review these materials with a fine-tooth comb to ensure that you have articulated what will happen to these assets if you were to suddenly pass away. You may wish to schedule a consultation with an estate planning attorney to discuss things such as guardianship, wills versus trust, maintaining separate property and powers of attorney. Having the insight provided by an experienced lawyer can help you to figure out the next steps that you should take to protect yourself as well as to make the most of the inheritance you have just received.

How Is an Administrator in New Jersey Appointed When There is No Will?

When there is no will established by a person, a personal representative or administrator will be appointed by the surrogate’s court. The first right to apply for the position of administrator is given to the surviving spouse but any heir of the decedent could be appointed. 

When one of multiple heirs wants to be appointed an administrator, all other heirs have to renounce their right to the appointed administrator. Usually a surety bond is required in order to cover the cost of real and personal property in the estate.

In order to apply for an administration, you will need a list of estate debts, a death certificate with a seal and estimate of the gross value of the estate, the names, and addresses of next of kin, and a blank check or cash for fees which vary with each estate. The first steps that are usually taken to handle the administration process include:

  •       Locating the decedent’s will
  •       Contacting social security
  •       Securing all estate assets
  •       Getting one or more original death certificates
  •       Beginning a checklist of estate assets such as stocks, credit unions, and bank accounts
  •       Keeping a list of medical expenses, utility bills, and charge accounts
  •       Investigating veterans’ benefits, if applicable.
  •       Arrange for the forwarding or pickup of mail

Consulting with an experienced estate planning attorney can help you to name a personal representative or administrator today such that your family members are not left with a difficult decision of determining whether or not they will serve in this role.

Lessons from the Joan Rivers Estate

Joan Rivers was heralded as a stellar performer, but she also left behind a legacy as an incredible businesswoman. Her estate included income, collectibles, and real estate that was estimated in value between $150 million and $250 million. She left behind detailed instructions for her assets after her death, which is rare in a society when many celebrity deaths highlight the weaknesses of their estate plans. Photo Credit: breitbart.com

Looking at her careful planning, there are a few key lessons: be prepared for the unexpected, outline plans for pets, and correctly title the assets. Joan Rivers was also masterful in giving her family a brief overview of the estate plans to help improve clarity and reduce the possibility of arguments. Rivers made use of family trusts to reduce the tax burden for her beneficiaries and titled her assets

appropriately to allow for the smooth transition of business assets. This act alone helped to diminish her capital gains taxes.

Regardless of the size of your estate, proper planning allows you to pass on assets to your heirs in the most efficient manner while minimizing the tax liability. Contact our offices today for a consultation for your business and personal needs through email at info@lawesq.net or contact us via phone at 732-521-9455.

Robin Williams’ Trusts Call for Conversation About Trust Privacy

The loss of Robin Williams last week certainly sent ripples across the country, but it also highlights an important topic for your estate plans: privacy. Within a matter of hours after news outlets started reporting his death, details about the trusts documents he had established for his three children started emerging as well. The prime sources for these details? Gossip websites and tabloid. One site even published a 35-page document detailing Williams’ irrevocable trusts established for his children.

Shortly after these documents, one of which dated back to 1989, hit the media, Williams’ publicist responded that neither of them were accurate with regards to the former actor’s current estate plan. What’s most disturbing, however, is that trusts are most often used instead of wills because of the veil of privacy they offer.

So how did Williams’ documents, albeit outdated, end up in the public eye? The trustee of both the trusts had requested a co-trustee successor be appointed back in 2008, when the originally designated individual passed away. All of the public sharing of the trust document could easily have been avoided simply using trust protectors, like an accountant, trusted friend, or attorney who retains the power to appoint or remove trustees. To learn more about ensuring that your trusts are protected privately, contact our offices at info@lawesq.net or via phone at 732-521-9455 to get started.

Robin Williams’ Trusts Call for Conversation About Trust Privacy

 

 

 

 

 

 

 

 

 

Photo Credit: emilystepp.com

How To Handle Leaving Unequal Amounts To Your Children

Many parents divide their assets equally among their children. That’s the easy way.

Family discussion
(Photo credit: Muffet)

But what if you want to give more to one child than to another? Is that fair? Is it a good idea?

Sometimes it may be the best plan. For example, maybe one of your children earns much more than the others. Does this child really need to share equally in your estate?

