By Executor's Resource, Inc.
Do you work with a financial advisor? If he or she hasn't already brought up the topic, it's time to discuss estate and legacy topics with him or her at your regular meetings. The questions below can serve as a guide of discussion points to cover when you meet.
1. What are key considerations in selecting an executor, personal representative or trustee?
2. Do you offer any centralized information of all the accounts I have with you?
3. Can I list you as a key contact and direct my executor/personal representative to you in the future when he has questions?
4. Are there any of my accounts that need additional features added – transfer on death instructions; duplicate statements; automatic bill pay or wire instructions – to make it easier for my executor/personal representative?
5. When did I last update my beneficiary designations? Can you give me copies of every beneficiary designation form so I can keep them all in one safe place? Or can I just direct my executor to contact your office?
6. (If applicable) I recently set up a trust for certain assets. Can you help me with any requirements to retitle my accounts so they are consistent with the trust?
7. Can we meet about setting up more appropriate estate planning accounts – Conversions to a Roth IRA? Rolling over my former employer 401(k)s?
8. Can we discuss insurance options that I should be thinking about to protect my family once I’m gone – life insurance, long-term care, disability, etc.?
9. Can we review the options I have in my employer’s pension plan and decide on best choices for me and my spouse?
10. What information/ resources do you have about dealing with older parents who need to do their own legacy and estate planning?
Monday, March 22, 2010
Tuesday, March 9, 2010
Don’t forget state estate tax
By Executor’s Resource, Inc.
All the recent publicity surrounding the federal estate tax may have caused the topic of state death taxes to take a second fiddle in your planning. Depending upon the current net worth of your estate and where you reside for tax purposes, the applicable tax in your own proverbial backyard may be more impactful than the federal estate tax. Here’s some information to use in your planning.
What happened to the state estate tax in 2001 when EGTRRA passed?
When Congress passed the Economic Growth and Tax Relief Reconciliation Act (“EGTRRA”) of 2001, it amended the federal estate tax laws so that the estate tax decreased every two years through this year, at which point it is repealed and disappears entirely. In 2011, the estate tax repeal sunsets and the tax resumes at 2001 rates - 55 percent maximum rate with a $1 million individual exemption.
Prior to the passage of EGTRRA, many state estate taxes were linked to federal law. To protect state tax revenues from EGTRRA’s impact, some states took action by enacting their own separate estate tax, retaining their current estate tax, or so called “decoupling” with the federal estate tax law, essentially opting to link with the version of the federal code that existed before it was amended in 2001.
Knowing the high level estate tax environment inside and outside your state can help you better prepare, especially if you own property in multiple states or are considering a move. Here’s a reference chart to help jump start your own research and assist you in your conversations with your estate attorney, accountant or financial advisor.
While the majority of states do not collect an estate tax, change is still occurring. Kansas and Oklahoma recently did away with their state estate taxes effective January 1, 2010. The estate tax was repealed in Illinois effective January 1, 2010.
Another important consideration for planning is whether you live n a state that currently collects an inheritance tax. An inheritance tax is different from an estate tax in that it is levied on the portion of assets received from an estate by individuals. An estate tax is applied to an entire estate before it is distributed.
Inheritance tax is currently collected in Indiana, Iowa, Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania and Tennessee. This tax would potentially be applicable for estate holders who die in 2010 or later, assuming no further changes. Those of you who are several years long in the throes of serving as a loved one’s executor or personal representative may not see that state reflected. Some states, like Connecticut had an inheritance tax in prior years but presently do not.
Bottom line? The state estate and inheritance tax environment should be given due consideration in your comprehensive planning efforts. The tax rates and exemption levels have been moving targets over the past decade, essentially increasing the complexity of an already complex topic. This underscores the need to seek guidance from qualified estate attorneys, tax professionals and financial advisors who can assist you in structuring the best plan given your situation.
Lastly, it highlights the need for you to talk with your future executor or personal representative about what might be in store for him or her in the future. Remember, many family members accept the future role without thinking about what it entails. While understanding all the intricate details now may be less important, having a fundamental understanding of what duties may be involved in settling your estate, timeframes for doing so, the fiduciary standard that executors are held to, and where to seek out professional expertise is imperative in instilling a future sense of confidence in them and peace of mind for you.
For more information, visit http://www.executorsresource.com/.
All the recent publicity surrounding the federal estate tax may have caused the topic of state death taxes to take a second fiddle in your planning. Depending upon the current net worth of your estate and where you reside for tax purposes, the applicable tax in your own proverbial backyard may be more impactful than the federal estate tax. Here’s some information to use in your planning.
What happened to the state estate tax in 2001 when EGTRRA passed?
When Congress passed the Economic Growth and Tax Relief Reconciliation Act (“EGTRRA”) of 2001, it amended the federal estate tax laws so that the estate tax decreased every two years through this year, at which point it is repealed and disappears entirely. In 2011, the estate tax repeal sunsets and the tax resumes at 2001 rates - 55 percent maximum rate with a $1 million individual exemption.
