Wealth Preservation, Trusts and Estates

Picking an executor is a critical part of any sophisticated or even simple and effective estate plan. Having the wrong executor or someone that does not fully understand your wishes can wreak havoc on your estate’s administration and more importantly on the execution of your wishes. In fact, other than the decision to create and execute an estate plan; executor selection may be one of the most important estate planning decisions you will make. Consider the Pennsylvania case below.

In a recent 2011 Pennsylvania case a co-executor removed decedent’s safe and financial records two days before the death and failed to return or disclose this to the beneficiaries or list the items on the inheritance tax return. The Orphans Court removed and surcharged the co- executor for attorney fees and costs of the estate. Jonik Est. (O.C. Div. Phila.), 1 Fiduc. Rep. 3d 296.

Would your executor do this to you?

Do you have the right executor?

How do you pick the right person or institution to do this job?

Click here to read more about how to select the right executor for your estate plan.

Being an executor is a tough job. The executor must find your legal and financial documents, gather your assets, pay off all your debts, keep the beneficiaries informed, make financial decisions, and implement your wishes as if you were there.

Many times we see executors who are overwhelmed by the amount of work required by law to be an executor in Pennsylvania.  For that reason, it is important to pick someone who can handle it and even more importantly can get the job done the way you would want your estate administered.

Furthermore we often see even dedicated executors make the same simple but dangerous mistakes. To educate yourself and or your executors click below to get a free copy of our resource for executors.

The Ten Most Common Mistakes Executors Make… and how to avoid them

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For Executors and Maybe Trustees

Losing a loved one is hard. But if you’re an executor or trustee hopefully this step-by-step guide to Estate Administration will ease the burden of knowing the business of what to do when a close family member or friend dies.

Whether or not your loved one has a will or trust their estate may be still have to go through the probate process in Pennsylvania.

Each estate administration varies in complexity and you may have more to do than these basic steps but this is a great starting point to get you familiar with what needs to happen after the death of a loved one.

1.      The Will- Find the Will, any living trusts, any amendments to the will or trust, and any previous wills.  It may be necessary to ask a sick or dying loved one where the Will is so that you do not have to find it when they are gone. If there is no will the state “intestate law,” will govern who acts as the administrator, and who inherits.

2.      Contact an Attorney- Call an estate planning and estate administration attorney to help you navigate through the process.  Even if there is No probate required there are many rules about what gets paid and what still gets taxed. You may have many meetings with the attorney so make sure you are comfortable with the attorney and their location. www.avvo.com is a great website where you can search for local, competent, and highly knowledgeable lawyers.

3.      Gather Documents And Information- When you meet with the lawyer bring the Will and any amendments to it or previous wills. Also bring income tax returns (from the past few years if possible), bank account statements, retirement accounts, and any bills due. Also make a list of your loved ones valuables like real estate, CD’s, bank and investment accounts and insurance and annuities.

4.      The Probate Process- Your attorney will determine what assets must be probated. Things like jointly held assets, assets in a trust, IRA’s, annuities or life insurance and the beneficiaries named do not go through probate and are automatically distributed.

*Make sure the attorney tells you an estimate of the Pennsylvania inheritance tax and federal estate tax that may be due even on non-probate assets.

5.      Executor Duties- The executor is named in the Will. The executor will need to go with the attorney to the Register of Wills office, one is located in every county, and the original will and death certificate must be presented and any county fees must be paid depending on the size of the estate and other considerations. The executor has many duties and some have deadlines so make sure you get legal guidance to make sure the job is getting done.

6.      Advertising the Estate- The estate must be advertised for several weeks in two local newspapers. The reason this must be done is so that any creditor is notified and can make a claim on the estate. Also notices are sent out to all possible beneficiaries of the estate.

7.      Inheritance Tax Discount- The estate should consider paying the Pennsylvania inheritance tax or at least an estimate within three months to get a 5% discount. The full amount of the Pennsylvania Inheritance tax and the federal estate tax (if you owe this) is due within 9 months of your loved ones death. It is not always desirable to pay this so make sure to review this issue with your adviser to avoid paying tax on funds you may never receive.

8.      Estate Distribution- The executor with the attorney’s help will divide the assets and pay bills due on the estate. This must be done before you can distribute and close the estate. At the end of the estate you should protect yourself from liability by getting a court order OR a family settlement agreement.

* Family Settlement Agreements (FSA’s) cannot be drafted by anyone but a lawyer. However, this is one of the only ways to avoid personal liability other than through the probate court.

This is simply a beginner step-by step guide to Estate Administration, the process that follows after a person passes. There are many more detailed steps.

For more information click here to read our entire report  The Ten Most Common Mistakes Executors Make…and How To Avoid Them.

This may seem like a lot for someone, the executor, to do while trying to cope with the loss of family or a loved one and often times it can be very overwhelming. If you have been named an executor find out exactly what that entails to make sure you have the time and energy to follow the required steps involved.

A law firm is an excellent source of knowledge. Try to find one that offers  consultations and  fixed or hourly fees to make sure you understand the legal and financial and liability ramifications of being an executor and or what all is entailed in an estate administration so you can prepare yourself and or family and loved ones so there is less time to struggle with these steps and more time to grieve for the loss of your family or loved one.

We hope this Estate Administration 101 Guide has helped you understand your role as executor or trustee and or understand what happens after a loved one dies.

