Estate Planning Scenarios: The Simultaneous Death of Both Spouses

Jan 20, 2013  /  By: Mark  /  Category: Estate Planning, Probate

When you start making an estate plan, you may start thinking about some rather macabre scenarios or hypothetical situations that you never really considered before. One of these involves the simultaneous deaths of both spouses. For example, what would happen to your estate if both you and your spouse were killed in the same automobile accident?

This is not a new question, and all states have adopted laws that specifically deal with this scenario. The original simultaneous death laws originated in the 1940s and have since been adopted in various versions by every state.

Simultaneous death laws state that when both spouses die at the same time, their property is passed assuming that each spouse was the sole surviving person. This means, for example, that if both spouses die, the courts will look at each estate (the property each of the spouses owned) as if that spouse died as the sole surviving spouse.

This occurs because if the courts considered each spouse to have died right before the other, it might require spousal property to have to go through two separate probate processes, and perhaps even incur multiple estate or inheritance tax liabilities on the same property.

It’s important to realize that the simultaneous death laws of each state apply whether you die without leaving behind a last will and testament or if you have created one. However, if you create a will it is often advantageous to include within it a survival clause. The survival clause states that if spouses die within a specific length of one another, say within 21 days, the simultaneous deaths provisions will apply even if they did not die at exactly the same moment.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Everything You Generally Need to Know about Choosing an Executor

Dec 07, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Probate, Wills and Trusts

The executor of a Will handles complex tasks such as notifying creditors of the death, paying debts of the estate, and working with the probate attorney. Not to mention handling tedious administrative tasks like collecting the deceased’s mail, canceling credit cards and subscriptions, notifying benefit plan administrators of the death, and inventorying any lock boxes, safes, and other personal property.

With such varied tasks it’s very important to choose the right person as the executor of your Will. Closing your estate may take months to complete, and your executor will be legally obligated to see it through to the end, so be sure you pick someone responsible, organized, and trustworthy.

Common choices for executors are spouses, children, siblings, or close friends; still, there are limitations on who you can choose to be your executor, in that you cannot name a minor child or a convicted felon as your executor. Additionally, your state may have extra limitations, restrictions, or requirements, so be sure you know what those may be.

Finally, you should talk to the person you want to name as your executor to make sure he or she is available – and willing – to undertake the job. If they are, you should provide them with a list of where your records are stored, and how to get any other important items necessary to make it easier for them. Writing a Will and estate planning can be a stressful experience, but having someone competent to handle your estate will help ease the process.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

When Debt Collectors Come Calling After Death

Oct 18, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: asset protection, Estate Planning, Financial Planning, Probate

It isn’t uncommon for people who have recently lost a spouse or close family member to be approached by a debt collector who is attempting to collect on the deceased person’s debt. Dealing with these debt collectors at such an emotionally difficult time is never pleasant, but there are some tips you can remember that will help make the process easier.

Tip 1: You are not responsible for someone else’s debt

Some debt collectors can be unscrupulous in their attempts to collect money. Even when a collector or creditor knows that the debt left behind by a deceased person is not the responsibility of other family members, that may not prevent the collector from trying to convince those family members to pay. Debt collectors can use tactics such as trying to persuade you that it is your moral responsibility to pay for the debt or by trying to pressure you to assume it. Never give in to these tactics. If you’re being pressured by debt collector to assume a debt you should demand they stop contacting you and refer them to the estate representative. If that doesn’t work, contact your attorney.

Tip 2: Joint debts are still your responsibility

It’s very common, especially for spouses, to have joint debts, such as joint credit card accounts. In this situation any debt left behind by a deceased person is still your responsibility if you entered into it as a joint debtor. However, not all debts that married couples have our joint debts, and you should never sign an agreement creditor since you asking you to assume a debt. Instead, review the original debt documentation and refer the matter to your attorney or the estate representative.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Will Registry Misconceptions

Oct 18, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Probate, Wills and Trusts

Most people have only a general knowledge of the laws surrounding wills. Because of this, it isn’t uncommon for people to come into an estate planning attorney’s office with some potentially problematic misperceptions. One of these is that in order to make a will you must file it with a state office or will registry. This is completely false. While will registries do exist in some states, they are not a requirement for making a will. Here’s why.

