Estate Planning

When You End your LEGACY Begins

Estate Planning
Starter Guide

Our Approach To Estate Planning

When You End your LEGACY Begins. A Life Well Lived – is a Life Well Planned. Planning your estate refers to how your estate will be handled when you pass. No matter how large or how small, everyone has an estate and whether you know it or not, everyone has a Plan. The government’s plan of Probate or your own custom plan. The choice is yours. When you choose a plan, you need to know what the consequences will be. Having your own plan is preferred to having the government’s plan. How do you know this? First you need to have an understanding of estate planning, which includes an understanding of how the government’s plan works (see The Government’s Probate Court Process below). And then you need to have an understanding of how having your own custom plan (Comprehensive Estate Plan) bypasses the government’s plan of probate.

Last Will and Testament

A last will and testament is a legal “wish” document that communicates a person’s final wishes pertaining to possessions and dependents. It is not a contract and can be modified based on the findings of the probate court. This can occur if someone questions anything concerning the will. A probate court judge makes the final determination based on the findings of the court proceedings.

A Revocable Living Trust

This document is a legal contract which enables the grantor (often referred to as the trustee, which can be a single
individual or a married couple) to decide how the estate will be settled, to whom, how the proceeds are to be distributed, and when. A Revocable Living Trust is considered a “must have” document.

Durable Power of Attorney over Finances

The term Durable Power of Attorney over Finances is a legal document that allows another person to transact personal financial
business on your behalf. Not having a properly written document could mean that your family may be forced to petition a court to be
appointed as your legal guardian or conservator in order to gain the powers they need to care for you. This is considered a “must have” document.

Durable Power of Attorney over Healthcare

This legal document enables you to appoint someone you trust as your healthcare agent. Not having this document can place a heavy burden on your loved ones since they may be forced to make tough decisions about your care at a time when they are already emotionally drained. Not only that, but family members may also disagree as to what to do, putting unnecessary strain on your family relationships. This is considered a “must have” document.

Advanced Medical Directives (Living Will)

Your advanced medical directive allows you to spell out your decisions about how you want to be cared for in a life-threatening situation. Making these decisions now when you are in control is far more preferable versus when it is too late. This is considered a “must have” document.

The Government’s Probate Court Process

Even though laws vary from state to state, the requirements of probate are generally the same with some exceptions relative to filing
fees, court costs, and estates that are filled intestate (these are estates of a deceased person who died without a last will and testament). The higher the cost of probate, the smaller the financial legacy will be for the beneficiaries.

An Outline of the Probate Process

Definition of probate (to prove) – the action or process of proving before a competent judicial authority that a document offered for
official recognition and registration as the last will and testament of a deceased person is genuine. A formal petition for probate is filed in Probate Court and a fee is paid. Some states may have a different name for the court but regardless it is still called the probate process. Fees are largely dependent on the size of the estate and state laws can range from a low end of $50 to a high end of $1,200. You can check on the fees for the state you reside in. There are also certificates that can be as much as $20 per certificate and notifications that can be as much as $300. Certificates are issued by the court with the seal of the court and are used to show financial institutions and other entities that certain people have been appointed by the court to assist in settling the probate case. Notifications are required to be sent to the beneficiaries, heirs, and creditors. This may include placing notices in publications in the area of the deceased (there is also a cost to place the notice; however, using smaller regional papers can help reduce this cost). The petition may also include the person or persons’ names who are requesting the court to be appointed as the administrator or executor of the estate. When there’s a will, the personal representative will be responsible for this entire process; otherwise, the family will hire a legal representative to manage the process. Where there’s no will, the court will appoint a representative to oversee the process, the cost of which will be paid out of the estate.

What Will a Personal Representative Be Responsible For?

The representative will be responsible for:
· Cataloging all property of the deceased (including real property and personal property)
· Paying any debts, claims, or taxes that are due
· Collecting rights to any income (royalties, stock dividends, etc.) to which the deceased was entitled
· Settling financial and property disputes
· Filing the deceased’s final income tax return
· Filing the estate tax return, if needed
· Preparing an accounting of estate assets and expenses
· Litigating creditor’s claims
· Distributing or transferring the remaining assets in the estate to heirs. A personal representative of an estate may be required to post a bond to serve. The “cost” of the bond will depend on the value of the estate and the personal representative’s credit score. It goes without saying that the worse the credit score the more the representative will pay for a bond.

The Petition for Probate must be served on all beneficiaries named in the will, if there is a will. In the event there’s no will, it must be
served on all intestate heirs of the decedent. There may be special procedures required in the particular jurisdiction and if so,
the court will provide that information. Once the personal representative is appointed at the first hearing (assuming there are no challenges to the appointment) the Court will issue testamentary letters to the personal representative. This court document will empower the personal representative to enforce the terms of the will when dealing with banks or real estate agents and anyone else that might require proof before cooperating with the personal representative of the deceased’s estate. This document gives
the court authority to act on behalf of the deceased’s estate. After appointment, the personal representative will have to serve a notice to all known creditors of the decedent. It can vary from one state to another, but the creditors then have several months from the date of service of notice to file a claim. After this time period has passed, “technically” their claim is dropped.
Next the personal representative will have to prepare and file with the court an inventory of all of the estate assets. All assets of the estate must appear on these attachments. Certain assets may require appraisals such as real property, antiques, jewelry and automobiles. This process is very detail-oriented, time consuming, stressful, and costly. If someone in the family takes on the responsibility of being the executor of the estate through probate, it will become a job. As a result, many families have to face the reality of hiring someone to administer and work through the process. These fees will have to be paid out of the estate. One aspect of the probate process that most people are unaware of is the fact that the estate is open to the public. The court system is a part of the public domain, making the probate case available for the world to see.

*This is a website providing information. It is neither legal advice nor is it intended as an advertisement for legal services. I am not your lawyer and you are not my client. There is no attorney-client relationship.