The Four Basic Steps to Probate

Five Common Mistakes Made in Wills

Make a Resolution to Write a Will

How to Choose Between a Living Trust and a Will

Talk to your Family and Get Started Writing a Will

The Four Basic Steps to Probate

When it comes to administering a decedent’s estate, the process commonly referred to as “probate”—many people fear it is daunting and complicated, but it can actually be as simple as four steps.

What is the Probate Process?

“Probate” refers to the process whereby certain of decedent’s debts may be settled and legal title to the decedent’s property held in the decedent’s name alone and not otherwise distributed by law is transferred to heirs and beneficiaries. If a decedent had a will, and the decedent had property subject to probate, the probate process begins when the executor, who is nominated by the decedent in the will, presents the will for probate in a courthouse in the county where the decedent lived, or owned property. If there is no will, someone must ask the court to appoint him or her as administrator of the decedent’s estate. Often, this is the spouse or an adult child of the decedent. Once appointed by the court, the executor or administrator becomes the legal representative of the estate.

The Four Basic Steps to Probate

1. File a petition and give notice to heirs and beneficiaries

As described above, the probate process begins with the filing of the petition with the court to either (1) admit the will to probate and appoint the executor or (2) if there is no will, appoint an administrator of the estate. Generally, notice of the court hearing regarding the petition must be provided to all of the decedent’s heirs and beneficiaries. If an heir or beneficiary objects to the petition, they have the opportunity to do so in court. Also, generally, notice of the hearing is published in a local newspaper. This is to attempt to notify others, such as unknown creditors of the decedent, of the beginning of the proceeding.

2. Following appointment by the court, the personal representative must give notice to all known creditors of the estate and take an inventory of the estate property

The personal representative then gives written notice to all creditors of the estate based upon state law; any creditor who wishes to make a claim on assets of the estate must do so within a limited period of time (which also varies by state). An inventory of all of decedent’s probate property, including real property, stocks, bonds, business interests, among other assets, is taken. In some states, a court appointed appraiser values the assets. When necessary, an independent appraiser is hired by the estate to appraise non-cash assets.

3. All estate and funeral expenses, debts and taxes must be paid from the estate

The personal representative must determine which creditor’s claims are legitimate and pay those and other final bills from the estate. In some instances, the personal representative is permitted to sell estate assets to satisfy the decedent’s obligations.

4. Legal title in property is transferred according to the will or under the laws of intestacy (if the decedent did not have a will)

Following the waiting period to allow creditors to file claims against the estate, and all approved claims and bills are paid, generally, the personal representative petitions the court for the authority to transfer the remaining assets to beneficiaries as directed in the decedent’s will or, if there is no will, according to state intestate succession laws. If the will calls for the creation of a trust for the benefit of a minor, spouse or incapacitated family member, money is then transferred to the trustee. Unless the beneficiaries of the estate waive the requirement as allowed under some state laws, the petition may include an accounting of how the assets were managed during the probate process. Once the petition is granted, the personal representative may draw up new deeds for property, transfer stock, liquidate assets and transfer property to the appropriate recipients.

In short, a properly drafted will, updated regularly to account for life changes, organized records of debts, personal property and other assets simplifies the probate process. The easier it is for your personal representative to trace your steps after you’re gone, the easier the process.

Five Common Mistakes Made in Wills

We all know that having a last will is a way to make certain that your wishes regarding the distribution of your assets are followed. Once you have everything in place, you can breathe easy, right? Before exhaling, take a look at the following common mistakes made in wills. By doing so, you may hopefully avoid some predictable—but entirely preventable—traps.

 1. Remember to Update Your Will

You really meant to get around to updating your will after your divorce, the birth of your child, your big move, the start of your now-blossoming business, but you just haven't found the time. The right time is now. When you have experienced a major life change or change in financial circumstances, such as a move to another state, birth, death, marriage, or the opening of a new enterprise, you must take another look at your last will. Failure to do so could result in unintended bequests and inheritances, and leave your estate in one big mess. The importance of naming guardians for your minor children in the event of the death of both natural parents cannot be stressed enough.

