Shark Week is fast approaching, beginning on August 9th and ending on August 16th this year. Shark Week is not canceled, contrary to what some rumors are saying, and Discovery Channel apparently has some awesome new footage for us to enjoy (while safe on our couches, of course).
Shark Week has us thinking about some of the legal “sharks” we might run into. Luckily, unlike a Great White in the ocean, the law gives you ways you can protect yourself against these not-so-nice characters, as long as you act fast. Here is an overview to protections that are in place in estate planning to keep your and your loved ones’ health and finances safe.
Protection Against a Bad Power of Attorney
In some ways, the power of attorney role in estate planning is one of the most dangerous. A bad power of attorney can be considered the “Bull Shark” of misconduct—it doesn’t get the headlines the way the Great White does, but it is responsible for the most attacks.
A power of attorney is the person in charge of someone’s finances and healthcare when the person is too incapacitated to make these decisions on his or her own behalf. The POA has a lot of power. Luckily, state and federal governments have realized the need to protect citizens—especially elderly, vulnerable people—against power of attorney misconduct.
Failure to Comply
Perhaps the most common type of power of attorney misconduct is failure to comply. When a power of attorney makes a decision or acts in a way that is not in the best interest and/or is against the wishes of the donor (the person who appointed the POA), that should be brought immediately to the attention of the court.
For example, if the POA spends the donor’s money on a new car for him- or herself, this is blatant misconduct and theft. By bringing this to the attention of an attorney or elder advocate, the POA can be revoked. The abusive POA can also face criminal charges and/or a civil lawsuit.
Coercion in Creating the POA
Another type of power of attorney abuse has to do with the formation of the POA. If a person is forced or coerced into appointing someone as power of attorney against his or her will, that can be brought to the attention of the court and revoked.
There are several ways that a POA can be abusive—colloquially, a POA has even been nicknamed a “license to steal”—but, luckily, contacting an elder advocacy organization such as the AARP or a state ombudsman can put a stop to misconduct. The state can also even bring criminal charges against the bad actor.
Bad-Faith Will Contests
A will contest in “bad faith” occurs when someone attempts to challenge or overturn a will without acting fairly and honestly. Perhaps the person knows that the will is valid, but he or she is bringing the contest as a way to pressure the beneficiaries into settling it out of court and giving him or her something to avoid the legal hassle.
In Florida, if a court finds that you are contesting a will in bad faith, the law explicitly requires the bad-faith party to pay attorney’s fees for the other side. This applies even if your claim was based on law or in fact—bad faith is bad faith.
Good-Faith Will Contests
On the flip side, contesting a will in good faith is a valid way to fight misconduct in a will through the legal system. Perhaps you believe that some part of a will is fraudulent. In Florida, you can contest a will through probate court. Usually, you must submit your challenge to the will before the probate process is over.
Early Prevention: Spotting the Warning Signs
The AARP is an advocacy organization dedicated to helping the elderly. On the organization’s website, the AARP has listed several signs of financial abuse against the elderly. One big “red flag” is when an elderly person starts to show a lack of knowledge about important financial matters. For example, the person might have been sharp and engaged before, but, now, when asked about a large withdrawal from their checking account, he or she is nonplussed. This is a sign that something might not be right.
Elderly people who are physically frail and/or isolated are at a high risk for elder abuse. Pay attention to “new friends” who pop up out of nowhere. Also, keep an eye on questionable behavior by family members, especially those who have a history of substance abuse, mental/physical ailments, financial problems, and/or lack of employment. According to the New England Journal of Medicine, these perpetrators are most likely adult children or spouses (though they can be anyone).
Keeping wary of the “sharks” in our lives and the lives of our elderly/disabled loved ones is vital. There are people who may—intentionally or negligently—try to take advantage of those in vulnerable positions. By being attentive and bringing problems to the attention of the court immediately, you can prevent abuse or misconduct.
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As any cursory glance at the news will tell you, Florida does things a little differently when compared to the other 49 states. Probate court in Florida is no exception.
One major difference is that you’re almost always going to need a lawyer. In other states, executors of a will (the people charged with managing a deceased person’s estate) can fill out the paperwork themselves and rely on the court clerk’s office to help them. This is not the case with Florida. In Florida, the courts are not staffed to help you with this particular task—you need to hire a probate attorney.