Maybe one of your children has several children of his own, while the others are childless or have only one child. That may be a good case for giving the child with the most children a larger share.

Another reason might be that one of your children spent a lot of time and energy caring for you in your old age. Shouldn’t that child get rewarded?

And what if one of your children went down the wrong path? Maybe he became addicted to drugs or alcohol. Should this behavior be reinforced?

These are difficult decisions posed in an article in the Wall Street Journal. And they can lead to hurt feelings, lawsuits and other problems.

If you end up giving different children differing amounts in your will or estate plan, your decision may end up being challenged in court by the child or children who got less. It could turn into a mess.

To make sure your wishes are carried out, make sure to prove that you are of “sound mind” when you drew up your plan. You might want to get a letter from your doctor or psychologist saying so.

At the same time, make sure to talk to each of your children and explain what you are doing and why. This could result in fewer bad feelings.

Perhaps you can establish a pattern by helping those who need the most help while you are alive, as well as helping those who help you by giving them financial support during that time.

You can also include clauses mandating that disputes be settled through mediation or arbitration, not litigation. You can even include a “no contest” clause that says if any of the beneficiaries tries to contest the will, that child’s share is forfeited.

These are tough decisions that your estate planning attorney can help you make when drafting your will or estate plan.

 

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Teenager Gets $25 Million Fortune – With One Catch

Actor Paul Walker of Fast & Furious fame, who died in a car accident in November, left his entire fortune of $25 million to his 15-year-old daughter, who had recently left her mother and childhood home in Hawaii to live with him in California.

Paul Walker at the Fast & Furious premiere at ...
Paul Walker at the Fast & Furious premiere at Leicester Square. (Photo credit: Wikipedia)

Walker did not leave a dime to any other family members or even his girlfriend.

But Walker’s will did have one catch. His daughter, Meadow, will not be able to touch the money until she becomes an adult. Nothing unusual there, except that Walker named his own mother to be Meadow’s guardian.

According to an article on cafemom.com, this is a bit unusual and could be tricky. One wonders why he named Meadow’s grandmother as her guardian rather than Meadow’s own mother, Rebecca Soteros.

However, the matter will be decided by a judge later this month. In the meantime, Meadow is back in Hawaii living with her mother.

Walker was a very private person and not much is known about the circumstances of his breakup or the decision to have Meadow come live with him in California.

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Hoffman’s Will Raises Legal Issues

Actor Phillip Seymour Hoffman, who died of a drug overdose in February, had not updated his will in years. The mistake could prove troublesome for two of his daughters and their mother.

Philip Seymour Hoffman won a Academy Award for...
Philip Seymour Hoffman (Photo credit: Wikipedia)

The will was signed in 2004 when the actor had just one child, Cooper, now 11. But he subsequently had two daughters, Tallulah and Willa, neither of whom are mentioned in the will.

This may or may not be a problem.

The award-winning actor, who was just 46 when he died, left everything to his longtime companion, Marianne O’Donnell, the mother of his three children. But that’s just the beginning of the story, according to an article on Forbes.com.

Since Hoffman and O’Donnell were not married, she does not get any of the estate tax breaks available to spouses. You can give an unlimited amount to your spouse during life or in an estate plan, with no federal or state tax applied.

Hoffman was worth an estimated $35 million at the time of his death. The federal estate tax exemption is $5.3 million, but the rest is taxed at up to 40 percent. New York has its own estate tax of up to 16 percent for non-spouses, with a $1 million exemption.

In all, Hoffman’s estate will be taxed at more than $15 million. And since they were not married, any assets that remain at O’Donnell’s death would be taxed again.

There may be a way out for O’Donnell, however, The will allows for her to turn down all or part of her inheritance and put it into a trust. Any assets that go into the trust bypass her estate and cannot be taxed when she dies.

But the fact that only Cooper was mentioned in the will, complicates the matter. The will provides that he get half the principal of such a trust when he turns 25 and the other half when he turns 30. However, the law of New York and most states protects children not named in a will that has not been updated from being disinherited.

The article suggests that O’Donnell, who is the executor of the will, should appoint a guardian to represent the two sisters.

Other matters that could complicate matters include if Hoffman had set up a retirement account or a life insurance policy.

But all the confusion could have been avoided if Hoffman had included a clause in the will stipulating that any reference to Cooper includes any other children born after him.

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“Mom, Can You Co-sign?”: Did a Family Member Participate in Your Loan?