Prior to the passage of EGTRRA, many state estate taxes were linked to federal law. To protect state tax revenues from EGTRRA’s impact, some states took action by enacting their own separate estate tax, retaining their current estate tax, or so called “decoupling” with the federal estate tax law, essentially opting to link with the version of the federal code that existed before it was amended in 2001.
Knowing the high level estate tax environment inside and outside your state can help you better prepare, especially if you own property in multiple states or are considering a move. Here’s a reference chart to help jump start your own research and assist you in your conversations with your estate attorney, accountant or financial advisor.
While the majority of states do not collect an estate tax, change is still occurring. Kansas and Oklahoma recently did away with their state estate taxes effective January 1, 2010. The estate tax was repealed in Illinois effective January 1, 2010.
Another important consideration for planning is whether you live n a state that currently collects an inheritance tax. An inheritance tax is different from an estate tax in that it is levied on the portion of assets received from an estate by individuals. An estate tax is applied to an entire estate before it is distributed.
Inheritance tax is currently collected in Indiana, Iowa, Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania and Tennessee. This tax would potentially be applicable for estate holders who die in 2010 or later, assuming no further changes. Those of you who are several years long in the throes of serving as a loved one’s executor or personal representative may not see that state reflected. Some states, like Connecticut had an inheritance tax in prior years but presently do not.
Bottom line? The state estate and inheritance tax environment should be given due consideration in your comprehensive planning efforts. The tax rates and exemption levels have been moving targets over the past decade, essentially increasing the complexity of an already complex topic. This underscores the need to seek guidance from qualified estate attorneys, tax professionals and financial advisors who can assist you in structuring the best plan given your situation.
Lastly, it highlights the need for you to talk with your future executor or personal representative about what might be in store for him or her in the future. Remember, many family members accept the future role without thinking about what it entails. While understanding all the intricate details now may be less important, having a fundamental understanding of what duties may be involved in settling your estate, timeframes for doing so, the fiduciary standard that executors are held to, and where to seek out professional expertise is imperative in instilling a future sense of confidence in them and peace of mind for you.
For more information, visit http://www.executorsresource.com/.
Monday, March 8, 2010
What you need to do as estate executor
A bigger responsibility than you might expect
By Executor’s Resource, Inc.
When someone with an estate dies, an executor or personal representative as designated in the will or by law is appointed by the court. If you are the one selected, you may find the responsibility much more than you anticipated in terms of time, expense and heartache.
An executor settles your estate, taking care of debts and creditors and getting assets to your heirs, sort of a CEO of the afterlife.
“If you really want to know what executors do, go to a circus and watch the clown in the center ring juggle several balls while riding a unicycle-- despite the glare of spotlights and the kids bawling in the third row,” wrote Joan Lisante in a 2003 Washington Post article.
Typically, executors are close family members, more often than not a surviving spouse, adult child or close relative. Most people accept the appointment as both an honor and responsibility to those close to them. Rarely do they have an idea of what’s in store.
Wealthy estate holders have it easy. Their executors can hire a team of specialists – attorneys, accountants, financial planners – to handle the endless details. Most middle class estates can’t afford professionals, leaving the “amateur” executor to navigate solo along the time consuming and often tricky route to final estate settlement.
A Long List of Responsibilities
An estate of modest size is not necessarily simple. Regardless of estate value, the executor is required to settle all creditors’ claims, file individual and estate tax returns, accumulate and value all assets, close bank and investment accounts and transfer them to newly created estate accounts, handle the immediate needs of the family, and, finally, disburse the assets to the beneficiaries.
The complexity escalates if there are challenges to the will or if the decedent and the executor reside in different states, as is often the case. Legal proceedings must occur in every state in which there are assets. And although a number of states have similar probate codes, they’re not identical, and an executor must be prepared to encounter unique rules.
Following is a detailed list of the challenges and responsibilities an executor can be expected to face. Some of these are legally required of the role, and some are "expected" duties, essentially what other family members might expect of you as the perceived person in charge.
Immediate Responsibilities
1.Security of Family: Ensure that decedent’s home and possessions are protected. Provisions need to be made for any family financial assistance if required.
2. Organ donation: Determine immediately if the decedent had directions for organ donation.
3. Funeral Arrangements: Determine that funeral arrangements have been made and paid for.
4. Obituary: Help prepare facts surrounding the death and also chronicle achievements of the person’s life and distribute them to the media.
5. Bank Notification: Ensure that banks are aware of decedent’s passing and arrange for all automatic payments to be ceased.
Initial Administration
1. Location of Will and any Trust Agreements: These are the executor’s governing documents and are likely maintained in a safe deposit box or by the decedent’s lawyer. Identify beneficiaries and determine needs of survivors.
