Kent Larsson writes about the proper use of wills, advance directives, trusts, and other estate planning tools, and how how they play a vital role in you receiving proper medical care and helping you to preserve and pass on your assets to your loved ones.
Family members may have grievances with each other, but an executor can’t just even things out.
An executor does not have the authority to make things even between family members, unless it is strictly within the law, according to the Napa Valley Register in "Can mom make son pay debt?"
The article was about an executor who was the child of the deceased and charged with distributing equal shares.
However, one of the siblings had borrowed money from the deceased over the years and never paid any of it back. Unless there is documentation of the loans, there is little chance the executor can take that information into consideration.
There are several problems with what the executor might want to do.
Among them is that loans to children are often more gifts than they are loans. The mother may have “loaned” the money to the sibling, knowing that it would never be paid back. That makes it a gift.
If the loans are undocumented, there is no way to prove they happened short of a court battle. If they were considered loans and not gifts, they could be well outside the statute of limitations.
It can be tempting for executors to want to redress past wrongs. However, they should be careful before doing so.
An estate planning attorney can advise an executor on their powers.
Reference: Napa Valley Register (Oct. 26, 2017) "Can mom make son pay debt?"
The status of a will that is written prior to life changing events varies across the nation.
Significant life events, such as having more children, should be included in an update of a will, but if not the impact varies from state to state.
In Georgia the will gets revoked, according to the Wills, Trusts & Estates Prof Blog in "State Law on After-born Children Leads to Revocation of a Will."
In a recent court case, a Georgia man created a will in 1989. He later had three children out-of-wedlock, but he never updated his will to include the children.
The Georgia court decided that the will was, therefore, invalid and revoked it.
The man's estate would thus be distributed according to the state's laws of intestacy, as if the will never existed at all.
Every state treats these after-born children (who are not mentioned in wills) differently.
An estate planning attorney can advise you on creating a will that fits your unique circumstances, according to the laws of your state of residence, as well as updating your will as needed.
Reference: Wills, Trusts & Estates Prof Blog (Oct. 17, 2017) "State Law on After-born Children Leads to Revocation of a Will."
Families sometimes face a challenge because of federal law.
A federal law called the Stored Communications Act can make it difficult for families to retrieve digital information when someone passes away, according to the Wills, Trusts & Estates Prof Blog in "Court Holds Personal Representative May Provide Lawful Consent Under Stored Communications Act."
The Stored Communications Act is essentially a privacy law.
It prevents providers from giving access to some user personal data without the consent of the user.
When someone passes away, one of the many things families often want to do is gain access to the digital accounts the deceased had. These include emails, financial accounts and social media accounts.
Sometimes access is wanted, so important financial and business transactions can be completed, if necessary. Other times the families would just like to have access for their own information and to close the accounts.
The terms of services of most digital providers make it difficult to gain access.
In a recent Massachusetts court case, Yahoo cited the act as the reason it could not give access to emails sought by the personal representative of a deceased account holder's estate.
The court declared that, under the act, the personal representative could give the necessary consent to gain access to the data. However, the court did not make this mandatory. The court instead decided that it was still up to the company whether to comply with the request.
Many states are attempting to make it easier to access digital information after someone passes away.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and work with you to make your digital information available to your family when the time is right.
Reference: Wills, Trusts & Estates Prof Blog (Oct. 20, 2017) "Court Holds Personal Representative May Provide Lawful Consent Under Stored Communications Act."
Woman does it herself and saves money, but estate and charities may end up paying the bill.
A decision by a woman in Australia to use a do-it-yourself will could end up costing her estate a lot of money, according to News.com.au in "Unholy row as court decides on religious woman's will."
Sandra Marie Hatton wanted to give most of her assets to charities that carry on religious work.
Hatton did not see an estate planning attorney to help draft her will, but used a do-it-yourself will form.
Hatton filled it out and then proceeded to make many handwritten changes to it, as she changed her mind about which charities to benefit.
The will itself has been accepted into probate as valid.
The court now also has to decide which of the handwritten changes to accept as valid.
The charities who could benefit from the decisions are all eager to stake their claim and lawyers will have to be hired by Hatton's estate to help in the case.
Do-it-yourself wills, whether purchased in a kit or online, offer people a way to save some money by cutting out estate planning attorneys.
Unfortunately, as is the case with Hatton's will, things can go wrong with DIY wills.
Reference: News.com.au (Oct. 15, 2017) "Unholy row as court decides on religious woman's will."
Even though federal tax reform legislation is an uncertainty, the elderly can prepare for possible changes.
As the possibility of federal tax reform looms, people in retirement do have some options that could prepare for potential changes, according to USA Today in "Retirees: 4 ways you can start planning for possible tax law changes now."
These things include:
• One of the changes being talked about is eliminating the deduction for state and local taxes. Therefore, people who live in high tax states, might want to start considering moving to a more tax-friendly state.
• Congress has discussed increasing the standard deduction. That might make it a good time to create a donor-advised fund to take advantage of current tax law and then donate to the fund later, as necessary.
• While there is talk of eliminating the estate and gift taxes, do not plan for it. Even if they are eliminated, they can always come back later.
Reference: USA Today (Oct. 13, 2017) "Retirees: 4 ways you can start planning for possible tax law changes now."
If you think a will is just for the rich, you are mistaken.
Everyone who has any property at all needs a will, according to CNBC in "Think you're not rich enough to need a will? Think Again."
