Planning For Taxes Archives - Magellan Law, PLC

11
Feb 15
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The Role of a Personal Representative, Part 2

Tags : estate planning personal representative Wills and Estate Planning: Appointing a Personal Representative

As I mentioned in my previous video, a good estate plan covers key life decisions. Your personal representative will be the one to make the necessary decisions to carry out your wishes.

Here are further responsibilities, based on the law in Arizona, but pertinent no matter where you live in the U.S.

Provide an inventory of assets. This is where having an attorney with some experience comes in handy to help you classify different types of assets, especially personal property like furniture, ceramics or porcelain and photographs.
Comply with the applicable standards of care. As personal representative, you are required to perform duties with prudence, reasonable care and caution.
Keep detailed records. Keep and maintain records of everything: copies of checks, receipts, bills. Everything. You need to be able to prove where every dollar goes. So, avoid dealing in cash.
Pay valid debts and expenses. There’s a specific procedure for determining whether a debt is valid. This takes into account all the debt and how to treat creditors equally as part of a personal representative’s fiduciary duty.
Pay applicable taxes. Always pay applicable taxes before paying creditors and distributing assets.
Distribute remaining assets. After all taxes and expenses have been paid, the remainder of assets can be distributed as the will has specified.
Change the address of the estate. Until probate is closed and you complete your role as personal representative, you must notify the court in writing if you move or if your mailing address changes.
Document payment your receipt of payment as personal representative. It’s important to document meticulously the time you’ve spent and the expenses you’ve incurred when seeking reimbursement from the estate you’re managing.
Court involvement. The court prefers minimal involvement in settling estates where a personal representative has been appointed, but will get involved if the estate is not closed within two years.

To be sure your wishes are carried out, carefully select a personal representative for your estate. A little extra planning now can protect your family’s future. You can read more about a personal representative’s duties here.

If you have any questions about the duties of a personal representative, I’d love to help.

21
Jan 15
2

Avoid Estate-Planning Pitfalls: Probate Assets vs. Non-Probate Assets

Tags : bank account house IRA life insurance non-probate assets probate assets retirement plan

You’ve heard of estates, but do you know what an estate is? An estate (in terms of probate law) is property – either physical or monetary. It can also include intangible items such as contractual rights, trademarks and patents. So, how is this property settled?

With an estate, it’s through probate. If there is a will, then “probating the will” involves the official proving of a will. The assets of a property are divided under that will.

When planning your estate—more specifically, when you work to determine how property is to be distributed in your estate plan—it’s important to understand the difference between the different types of assets, and how they are owned. Probate can be a technical and sometimes-complex aspect of estate planning. But if you understand a few of the terms, and take the time to set up an estate properly, you can avoid costly and time-consuming mistakes.

In Arizona and most other states, probate is a court in which estates are settled after a person dies or becomes incapacitated. For the purposes of this post, we will be referring to probate assets. Let me give you a couple of definitions:

Probate assets — These are assets that are left behind after someone dies or is incapacitated. These assets can only be controlled, managed or transferred by court order.

Non‑probate assets — These are assets that are handled or distributed without having to go to court.

Keep in mind that going to court isn’t necessarily a bad thing. Often, going to court is the only way you can resolve a problem or get guidance when there’s a disagreement.

To give you an idea of the differences between probate and non-probate assets, here is an example of each.

Probate assets:

Let’s say that your mother, Alice, owns a house and passes away. Alice has left a valid will, and the title for the home is in her name. In order to sell the house after Alice’s death, the title must be transferred out of her name. This is true even if her will specified what should happen to the house (for example, that it should be sold and the proceeds distributed to her kids). The change of title can only be done through probate court. Alice’s house is a probate asset.

Non-probate assets typically include IRAs, retirement plans, life-insurance policies and assets that are held in trust. But each of these requires a beneficiary in order to be classified as a non-probate asset. Without a specified beneficiary, these assets can only be resolved through probate court.

When you know whether an asset is probate or non-probate, you will know if you will need to resolve an issue in court.

But because of the complexity of this area of estate-planning or management, it’s best to find an attorney who focuses on probate law. You may think that dealing with an attorney can be intimidating, but it doesn’t have to be. In fact, a competent attorney will help you avoid costly, time-consuming mistakes.

Do you have any questions about probate and non-probate assets? I’d love to help. Please leave a comment below or contact our office.

Category Archives: Planning For Taxes

Feb 15

-

The Role of a Personal Representative, Part 2

Jan 15

2

Avoid Estate-Planning Pitfalls: Probate Assets vs. Non-Probate Assets

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