Wealth Preservation, Trusts and Estates

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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Many people initially look to friends and family members to act as Trustees for Trusts created under a Last Will for their children. The prevailing thought is that the family member or friend will be more invested in the lives of the children and will therefore do a great job. The clients also believe that it will be the most cost effective approach to naming a Trustee because the friend or family member may choose to take little or no compensation.

Although friends and family members might do a good job, I have experienced enough cases where that is not the case that I suggest considering the use of a Corporate Trustee. This is not to say that the family member or friend would not be well intentioned in their efforts. They almost always are. The problem is that they do not always know the best way to approach the job as trustee. They do not fully understand the investment options or the income tax considerations. They often tire of having to deal with the minutia of the job including, but not limited to, the need to field the calls from beneficiaries who want their money. These potential negatives can serve to cost the Trust more in loss than the fees saved by naming the individual trustee.

Many clients are now opting to name a Corporate Fiduciary, such as a bank or financial institution, as the Trustee. The key component to this shift is that the clients are now naming the friend or family member to act as the Trust Protector. The Trust Protector is given the power to oversee the actions of the Corporate Trustee. Most importantly, the Trust Protector is given the power to remove and replace the Corporate Trustee. This gives us something that is close to the best of both worlds, professional advice and management and family involvement.

Read our article Choosing a Trustee: Individual Trustee vs.Corporate Trustee to find out the advantages and disadvantages of either scenario so you can pick the right trustee for your trust.

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Did You Pick The Wrong Trustee Under Your Will or Revocable Trust?

A Quick Guide To Fixing This Mistake And Updating
That Old Will Or Trust

First, What is a Trustee?

A trustee is named in the trust to manage and oversee the trust.A trustee

has the ability to make decisions regarding the assets of the trust and

how to implement the terms of the trust. A trustee is an important role

to a successful trust.

Second, Do You Have the Right Trustee?

The type of trustee depends on many factors such as the type of trust,

the amount of assets, and how long the trust will last. There are

many advantages and disadvantages to having an individual trustee.

An individual trustee may be less expensive and may better understand

your situation and desires. Although, they may  lack expert knowledge

and experience. And, because Pennsylvania is now a UTA

(Uniform Trust Act) state and a Prudent Investor rule state, individual

trustees may lack the time or technical expertise to comply with these laws.

For this reason, there are may advantages and disadvantages of having

a corporate trustee such as a bank or trust company. They have knowledge

about investments, trust record keeping, and rules but may be more expensive.

Read our article Choosing a Trustee: Individual Trustee vs. Corporate Trustee

to find out if you have the wrong trustee or how to have the Right trustee

for your trust or trusts.

If you already know that you need to do estate planning, or to update
an old will or trust, then please call 610-933-8069 and mention this
article by David Frees for a discounted estate plan only available to
David’s blog readers and existing clients and their families.

Have a business?  Ask about our enhanced and elite First Class
and Business class upgrades to your estate planning.

Our estate planning fees include wills, trusts (when needed), a power of
attorney for each of you, a medical power of attorney and living will,
a HIPPA authorization and more.

And, our superior two step process get you through the planning and
to signed documents faster and with more precision than many other
lawyers or firms.
And, we give you everything that you need to get started and to get this
off your TO Do list.

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James Douglas Kaune, Attorney to be?

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

I have had a recent addition to the family, my son, James Douglas Kaune.  Welcome to our lives James!! Taking my own advice, my wife and I immediately updated our estate planning documents including wills, powers of attorney and trusts.  We also modified our beneficiary designation forms in IRA’s, 401k’s and life insurance to name the testamentary trust for my son if something happens to my wife and me.  We want to make sure James is well taken care of and that the correct trustee is apppointed to oversee his inheritance. This will help to make sure these assets are protected from poor spending habits, future creditors and possible divorce (A long time from now I hope!)  Take a look at this article for some advice when determining what type of trust, what trust provisions and what trustee would be best suited to take care of the assets you leave for your children. We are looking forward to long healthy lives with James, but want to make sure that we take all the necessary steps to make sure he is well cared for under all circumstances.

Douglas L. Kaune, Esquire
Serving, Chester, Montgomery, Delaware
Bucks and Philadelphia Counties

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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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