Wow, technology is tough

Greetings, loyal readers.  Once again, I have not been able to post, simply because google has changed their platform and it has taken me until now to figure out how to get back into this blog page to post new entries.  This is a test, and with luck, I will be back in and posting articles far more interesting than this one.  Thanks for your patience.  And here we go...

Mea Culpa

To all of you loyal readers of this dormant blog-- it had been my intention to post regularly, but I I was thwarted by circumstances beyond my control, so I have been less attentive than I was previously. I am hoping to revive this and again post information of interest to my clients.

I'm a beneficiary under an estate. When will I receive my share?

When I probate an estate of a dearly departed, one of the first questions I am often asked is "When will I get my inheritance?"  Unfortunately, distributing the assets to the beneficiaries can take several months, and is the last thing the Personal Representative (PR) is likely to do. 

In the context of probating an estate, before the assets can be distributed to the beneficiaries, the PR has several tasks, including: 

1.      Due to the adoption in Massachusetts of the Uniform Probate Code, there are now two methods by which the appointment may occur.  These are known as “Formal” and “Informal” probate.  Generally, informal probate is appropriate if the decedent had fewer assets or assets consolidated into just a few places, and no real estate. This process is fairly streamlined.  The PR is granted the authority to manage and dispose of assets without any further formal court proceeding.  Formal Probate is generally necessary if the estate is of a higher value, or there are numerous separate assets, or if the estate includes real estate.  Formal Probate resembles the general probate laws under the old system.   Both forms of probate require submission of documents to the Probate Court, the payment of filing fees, and a certain amount of time before appointment is issued.

2.      Once the PR is appointed, the PR must gather information and locate paperwork reflecting of all of decedent’s assets, as well as any estate planning documents.  The PR must value each asset at its date of death value.  This is important for the beneficiaries, who receive a step-up in the tax basis of any asset when sold.  It is also important for purposes of determining estate tax liability, if any. 

3.      Next, the PR must notify the decedent’s creditors, primarily by publication, and then pay the decedent's final bills and ongoing administration expenses.  The PR must then file applicable tax returns and pay applicable taxes.  These may include a final income tax return, an estate income tax return, and estate tax returns if applicable, and pay any taxes due.  The PR is personally responsible for all unpaid bills, administrative expenses and/or taxes due, so the PR wants to be absolutely certain that all liabilities have been accounted for.

4.      Finally, after all of the above is accomplished, the PR may distribute the remainder to the beneficiaries.  The timing of distribution will depend on many factors, including the types of assets the decedent owned, the value of those assets, a determination of taxes and expenses due, how many beneficiaries are involved, whether the beneficiaries get along, and the skills and diligence of the PR is administering the estate. A simple estate or trust may be settled within a few months, while a complicated estate or trust may take one or more years to settle.

The above explanation addresses the steps to be taken in the context of filing a will for probate due to the Decedent’s ownership of probate assets. Probate assets consist of assets owned by the decedent, outright in individual name. Non-probate assets consist of (a) property held jointly with a right of survivorship, (b) assets for which a beneficiary is named, such as retirement funds or life insurance, and (c) assets held in trust.  While the concept of “avoiding probate” is somewhat overstated, assets held in trust are not subject to the probate process, are likely to be organized in advance, and areup to date on payment of liabilities.  For this reason, the creation and funding of a Revocable (Living) Trust may save a great deal of time at the death of the decedent.

I am available for more information or to work with clients to establish an efficient estate plan.

What do I Tell My Heirs?

When a client completes an estate plan, I am often asked whether they should give a copy of the documents to their children, or otherwise share the content.  Unless there is close relationship or unusual circumstances, I generally advise the client not to do so.  I do recommend that they give a copy of the Durable Power of Attorney and Health Care Proxy to both the primary and the alternate appointees, because those are documents that might have to be accessed quickly in the case of sudden illness or catastrophe. But otherwise,  I encourage clients to keep the contents of the other documents to themselves.  Even if assets are distributed equally among children, one may be appointed in a fiduciary role, which may insult another child.  One child may feel that he or she is entitled to more than their equal share.  One may have special needs that warrant giving such child a larger share of the estate.  There may be an asset (such as a vacation home) which some children want but others don’t.  Any or all of these, and many other circumstances, may create ill will among the children that the creator of the plan would rather avoid. There are myriad circumstances that warrant keeping the information private until death, so that the children have no opportunity to influence a parent to make changes during life time.  It is best to make your own assessment, and you may determine that keeping the information to yourself is the best course of action.

More on Digital Estate Planning

Last February I posted an entry about how to manage on-line accounts and social media sites after death.  The New York Times has caught up to me with this recent article:

http://www.nytimes.com/2014/07/03/technology/personaltech/how-to-digitally-avoid-taking-it-to-the-grave.html?emc=edit_tnt_20140702&nlid=10789246&tntemail0=y&_r=1

Worth reading.

Good Advice for College Graduates

This  isn't really within my usual range of topics, but as I watch both of my children graduate this spring, one from high school and one from college, I found this article of interest.
http://www.bostonglobe.com/business/2014/05/31/post-graduation-course-budgeting/wXMbYYRJmGPEWTfkxQ2wLM/story.html

It's Time To Have That Talk

As parents age, many families still have difficulty discussing end of life care.  Adult children don't like to think of their parents as mortal, and if they refuse to have the discussion, maybe mom or dad will never die.   Unfortunately, this is not true.  Perhaps the adult children feel that such a discussion is unnecessary.  Perhaps they are just too busy to find the time.  But many adult children become caregivers for their elderly parents, either physically, by having mom or dad move in with them, or administratively, by ensuring that mom and dad get the needed care elsewhere, such as in assisted living, or home with a caregiver.  It is very important for adult children to sit down with mom and dad and discuss a couple of things.  One is end-of-life care in the event of a terminal illness-- what medical interventions would they want, and not want, as they see the end of their life?  For this, a Health Care Proxy is an invaluable tool on which the adult children can rely for guidance, but it is no substitute for the conversation.  The other major topic is burial and funeral wishes.  Some wish to be buried in a plot, others wish to be cremated.  Some would like a funeral or memorial service, others do not.  Some would like visiting hours or shiva, others would prefer to skip those things.  By having the discussion with elderly parents ahead of time, when mom or dad passes away, the children will not have to guess what to do, especially at such an emotional time.  Most funeral homes offer advance arrangements, such as identifying a burial plot and discussing the type of services that will be needed.  This is difficult stuff, and losing a parent might be one of the greatest emotional challenges an adult child will ever face, but it is a gift you can give both to your parents and to yourself if you are armed with this information in advance.