2. Death Certificate: Certified copies or photocopies are required for transfer of assets and resolving creditor accounts. Plan to get multiple copies (i.e., 5 to 10).
3. Insurance Policies: Contact insurance agent(s) and obtain copies of life, mortgage and loan insurance policies.
4. Important Contacts: Contact the following to determine if benefits may be available:
a. Social Security Administration: Death should be reported and determination of available benefits.
b. Current Employer: Several immediate benefits may be available including group life, health plans, vested interest in pension, stock or savings plans and final paycheck.
c. Pension Plan Administrators: If decedent was retired or vested, surviving spouse and children may be entitled to benefits.
d. Veteran’s Administration: If decedent was a veteran, burial and other benefits may be available.
5.Post Office: Have mail sent to executor and cancel subscriptions.
Estate Administration
1. Obtain Formal Appointment as Executor or Personal Representative: Obtain “Letters of Appointment” from probate court to legally act on behalf of the estate.
2. Open Estate Bank Account: Open a separate bank account to deposit liquid assets, manage creditors and maintain accounting of expenses.
3. Retain Attorney: Preferably an attorney familiar with the estate, family and who may have prepared the will.
4. IRS: Obtain a Federal Identification Number for the estate using IRS form SS-4. Notify IRS of authority to act on behalf of the decedent.
5. Submit Will for Probate: Upon consultation with attorney, petition court to admit the will. Consider simplified administration for small estates.
6. Obtain Bond, If Required: Based on consultation with attorney if bond is recommended or required.
Estate Management
1. Pay Current Obligations: After consultation with attorney and assuming the estate is solvent, assemble and pay all obligations including mortgages, utilities, credit cards, medical bills, funeral arrangements and other costs covering continual maintenance of home, businesses, properties etc. Determine immediate and ongoing needs of surviving family.
2. Identify and Locate Assets: Identify, locate and inventory all decedent’s assets, including:
a. Real Estate: Arrange for security, maintenance and upkeep assuring that all payments are made and partners, tenants etc. are notified of new ownership.
b. Life Insurance: Identify all policies and determine beneficiaries. File appropriate claims. (See assets not subject to probate below).
c. Valuables: Arrange for protection and safety of decedent’s valuables and appraisals if necessary.
d. Safe Deposit Boxes: Contact bank(s) and arrange for opening and inventory.
e. Bank Accounts: Arrange for transfer of funds to new account in estate’s name.
f. Investment Accounts: Identify all investment accounts and arrange for transfer to estate’s name. Determine if any investment action is required.
g. Businesses: Determine decedent’s ownership or interest in businesses and notify partners, if any, of decedent’s death.
3. Appraise or Value Assets: Determine if outside appraisers or business consultants are necessary to appraise assets and make appropriate arrangements. File inventory with the court if required.
4. Identify Assets not Subject to Probate: Identify and locate all assets that are not subject to probate and that can pass directly to beneficiaries such as:
a. Property held in joint ownership with right of survivorship.
b. Pay-on-death bank accounts and transfer-on-death securities
c. Trust account assets.
d. Life insurance with living beneficiaries other than the estate.
e. IRA, Keogh, SEP, deferred compensation and other accounts not payable to the estate.
5. Manage Assets: Manage existing and on-going assets such as businesses, investments, properties etc. The executor determines whether to continue, sell or liquidate.
6. Manage Creditors and Liabilities: Assure that all creditors’ claim are handled.
Advise all creditors in writing of decedent’s death and the need to resolve all outstanding claims within specified timeframe.
a. Post notice for all creditors to make claims known.
b. Examine all creditor and liability claims to determine their validity.
c. Make final payment of approved creditors and claims.
7. Tax Management: Depending on the complexity of the estate, determine, with advice from financial consultants, appropriate tax strategy.
a. Income Taxes:
- File decedent’s final federal, state and local income tax returns.
- File estate’s federal, state, and local income tax returns for income earned during administration from investments or businesses.
- Use appraisals (or original purchase price) to establish income tax basis.
- Handle any tax audits.
b. Death Taxes:
- Value estate assets for tax purposes.
- File federal estate tax return if estate value exceeds exclusion amount.
- File state inheritance or estate tax return if required.
Distribution and Closing
1. Distribute Assets: Upon payment of all claimants, distribute all remaining assets to beneficiaries as prescribed by will and obtain receipts.
2. Final Accounting: Prepare final estate accounting including reports of all receipts and disbursements and distribute to court if required and beneficiaries.
3. Discharge: Obtain court order discharging executor and closing estate.
Depending upon the situation, there may be additional duties as assigned. For more information or to print out a hard copy of this article, visit http://www.executorsresource.com/. Click on "Resources" and then "Articles."
By Executor’s Resource, Inc.
When someone with an estate dies, an executor or personal representative as designated in the will or by law is appointed by the court. If you are the one selected, you may find the responsibility much more than you anticipated in terms of time, expense and heartache.