For executors, this article will serve as a guide to the FAQs of Florida probate court, but this guide cannot replace actual legal advice.
When Don’t You Need a Lawyer?
As you may have noted, we used “almost always” when describing your duty to contact an attorney as an executor. There is an exception. When you’re dealing with a very small estate, you can go through “disposition without administration.”
Disposition without administration comes into play when the person who paid for the medical bills and/or funeral of the deceased wants the deceased’s assets (of which there are few) released to them. If the person requesting disposition without administration is not the same one who paid the funeral/medical bills, there are consent requirements before such disposition can happen. The catch-22 is that you will likely need to hire a lawyer to figure out whether you can qualify for disposition without administration.
Can’t I Just Change the Title to the Property in the Will?
If property is the main asset in the estate, you might be thinking that simply changing the title to the property listed in the will is enough, if you record the will. However, title insurance underwriters in the state of Florida won’t recognize this legal maneuver as a valid way to convey title.
First, the underwriters don’t know if this change is fraudulent. The deceased person is, well, deceased, so they don’t get to affirm that the change in title is what they really wanted. Secondly, there are certain situations where property cannot pass this way—and these situations almost always involve creditors.
Can’t Find the Heir—Now What?
A “missing heir” is the term used to refer to a person who is listed in the will as the beneficiary but is now unavailable and cannot be found. Under Florida law, the executor can deposit the missing heir’s share of the proceeds into the court’s registry after selling the property.
Note that the missing heir is not the same thing as a missing owner of record. If the latter is not dead/has not been declared dead, then Florida probate code is inapplicable. The situation gets much more complicated, and it’s quite likely that a conservator will be appointed.
Let’s say that the estate didn’t qualify for disposition without administration. There is a chance that it might qualify for summary administration, which requires a lawyer but is also faster and cheaper. Florida has a definition of “homestead” that allows unlimited value. So, if the estate has a very expensive homestead property but little to nothing else, this estate can go through summary administration.
Another reason an estate could qualify for summary administration is if the deceased has been dead for over two years. In Florida, there is no deadline by which probate must be started. You could start probate fifty years after the deceased’s date of death (however, that isn’t exactly ideal).
Do I Have to Go Down to Florida to Appear?
It’s understandable, during the current pandemic, that you would not want to travel down to Florida. Luckily, your physical presence is almost always not required for probate unless there is a dispute that requires an actual hearing. Generally, probate can be done via email, “snail mail,” phone, and other digital means.
If this seems confusing, don’t worry, as your lawyer will be able to explain in layman’s terms what you need to do in order to wrap up an estate quickly and efficiently. Contact a probate attorney for further guidance, even if you believe your estate could fall into the “disposition without administration” category.
Read more about Florida probate.
For a while, the idea of a “trust” or “estate” was thought of as a tool of the wealthy who had large mansions and companies. However, estates and trusts are for everyone, and trust administration is a top that can (and likely will) come up for every family, regardless of financial status. In this article, we will give you an overview of trust administration. This is not intended to replace the advice of an attorney, as every family is different and has their own specific needs.
What is a Trust?
A trust is a tri-party fiduciary relationship. The first person is called a “trustor.” A trustor transfers the property to the second party, who is called a “trustee.” The trustee holds the property for the benefit of party #3, who is known as the “beneficiary.” The trustee will hand over the property to the beneficiary at a date predetermined by the trustor. Usually, the beneficiary gets the property after the turn a certain age or upon the death of the trustor.
What is Trust Administration?
Trust administration refers to the rights and duties of the second party—the trustee. The trustee must manage the trust according to the terms and conditions of the trust document that the grantor has written. The trustee must manage the trust for the benefit of the beneficiary. A trustee is always encouraged to work alongside an attorney in order to make the management process easier and clearer.
Who Can be the Trustee?
It is possible to name the same individual to the position of trustee and the position of executor of your estate. There are some who recommend that two different people be the trustee and executor, as a way to put checks and balances in place. But, if you name the trustee and executor as the same person, it will minimize legal expenses, as the lawyer only has to communicate with one person.