2. Remember to Provide for the IRS

The Internal Revenue Service, as well as your state tax system, is surely on your mind at least once a year—probably mid-April. Add another time: When writing your will, you cannot afford to forget about estate taxes, the laws of which are constantly changing. One of the most common mistakes people make when they create last wills is assuming that their estates aren't worth enough to come under the estate tax system. The truth is, even though certain property isn't in your estate, it still may be taxable. Assets such as life insurance proceeds, trusts, and retirement plans could be included in your estate for tax purposes.

3. Remember to Appoint a Proper Executor

Your executor will be the one who administers your estate, so choose wisely. If your chosen executor can no longer serve in this capacity for whatever reason (e.g., no longer of sound mind, has moved out of the country), you need to change your will.

4. Remember to Include Intended Beneficiaries

This mistake may or may not coincide with one's failure to update a last will, but regardless, you should very carefully consider who exactly you want named as a beneficiary in your will. Also, if you are intentionally leaving someone out of your will or providing for distribution in an unusual way, you might want to include why you have done this to prevent challenges after your death. Another note on beneficiaries: some states prohibit a beneficiary who also served as a witness at the will's signing, so it's usually best to have witnesses who are not named elsewhere in the will.

5. Don't forget to Dispose of Everything

It's important to carefully consider your assets and include a provision for everything that you wish to distribute to your beneficiaries. It is also a good idea to provide some what-if provisions in the event that a named beneficiary cannot inherit as intended (e.g., the beneficiary has died).

Including a residuary clause is a good way to make sure that all of your assets are distributed to your beneficiaries and not taken by the state. This is often called a "leftovers" clause, because it includes just that—those assets that are leftover after items specifically mentioned have been distributed.

If you don't have a residuary clause and you have property left over that wasn't distributed, you have died partially intestate, meaning without a will, and your state laws will dictate where any property not specifically mentioned will go.

 Don't let these potential pitfalls keep you from writing a last will—for most Americans, it is the most important document they will ever sign.

Make a Resolution to Write a Will

It's simple. Most of us want our wishes carried out after our death. And having a will is a good way to ensure that the family silver winds up in the right hands. In short, a will is a legal document that tells the world how you want your assets distributed after your death. But don't worry—in the meantime your wishes will remain private. No one has to know what's in your will until after you're gone.

Every adult—whether they are wealthy or not—should have a valid will. Yet, over half of all Americans die without one. In fact, national estimates project that 70% of American adults currently don't have a will. The reasons for this are common. Many people think they don't have enough property to worry about or that writing a will might be too expensive. Others simply prefer not to think about the subject at all.

The truth is drafting a will is neither difficult nor expensive. And contrary to what most people think, it doesn't require an attorney to write one. Let's take a quick look at the process of creating a will, beginning with what happens if you decide not to.

Dying Without a Will

If you die without a will, what does this mean for your belongings? Most states have a system for distributing assets at death. As you might guess, surviving spouses and children usually get top priority. Family members like parents and siblings may also be entitled to a share of the pie. However, every state's laws are different.

Be advised, though. If you die without a will and have no surviving spouse, children, grandchildren, parents, grandparents, siblings, aunts or uncles, your entire estate may go to your state government.

If your state's distribution laws work fine for you, does that mean you shouldn't write a will? Well, not exactly. After all, having a will takes the guesswork out of who will receive what. And why not help to avoid potential family feuds over where your property will go?

OK, I Really Want to Write a Will...Now What?

So, you're ready to get started on that will. To eliminate surprises, here are a few things that are typically included:

Statement of Last Will and Testament: Your will should state that you're of sound mind and that you intend this document to be your last will and testament. Also, the will should state that it overrules any previous wills.

Executor: The executor is the person who will oversee the distribution of your assets after your death. If you die without a will, the court will select an administrator to perform the duties of an executor.