An executor settles your estate, taking care of debts and creditors and getting assets to your heirs, sort of a CEO of the afterlife.
“If you really want to know what executors do, go to a circus and watch the clown in the center ring juggle several balls while riding a unicycle-- despite the glare of spotlights and the kids bawling in the third row,” wrote Joan Lisante in a 2003 Washington Post article.
Typically, executors are close family members, more often than not a surviving spouse, adult child or close relative. Most people accept the appointment as both an honor and responsibility to those close to them. Rarely do they have an idea of what’s in store.
Wealthy estate holders have it easy. Their executors can hire a team of specialists – attorneys, accountants, financial planners – to handle the endless details. Most middle class estates can’t afford professionals, leaving the “amateur” executor to navigate solo along the time consuming and often tricky route to final estate settlement.
A Long List of Responsibilities
An estate of modest size is not necessarily simple. Regardless of estate value, the executor is required to settle all creditors’ claims, file individual and estate tax returns, accumulate and value all assets, close bank and investment accounts and transfer them to newly created estate accounts, handle the immediate needs of the family, and, finally, disburse the assets to the beneficiaries.
The complexity escalates if there are challenges to the will or if the decedent and the executor reside in different states, as is often the case. Legal proceedings must occur in every state in which there are assets. And although a number of states have similar probate codes, they’re not identical, and an executor must be prepared to encounter unique rules.
Following is a detailed list of the challenges and responsibilities an executor can be expected to face. Some of these are legally required of the role, and some are "expected" duties, essentially what other family members might expect of you as the perceived person in charge.
Immediate Responsibilities
1.Security of Family: Ensure that decedent’s home and possessions are protected. Provisions need to be made for any family financial assistance if required.
2. Organ donation: Determine immediately if the decedent had directions for organ donation.
3. Funeral Arrangements: Determine that funeral arrangements have been made and paid for.
4. Obituary: Help prepare facts surrounding the death and also chronicle achievements of the person’s life and distribute them to the media.
5. Bank Notification: Ensure that banks are aware of decedent’s passing and arrange for all automatic payments to be ceased.
Initial Administration
1. Location of Will and any Trust Agreements: These are the executor’s governing documents and are likely maintained in a safe deposit box or by the decedent’s lawyer. Identify beneficiaries and determine needs of survivors.
2. Death Certificate: Certified copies or photocopies are required for transfer of assets and resolving creditor accounts. Plan to get multiple copies (i.e., 5 to 10).
3. Insurance Policies: Contact insurance agent(s) and obtain copies of life, mortgage and loan insurance policies.
4. Important Contacts: Contact the following to determine if benefits may be available:
a. Social Security Administration: Death should be reported and determination of available benefits.
b. Current Employer: Several immediate benefits may be available including group life, health plans, vested interest in pension, stock or savings plans and final paycheck.
c. Pension Plan Administrators: If decedent was retired or vested, surviving spouse and children may be entitled to benefits.
d. Veteran’s Administration: If decedent was a veteran, burial and other benefits may be available.
5.Post Office: Have mail sent to executor and cancel subscriptions.
Estate Administration
1. Obtain Formal Appointment as Executor or Personal Representative: Obtain “Letters of Appointment” from probate court to legally act on behalf of the estate.
2. Open Estate Bank Account: Open a separate bank account to deposit liquid assets, manage creditors and maintain accounting of expenses.
3. Retain Attorney: Preferably an attorney familiar with the estate, family and who may have prepared the will.
4. IRS: Obtain a Federal Identification Number for the estate using IRS form SS-4. Notify IRS of authority to act on behalf of the decedent.
5. Submit Will for Probate: Upon consultation with attorney, petition court to admit the will. Consider simplified administration for small estates.
6. Obtain Bond, If Required: Based on consultation with attorney if bond is recommended or required.
Estate Management
1. Pay Current Obligations: After consultation with attorney and assuming the estate is solvent, assemble and pay all obligations including mortgages, utilities, credit cards, medical bills, funeral arrangements and other costs covering continual maintenance of home, businesses, properties etc. Determine immediate and ongoing needs of surviving family.
2. Identify and Locate Assets: Identify, locate and inventory all decedent’s assets, including:
a. Real Estate: Arrange for security, maintenance and upkeep assuring that all payments are made and partners, tenants etc. are notified of new ownership.
b. Life Insurance: Identify all policies and determine beneficiaries. File appropriate claims. (See assets not subject to probate below).
c. Valuables: Arrange for protection and safety of decedent’s valuables and appraisals if necessary.
d. Safe Deposit Boxes: Contact bank(s) and arrange for opening and inventory.
e. Bank Accounts: Arrange for transfer of funds to new account in estate’s name.
f. Investment Accounts: Identify all investment accounts and arrange for transfer to estate’s name. Determine if any investment action is required.
g. Businesses: Determine decedent’s ownership or interest in businesses and notify partners, if any, of decedent’s death.
