"Inheriting an estate can be an emotional journey, especially if you had a close relationship with the person whose estate you are settling or if you're planning an estate sale due to divorce or foreclosure."
Get advice. Don't take on this responsibility alone. As you begin the process of selling the contents of an estate, find yourself a support system. This can include members of your family, friends, and experts (like an estate planning attorney). These folks can provide you with valuable advice, and you may feel more comfortable when you've considered input from others. Given that this is an extremely emotional experience, you might also want to talk with a member of the clergy or a counselor as you go through the steps of preparing for the estate sale.
Get ready for memories. There can be times of grief that will pop up unexpectedly, and in some instances, simply seeing certain items will trigger special memories. Sorting through some household items might appear to be a simple and unemotional task. However, it can be tough when you come across something that you associate with a memorable occasion. Be prepared to find items that may cause a moment of pain. Even so, try to balance this with happy memories when you can. While this isn't always easy, concentrating on positive feelings can be a critical part of staying strong throughout the process.
Get ready to take your time. Although it may not be possible, try not to rush through the planning stages for the estate sale. Make wise decisions on what to sell, what to keep, and what to donate—as you want to avoid any regrets in the future. Preparing for an estate sale offers a measure of closure, but this process can also cultivate feelings of finality. Allow yourself time and space to consider your options to reduce the emotional burden.
Get help. An estate sale service can eliminate much of the emotional pressure that comes from the estate sale process. This way you don't have to focus on details that aren't really your area of expertise, such as pricing, staging, and scheduling. This will let you have the freedom to channel your energy into emotional healing. In addition, this professional assistance can lessen the burden of decision making, which can be helpful.
Our caring team at Sundvick Legacy Center are here for you when you find yourself facing challenges such as these. Please call our office at 702-384-3767 to schedule a consultation.
"From keys to debts, handling an estate is a detail-oriented responsibility."
Being named an executor of a will is a big responsibility. However, most individuals selected know nothing about what they need to do in the role, according to the recent US News article "4 Tips to Be a Better Executor."
An executor must deal with the estate of a deceased person—including identifying and valuing the assets, paying debts, and disbursing the assets according to the decedent's will. He or she also needs to ensure that the assets are protected during this period.
Here are a few things to know about the role of an executor of an estate.
You're a fiduciary. A fiduciary is the person who's liable if they don't do it right, which means that the person named as executor has to follow the wishes of the will. Any deviation requires approval from the probate court.
You may be required to get some help. In some states, the executor must have an attorney—except in some situations—because he or she is representing other heirs and has some duties to creditors. Wills need to be probated, and an attorney can help the executor with this the process. Executors need to have state-specific information because probate laws vary. In addition, having an attorney helps if there is any contention—like a person who says they have a newer version of a will or who argues that the person named executor is incapable of doing the job. Also, with a large estate, the executor may also want to engage other professionals—such as an accountant to complete the deceased's final tax return, a real estate broker to sell any property in the estate, or an individual who specializes in collectibles to help the process go smoothly. These professionals are paid from proceeds of the estate.
Secure the estate ASAP. Change the locks on the house and collect the keys to any vehicles. Inform heirs and creditors quickly. Executors need to create a legal notice to creditors through publication. The creditors of the deceased have a limited time to make a claim, or else they are barred. Don't pay claims until they've been properly authenticated. You can also negotiate claims with creditors—even after you've determined them to be valid—in order to retain more assets for the heirs.
Communicate with the beneficiaries. It's important to reach out to the beneficiaries to keep them in the loop throughout the process, which may take six months or more. Heirs will ask when they get their money or property. They get their distributions when the executor has made the determination that the proper debts have all been paid. However, partial distribution of the estate may satisfy heirs while the estate is being settled, which may include passing out small, tangible items that don't require a separate appraisal. These items can be distributed easily and quickly, but executors first need to make certain there are assets remaining to pay creditors. Document everything concerning the will, which helps with any disputes.
A fiduciary should be transparent and communicate with the beneficiaries, but it's not a democratic process: you're in charge. Sundvick Legacy Center helps guide families through both the planning process as well as the process of Trust Administration helping to make the process as smooth as possible for families. We are here for you. Please call our office at 702-384-3767 to schedule your free consultation today!