Minor children: If you have minor children, a will enables you to select a guardian and a trustee to manage their affairs. Without a will, a court will appoint a guardian and/or trustee who may not be your first choice. Remember, if you decide to select someone other than the child living parent as a first choice, you may want to explain the reasons just in case the living parent challenges the will.

Personal Effects: Any items that you want certain people to have should be detailed in your will. For instance, you may want the family photo albums to go to a reliable cousin or an antique pearl ring to be handed down to your daughter.

Pets: Ah, trusted members of the family. Unfortunately, state law defines them as personal property. That's why you may want to name a caretaker and even leave money to your pet's guardian for the animal's future care.

Debts and Taxes: Your will can instruct the way you prefer your debts and taxes to be paid. In addition, you might want to leave contact information for assets such as an IRA, insurance policy or employment retirement plan.

After Your Death

A court oversees the distribution of your property whether you have a will or not in a process called probate. The will is first authenticated and then the deceased's assets are collected. Once the debts and taxes paid, any remaining money is distributed according to the will.

The process ends with an audit when the court approves the executor's accounting and distribution. The audit prevents people from coming forward later to claim they should have received something from the estate.

Other Considerations

Remember, you can cancel or rewrite your will at any time before your death. What you decide now doesn't have to be the truth forever. In fact, you may want to revise your will after any major life events like marriage, divorce, moving to a new state, the birth of a new child, or the death of loved one. Bray, Chappell and Patterson can help you prepare and even update your will with very little time and effort required.

It's also a good idea to review the beneficiaries you've listed for your 401(k), IRA, pension, and life insurance policy because these accounts are automatically transferred to your named beneficiaries when you die.

Once you have completed and signed your will, make sure it's safe and accessible. Your lawyer and Executor should know where to find it. Good locations for your will include a fireproof safe or a safety deposit box. Just make sure you know your bank's policy about accessing the box after you die.

Final Comments

Having a will not only provides clear guidance for your loved ones after your death, but it also allows you to rest easy, knowing your wishes will be carried out. The peace of mind you gain will be well worth any expense or effort involved in drafting a will. After all, we all want to take care of our loved ones. Writing a will is one way to make sure they're cared for even when you're gone.

How to Choose Between a Living Trust and a Will

Wills and living trusts can both be effective estate planning documents that enable you to direct the transfer of your assets after your death. But how do you know which you need? Read on for more information about how to choose between a will and a living trust.

What is a Will?

A will is a legal document that directs the disposition of your assets after your death. Having a valid will makes the probate process, the distribution of your assets, go more smoothly than if you didn’t have a will. Also, in a will, you can name a guardian for your children.

What is a Living Trust?

A living trust is a legal document that becomes valid when you execute the documents and your property is transferred into it. You, as the grantor and trustee, manage the assets while you are alive and then they are passed directly to a trustee of your choice upon your death without involving probate.

Although you can’t name a guardian for your children in a living trust, you can choose someone to manage assets set aside for a specific beneficiary until they are older. As discussed below, you can execute a will in conjunction with your living trust, under which you can name a guardian of your children.

What are the Differences Between a Will and a Living Trust?

The main difference between the two documents is that a will takes effect only after your death while a living trust becomes valid as soon as it is duly executed and assets are added—that is, during your lifetime./p>

Another significant difference between the two is that a living trust can make provisions for your estate in case you are incapacitated. A will can’t do this, although a power of attorney can. Living trusts, though, may be more specific and make managing the estate easier on the trustee than a power of attorney.

MMoreover, regarding probate, a living trust can help to avoid time and costs associated with it, particularly since with a living trust, there is no freezing of assets so long as the trust has been funded. Another advantage to a living trust is that it remains private in many states, while a will becomes part of the public record during the probate process.

What Factors Should I Consider When Choosing Between a Living Trust and a Will?