3. Appraise or Value Assets: Determine if outside appraisers or business consultants are necessary to appraise assets and make appropriate arrangements. File inventory with the court if required.
4. Identify Assets not Subject to Probate: Identify and locate all assets that are not subject to probate and that can pass directly to beneficiaries such as:
a. Property held in joint ownership with right of survivorship.
b. Pay-on-death bank accounts and transfer-on-death securities
c. Trust account assets.
d. Life insurance with living beneficiaries other than the estate.
e. IRA, Keogh, SEP, deferred compensation and other accounts not payable to the estate.
5. Manage Assets: Manage existing and on-going assets such as businesses, investments, properties etc. The executor determines whether to continue, sell or liquidate.
6. Manage Creditors and Liabilities: Assure that all creditors’ claim are handled.
Advise all creditors in writing of decedent’s death and the need to resolve all outstanding claims within specified timeframe.
a. Post notice for all creditors to make claims known.
b. Examine all creditor and liability claims to determine their validity.
c. Make final payment of approved creditors and claims.
7. Tax Management: Depending on the complexity of the estate, determine, with advice from financial consultants, appropriate tax strategy.
a. Income Taxes:
- File decedent’s final federal, state and local income tax returns.
- File estate’s federal, state, and local income tax returns for income earned during administration from investments or businesses.
- Use appraisals (or original purchase price) to establish income tax basis.
- Handle any tax audits.
b. Death Taxes:
- Value estate assets for tax purposes.
- File federal estate tax return if estate value exceeds exclusion amount.
- File state inheritance or estate tax return if required.
Distribution and Closing
1. Distribute Assets: Upon payment of all claimants, distribute all remaining assets to beneficiaries as prescribed by will and obtain receipts.
2. Final Accounting: Prepare final estate accounting including reports of all receipts and disbursements and distribute to court if required and beneficiaries.
3. Discharge: Obtain court order discharging executor and closing estate.
Depending upon the situation, there may be additional duties as assigned. For more information or to print out a hard copy of this article, visit http://www.executorsresource.com/. Click on "Resources" and then "Articles."
Friday, March 5, 2010
You've got an estate!
Most people are not aware it applies to them – even if they are not wealthy
By Executor's Resource, Inc.
Who, me? An estate holder? Don't make me laugh. Wait, let me call Jeeves the butler and have him fix me a sherry (giggle). I'm looking around my house and see the repairs that have to be made. I see an old bike hanging in the garage, hockey skates. My trusty lawn mower. Now there's a 20-year old relic. Really, people like me don't have to worry about estate planning. I don't have an estate.
If you are thinking like the guy above, you are in for a surprise. You've got an estate. You have scrapbooks, photos, memories, books, even that old lawn mower that started every time is part of your estate. And some of it probably has financial value you don't realize, equity in your home (despite its repair needs), a small company insurance policy lying around, the porcelain collection that's collecting cobwebs in the basement. It's all part of an estate.
But maybe we should do away with the word "estate," itself, says financial planner and Executor's Resource founder, Myra Salzer.
"The word ‘estate' is confusing," she says. "Most people would agree they have stuff. Somehow there's this vision that an estate is an expansive house on 500 acres, or a plantation with servants. Actually an estate is stuff. If you have stuff that you distribute when you die, you have an estate."
Here's a quick question for you in explaining this estate thing. What would you think would be the "stuff," as Salzer puts it, that family and friends argue about the most when someone dies? Money? The house on the lake? The Jaguar? Nope.
"The things that people fight about are small and have sentimental value," Salzer says.
"For example, my girls are in their late 20s and I asked them what would you want of ours? My oldest daughter wanted this hideous plastic mixing bowl we've had forever. You couldn't sell it at a garage sale for a quarter. But my daughter has a picture of herself as an infant taking a bath in it. If another daughter wanted it, there would be a conflict."
Other things comprise an estate, such as kids and even pets. Most people think of their children first and what might happen to them and how they would be cared for in the event of unforeseen death.
And what about the tabby Princess, Rover and the three goldfish? Who takes care of them? Any animal owner would love to see their pets go to a good home. That should be accounted for in the will. Salzer has organized animal trusts to care for horses. Let's not even go there with Leona Helmsley giving her dog Trouble, a white Maltese, $12 million when Helmsley died. That may be over the top in planning a will, but the point is that each part of your life needs to be dealt with after death.
Here's an example in Salzer's practice where the lack of planning caused a problem. Her client unwittingly received a large estate from an uncle she was not on speaking terms with. The uncle died without a will (intestate) and under state law, the niece was the only living relative because her brother died two weeks before her uncle did.
The woman felt a great deal of guilt because there were no other heirs to share the money with. She can't exactly give the money away to her brother's heirs because he had none either.