However, placing the same person in both roles requires a massive amount of trust in the individual. The individual must be responsible, as he or she is personally liable for the trust in certain situations.
Trustees are obliged to strictly abide by the trust’s terms. If the trust prohibits or mandates something, the trustee must do everything in his or her power to stick to the terms of trust.
A big taboo in trust administration is using trust assets for your own benefit. This and other trust-related wrongdoing will lead to a court holding the trustee accountable, whether the court mandates repayment or strips the trustee of their title. A trustee who commits wrongdoing can even be sued in a court of law for restitution and damages.
Can You Decline an Appointment?
Both offices have a lot of responsibility. If you are appointed to either and don’t feel that you can take on that responsibility, you are in luck, as declining is perfectly legal. If you are offered the job of executor and decline, the court will name someone else in your stead. If you decline the job of trustee, the grantor can just replace you with someone else. Trust administration can get complicated, so there is no shame in declining the position if it seems outside your wheelhouse.
Trust administration has the potential to either be very simple or very complex (like everything in law, really). Trusts and trust administration are topics about which you should contact an attorney, as opposed to going on DIY legal sites. It’s important to ensure the trust is done correctly to avoid any unintended results.
The coronavirus pandemic has hit everyone very hard, and there are few signs that it will be ending anytime soon. If you watch the news, you’ll hear about the constant economic hardships that people have endured. Small businesses have been undergoing massive amounts of strain, and applications for new businesses plummeted when the pandemic began.
…And then they stopped plummeting. America is nothing if not the land of opportunists and bootstrappers, and, as of the third week of June, there have been 87,950 new business applications. This is 33% more than last year had at this time. America is bouncing back, and people are seeing small business growth as people try to tackle the pandemic through the free market.
This article will give some tips/advice for starting a new business in volatile times. This isn’t America’s first rodeo. According to Bloomberg, small business applications spiked in 2009 after the recession, too.
Why Start Now?
You might have read the introduction in surprise, wondering why someone would ever want to start a business during a crisis like this. It’s hard enough starting one in perfectly calm conditions, let along during a pandemic that has thrown us into a recession.
However, a recession can actually benefit startups. The old saying, “Necessity is the mother of invention,” is very true. Startups that take advantage of the problems that coronavirus brings—healthcare-related, deliveries, helping people stay at home, making masks, etc.—already have a built-in demand for the product.
Economic recession also likely means that interest rates are lower, making loans more affordable. Investors can sometimes use a downturn to get more loan money for less. Additionally, there is a lot of top talent available, as people have been laid off during the recession.
The competition is also lower, as everyone is struggling. You may be able to negotiate for lower prices and better terms on new custom, and, if you’re in a good cash position yourself, you might be able to buy up other companies or new assets that have decided to cease trading.
While every business will not succeed, there are factors that put startups in a positive position during a recession such as this.
Some Successful Businesses that Began During Recessions
Need proof? Burger King, FedEx, Microsoft and General Motors all were founded during a recession, and these companies have gone on to become global powerhouses.
Burger King was founded in the fifties after the Korean War took its toll on the American economy. It wasn’t enough to send the U.S. into a Depression, but it did create a small recession. The Burger King founders sought to capitalize off a need for affordable fast food. Thus, BK was founded.
FedEx was founded as a college project by university student Fred Smith during the recession of 1969 (which lasted until 1971). Smith was able to turn FedEx into a $70-billion business. Microsoft was founded a few years later during a recession, when the American GDP was stagnant. Though there was high unemployment and rising inflation, Bill Gates took a chance that paid off heavily.
Lastly, General Motors started before the Great Depression, but it used those economic conditions to give it a major boost. The GM founder bought up smaller, struggling manufacturers in the early 1900s and used it to expand the GM empire and reach.
Best Businesses to Start
When you look at the pandemic, you will see that there is a huge need for Internet-related and delivery-related items and services. People are not able to go to restaurants, and the Internet has taken the place of shopping and schooling. Online tutoring, online sales, food and gift delivery, and similar endeavors are all example of businesses that might do well in the pandemic (but, of course, there are no guarantees in the free market).
Being in the middle of a pandemic and a recession has never stopped Americans before, and it doesn’t appear to stop them now, as the statistics indicate. Small business planning for a recession will go smoother if you hire a lawyer to help you with the necessary documents. Contact an attorney for more assistance today.