Some of the most important factors to consider when deciding on whether you should establish a living trust include, but are not limited to, the following:/p>

• Your location. State law regarding estate taxes and probate vary greatly, so what may be advantageous in one state may not be in another.
• Your assets. Generally, states establish an asset value below which even wills can bypass probate, but that doesn’t mean lower valued estates couldn’t benefit from the other advantages of a living trust. Also, if you have assets that could be harmed by prolonged probate, such as a business for example, a living trust might be the better choice.
• Taxes. A living trust may have estate tax advantages both on the federal and state levels, but it depends not only on your state and the value of your estate, but also on the federal estate tax, the status of which is currently in limbo.
• Your beneficiaries. Because a living trust can hold your assets after your death, it offers a way to provide for young, special needs, or other particular beneficiaries you would rather not immediately receive their share of your estate. You may also provide for the care of pets in this way.
• Likelihood of your estate being contested. If you think there is a good chance that your estate distribution will be contested, a living trust may be more likely to withstand the challenge.
• Your trust in a potential trustee. With a living trust, you must be able to trust your named trustee to act according to your wishes without court intervention or monitoring. • Your current financial situation. Setting up a living trust may be more expensive upfront than writing a will, but this must also be weighed against all the above factors.

Final Thoughts on a Living Trust

WWith a living trust, an asset doesn’t become part of it without specifically being included, so you must keep up with adding your assets to the trust to ensure that a valued asset doesn’t end up going through probate, especially if it is not included in your will either.

For this reason, it is advisable to also have a pour-over will, not only because you are able to name a guardian for any children, but also because you can catch any assets that didn’t make it into the trust. Like all wills, a pour-over will is handled in probate court, if necessary.

Talk to your Family and Get Started Writing a Will

A stressful experience can takes its toll on any family, particularly when factors like money and death come into play. You've seen it on the news: heirs battling it out in court over an estate.

But it's not just the families of the rich and famous who deal with estate issues. Every family has to face them in one way or another. And if you fail to make preparations, you may increase the chances that there will be hard feelings and disagreements at a time when your family needs to come together most.

The good news is there are steps you can take to prevent this, and it starts with a conversation.

Who should talk about estate planning?

Mortality isn't a pleasant topic, and many people are also reluctant to discuss their finances. So it's no wonder many families put off the conversation about estate planning indefinitely, often until it's too late. Others believe that estate planning is only for the elderly. They think they'll just wait until retirement to address it. But that's not a good strategy either.

Everyone who has property and loved ones should think about estate planning sooner rather than later. It's also a good idea for families to discuss it openly so that everyone understands each other's wishes. This approach ensures that there will be no surprises later, and it allows everyone affected to plan accordingly.

What's the best way to approach the estate planning conversation?

Estate planning might not be a good topic to bring up during your actual Thanksgiving meal. But holidays are often the few times during the year that families come together. You might consider setting aside a specific time to come together as a family to discuss the topic. Remember, writing a will or trust can be broached tactfully and purposefully.

Since it's a sensitive subject, it's important to be forthright about your motives in bringing it up. Once you start the discussion, concentrate on how estate planning can help you carry out the wishes of others (your parents, for example) or how it can help you take care of your children or other loved ones.

The idea is to make it clear that the conversation will not be about what you will gain; instead, it's about setting expectations that can help maintain family harmony and honor each other's wishes. One way to make this clear is to talk about your own estate planning. Again, before you have this discussion, it is probably a good idea to write your own estate plan, particularly if you are planning on suggesting it to your family. Focus on how you wrote your own will or living trust and how it will affect your family. For example, if you have a living will and/or power of attorney, you can tell your family how these documents helped you make sure you're prepared.

What will happen if you don't discuss it?

Discussing estate planning now means less stress at a difficult time later. That's reason enough to talk it over with your family. But an even more compelling reason might be to make sure assets are distributed as desired. A good estate plan is the only way to ensure that happens. So think about setting aside some time to discuss estate planning with your family. It's in everyone's best interest, and it can be a positive step toward keeping your family whole in the future.

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