“We’ve all seen it on TV and in movies, as well as in real life: wills can trigger nasty squabbles and bruised feelings.”
Without some communication about what’s in a person’s will, there can be big surprises when this individual passes away—especially if children or grandchildren are cut out. A recent business2community.com article, “How to Successfully Contest a Will,” says that if you are left out of a will you may be pretty upset. Although you may never know why your loved one made this decision, there are some steps you can take.
Contesting the will as a spouse: the right of election. If your spouse left you out of his or her will, you would be entitled to the right of election in most states. This means that you can reject the will and get a certain dollar amount or percentage of the estate pursuant to state probate law.
Contesting the will as another type of heir. Other than a surviving spouse, no one has an automatic right to inherit anything, meaning a person can cut out anyone they choose. However, people can contest the will’s validity on other grounds:
Improper signing: If the will wasn’t signed in accordance with state laws, the will may be thrown out. For example, in most states a testator must sign the will in the presence of two witnesses who are unrelated to him or her by blood or marriage.
Lack of capacity: We’ve seen this many times in the case of billionaires changing their wills right before they pass away. If the testator can be shown not to have had the capacity needed to create and sign the will, then the will may be invalidated. People who have dementia can still be considered capable of executing a will if they intermittently displayed the necessary mental capacity.
Undue influence or fraud: What if a person was forced to sign the will or signed it without realizing he or she was signing a will? What if someone swapped pages in the will when the signature happened? In each of these instances, the will could be invalid.
A later will or codicil: A will can be invalidated if another one, signed later, is discovered. The most recent will is used, and it’s as if the old one doesn’t exist. If the testator signed a codicil or amendment to the existing will, both the codicil and will are probated. Any changes or additions made in the codicil will control the distribution. A codicil can also be contested, just like a will.
When a will is invalidated, a number of things could happen. If there’s an older will that was signed before the now invalidated one, that one could take effect if the court approves it. If there’s no other will, the estate is divided according to the terms of state intestacy laws. Typically, assets are divided among the spouse and children. Other relatives may get something if there’s no spouse or child. In any event, this is a complicate matter requiring experienced legal professionals. At Sundvick Legacy Center, we have been navigating families through the complex maze of estate planning for over 20 years. Call our our office at 702-384-3767 for your free consultation today.
“How would like to give your ex your life savings? Over your dead body, right?” You might be surprised how often people forget to review documents such as life insurance policies. Here's some very important tips to prevent your ex getting your life savings.
Do you want your ex-spouse to inherit any part of your estate? It could happen if you initially signed up for a retirement plan or life insurance policy when you were married to your ex-spouse. Chances are good that you designated your spouse at the time as the beneficiary. Now that you are divorced (and possibly remarried), you need to revisit your beneficiary designations and overall estate planning.
Review all of your assets and to whom you intend to give them at your death whenever there’s a major life event like a birth, adoption, death, marriage or divorce. This quick check-up may save those you leave behind a lot of hard feelings, trouble and expense.
While you’re at it, here are several other things to consider:
Rather than listing a young adult as a beneficiary, ask an estate planning attorney about drafting a trust to detail exactly how you want the money to be disbursed.
Do not designate a minor as a beneficiary because life insurance policies won't pay minors directly. Consider a “testamentary trust” under your Will or a similar inheritance trust under your living trust.
Remember you need to list a contingent beneficiary: if the primary beneficiary dies before you, you need a backup.
Want to list someone other than your spouse as the beneficiary on a 401(k) plan? Unless your spouse agrees, by law, you are not allowed to do this.
Failing to do estate planning creates ambiguity and means more headaches and fees for your family.
A qualified estate planning attorney can help you navigate all of the ins and outs of estate planning, giving you peace of mind and letting those you leave behind know that you cared enough to tackle these matters.
“Community property laws are, in short, a mixed bag, sometimes a boon and sometimes a nightmare.”