Elder law covers all of the issues that either specifically or more frequently impact people over the age of 65 (though that age is not a hard limit—those under sixty-five can take advantage of elder law). An elder law attorney deals with a wide variety of legal issues, including long-term care planning, retirement, guardianship, healthcare, Social Security, Medicaid/Medicare, and other, similar issues. Disabled people are also covered under many of the same laws as the elderly, as there is often an overlap between the two groups.
In these uncertain times, elderly people are at their most vulnerable. According to the CDC, older adults are at the “highest risk” if they contract coronavirus. The risk for several illness due to coronavirus increases as one ages. It’s important to understand how elder law can help you during these times.
Below, you’ll see an overview of what elder law entails.
Elder Law vs. Estate Planning
The purposes and goals of elder law and estate planning are different. Elder law helps an elderly person attain financial autonomy and freedom through proper financial and medical planning. This area of legal practice tries to help place the elder individual in as stable a situation as possible in the financial, medical, and legal aspects of their lives.
To be frank, the main difference between elder law and estate planning is that the latter is for use after you die, while elder law is for the living. Estate planning deals with what will happen to your assets after you die, while elder law is concerned with the here and now.
Should I Hire an Elder Law Attorney?
If you or your loved one are aging and beginning to encounter issues pertaining to Social Security, Medicare/Medicaid, long-term care, and other elder-specific issues, you might consider hiring an elder law attorney. Having essential legal documents in place will allow you to keep your autonomy to the greatest extent possible. A lawyer can ensure these documents are drawn up correctly and in a way that advantages you. The lawyer has your best interests at heart. Other parties might not.
Where Does the AARP Come In?
The AARP provides free legal counsel to many of its members, depending on where you live. For example, Washington D.C. residents have the benefit of a free hotline that helps seniors who have legal questions. These services also include fighting foreclosures, evictions, obtaining SSI, Medicaid, and VA benefits, and advocating for nursing home residents.
The AARP might also offer programs that will help you prepare power of attorney and will documents. The AARP is a valuable resource for seniors, so check in at your local headquarters to see what kind of services they offer.
Other Serious Issues with Which Elder Law Deals
A very serious area that elder law practitioners deal with is elder abuse. This includes emotional, physical, and sexual abuse, as well as neglect/abandonment, financial exploitation, and healthcare fraud. Neglect, according to the NCOA (National Council on Aging) is the most common form of elder abuse.
The NCOA also has found that one in ten elders are abused yearly, but only one in fourteen cases of elder abuse are reported to the police. It is impossible to talk about the important of elder law without mentioning that elder law practitioners will help you if you or your loved one is suffering abuse—or if you suspect abuse.
This guide is by no means the be-all, end-all of elder law, but it has hopefully helped shine a light on how elder law can help you and/or your loved one. Contact an attorney for more situation-specific questions, as no one legal issue is the same.
The impact of Coronavirus on small businesses has been devastating. While the Small Business Administration gave out loans to help small business owners make it through, many are still struggling or were unable to secure the loan before the money ran out.
There’s no doubting that small businesses are truly a cornerstone of the American economy. Businesses with less than five-hundred employees account for nearly half of the American workforce and over 43% of the U.S. GDP (Gross Domestic Product).
One of the main reasons for the struggle is the uncertainly. How long will this last? Will there be a second wave? A second CARES Act? There are a few things to note if you’re a small business looking to keep moving forward. As things open up, keep the following in mind:
If you haven’t already, make detailed contingency plans in the event of a second wave. Making plans helps people achieve goals, and writing those concrete plans down increases your chance of success. When creating a contingency plan, make sure that you look ahead—what will you do if things are worse in twenty days? Better? This forward-thinking will help in the long run. You won’t feel blindsided.
Apply for CARES Act Loans if You Haven’t Already
Currently, this is the link for more information for businesses and lenders: https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses. There is an application that you must fill out, and you will likely have to wait in line. The SBA is swamped, and lending $349 billion is as difficult as it sounds. The money goes through the banks, which then lend the loans directly to local businesses.