But let's forget all this talk about money, because we started this conversation with the notion that everyone has an estate. Assets, such as a garden or a house, have to be kept up or they disintegrate. That too must be planed for.
Part of your estate may be very sentimental or of value only to you, that golf club collection or grandma's diaries. One person inherited a set of letters from an aide to General George Washington written during the Revolutionary War. Things with sentimental value – think family photos and movies, even your email, Facebook, Twitter, blog or Flickr accounts – are highly important components of an estate.
"It doesn't matter how many zeros or commas there are," Salzer says. "It matters how the recipient feels about the asset and how it affects them." For more information on how to better organize all of your estate information, visit http://www.executorsresource.com/.
By Executor's Resource, Inc.
Who, me? An estate holder? Don't make me laugh. Wait, let me call Jeeves the butler and have him fix me a sherry (giggle). I'm looking around my house and see the repairs that have to be made. I see an old bike hanging in the garage, hockey skates. My trusty lawn mower. Now there's a 20-year old relic. Really, people like me don't have to worry about estate planning. I don't have an estate.
If you are thinking like the guy above, you are in for a surprise. You've got an estate. You have scrapbooks, photos, memories, books, even that old lawn mower that started every time is part of your estate. And some of it probably has financial value you don't realize, equity in your home (despite its repair needs), a small company insurance policy lying around, the porcelain collection that's collecting cobwebs in the basement. It's all part of an estate.
But maybe we should do away with the word "estate," itself, says financial planner and Executor's Resource founder, Myra Salzer.
"The word ‘estate' is confusing," she says. "Most people would agree they have stuff. Somehow there's this vision that an estate is an expansive house on 500 acres, or a plantation with servants. Actually an estate is stuff. If you have stuff that you distribute when you die, you have an estate."
Here's a quick question for you in explaining this estate thing. What would you think would be the "stuff," as Salzer puts it, that family and friends argue about the most when someone dies? Money? The house on the lake? The Jaguar? Nope.
"The things that people fight about are small and have sentimental value," Salzer says.
"For example, my girls are in their late 20s and I asked them what would you want of ours? My oldest daughter wanted this hideous plastic mixing bowl we've had forever. You couldn't sell it at a garage sale for a quarter. But my daughter has a picture of herself as an infant taking a bath in it. If another daughter wanted it, there would be a conflict."
Other things comprise an estate, such as kids and even pets. Most people think of their children first and what might happen to them and how they would be cared for in the event of unforeseen death.
And what about the tabby Princess, Rover and the three goldfish? Who takes care of them? Any animal owner would love to see their pets go to a good home. That should be accounted for in the will. Salzer has organized animal trusts to care for horses. Let's not even go there with Leona Helmsley giving her dog Trouble, a white Maltese, $12 million when Helmsley died. That may be over the top in planning a will, but the point is that each part of your life needs to be dealt with after death.
Here's an example in Salzer's practice where the lack of planning caused a problem. Her client unwittingly received a large estate from an uncle she was not on speaking terms with. The uncle died without a will (intestate) and under state law, the niece was the only living relative because her brother died two weeks before her uncle did.
The woman felt a great deal of guilt because there were no other heirs to share the money with. She can't exactly give the money away to her brother's heirs because he had none either.
But let's forget all this talk about money, because we started this conversation with the notion that everyone has an estate. Assets, such as a garden or a house, have to be kept up or they disintegrate. That too must be planed for.
Part of your estate may be very sentimental or of value only to you, that golf club collection or grandma's diaries. One person inherited a set of letters from an aide to General George Washington written during the Revolutionary War. Things with sentimental value – think family photos and movies, even your email, Facebook, Twitter, blog or Flickr accounts – are highly important components of an estate.
"It doesn't matter how many zeros or commas there are," Salzer says. "It matters how the recipient feels about the asset and how it affects them." For more information on how to better organize all of your estate information, visit http://www.executorsresource.com/.
Estate Planning Checklist
What key documents do I need?
By Executor's Resource, Inc.
All of us should be planning for our eventual – or sudden – passing. No death is expected, even if someone experiences a long illness. The shock of it is still there and there never seems to be enough time to prepare for it.
You might be flying overseas, taking a dangerous job or are to be deployed in harm's way if you are in the military.
That's why it's important to chip away at putting your estate in order. Everything you do will make it easier for your friends and family after you are gone. For example, who is in charge of your pets and what should be done with them? The refrigerator needs to be cleaned, the garden and lawn kept up, the newspaper subscription stopped.
First up, the bare minimum
Here's your estate organizer lite, the bare minimum of what you need to make the process a smooth one:
Your will: Whether an attorney assists you or not, this document needs to be where your loved ones can find it. Notify your executor of its whereabouts.
Medical power of attorney: This document names a delegate to make medical decisions on your behalf in the event of your incapacity.
Financial power of attorney: This document allows someone to act in your behalf with respect to your finances and gives him the ability to sign documents, checks, etc. in your name.