Many married couples living in the U.S. own assets that are deemed legally separate. This may include a business or real property purchased in one person’s name alone. The reason for this designation is that the laws of most states treat married individuals as financially unrelated to their spouse, except for joint accounts and those assets specifically mentioned in a Will. However, there are some states called community property states that have different laws on this issue.
As a result, it’s important to know about community property laws in the event you move to one of these jurisdictions or already live in one.
Barron’s article, “How Community Property States Are Different,” explains that Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin are the states in which everything you acquire during a marriage is considered legally owned by both spouses. For example, their state statutes view a couple as the co-owners of a business with a 50-50 partnership.
Here are a few other issues to consider.
Premarital assets. Typically, any wealth acquired before the marriage and any inheritances acquired at any time by one spouse are not the property of the other spouse. If you intend to keep them separate, leave them out of your community accounts created after the marriage. If you want to join finances, an estate planning attorney can help you with pre- and post-marital agreements and community property agreements to pool assets.
Estate plans. In most states, a married couple’s assets are divided evenly in life, and the same is true when one dies. One half the couple’s assets become part of the estate, which can make for major taxes in some situations. If a couple buys a home for $1 million, which then appreciates to $5 million, half of the value of the home—or $2.5 million—becomes a part of the decedent spouse’s estate. It’s given a step-up in basis—a readjustment of the value of the home to the market price over what was initially paid. The surviving spouse keeps the original cost basis of $500,000. If that spouse wanted to sell the property upon the death of the spouse, he or she would have a cost basis of $3 million (the $500,000 cost basis plus the adjusted basis of $2.5 million) amounting to a $2 million capital gain.
Community property states are a plus in this case because they give a step-up in basis to the entire home. In this example, the surviving spouse will also get a step-up in basis, which means if he or she sells the home there would be no capital gains tax owed. However, the step-up in basis can complicate wealth transfer planning.
Gifting. In community property states, both spouses have to agree on gifts from joint funds. No one can make a gift of your property without your consent, and without that consent, the spouse who didn’t make the gift can revoke the gift at a later date. It’s best to make sure it’s in writing—even when it’s a gift to each other.
Life insurance. Talk with an experienced estate planning attorney before you create an irrevocable life insurance trust. For example, a husband creates an irrevocable life insurance trust to benefit his wife, and the trust buys a $10 million life insurance policy on his life. He will need to be certain that any gifts made to the trust and used to pay the premiums are paid for from a non-community property account—payments cannot come from a joint account. Otherwise, it places a portion of the trust into the estate of his wife, which defeats the purpose of having an irrevocable life insurance trust in the first place and subjects it to an estate tax. Sign a transmutation agreement, which makes the gifts to the trusts entirely one person’s.
It’s important to remember that when community property laws are advantageous to your situation, you can carry community property over with you when you move to a new state. An agreement can preserve the community property state of already-acquired assets and conserve joint trusts to save them from getting comingled with assets in the new state.
Be sure to consult with a qualified estate planning attorney who understands community property law.
"The establishment of this endowment provides much-needed funding for the zoo now and in the future.
Jayne has certainly left her mark."
A $3 million trust donation has been given to the Little Rock Zoo and is the largest gift the zoo has ever received, according to The Northwest Arkansas Democrat Gazette's recent article, "Animal Lover leavesLittle Rock Zoo nearly $3M, biggest gift ever."The money came from Jayne Jackson, "an animal and zoo lover," who died in December.
"Animals are what made her happy," a zoo representative commented. "It was no surprise after we got to know her that the zoo was what she wanted to leave her estate to upon her passing."
The trust creates an endowment fund. Ms. Jackson made arrangements and created the trust with the zoo as the beneficiary some time ago.
"Jayne Jackson connected with animals and found a way to connect with the Little Rock Zoo forever by establishing this generous endowment fund," said Lisa Buehler, chair of the Arkansas Zoological Foundation.
She was very interested in the Zoo's bird population and loved the fact that the birds are part of the education and outreach of the Zoo.
The Zoo has not stated what it plans to do with the endowment, and the dollar amount is not set because it will be based on investments and market performance.
The Zoo Foundation reminded potential donors to include the Arkansas Zoological Foundation in their estate planning, which can be a meaningful tribute at someone's passing.
