By Executor's Resource, Inc.
Have you been an executor? If you haven't, chances are you will be.
The majority of Americans typically choose a close family member or friend for the role. Most of us accept without thinking about what it really means. Will you be up for the job when the time comes? Take this quick quiz to find out:
1. As the future executor for your loved one, do you know where to find the following:
a. Final instructions (i.e., funeral arrangements and preferences)
b. Will or trust agreement, and other legal documents (e.g., powers of attorney)
c. A key to residence(s) and the passcode to the home alarm system
d. Insurance policies, banking accounts and other assets and liabilities
e. A listing of digital assets - passwords for computers and online accounts
f. Valuables and collectibles
g. Family photo albums and other important personal and heritage information
h. Safe deposit box key(s)
i. Contact information for the estate attorney who drafted the will
j. Contact information for other professionals (e.g., financial advisor, insurance agents)
2. Are you aware of any hidden items of importance in the home or elsewhere?
3. Do you talk with your loved one about this information at least once a year or when there are updates?
If you answered yes to many of the questions, serving as executor, personal representative or trustee should be easier for you. If you marked "no" more times than "yes", it's time for you to have the talk with your loved one. We'll address how you go about doing that in our next posting.
In the interim, tells us how you fared on this quiz by submitting a comment.
Showing posts with label personal representative. Show all posts
Showing posts with label personal representative. Show all posts
Thursday, July 29, 2010
Wednesday, June 2, 2010
Probate 411
In a prior posting, we provided a probate 411 of sorts. To continue along those lines, let’s define a couple terms you’ll need to know when contemplating probate:
Executor: This is the person, usually a family member, husband, wife or friend who gets stuck with all of the administrative work of settling an estate. It could involve processing paperwork involved with a 401(k) settlement, writing checks to real estate agents, attorneys, repairmen, and auctioneers, and it always involves a lot of communication. If there’s a will, the court typically appoints the executor named by the deceased. If a person dies without a will – or intestate – the court appoints an executor based on a priority list set forth by the legislature. States may call them something different. For example, they are called “personal representatives” in Colorado. Note that if a trust is involved, there is a "trustee" or several trustees. This is a different role than that of an executor or personal representative.
Assets: Your assets include any real estate that you own, as well as any personal property such as art, cars, an antique collection, stocks (in public or privately owned shares), bonds, business interests, retirement accounts and life insurance policies. Don't forget the digital assets like Pay Pal accounts or monetized blogs, websites, even your email, Facebook and Twitter accounts. Many people believe they have no “estate,” when in reality, they do.
Probate court: This is a division of your county’s court system, complete with clerk’s office, courtrooms, judges and all the record keeping functions.
So now that we have some basics down, let’s answer a few helpful questions.
What passes through probate and what doesn’t?
Assets that typically follow the path of probate include:
Some people arrange their property so that it completely bypasses probate, using a variety of techniques, such as signing forms on their bank and retirement accounts that cause money to go directly to beneficiaries (other than their estate); gifting assets before death and using revocable living trusts.
Others have all of their assets distributed via probate. To find out what avenue might work best for your personal situation, you might consider speaking with a financial planner who specializes in estate planning, or an estate attorney.
No probate = no taxes = MYTH!
A common myth is that if you can avoid probate, you can avoid taxation. This is not the case. Assets that are part of your probate estate, along with assets that pass outside of probate are considered part of your gross estate. Your gross estate is used to calculate any estate tax you may owe. The only way to completely avoid estate taxation on an asset is to simply not own it or any interest in it at the time of your death.
Even assets that pass to your beneficiaries outside of probate are subject to estate tax. If taxation is a driving force behind your probate concerns, it may be in your best interest to meet with an estate attorney or financial planner that specializes in estate planning to uncover and identify your goals for your estate and design strategies for how to best achieve them.
Executor: This is the person, usually a family member, husband, wife or friend who gets stuck with all of the administrative work of settling an estate. It could involve processing paperwork involved with a 401(k) settlement, writing checks to real estate agents, attorneys, repairmen, and auctioneers, and it always involves a lot of communication. If there’s a will, the court typically appoints the executor named by the deceased. If a person dies without a will – or intestate – the court appoints an executor based on a priority list set forth by the legislature. States may call them something different. For example, they are called “personal representatives” in Colorado. Note that if a trust is involved, there is a "trustee" or several trustees. This is a different role than that of an executor or personal representative.
Assets: Your assets include any real estate that you own, as well as any personal property such as art, cars, an antique collection, stocks (in public or privately owned shares), bonds, business interests, retirement accounts and life insurance policies. Don't forget the digital assets like Pay Pal accounts or monetized blogs, websites, even your email, Facebook and Twitter accounts. Many people believe they have no “estate,” when in reality, they do.
Probate court: This is a division of your county’s court system, complete with clerk’s office, courtrooms, judges and all the record keeping functions.
So now that we have some basics down, let’s answer a few helpful questions.
What passes through probate and what doesn’t?
Assets that typically follow the path of probate include:
- Any asset (financial like a brokerage or checking account or physical like a car or personal residence) that you, as an individual, own outright at the time of your death, and that does not have a beneficiary designation
- Any assets like life insurance or a retirement account that you specified through a beneficiary designation should go to your estate after your death
- Your share of a joint asset, usually in association with real estate or a home, titled in the form of “tenants in common”
Some people arrange their property so that it completely bypasses probate, using a variety of techniques, such as signing forms on their bank and retirement accounts that cause money to go directly to beneficiaries (other than their estate); gifting assets before death and using revocable living trusts.
Others have all of their assets distributed via probate. To find out what avenue might work best for your personal situation, you might consider speaking with a financial planner who specializes in estate planning, or an estate attorney.
No probate = no taxes = MYTH!
A common myth is that if you can avoid probate, you can avoid taxation. This is not the case. Assets that are part of your probate estate, along with assets that pass outside of probate are considered part of your gross estate. Your gross estate is used to calculate any estate tax you may owe. The only way to completely avoid estate taxation on an asset is to simply not own it or any interest in it at the time of your death.
Even assets that pass to your beneficiaries outside of probate are subject to estate tax. If taxation is a driving force behind your probate concerns, it may be in your best interest to meet with an estate attorney or financial planner that specializes in estate planning to uncover and identify your goals for your estate and design strategies for how to best achieve them.
Monday, March 22, 2010
10 things to ask my advisor about estate and legacy planning
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?
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?
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