Optional Registration

States that have will registries provide them as an optional service to anyone who wants to make a last will and testament. These registries allow you to store a copy of your will or information about where your will can be found. They exist to make it easier for your family and estate representative to find your will after you die. However, no state makes it a requirement for anyone to use the will registry, and the services are always optional.

Living Will Registration

Similar to will registries, some states offer living will registries. Wills and living wills are very different types of documents, but living will registries are also optional. If you decide to make a living will or other advanced directive, you are under no obligation to file it with any registry.

Private Registries

There are also companies which offer to serve as will registries and which charge people a fee for their services. Though these companies may provide a reliable service, you should speak to your estate planning lawyer about other options if you are concerned about keeping your will secure and ensuring your family can find it when it is needed.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

What You Shouldn’t Do As An Executor

Oct 17, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Estate Planning, Probate, Wills and Trusts

If you’ve been asked to serve as someone’s personal representative, also known as an executor, you’ll want to take some time to think about the position carefully before you accept. If you choose to serve, you should know that there are some actions you can take that might make you personally liable for damages, and which may even send you to jail. Here’s a brief list of what you never want to do as an executor.

1: Use estate funds for personal purposes.

As an executor, you have to act in the best interests of the estate. Just because you control estate property that doesn’t mean you can use it as you see fit. If you take money or property from the estate to use for anything other than estate purposes, you can face serious civil and even criminal liability.

2: Pay claims early.

You may feel that wrapping up the estate as quickly as possible is in everyone’s best interests, but that’s not always the case. You must allow potential creditors the legally prescribed time period to submit claims. Rushing to pay claims or pay out inheritances can come back to bite you.

3: Do it yourself.

While there’s been an explosion of “do it yourself” legal information recently, such as books, websites, or even videos, probate administration is not something the average person can handle on their own. An experienced probate attorney is necessary if you want to make sure you perform your duties as executor properly and in accordance with state and local requirements.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

3 Questions About Escheat

Oct 16, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Estate Planning, Probate, Wills and Trusts

There are a lot of odd terms in estate planning law, most of which people never really encounter in their ordinary lives. One of these terms, escheat, means the process through which the property a deceased person leaves behind becomes owned by the state. Let’s take a look at escheat and why it is not really something you have to worry about.

You can make your own inheritance choices

While in very limited circumstances your state might inherit your property, this won’t happen if you create an estate plan. You can create a will, trust, or use other property that will pass to chosen beneficiaries automatically after you die.

If you don’t choose, your state will choose

If you’re like most people and never make any kind of estate plan, your state has already planned for this possibility. All states have what are known as intestacy laws which choose who shall inherit your property if you die without creating an estate plan. Your property will typically pass to your closest remaining relative, though more distant relatives might inherit your property if your closest relatives are already dead.

There is a very small chance your state will inherit your property

In the event you die without creating an estate plan and have no relatives who survive you, your property will go to the state. This is what escheat means. However, because it is so rare, it is not a problem you have to worry about, especially if you create an estate plan.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Your Probate Estate: 3 Types of Property

Oct 15, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Probate, Wills and Trusts

When you die your property gets divided into two general categories: your probate estate and your non-probate estate. Your probate estate is all the property that will have to go before the probate court before it can be transferred to new owners. Not all of your property has to do this, and designing an estate plan which tries to keep your probate estate as small as possible is a common estate planning strategy. Let’s take a look at the three main types of property which fall into the probate estate category.

Individual Property

Anything you own as an individual, meaning you don’t own it as a joint owner with someone else, typically falls under the category of probate property. A home that you own in your name, or a personal vehicle or boat, is commonly covered under probate.

Non-Beneficiary Accounts

If you have bank accounts, retirement accounts, or insurance policies which allow you to name a beneficiary, this property does not have to go through probate. Other accounts in which you do not name a beneficiary, such as individual stocks you might own or bank accounts without beneficiary designations, are a part of your probate estate.