"A new report from the National Council on Aging shows that more seniors are in even deeper financial straits, borrowing and going into debt to meet their expenses."
Manny Martinez lives in rent-controlled senior housing and watches his expenses. However, with all of his other bills going up, money from his Social Security, which is his only income, makes things rather tight financially for the 83-year-old. Sometimes he receives food from a church food bank where he volunteers.
Martinez said it doesn't pay to get a part-time job because his rent would increase.
The report found that borrowing by seniors has doubled their debt in the past decade, with more than
61% of households headed by an adult over 60 having some form of debt.
People frequently have mortgages later on when the kids go to college and the parents refinance or move into a new home. Or a spouse passes away, and the surviving spouse is trying to stay in the home. They have less income, but taxes, household expenses, heating and cooling costs, plus other bills remain constant.
The National Council on Aging report says that among older households with debt, the median total debt was $40,900 in 2013, which is more than double what it was in 2001. One third of senior homeowners owed money on a mortgage or home equity line of credit, with 30% owing payments that were more than 25% of their income.
Seniors are also taking payday loans at a rate four times higher in the past five years.
The report, which includes the results of a survey of professionals who work with seniors, states that more than 90% said that medical debt threatened their clients' financial security. Next was credit card debt at 87% and household utilities at 84%. Nearly 25% found their senior clients were passing up needed home and vehicle repairs because of debt.
"Simply, they've spent the past 35 to 40 years saving money, but they haven't spent much time at all thinking through how they want to invest their time once they retire." Retirees are not the same as they were 30 years ago and many are starting new careers and fulfilling lifelong dreams. What will you be doing?
Many folks head into retirement with a sense of excitement and a bit of anxiety-but they haven't given much thought to their actual goals: they haven't spent sufficient time thinking about how best to use their unique skills and abilities in their future. Many folks do very little "avocational" planning when preparing for retirement and plan to just "take it as it comes." Those who put some time and effort into planning prior for the day they stop working will have more meaningful and interesting lives. You can devote your time of service to others, newfound creativity, or even start a new business.
If an individual uses good time management and active planning, retirement and the freedom that comes with it can be the best part of your life. Unfortunately, for too many people, retirement is a big disappointment. Loneliness, depression, and alcoholism are common afflictions of retirees.
But that's not you. You have a plan!
You're getting your finances ready for retirement. At the same time, you are going to set some worthwhile goals. Take time each week to determine where you excel, to define your interests, and to consider what types of things you'd like to learn and what experiences will give you the most satisfaction. Then, look for ways to employ those skills and goals. Retirement isn't the end of anything. Quite the contrary, when you plan and prepare, it's really the beginning of new pursuits.
Don't spend your retirement sitting in front of the television! Start planning what you want to do in your retirement. If you don't know where to start, chat with family and friends. Ask them what they could see you doing. Don't delay! Figure out today what's going to bring you a sense of purpose and fun in retirement.
Reference: Kiplinger's (October 2015) "The Biggest Oversight in Most Americans' Retirement Planning"
Although American retirees have been ranked high as some of the most generous in the world in terms of amount of assets passed to family members, a new retirement trend has emerged. About 43% of U.S. retirees now say they continue to provide regular financial support to at least one other person, with 10% saying they were supporting at least one adult child. These changing demands on the resources of some retirees shows that inheritance planning may become a bit more complex in some families. This could mean added stress between aging parents and adult children.
You need to remember that your financial well-being needs to be the priority. Make sure that your estate plan is updated to fully coordinate with your complete financial picture. This should be adjusted when significant life changes happen or if there is a major shift in assets—like when a child needs help. For some families, dividing up assets fairly equally among adult children is not a problem. When this isn’t fair for everyone involved, it can be tougher. Varying situations for each child might mean it won't be an even split.
Communicate your plans to your children in advance and make sure your legal documents confirm what you want to do. Anticipate how you'll deal with discord and try to consider what might go right or wrong in the discussion. Have a strategy prepared to diffuse potential issues.
Strong communication and trust with your family can be equally as important as determining what to do with your money.