Living will: This document provides your instructions to physicians, medical staff, and family on receiving medical assistance in the event that you are unable to.
Just remember that for as long as you are alive and capable, you can update these documents when needed.
Estate Organizer II, The Next Level: Really making things better for your loved ones
Do you care about your loved ones and your heirs? If you do, you should know that anything you do now to organize your important personal information will relieve the burden of your affairs after you pass. And that burden can be quite heavy for someone who is grieving for you.
Doing any one of the following makes it easier on your future executor, personal representative or trustee. If you use an online estate organizer like EstateLogic®, you can place this information in a secure location online - what documents and items you have, their whereabouts, and who to contact in an emergency situation. You can even store e-copies of your documents. When needed your executor and family can access the information you've prepared from any Internet connection.
Your detailed estate planning checklist in alphabetical order:
Adoption papers – these documents will be important in estate matters.
Accountant name and phone number – Also may have your tax return information handy.
Bank accounts and numbers – You can scan in the year-end statement as you go along. It will contain most of the information needed. Also note where hard copy checks are being stored.
Beneficiary forms from 401k, SEP, etc. - These are especially important to locate if you intend to avoid probate court. Beneficiary transfers are typically not subject to probate.
Birth certificate
Brokerage account numbers, account website and passwords, broker contact info – Most brokerage accounts have online account information that can be easily accessed.
Business and partnership contracts – The executor may need to analyze all business holdings and may need to hire an attorney to settle any conflicts on business ownerships, ie. Business valuations and buyouts.
Computer/online account IDs/password listing – This is mainly to access your laptop or other computers, close down any open online subscriptions, email accounts, Facebook or social media accounts, PayPal accounts, online bank accounts and the like. Cover both your personal and any work or business related accounts.
Credit card inventory and balances
Consumer debt documents like including mortgage, home equity loans, auto loans and others – Part of your executor's job is to settle all outstanding debts.
Divorce decree
Driver's license
Employer information - Your present employer, work address, telephone, title, supervisor, and records on any benefits (pension plans, health benefits, life insurance, stock options, etc.)
Estate Attorney - Name and contact information of the attorney who helped you create your legal estate documents.
Family Attorney - Name and contact information.
Financial Advisor - Name and contact information.
Friends and family list - Names and contact information for your direct family, and a listing of friends and others to notify in the event of your death.
Funeral/burial/cremation instructions - Include any information for any prepaid arrangements, service preferences like music, donating to charities in lieu of flowers, etc.
Health records – Often there are unpaid health bills or other costs associated with a long illness that need to be settled. Records should also include your health insurance, immunization records for you, your spouse and any dependent children, among others.
Home alarm code and location of instructions – It could be pretty embarrassing for your executor to trip off your alarm or not know how to work it should you not be around.
Household instructions, including plants and gardens, food removal – You need to write down instructions on contacting the gardener you've hired, how often the plants are watered, what to do with the utilities and hot water heater, and remind your executor to remove perishables from the house.
Insurance policies – Make sure life and health insurance policies are available.
Living will
Marriage license(s) – Some have more than one, and claims might arise after death.
Military papers – Comes into play if military benefits are involved.
Naturalization/citizenship papers
Organ donor preferences
Passport
Pet owernship papers and instructions - Pedigree or adoption papers. Instructions for pets and health records for them. Otherwise Fido might be headed to the pound.
Power of attorney
Real estate paperwork for property owned
Safe deposit box number and key location
Social Security card – Important for identification and benefit claims.
Subscriptions with automatic renewals, newspapers – As referenced before, many subscriptions will automatically renew and cause creditor problems after an estate is settled.
Tax returns – Important to be kept with loan records, insurance policies and other large documents, preferably in a safe or locked file cabinet, but make sure your executor knows where the key is or has the combination.
Trust documents/agreements
Vehicles - Listing of cars, trucks, motorcycles, as well as any recreational vehicles like boats, snowmobiles, RVs, etc.
Will
Not every document in this estate planning checklist will apply to every situation. You could have other documents that apply specifically to your situation that aren't included.
As you complete this checklist, document information for both you and your spouse/partner. Any dependent children or adults also need to be taken into consideration.
Bottom line? Creating an inventory of what you have, where it's located, and who to contact might be the best gift you give to your future executor and loved ones.For more information, visit http://www.executorsresource.com/.
By Executor's Resource, Inc.
All of us should be planning for our eventual – or sudden – passing. No death is expected, even if someone experiences a long illness. The shock of it is still there and there never seems to be enough time to prepare for it.
You might be flying overseas, taking a dangerous job or are to be deployed in harm's way if you are in the military.
That's why it's important to chip away at putting your estate in order. Everything you do will make it easier for your friends and family after you are gone. For example, who is in charge of your pets and what should be done with them? The refrigerator needs to be cleaned, the garden and lawn kept up, the newspaper subscription stopped.