Non-Trust Property

Creating a living trust is a common estate planning tool, but may not be able to keep all of your property out of probate court. Anything the trust owns can bypass probate, but if you fail to transfer some of your property to the trust or you make an error during the trust funding process, the property will have to go through probate.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

A Practical Estate Planning Tip: Getting the Most out of Your Safe Deposit Box

Sep 05, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Estate Planning, Probate

Let’s say you’ve created an estate plan which includes all the important documents, such as your powers of attorney, medical directives, and last will and testament. You will naturally want to keep these documents somewhere safe, and many people choose to keep them in a bank safe deposit box. While this is acceptable, you will need to take precautions if you choose a safe deposit box as your storage place. There are several problems that can arise because of how safe deposit boxes operate. You need to be aware of these and speak to your state planning lawyer to ensure you avoid potential competition.

Locating the Box

Some married couples have joint safe deposit boxes, with each spouse capable of accessing the box whenever they choose. Even if you do have joint access, it’s important that someone else knows of the boxes existence. If, for example, you and your spouse both die simultaneously, your estate representative may not even be aware that the box exists, much less what it contains.

Using the Box

As long as your estate representative knows the box exists, he or she can typically compel a bank to allow for inspection of the contents. Otherwise, you will need to ensure that the bank will later allow your executor or personal representative to gain access to the box and withdraw the will or other estate planning items.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Probate and Joint Property – 3 Issues

Sep 04, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Estate Planning, Probate

Some people own property jointly with someone else. For example, it’s common for spouses to be joint owners of their home. While joint ownership is a useful form of property ownership, it does pose advantages and disadvantages when it comes to estate planning. Here are three issues you want to think about if you currently jointly owned property or are considering it.

Issue 1. Not all joint property is the same

There are different types of joint property ownership, including joint tenancy with the right of survivorship, tenancy in common, tenancy by the entirety, and community property. Not all of these forms are recognized in all states, and each of them has different requirements associated with it. Also, some forms of joint property can allow you to skip probate while others do not.

Issue 2: Probate avoidance

Any form of joint property that has a right of survivorship can be used to avoid probate. A right of survivorship essentially allows a joint owner to become the sole owner once the other owner dies. When this happens the remaining owner is automatically the sole owner and no probate court has to preside over that process. In joint property ownership without a right of survivorship, such as a tenancy in common, probate is typically required.

Issue 3: Subsequent ownership

Once a joint owner becomes the sole owner, that property is no longer owned as joint property. This means that the new owner will have to take additional steps if he or she wants to avoid that property having to go through probate. Many people in this situation choose to create a revocable living trust, as these are very effective at avoiding probate.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

3 Questions About Letters of Instruction

Aug 08, 2012  /  By: Geoffrey H. Garrett, Estate Planning Attorney  /  Category: Estate Planning, Probate, Wills and Trusts

If you’ve prepared your estate plan and have readied your property to more easily passed to your inheritors, you’ll probably want to create a letter of instruction as well. Letters of instruction are designed to assist your executor or personal representative as he or she begins to administer your estate. Here are some common questions about letters of instruction and why they are important.

Question 1: Do I have to have a letter of instruction?

No. No state requires you to provide your estate representative with a letter of instruction, also referred to as the letter of final instruction. Also, these letters are not legally binding, meaning any instructions you include in them will not be used by a court to direct your estate.

Question 2: What do these letters contain?

When an estate executor begins the estate settlement process, he or she has to perform a range of duties. Some of these, such as inventorying estate assets and contacting creditors, are rather mundane jobs. The letter of instruction is designed to assist the executor in the use duties, such as by listing all of your current assets, debts, and the names and addresses of financial institutions.

Question 3: How useful are letters of instruction?

Depending on how complex an estate you have, your executor may rely more on your letter of instruction than he or she does on the terms of your last will and testament. Also, because letters of instruction are not legally binding, and executor can use them as a guide instead of a requirement. It gives executors flexibility in their duties while at the same time providing them with relevant information.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.