Some people believe that if they only have only a little bit of money or property, then everything they have will simply pass wherever their family decides.
However, that is not what happens.
For example, if a person has a car when he or she passes away, then someone has to decide who gets that car. A related person cannot just show up at the appropriate government office and have the title changed into his or her name.
It does not work that way.
A court must decide who will get that car.
In the absence of a will, a deceased person's property will be distributed according to the state's laws of intestate succession. Those laws determine which relations have priority to receive the estate and the court distributes everything accordingly.
Bottom line: the deceased has absolutely no say in who gets his or her property.
Instead of relying on a court to divide your property, get a will.
It does not have to be complicated.
An estate planning attorney can guide you in creating an estate plan that fits your unique circumstances including many, many assets or just a few.
Reference: CNBC (Oct. 24, 2017) "Think you're not rich enough to need a will? Think Again."
The earlier dementia is diagnosed, the better the chance of slowing its progress.
Researchers have discovered a new sign of possible upcoming dementia in a sense of smell, according to The New York Times in "Poor Sense of Smell May Signal Dementia."
Early diagnosis of dementia allows professionals to develop treatment plans that will slow dementia's progress. It also lets people who have the disease to make end of life plans, such as advanced medical directives and estate plans, before they become unable to do so.
In a study of women, subjects were asked to identify five distinct smells, including leather, fish and roses. How they performed at identifying the smells, was found to correlate with whether they later got dementia.
That does not mean that everyone with a poor sense of smell will get dementia.
What it means is that smell is a cognitive function. Therefore, when a person begins to lose the sense of smell, it indicates declining cognitive functions and the possibility of very early dementia.
How this research can be applied in the field is not certain, but could be another step in early detection.
Reference: New York Times (Oct. 3, 2017) "Poor Sense of Smell May Signal Dementia."
A woman in Spain was mistakenly ruled dead and now she finds herself in a nightmare. Yes, it can happen here, too!
There is a master government list in the U.S. that has your name and other identifying information on it. When you pass away, it will be recorded and your death will be noted on another master list.
Finding yourself prematurely declared dead by the government can be a very difficult problem to resolve. However, it is usually not as bad as what one woman is going through in Spain, according to Fox News in "Spanish woman wants to open up grave to prove she's alive."
The government maintains a list that records when you pass away, so the government and private businesses can know when you are eligible for services and when your eligibility ends.
Human error sometime causes problems with the list. As a result, people who are still alive are accidentally put on the master list of the deceased.
But rarely does it get as difficult as it is for Juana Escudero. She has been declared deceased for seven years because seven years ago someone with her exact same name and place of birth was recorded as deceased.
As a result, Escudero has not been eligible to receive government services, including going to a doctor for the last seven years. Her efforts to convince the government that she is alive have so far been fruitless.
She's asking the government to open the grave of the person they declared dead, so she can prove it is not her.
In the U.S. it is easier to fix these clerical errors. However, it still is not always easy, so it would probably be a good idea to get yourself an attorney.
Reference: Fox News (Sep. 27, 2017) "Spanish woman wants to open up grave to prove she's alive."
Sometimes it creates problems to name a close family member executor, as seen in Jerry Garcia’s estate.
A big mistake in Jerry Garcia’s estate came when third wife Debra Koons was chosen to administer the estate, according to the Wills, Trusts & Estates Prof Blog in "The Wrong Executor Can Make Family Drama Worse, As Jerry Garcia's Heirs Discovered."
Garcia passed away in 1995 after being married three times, having four children and having one stepchild.
Koons threw the first two wives out of his funeral. However, no one challenged his will, so no problems were anticipated.
The problem for Garcia's estate is that his other heirs objected to many of the decisions made by Koons. They felt that she was acting in her own interests and not in the best interests of everyone.
This led to constant family squabbles and made the estate administration more costly and time-consuming than it needed to be.
The problems should have been anticipated.
It would have been wiser to have an independent professional hired to handle the administration of the estate. That might not have been a solution to all problems, but it would have taken much of the family drama out of the situation.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and can also advise you on naming an executor.
Reference: Wills, Trusts & Estates Prof Blog (Oct. 12, 2017) "The Wrong Executor Can Make Family Drama Worse, As Jerry Garcia's Heirs Discovered."
The government has decided that the Section 2704 estate tax rules are unworkable.
The Trump administration has decided to change course on Section 2704 rules after a close look at changes by Obama, according to Forbes in "Treasury To Withdraw Hated Estate Tax Valuation Rules."
There was a lot of concern when the Obama administration announced changes to the valuation discounts for family businesses for estate tax purposes known as the Section 2704 rules.
Many estate and legacy plans would have to be completely reworked in order to comply with the complicated new rules. It was not absolutely clear how all of those plans could be reworked and how the rules would actually be enforced. This created headaches for many people.
The Treasury Department recently announced that it will soon publish an official withdrawal of the rules, since they have decided the rules are unworkable. That means planners can continue to rely on previous valuation methods, which brings a lot more certainty about how to make legacy plans for now.
This does not mean the estate tax itself has been repealed. President Trump has indicated he wants to do so, but, in the meantime, it should help those people who are affected by the estate tax.
It might be a wise move to contact your estate planning attorney to consider an update to your plan.
Reference: Forbes (Oct. 4, 2017) "Treasury To Withdraw Hated Estate Tax Valuation Rules."