First up, the bare minimum
Here's your estate organizer lite, the bare minimum of what you need to make the process a smooth one:
Your will: Whether an attorney assists you or not, this document needs to be where your loved ones can find it. Notify your executor of its whereabouts.
Medical power of attorney: This document names a delegate to make medical decisions on your behalf in the event of your incapacity.
Financial power of attorney: This document allows someone to act in your behalf with respect to your finances and gives him the ability to sign documents, checks, etc. in your name.
Living will: This document provides your instructions to physicians, medical staff, and family on receiving medical assistance in the event that you are unable to.
Just remember that for as long as you are alive and capable, you can update these documents when needed.
Estate Organizer II, The Next Level: Really making things better for your loved ones
Do you care about your loved ones and your heirs? If you do, you should know that anything you do now to organize your important personal information will relieve the burden of your affairs after you pass. And that burden can be quite heavy for someone who is grieving for you.
Doing any one of the following makes it easier on your future executor, personal representative or trustee. If you use an online estate organizer like EstateLogic®, you can place this information in a secure location online - what documents and items you have, their whereabouts, and who to contact in an emergency situation. You can even store e-copies of your documents. When needed your executor and family can access the information you've prepared from any Internet connection.
Your detailed estate planning checklist in alphabetical order:
Adoption papers – these documents will be important in estate matters.
Accountant name and phone number – Also may have your tax return information handy.
Bank accounts and numbers – You can scan in the year-end statement as you go along. It will contain most of the information needed. Also note where hard copy checks are being stored.
Beneficiary forms from 401k, SEP, etc. - These are especially important to locate if you intend to avoid probate court. Beneficiary transfers are typically not subject to probate.
Birth certificate
Brokerage account numbers, account website and passwords, broker contact info – Most brokerage accounts have online account information that can be easily accessed.
Business and partnership contracts – The executor may need to analyze all business holdings and may need to hire an attorney to settle any conflicts on business ownerships, ie. Business valuations and buyouts.
Computer/online account IDs/password listing – This is mainly to access your laptop or other computers, close down any open online subscriptions, email accounts, Facebook or social media accounts, PayPal accounts, online bank accounts and the like. Cover both your personal and any work or business related accounts.
Credit card inventory and balances
Consumer debt documents like including mortgage, home equity loans, auto loans and others – Part of your executor's job is to settle all outstanding debts.
Divorce decree
Driver's license
Employer information - Your present employer, work address, telephone, title, supervisor, and records on any benefits (pension plans, health benefits, life insurance, stock options, etc.)
Estate Attorney - Name and contact information of the attorney who helped you create your legal estate documents.
Family Attorney - Name and contact information.
Financial Advisor - Name and contact information.
Friends and family list - Names and contact information for your direct family, and a listing of friends and others to notify in the event of your death.
Funeral/burial/cremation instructions - Include any information for any prepaid arrangements, service preferences like music, donating to charities in lieu of flowers, etc.
Health records – Often there are unpaid health bills or other costs associated with a long illness that need to be settled. Records should also include your health insurance, immunization records for you, your spouse and any dependent children, among others.
Home alarm code and location of instructions – It could be pretty embarrassing for your executor to trip off your alarm or not know how to work it should you not be around.
Household instructions, including plants and gardens, food removal – You need to write down instructions on contacting the gardener you've hired, how often the plants are watered, what to do with the utilities and hot water heater, and remind your executor to remove perishables from the house.
Insurance policies – Make sure life and health insurance policies are available.
Living will
Marriage license(s) – Some have more than one, and claims might arise after death.
Military papers – Comes into play if military benefits are involved.
Naturalization/citizenship papers
Organ donor preferences
Passport
Pet owernship papers and instructions - Pedigree or adoption papers. Instructions for pets and health records for them. Otherwise Fido might be headed to the pound.
Power of attorney
Real estate paperwork for property owned
Safe deposit box number and key location
Social Security card – Important for identification and benefit claims.
Subscriptions with automatic renewals, newspapers – As referenced before, many subscriptions will automatically renew and cause creditor problems after an estate is settled.
Tax returns – Important to be kept with loan records, insurance policies and other large documents, preferably in a safe or locked file cabinet, but make sure your executor knows where the key is or has the combination.
Trust documents/agreements
Vehicles - Listing of cars, trucks, motorcycles, as well as any recreational vehicles like boats, snowmobiles, RVs, etc.
Will
Not every document in this estate planning checklist will apply to every situation. You could have other documents that apply specifically to your situation that aren't included.
As you complete this checklist, document information for both you and your spouse/partner. Any dependent children or adults also need to be taken into consideration.
Bottom line? Creating an inventory of what you have, where it's located, and who to contact might be the best gift you give to your future executor and loved ones.For more information, visit http://www.executorsresource.com/.
Subscribe to:
Posts (Atom)