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Preparing to Probate an Estate? Get the Debts Organized

Courtesy of Armstrong, Fisch, & Tutoli Attorneys at Law · July 5, 2010 ·

If someone close to you passes away, you need time to cope with the emotional stress. However, there are some practical decisions that you cannot ignore. These relate to the bills and other debts of the estate.

If you have been named Personal Representative then it is best to contact a good attorney to help you with the probate process and other legal formalities. However, here’s some basic information about organizing the debts of the estate as you prepare for the probate process.

One of the first things you’ll want to do before Probate begins is to make a list of liabilities of the person who has passed away. This list should include:

Mortgages
Lines of credit
Condominium fees
Property taxes
Federal and state income taxes
Car and boat loans
Personal loans, including student loans
Storage fees
Loans against life insurance policies
Loans against retirement accounts
Credit card bills
Utility bills
Cell phone bills

After you have made a list of all the liabilities then divide them into expenses that will continue during the probate process and expenses that can be paid off.

Debts that you can clear fully during the Probate process are known as final bills. Administrative expenses like mortgages, condominium fees, property taxes, utility bills and storage fees, will have to be paid even when the Probate process is continuing.

Final bills include personal loans, income taxes, loans against life insurance and retirement accounts, cell phone bills, and credit card bills.

The Personal Representative has to deal with all these bills and wait 6-8 weeks before having access to the decedent’s funds, and for many of these, await Court approval to pay –the beneficiaries do not have to pay any of them.

Understanding the Duties of Your Probate Judge

Courtesy of Armstrong, Fisch, & Tutoli Attorneys at Law · July 2, 2010 ·

Every probate case has a probate judge. Depending up the speed of probate, you may never even meet this judge, but it’s important to understand his or her duties in the tricky probate process.

How intense the obligations of your probate judge are will depend upon the size of the probated estate, whether any aspect of the estate is contested, and if the deceased had a Last Will and Testament.

If there is a Will and all members of the family agree on probate issues then the judge’s duties may simply include signing basic probate orders. These orders will name the estate executor, who is likely already named in the Will. The probate orders will also allow probate to open, property to be appraised and sold or passed to beneficiaries and for the estate to close when all has settled.

When estate challenges occur, then a Judge will be more involved and actual court time may be required. In this case, the judge will listen to both sides and have a final say on the challenged issue. The probate judge may even be called to examine the performance of the estate executor.

So what if there is no Will? This can present a more complicated situation. In this case the biggest question is if the family members can agree who to appoint as administrator of the estate. If so, judicial probate duties may again be simply signing probate orders.

If, however, there is no Will and family members do not see eye-to-eye on estate matters, the probate judge will likely be very involved in the process. The judge will choose an estate administrator, likely a stranger, but will still have to keep a constant watch over probate happenings. This may require quite a bit of time in court, and this is the number one reason you should make a Last Will and Testament. Having the proper estate documents in place can make probate easier for every participant in the process, and may well save your loved ones time and money.

What is Estate Planning?

Courtesy of Armstrong, Fisch, & Tutoli Attorneys at Law · June 30, 2010 ·

If you have properties or cash that you wish to be handed over to one of your loved ones after your death with the least amount of legal hassle, you need to understand estate planning. Through estate planning, you can also take steps to ensure that your decisions with regard to your health care are fulfilled, especially when you are not in a state to implement them. This is not all. Apart from planning for your property and health-related wishes, you can also do the following through estate planning:

Reduce the tax liability on your estate to the minimum
Name guardians for your minor children, should something happen to you

Is Estate Planning For You?

Do you think that estate planning is only meant for people who have loads of cash and property? Well, it’s time to think twice and clarify your understanding of the concept of estate planning. You should consider estate planning if you own any of the following:

Bank accounts
Real estate
Stocks and other securities
Personal property, such as automobiles, jewelry, and artwork
Life insurance policies /IRAs
Minor children and/or beloved pets

What Do You Need For Estate Planning?

Usually people tend to put off estate planning and concentrate on more immediate matters at hand. However, this is not the right approach because you never know what life might have planned for you. A person can start estate planning when he or she is aged 18 years or more and is of sound mind. To properly plan for your estate, you should also be free of emotional stress.

While making an estate plan, you will need to put down your decisions in the form of legal documents such as a will, a trust and Powers of Attorney. The best way to go about this is to consult an estate planning attorney.

What Can’t A Revocable Living Trust Do?

Courtesy of Armstrong, Fisch, & Tutoli Attorneys at Law · June 28, 2010 ·

A Revocable Living Trust is a valuable estate planning tool that’s designed to allow you to avoid probate, but there are some things that you may be surprised to learn about this popular type of trust:

A Revocable Living Trust will not help you protect your assets from creditors. This is true during your lifetime and after your death. Because the trust is revocable (meaning you keep control and can take back the property at any time), the law says that your creditors can get at the trust assets while you’re alive. After you pass away, assuming all of your property is in your trust, then the property will be distributed through the trust and there will be no need for probate. If you’re concerned about creditors, this may not be such a good thing. This makes no sense..a trust can file a notice to creditors and get the same 4 month period. If it does nothing, it still has protection, but the claims period is 4 years instead of 4 months. The concept here is old law that’s been changed for at least 10 yearsThe probate process offers at least a little bit of protection from creditors. When you probate a Will, creditors have a deadline for filing their claims against the estate. If a creditor misses a deadline, they lose the right to collect on the debt forever.
A Revocable Living Trust does not do away with the need for a Will. This may seem strange, since the whole point of the trust is to avoid probate, but if you have a Revocable Living Trust, you need a special kind of Will called a Pour-Over Will. A Pour-Over Will serves as a catch-all for any property that may have been left out of the trust before your death, and places it in the trust when you die. This way, you make sure that all of your property ends up where you want it to.
A Revocable Living Trust will not help you avoid nursing home costs. Because the trust is revocable and you can end it at any time, the government counts all of the trust assets as your personal assets for purposes of determining whether you’re eligible for Medicaid.

A qualified estate planning attorney can help you determine whether a Revocable Living Trust is right for you, and can help you put together a comprehensive estate plan that will help you address all of the concerns you might have.

How To Update Your Estate Plan

Courtesy of Armstrong, Fisch, & Tutoli Attorneys at Law · June 25, 2010 ·

Regular maintenance of your estate plan includes updating your Will, Trust and other legal documents that name beneficiaries. You should review your estate plan at least once a year and when major life events occur such as marriage, divorce or a new child.
Changes to these documents need to be executed the same way as the original version.

Do you have a 401K, Pension Plan, Life Insurance Policy, or other financial account? You must maintain and update the beneficiary forms for these assets regularly to reflect any beneficiary changes. You cannot rely on your Will or Trust to transfer these assets to your intended beneficiaries upon death.

Changing your Will or Living Trust is a more complicated process than changing a Pension Plan or Life Insurance Policy beneficiary, and how you change it will depend upon how the original document is executed. To change these documents, talk to your estate planning attorney.

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