Often, young adults ask other family members to participate in a loan to assist the young adult in purchasing his or her first home. As a recent article explains, this can become extraordinarily problematic at the family member’s death.

Even though the family member pays little or nothing towards the home, his or her name will usually be added to the title. This gives him or her an ownership interest in the home. If the family member’s estate leaves the home to those who actually paid for it, no problems will arise.

However, if the family member’s estate does not deal with the title, the homeowners may have a legal battle on their hands. In this situation, the decedent’s beneficiaries may fight to have the decedent’s portion of the home included in the estate. These battles especially arise if there is already animosity or distrust within the family.

To avoid this outcome, be sure to discuss it with the person who participated in your home loan. Ask them how their ownership interest is disposed of in their will. If this never happens and you are worried that you may become the target of such a lawsuit, be sure to keep documentation proving that the third party never paid anything towards the loan.

Choosing Your Executor

One of the most important estate planning decisions a person can make is deciding who will serve as the executor of the estate. This is a vital decision, because the executor will be in charge of overseeing the distribution of the estate in accordance with the decedent’s stated wishes. A recent article discusses several frequently asked questions when it comes to selecting an executor.

Does My Executor Need a Financial or Legal Background?
State law does not require individuals to have any sort of specialized background in order to serve as the executor of an estate. However, these skill sets are clearly beneficial when settling an estate. Although the executor can hire an attorney to assist with the estate administration, it is the executor who must make all final decisions.

Should I Select More Than One Executor?
Most commonly, people select a single executor. However, in some situations, it may be beneficial to select two executors. For example, where the deceased left behind an elderly spouse who is being assisted by an adult child, it may be beneficial if he or she named the spouse and child as joint executors, rather than the spouse alone.  Note that this may increase complexities in settling the estate.

Can My Named Executor Refuse to Serve?
The selection of an executor is not legally binding. Although the chosen executor will be given the opportunity to serve as such, he or she may renounce the appointment. If the decedent named a contingent executor, he or she will take over, if not, the court will appoint one.

Estate Planning Oversight Will Cost Koch Estate 3 Million Dollars

After the death of New York City legend Ed Koch on February 1st, 2013, his estate plan became the topic of public conversation. A recent article discussing the plan suggests that he could have saved his estate 3 million dollars in taxes had he set up an irrevocable trust.

Edward I. Koch, mayor of New York City, sports a sailor’s cap at the commissioning ceremony for the guided missile cruiser USS LAKE CHAMPLAIN (CG 57). Location: NEW YORK, NEW YORK (NY) UNITED STATES OF AMERICA (USA) (Photo credit: Wikipedia)

Koch drafted his final estate plan in 2007. Through his will, he directed that his 10 million dollar estate be distributed mainly between his sister, three sons, and secretary of 40 years. His estate plan did not utilize any type of irrevocable trust in order to facilitate these distributions. According to Managing Director of Estate Street Partners, LLC, Rocco Beatrice, using such a trust could have eliminated the entire estate tax bill of 3 million.

Koch’s estate will be required to pay New York state taxes of 16% on the amount by which it exceeds $1 million, as well as federal estate tax of 40% on the amount by which the estate exceeds $5.25 million. Assuming his estate is worth $10 million, these taxes would amount to $1.44 million and $1.90 million, respectively.

According to Beatrice, “That is a lot of money in taxes which could have easily been avoided.” Beatrice explained that, had Koch set up irrevocable trusts, the $3 million could have gone to his family, rather than the government.

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Selecting Your Personal Representative

When creating an estate plan, one of the most important decisions to make is selecting a personal representative. A recent article discusses some of the different options individuals have when making this important decision.

Most people will select a close friend or family member to serve as their personal representative. If you choose this type of person, be sure that you select somebody you can trust to follow your final wishes. This person does not necessarily have to live close to you, or even in the same state as you. However, proximity to your estate does ease the process of estate administration.

If you would like to select a professional to serve as your personal representative, consider an estate planning attorney. Attorneys are beneficial because they are knowledgeable as to the law, and have a wealth of experience in estate administration. Speak with your estate planning attorney to determine whether they offer such services. If they do not, they may be able to recommend another professional who can assist you.

Another professional option is the trust department of a bank. As with estate planning attorneys, banks are a good option because they are knowledgeable professionals with a wealth of experience.