Be Prepared to Wait
Be prepared to wait in line. This means including, in your contingency plans, things that you should do to preserve what you can while you’re waiting for your loan. Help your employees contact the government about their loans (unemployment has been increased), and continuously check in with them. Though the idea of waiting might seem daunting, it is important that you don’t let that discourage you from getting in line for the CARES loans.
Your Customers’ Needs Have Changed
People are soon going to be able to leave the house. Your business needs to change with customers’ changing needs. Comply with the current regulations, whether that means increasing your drive-through or takeout or taking other, similar measures. Do what you can, and reach out to your customers to see how you can keep your connection to them going.
Consider Other Sources of Relief
Organizations and companies like Verizon, Amazon, Facebook, and the James Beard Foundation are all examples of the private sector stepping up. These relief programs all have their own specifics, but some of them may be able to help you. Above all, keep abreast of the latest developments in the news regarding relief programs, whether privately- or publicly-funded. You don’t want to be the last to know.
Business Succession Plan
Lastly, one thing to think about is making sure you have an iron-clad business succession plan in place if something happens to you. We’re not out of the woods yet. Make sure you have a written estate plan that details what you want to happen to your business if you die. Contact an estate planning attorney to make sure it is done correctly.
Everyone is struggling during the Coronavirus, so you are not alone. The constant uncertainty about the virus and the disagreements on how to handle it can be overwhelming. Set out to accomplish one small thing per day. Overloading yourself will only make the feeling of being overwhelmed worse. Hopefully, things will get back to normal soon.
Father’s Day is coming up in a few weeks, and we all have different things that we love about our dads. Dads might be the protectors of the family, but they might need protection themselves, as they get older. Helping your father with his estate plan is a long-lasting gift that will give him (and you) peace of mind. Here are some ways that kids can help their parents by setting up an estate planning meeting with an attorney.
As people get older, their health tends to become a little more precarious. Even someone in great shape one day can have a change the next. When it comes to healthcare, there are some major tools in the estate planning toolkit. Namely, you can set up a healthcare directive.
A healthcare directive is a document that lays out your father’s health wishes, whether these include a DNR order, special diet instructions (such as religious restrictions), or other important beliefs. If your father is too incapacitated to verbalize these decisions to the doctors and nurses taking care of him, the healthcare directive will do it for him.
A power of attorney is a trusted individual that your dad picks to handle his financial, legal, and/or medical affairs in the even that he isn’t able to make those decisions for himself. There can be more than one power of attorney, and each power of attorney can be limited in scope.
A general scope POA handles all of the decisions that your dad needs made. A special POA is restricted to just a certain decision-making field, whether it’s healthcare decisions or finances. Your father will pick the power of attorney, and the idea is to pick someone who is stable and level-headed. A power of attorney isn’t forever—it isn’t permanently taking power away. It comes into effect when in the event that your dad needs help when he’s older.
Updating Wills and Estate Plans
The rule of thumb states that you should update and/or review your will and estate plan every three to five years. However, if you experience a major life event, such as new people in the family, divorces, health scares, etc., you should update it earlier to reflect those changes.
Updating an estate plan can take a long time, especially if there are a lot of documents in the plan. It can take even longer to create a new estate plan from scratch, if your father doesn’t have one in place. Though it takes a lot of time and effort, your dad is worth it.
Setting Up a Trust
If your father knows he wants to transfer a specific piece of property/money to someone and has been talking about it forever (but hasn’t done it yet), helping him set up a trust is a great idea. A trust is a three-party relationship. Your father is the donor. He transfers title to the property to the trustee. The trustee then transfers the property to the beneficiary, which is the person that your father intended to get the property all along. The trustee keeps the property in his possession until instructed to transfer it—usually, the transfer goes through upon death.
If your dad owns his own business, making sure that there are business succession plans in the works will keep his company safe after he retires or passes on. Perhaps he wants his company liquidated and the proceeds distributed, or maybe he wants his company to merge with another. Putting in place a concrete plan for what will happen to the business will be hugely beneficial to your father’s financial stability.
Setting up your father’s power of attorney is just one of many ways that the law can help him as he gets older. Estate planning is a way to ensure long-term safety and financial stability of your dad.
