Losing a loved one is a sad and challenging event. In the aftermath of a loved one’s passing, it oftentimes is necessary to undertake what is known as the probate process in order to deal with that person’s estate. With this in mind, there are some essential elements associated with the probate process that are crucial to understand.
The Probate Process: Addressing Assets
On the surface, the probate process can seem complicated. In fact, when distilled to its essence, the probate process addresses a number of basic tasks in the aftermath of a person’s death. These include:
One of the primary tasks associated with the probate process is transferring the ownership of assets from the person who has passed away to his or her heirs or beneficiaries. This occurs in one of two different ways.
In some cases, a person dies with a last will and testament. The will governs how the property is to be distributed among heirs or beneficiaries.
In other instances, a person does not have a last will and testament when he or she dies. In those situations, the laws of the commonwealth of Pennsylvania govern the manner in which the assets of the deceased individual are distributed among the heirs or beneficiaries.
The Probate Process: Addressing Debts
The probate process is also designed to address the debts accumulated by the individual who has died. These debts oftentimes include those associated with that person’s law illness and death itself.
Valid debts must be paid first. Only after the debts are paid, including taxes, can a determination be made as to what assets are available to be distributed to the heirs of beneficiaries.
Validity of the Will
Another element in some probate proceedings is validating the will or determining whether the will meets the requirements of the laws of the commonwealth of Pennsylvania. If the will is deemed not to be valid, the laws of Pennsylvania will then govern how the assets are distributed.
Retaining a Pennsylvania Probate Lawyer
When facing the prospect of the probate process, retaining an experienced attorney is a wise course of action to take. A Pennsylvania probate lawyer will schedule an initial consultation at no cost to the prospective client.
The term revocable living trust typically refers to a trust that is created during the lifetime of a particular individual, according to the American Bar Association. At its essence, a revocable living trust is based on a legal instrument through which certain assets are transferred to the ownership of the trust itself.
A trustee is designated within the trust instrument itself. The trustee is the individual designated to manage the affairs of the trust on behalf of the beneficiary or beneficiaries. The trust instrument also identifies that individual or those individuals who are the beneficiaries of the trust. As the term suggests, a beneficiary is an individual who benefits from the trust. The creator of the trust can be a beneficiary of the trust. Successor beneficiaries can be designated who enjoy the benefits of the trust after the initial beneficiary dies.
A key element of a revocable living trust is that the creator is able to make changes to it during the course of his or her lifetime. The creator can change any of the specific terms included within the instrument. Indeed, if the creator so desires, he or she can eliminate the revocable living trust.
Probate and a Revocable Living Trust
One of the primary reasons for the creation of a revocable living trust is that it permits the probate process to be bypassed upon the death of the creator of the trust or the death of a trust beneficiary. Bypassing probate saves time and money in the final analysis.
Taxes and a Revocable Living Trust
What a revocable living trust does not do is permit tax avoidance. Although probate may be avoided with this type off trust, taxes must be paid as owed.
Revocable Living Trust Versus Irrevocable Living Trust
As the monikers associated with these two types of trusts indicate, revocability is the key distinction between these two types of trusts. The creator can terminate a revocable derivation. On the other hand, once a creator appropriately executes an irrevocable trust instrument, that trust generally cannot be altered or terminated.
A skilled, experienced Pennsylvania estate attorney can assist a person in deciding on whether or not a revocable living trust is a suitable estate planning structure. Typically, there is no charge for an initial consultation to discuss a revocable living trust.
A key decision when preparing a will is the designation of an executor. The executor is the person you select to oversee the provisions of your will after you pass. This is the person designated to make sure the directives you place in a will are carried out. Because of the importance of this position, there are a number of factors you must consider when selecting an executor for your will.
A Person You Trust
A fundamental consideration is selecting someone you trust to serve in this capacity. You need to select a person that you are confident will carry out your wishes and not act in a manner inconsistent with them.