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This article was posted
by Douglas L. Kaune, Esquire
Estate Planning, Estate Administration,
Wills, Trusts, Elder Law
Unruh, Turner, Burke & Frees
Phoenixville, Malvern, West Chester
Pennsylvania Attorney
dkaune@utbf.com PH: 610-933-8069

If you are going through or have recently completed a divorce proceding, you should reassess your will, trusts, beneficiary designations, power of attorney, life insurance, medical power of attorney and living will. It is likely that all of these documents will need to be changed to insure that the proper beneficiaries, executors, trustees and guardians are named in the documents. For a more detailed list of the steps you should take to protect you, your estate and your beneficiaries after a divorce you can review this article.

Douglas L. Kaune, Esquire
Serving the counties of Chester, Montgomery, Delaware, Berks, Bucks and Philadelphia

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This post was written by:
Douglas L. Kaune, Esquire
dkaune@utbf.com
610-933-8069

Many of us are wondering whether or not our Executors, Administrators, beneficiaries or Trustees will have to pay estate taxes at the time of our death. I came accross an excellent article in Smart Money that will help you answer the question, Will My Estate Owe Estate Taxes? This should help you get a better understanding of where you and your estate stand with regard to the possible tax issues at the time of your death.

There are also some excellent strategies to consider in helping to reduce the estate taxes owed by your estate. Some basic considerations mentioned are gifting, bypass trust planning, life insurance and life insurance trusts. If you have any questions in this regard please give me a call at 610 933-8069 or drop me an email at dkaune@utbf.com.

Douglas L. Kaune, Esquire

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Post By Douglas L. Kaune, Esquire Email: dkaune@utbf.com Phone: 610-933-8069

One of the most frequently neglected parts of the estate planning process is the proper use of beneficiary designations on life insurance, IRA’s, 401k’s, annuities and other similar assets. Failure to properly prepare and update a beneficiary designation can significantly change the disposition of assets someone intends to be carried out by his or her last will and testament.
I recently represented the Executor of a Chester County PA estate. I have changed the facts, but have maintained the essence of the issues for our discussion. The decedent was survived by a 18 year old son. One month before the decedent died, he signed a will designating a trust for his 18 year old son as the sole beneficiary of his estate believing that this was all of the “estate planning” he needed.
Unfortunately, five years before his death, the decedent submitted a beneficiary designation for his $600,000 life insurance policy naming his then 77 year old mother as a primary beneficiary. I have been told that the expectation was that the decedent’s mother would “watch over” the money for her grandson. The decedent’s mother predeceased him and was not available to collect the insurance proceeds. The contingent beneficiary, the decedent’s brother, is now in line to collect the proceeds from the policy. He has informed the family that he is having financial difficulties and has no intention of sharing the insurance proceeds with the decedent’s son or anyone else for that matter. WOW! This has sent shock waves through the family and significantly diminished the security of the decedent’s son. Although likely contrary to the decedent’s true intention and morally questionable, the decedent’s brother is legally entitled to keep the $600,000 in insurance proceeds and the surviving son does not get one cent.
This case is a flashing neon sign for everyone to check their own beneficiary designation forms and make sure that they are properly integrated into the estate planning process. The decedent should have created a new beneficiary designation form naming the son’s trust under the will as the beneficiary. This would have allowed the trustee to claim the proceeds and then manage the assets for the son until a later date. A will is not always enough!!

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The length of the probate process in Pennsylvania (PA) or other states varies greatly from estate to estate. The determining factors include the assets involved in the estate, the experience of the Executor/Administrator and counsel and the ease in dealing with the beneficiaries. Contrary to common belief, the process is rarely impacted by the actual probate court requirements which can be accomplished timely if the other factors are favorable. Some of the most common causes for a delay in the estate administration process are:
1. Beneficiaries and family members who are not getting along with each other or with the Executor. The psychological and family related issues are sometimes the most difficult to respolve.
2. Hard to value assets such as closely held business interests or vacant land.
3. Assets which are difficult to sell such as real estate or business assets.
4. Complex estate tax and inheritance tax considerations.
You can review some of the probate requirements at the Chester County Register of Wills Website.
Let us know if you have any questions about the probate process, inheritance or estate taxes or other improtant estate administration issues.

Douglas L. Kaune
dkaune@utbf.com
610-933-8069

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We have just posted the answers to some of your recent questions. Please enjoy this brief video and the answers to your questions. Just click below:

What is a pour over will? Click Here.
What is a Holographic or Handwritten Will and why avoid them? Click Here.
Who should be the executor of my will in Pennsylvania? Click Here.

David M. Frees III, Esquire
610-933-8069

Please remember to ask any questions and we will be happy to answer them. Just leave a comment below or for more privacy email me at dfrees@utbf.com. Remember, when you email a question we may answer it publicly.

Unruh, Turner, Burke and Frees and David Frees has offices for their Wills, Estates, Trust and Estate Planning and Asset Protection lawyers in Phoenixville, West Chester, and Malvern located conveniently in Chester County Pennsylvania also serving clients in the Philadelphia region. Click Here For Directions.

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Probate is the court oversight of the estate administration process after a person passes away. Only certain assets are considered probate in nature. Probate assets typically are those owned by the decedent in the decedent’s individual name without a beneficiary designated. The Executor, where there is a will, or Administrator, where there is no will, is appointed by the Register of Wills Office in the county where the decedent last resided. He or she then must follow the probate procedures to properly complete the estate administration. The Chester County Register of Wills can be visited by clicking here.

Douglas L. Kaune or dkaune@utbf.com

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