2020 has certainly sent us all for a loop. We’ve had months to reflect on our lives and the joys (or lack thereof) of working from home. It’s been a hard few months, but it appears to be coming to a close. Now that quarantine is over and we’re allowed to leave the house, it’s time to check off items on the to-do list that you may have been putting off. Namely, it’s time to review and update your estate plan.
This article will discuss things to think about when checking over and updating your estate plan.
I. Updating Your Will
There are several ways you can go about updating your will, and this section will touch on just a few of them, including: codicils, new wills, and personal property memorandums.
Codicil v. New Will
If you’ve never heard the term “codicil” before, you’re not alone. It’s a legal term, used to describe a minor change to your will. The codicil is a secondary document that you attach to your original will. On the codicil document, you can include changes to existing items in your will. An addendum, by contrast, is something that adds a new element to your will. It is also a secondary document.
However, if you want to make big changes to your will, you might want to simply revoke your old will and make a new one. For example, a change of beneficiary is a big deal, so revoking your old will and creating a new will might be the safest choice. Be sure to follow the letter of the law down to a T, or else your old, inaccurate will might be honored.
Personal Property Memorandum
A personal property memorandum (PPM) is another type of update to your will. A PPM is a separate secondary document, the same as a codicil. You attach it to your will. In the PPM, you list an accounting of all of your personal property. A PPM doesn’t usually have to be signed or witnessed, but you have to refer to it in your will in order for a court to find it valid. Trusts are often a better way to transfer personal property.
Don’t DIY It
If this sounds confusing, that isn’t surprising. A major mistake that people make is thinking they can go onto a legal “DIY” website and write their own will or make changes. It is best to have an attorney help you. The law is tricky and the devil is in the details.
II. Updating Your Estate Plan
The Rule of Thumb
The rule of thumb for updating an estate plan and/or will is to do so every three to five years. The thinking is that, in that time frame, there has likely been at least one or two life changes that might require you to take another look. However, there are other times you should update outside of that “3 to 5” framework.
Other Times to Update
If you go through a major life change or add new members to the family, you should update your will and estate plan to reflect those. These changes can include divorce, remarriage, new babies and other new family members, or changes in health circumstances. You never know what life will throw at you, so it’s best not to stick to the “3 to 5” rule too stringently.
What to Update First
These are just suggestions, but it might be wise to update documents that have to do with your kids or health first. Think about what you prioritize and work backwards from there. If you have a complicated estate plan with a lot of documents, updating/reviewing may be a multi-day undertaking.
Though the rule of thumb says to update your will and estate plan every three to five years, that’s not mandatory. If you’re undergoing a major life change, you should update. Above all, make sure to contact an estate planning attorney to ensure that the process is carried out correctly.
Probate law is its own field. There are attorneys who practice solely in this complex, multi-faceted field of law, and they know the ins and outs. These estate planning attorneys are the ones you should contact to set up an estate plan, as opposed to joining online sites like LegalZoom to do it yourself.
In this article, we will walk you through a day in the life of a probated estate. For each “step,” there are many sub-topics and sub-steps, as well as ways to avoid probate. This overview should not replace setting up an appointment with an estate planning attorney.
What is Probate?
If you make a will, probate is the way you can authenticate it. Probate court is the legal body that supervises the distribution of your estate and payoff of creditors. If you die intestate (without a will), your estate still goes through probate, but the court will determine all of the distribution factors. Here is an example of step-by-step probate process.
Step One: Authentication
Whoever has your will must file it with the state after your death as soon as “reasonably possible.” What is “reasonable” or not will be determined by the court. The person with the will also will file a petition for probate, which is a request to kick off the process.
Authentication means ensuring that the will is properly-made, accurate, and not forged. Each state has its own authentication mechanisms and laws, and the possessor of your will must be sure to follow the court’s rules on authenticating before probate can really get going.
Step Two: Appointments
After authentication, the court will appoint someone to administrate your will. This person is known as an executor. The executor is in charge of conducting transactions on behalf of your estate (including paying off creditors and distributing assets).
Step Two-and-a-Half: Bond
Sometimes, an executor will have to “post bond” before he or she can distribute the estate. Bond acts as an insurance policy in case the executor leaves or commits grievous errors in administrating the estate. Not all states require bond for executors.