Open Discussion with a Possible Executor
You must be up front and discuss your desire to select a particular person as your executor. A good number of people fail to take this step. By not engaging in open discussion, a person may not know of your decision to appoint him or her to serve in this capacity. This type of obligation is not something you want to surprise someone with after you die.
Review Prospect’s Background
Ultimately, whoever you nominate in a will to be your executor must be approved by the court. The court does give significant deference to the individual nominated in a will. However, there can be instances in which a court may not approve your nominee. For example, if you select someone that has a rather significant criminal history involving fraud, deceit or theft, a court may be highly reluctant to approve that individual to serve as your estate’s executor.
Family Member Versus Professional
A common strategy is to appoint a close family member to serve as the executor of an estate. That certainly is one of your options – but it is not the only course you can take.
An attorney can be designated as your executor. Designated a legal professional to serve in this capacity can be a wise course if an estate is particularly complex. Legal assistance will be needed anyway; thus, designated an attorney as the executor makes sense in such a situation.
If for some reason the person you designate as executor is not able to serve in this role, you need to designate a backup in your will. By designating a successor executor, you place yourself in the best position to ensure your interests will be protected after you pass away.
Estate planning is crucial. One estate planning vehicle worth considering is a revocable living trust. The first step in the process of determining whether establishing a revocable living trust is the proper course is understanding the essential elements of this type of trust.
Three Primary Reasons for Establishing a Revocable Living Trust
The reasons a person may need a revocable living trust are unique to his or her situation. However, there are three primary, common reasons why an individual may desire to establish a revocable living trust.
The first primary reason to establish a revocable living trust is to provide for loved ones but to protect them from their own thoughtless acts when it comes to finances. The reality is that oftentimes when an individual obtains money through the estate process, those funds are spent quickly and even irresponsible. A revocable living trust lessens the likelihood that this reckless use of funds occurs.
The second primary reason to establish a revocable living trust is avoiding the probate process. The probate process can be time consuming and expensive. By eliminating the probate process, the beneficiaries of the trust save time and money.
The final primary reason to establish a revocable living trust is to lessen tax obligations. Probating an estate is not only expensive and time consuming in and of itself, it also oftentimes results in a sizable tax liability.
How to Fund a Revocable Living Trust
There are a variety of ways in which a revocable living trust can be funded. Financial accounts of all types can be included in a trust. These include bank account and investment accounts.
Real estate can be included in a revocable living trust. This can include residential as well as commercial property. An estate lawyer is experienced in assisting a person in identifying what property can and should be included in a revocable living trust.
Retaining a Lawyer for a Revocable Living Trust
There are estate attorneys that focus on creating revocable living trusts. A qualified attorney can schedule an initial consultation with a prospective client to discuss that individual’s estate planning goals and objectives, including whether establishing a revocable trust is the proper course to take. An estate lawyer does not charge a fee for an initial consultation.
If you are like many individuals, you’ve given thought to the need for comprehensive estate planning, but you’ve done nothing about it. You’ve talked about comprehensive estate planning, but haven’t spoken with an estate attorney. There are five key facts about comprehensive estate planning to bear in mind. Considering these facts may motivate you to schedule a prompt appointment with an experienced estate lawyer.
Comprehensive Estate Planning is Not Just for Wealthy Individuals
A common misconception is that comprehensive estate planning is only for wealthy, well-healed folks. In reality, nearly everyone benefits from comprehensive estate planning. The starting point is scheduling a consultation with an estate lawyer. There is no charge for an initial consult regarding the need for an estate plan.
Absent Comprehensive Estate Planning, the State Runs the Show
You must keep in mind that if you do not estate plan, the state runs the show when you pass away. Without an estate plan, the laws of the commonwealth of Pennsylvania dictate what happens to your property when you die. Your wishes, whatever they may be, become complete irrelevant.