Step Three: Find the Assets
Identifying and listing the estate’s assets is a tedious process. The will may include many of them, but there might be “hidden assets.” The executor can find “hidden assets” through reviewing insurance policies or tax returns.
Step Four: D.O.D. Values
Date-of-death values are the appraisals of the assets—basically, how much an asset is worth on the day the person died. The court can appoint someone to make the appraisals, but the executor can also do the appraisal appointments him- or herself.
Step Five: Creditors
Next, creditors, which are the people to whom you owe debts, must be identified and notified of your death. In many states, an executor must post an ad in the paper to let creditors who are unidentified know that you have died. Usually, once they know you’re dead, creditors will swoop in to try to collect payment.
Step Six: Pay Debts
And once all the creditors have lined up, it is time for the executor to take the values accumulated in your estate, add them up, and start using the value to pay off debts. Creditors come first in probate, not your family.
Step Seven: Tax Returns
Next, the executor must file tax returns for your estate for the year up until your death. The IRS is considered a creditor, and sometimes, it is necessary to liquidate assets to pay off unpaid taxes.
Step Eight: Final Distribution
Your family gets what is left, if there is anything after paying off creditors. The executor will look to your will for guidance on the distribution.
If this sounds terrible, that’s because it can be. There are ways to legally minimize your tax burden and avoid probate court, and an attorney can help you do that. Probate court is a lengthy, difficult process, but it does not have to be that way.
Well, we knew this article would come eventually. Everyone is stuck in the house right now, whether they want to be or not, as Coronavirus rages through the country. Some people are quarantined by themselves, while others are stuck inside with spouses. Being stuck inside with your spouse leads to boredom, and boredom leads to fights. Arguing is just one way to pass the time.
But what happens when these arguments are stuff that your relationship cannot surmount? Old quarrels can lead to divorce and legal separation. If quarantine has driven you to this point, you should probably read this article. Here is some need-to-know info about divorce and its impact on your estate plan.
Divorce Vs. Legal Separation
Firstly, there is a difference between divorce and legal separation. Divorce ends the marriage contract between you and your (ex-) spouse. Legally, you two are no longer married. Legal separation, on the other hand, does not end the marriage contract. In a legal separation, the couple is still married, but they are living apart. A legal separation is a court order that will mandate the rights/duties of the couple during this time period. If you want to be done done, get a divorce.
And, as divorce is the end of the marriage, this article will discuss divorce’s, not legal separation’s, impact on your estate plan.
Divorce’s Impact on Your Estate Plan
Power of Attorney
Do you want someone with whom you have been arguing for two straight months (or longer) to be your power of attorney? The power of attorney is allowed to make major healthcare and/or financial decisions for you in the event of your incapacitation. This position can have a huge impact on your life when you are in your most vulnerable state. Switch out the power of attorney to someone you haven’t divorced. This can include a family member or close friend.
Some states have a strikeout provision in a will that essentially ignores your ex-spouse in the event of a divorce. The provisions about your ex are “ignored” by a court. However, not all states have this, and you shouldn’t rely on it anyone. If your ex is a beneficiary of your estate, take them out. You want to make sure your will (or a trust) is updated to reflect your current status.
Your 401(k), pension, or IRA are not passed down as part of your will. Instead, they go to a beneficiary in the event that you die and are unable to benefit. The same goes for life insurance. If your ex-spouse is listed as the beneficiary on these types of accounts, you should take them off. It’s likely that you do not want your ex getting a windfall of cash in the event of your death, so calling the financial/insurance institutions in charge of these is a must-do.
What About the Kids? Alimony?
Custody and alimony are part of family law, and an estate planning attorney who does not practice family law will likely refer you to another attorney. Custody determinations and alimony determinations are tricky, and they are handled separately than the other, above-mentioned aspects of an estate plan.
According to Bloomberg News, China has already seen a spike in divorce filings. The pandemic is pretty much over there, so China’s spike in divorces serves as a foreboding warning to the rest of the world. ABC News’s interview with Howard Markman (the Center for Marital and Family Studies’ co-director) came to the same conclusion: a surge in divorce is to be expected. Contact an attorney to ensure that there is as little negative impact on your estate plan as possible.