Proper Comprehensive Estate Planning Can Protect Children Financially
If you have minor children, or if you have adult children who may not be the best money managers, estate planning is a must. Through a properly crafted estate plan, you ensure that your minor children are taken care of after you pass. A solid estate plan ensures that your adult children are taken care of but that they do not waste money or assets in a frivolous manner.
Comprehensive Estate Planning is Crucial for Non-Traditional Relationships
If you are in a non-traditional relationship, you must develop an estate plan. For example, if you live with your significant other, but are not married, you must have an estate plan in place. Once again, the absence of an estate plan in this type of situation results in the laws of the commonwealth of Pennsylvania determining where your property goes after death. Your significant other can be effectively locked out of receiving your property if you die without a suitable estate plan in place.
It’s Never Too Early to Start Estate Planning
You are never too young and it is never too early to begin comprehensive estate planning. Make an appointment with a qualified estate attorney today to schedule a no-cost initial consultation to analyze you specific needs, goals and objectives.
There is a long overused cliché: The only thing certain and life is death and taxes. When it comes to death and dying, there are some interesting estate and probate facts worth pondering.
The Origin of “Last Will and Testament”
One of the more interesting estate and probate facts is the origin of the term “last will and testament.” Historically, will was utilized to distribute real estate when a person died. Testament was the term associated with distributing personal property after death.
Estate and Probate Facts: Longest Will Probated
The longest will ever probated by a court was in the United Kingdom. The estate itself was rather small, having a value of about $100,000. The will ran 1,066 pages and almost 96,000 words.
Estate and Probate Facts: Shortest Wills in Modern Times
There are two wills tied for the shortest in modern times, one written in India, the other in Germany. One will read: “All to wife.” The other will read: “All to son.”
The Actor and the Skull
An actor named Del Close includes a provision in his will that donated his skull to Chicago’s Goodman Theatre. His intention was to play Yorick in the Shakespeare play Hamlet after his death. (Yorick appears only as a skull in the iconic play.) In the end, no one would agree to remove the head from the dead actor’s body and the bequest remained unfulfilled.
The Oldest Will in History
The oldest known will in history dates back to 2548 B.C. in Egypt. A man named Uah left all of his property to his wife Teta.
Living Wills – Something Relatively New
Although wills have been around for centuries, living wills are of fairly recent origin. The living will was first permitted in the United States in the state of California in 1976.
Estate and Probate Facts: Howard Hughes
One of the wealthiest – and arguably most unusual – Americans in recent history died without a will. The lack of a will caused considerable chaos in the aftermath of the eccentric billionaire’s passing.
Retain an Estate Attorney
Perhaps the most important estate and probate fact is the need to retain a qualified, experienced estate and probate attorney. Proactive estate planning is the best course to take to ensure a person’s wishes are carried out at the time of death.
If you are in a non-traditional relationship, estate planning is a must. Non-traditional estate planning has become a major issue in this day and age, with so many people living in a wide range of different types of relationships. This particularly includes individuals who live together without the benefits associated with a traditional marriage.
The Reality of No Estate Planning
The stark reality of a lack of non-traditional estate planning is that when you pass, your loved one will not benefit in any way, shape or form from your estate. For example, assume that you’ve lived with your partner for years, decades even. You pass on. Despite the length of your relationship, despite the commitment to your significant other, all of your assets will pass so a family member or family members as set forth in the statutes of the commonwealth of Pennsylvania.
Side Arrangements with Family Members are No Substitute for Non-Traditional Estate Planning
Time and time again, a person in a non-traditional relationship makes what can best be described as a side deal or side arrangement with a family member (or family members) in lieu of proper estate planning. A person requests that a family member “take care of” his or her significant partner when the individual seeking help from a relative passes away. The person asks a family member to make sure his or her relationship partner “gets my property” when death occurs. This may sound like you. And, if it does you are not alone.
The odds of a family member honoring your desires informally expressed in this manner are not guaranteed. Moreover, there are tremendous legal and tax consequences associated with this type of informal “arrangement.” In short, side arrangements with family members do not work. They simply are no substitute for bona fide non-traditional estate planning.
The Necessity of Legal Assistance
Estate planning for a person in a non-traditional relationship can be quite complex. Informal arrangements won’t work. In addition, it is crucial that the legal documents necessary to create a suitable estate plan properly are prepared. Therefore, if you are in a non-traditional relationship, you must be proactive and retain the services of a skilled estate attorney. An estate lawyer will schedule a no-cost initial consultation with you to discuss your options.
If you are unmarried and do not have children, you may be like quite a number of similarly situated people and have done little or nothing in the way of estate planning. This particularly may be the case if you are a younger adult.
The reality is that an adult is never too young to start thinking about developing an appropriate estate plan. In addition, even a single person has very real needs when it comes to estate planning. In other words, estate planning is not just for wealthy, older, married people with children.
Death without an Estate Plan
One of the key aspects of estate planning is ensuring that your last wishes are carried out. This primarily means that property and possessions end up in the hands of intended loved ones. In the absence of a will, there is a real possibility in many cases that this will not happen.
If a single person elects to forgo estate planning, the laws of Pennsylvania dictate who gets his or her property upon his or her death. A person’s actual desires become irrelevant, because they have not been appropriately set forth in a will or other type of legal instrument (like a trust agreement).
Estate Planning Focuses on the Here and Now
Some younger single Pennsylvanians tend to avoid estate planning because they don’t think it effects them today. They are focused on the here and now and think estate planning is something for older folks, something to be taken up at a later date.
The reality is that the one guarantee in life is that no one knows when death will come. Estate planning is focused on what would happen if you die in the immediate future. An estate plan is updated with regularity to keep it current.
Comprehensive Financial Planning
A single person, particularly a young single person, should not put off comprehensive financial planning. This includes planning for retirement. But, it also must include proper estate planning.
Financial experts routinely report that single Pennsylvanians, particularly younger ones, simply are not taking comprehensive financial planning seriously. A single Pennsylvanian is best served by having a comprehensive financial checkup that includes a discussion of retirement planning and consultation with an estate attorney.
Death and money represent two subjects that most folks do not want to discuss. This reality underscores the difficulty of a family estate planning conversation – both subjects come together in one discussion.
Despite the inherent challenges of an estate planning conversation with family members, it must be done. There are four tips to consider when contemplating an estate planning conversation with the family.
Take a Proactive Approach to an Estate Planning Conversation
Do not wait until a crisis exists to engage in an estate planning conversation with family members. Rather, a proactive approach is crucial. Select and time and place in which a conversation of this nature can be undertaken without the added burden of a sick family member.
Estate Planning Conversation in a Safe Environment
Select a safe and comfortable environment for an estate planning conversation. Being able to control the environment where this discussion takes place is another reason for taking a proactive approach. “The comfort of your own home” is a turn of phrase that illustrates the type of environment in which a conversation about estate planning issues occurs.
In anticipation of a family estate planning conversation, it is important for the presenting family member to be well prepared. The basic objectives of an estate plan must be outlined. Ideally, an initial consultation with a skilled, experienced estate attorney occurs before the scheduling of this family confab.
Honestly Answer Questions
As part of being prepared for an estate planning conversation question, a person must also be ready to honestly and accurately respond to questions. If questions arise for which a person lacks an answer, that fact should honestly be conveyed to the questioner.
In addition, there may be some information that appropriately should not be shared with family members. As a result, precise boundaries should be established at the outset of a family estate planning conversation.
By engaging in a candid estate planning conversation with family members, these relatives will be both empowered and have a sense of buy-in to the estate plan itself. They will be in a better position to address estate related matters at the time the presenting family member passes away. Moreover, deficiencies that might exist in an estate plan oftentimes are realized and identified through this type of communication process.