Agreeing to be the administrator for the estate of a loved one in New York may seem simple, but there are numerous responsibilities involved. An administrator’s job typically begins upon the death of the individual to whom the estate belonged, meaning that this could be an emotional process. Additionally, there are many steps involved in handling the remaining assets of that individual.
If a will exists, the wishes of the decedent may be clear, but in intestate situations, the lack of a will leaves much of the decision-making process in the hands of the court system. The three phases of administrating an estate include management of assets, finalizing financial obligations to debtors and the government, and handling asset distribution. Before probate begins, issues such as burial, locating documents and safety deposit boxes, and obtaining copies of a death certificate are typically addressed. The more organized the estate is, the easier its administration will typically be.
With more advanced methods of estate planning , an individual can simplify the process for their selected administrator. Some assets can be managed while that party is still alive so that transfer is automatic upon their death. Naming of beneficiaries on retirement accounts and life insurance policies may also minimize probate matters. Forming a living trust may allow the probate process to be minimized or completely avoided. In addition, an individual who has been asked to serve as the executor of a will or as a trustee might be entitled to compensation for their services due to the extent and complexity of the task.
In addressing estate plans in a family, it may be prudent to discuss one’s estate and administration wishes with an intended executor or administrator. This may minimize confusion on various issues while making the task more manageable for the person to be appointed. Legal guidance may be important during this process. A lawyer could serve as an advisor throughout the planning of an estate.
When two people get married, some estate planning actions should be taken as soon as possible. For instance, it may be worthwhile to put sizable assets into a trust and to ensure that the assets in the trust are properly titled. If the assets are not properly titled, they may have to go through the probate process.
An easy action that newlyweds can take is to change the beneficiaries on 401Ks and other accounts with beneficiaries attached to them. In the event that assets inside an IRA or health savings account are to be split between parties, a notarized acknowledgement may be necessary. It may also be a good idea to add a secondary beneficiary in the event that the original beneficiary passes on. In addition to updating beneficiaries, it may be worthwhile to update any wills that may be on file.
While talking about splitting assets in the event that one person passes away may be uncomfortable, it is easier when both parties focus on those who they care about. For instance, it may be worthwhile to figure out whether assets would go to a parent or to any children that the couple has or may have in the future. Adding a durable power of attorney and a medical directive to a will may also be beneficial.
Couples who are talking about their future together may wish to form a comprehensive estate plan. This may be made easier by talking to an estate-planning attorney. An attorney can help the couple talk about different estate planning options and help create legal documents. When created correctly, documents such as a living will or a trust may stand up to any legal challenges posed to them.
Source: The Motley Fool, ” Estate Planning for Newlyweds “, Anna Wroblewska , December 29, 2014
Some New York residents may wonder what happens when a relative dies without a will. If the decedent leaves more than $30,000 in assets, the estate goes through administration, which is similar to probate. The difference is that probate occurs when the decedent leaves a will directing the distribution of assets. Administration occurs when a person dies intestate , or without a will, and the distribution is made in accordance with the state law of intestacy.
To start administration, the state issues letters to any person who may be entitled to claim the assets. That person may open a case in Surrogate’s Court by filing a petition. The petition lists the name and address of the decedent, the petitioner’s name, and the petitioner’s relationship to the decedent. If the petitioner is not a relative, it will be necessary to state the basis for asking to open the case. The petition also lists other individuals entitled to inherit under the law. Then, the petition gives the estimated value of the assets and a description of any real estate.
One reason that it is so important for a person to have a will or trust created during life is that the state’s list of relatives who inherit is not based on personal relationships. When there is no will, assets could be distributed to a distant, practically unknown relative rather than a close friend. Or assets might be split equally among relatives, without regard to whether the decedent had a closer relationship with one relative than the others.
An estate planning and administration attorney may be able to help create a will that ensures assets will be distributed to the intended beneficiaries. It may also be possible for the attorney to help probate the will and distribute assets when the time comes.
Source: NYCourts.gov, ” Administration – Decedent did NOT leave a Will (and estate assets of more than $30,000.00) “, August 04, 2014
Estate planning is a very important part of financial and retirement planning in the U.S. Americans seem to understand the importance of estate planning, with 90 percent of adults saying that estate planning is very important, according to a BMO Management survey.
Even though a majority of Americans say that estate planning is important, the same survey reported that only 19 percent of U.S. adults have had a detailed conversation with their parents about estate planning. Failing to discuss estate planning options can lead to difficult decisions and fights over the family legacy and inheritance instead of bonding and sharing memories with loves ones after a beloved family member has passed away.
Families should be aware of their estate planing options and parents should discuss these options with their children and other family members so there are no surprises after they pass away. Parents can use estate planning to create a family legacy that will make sure their family is taken care of as well as help their family have positive memories of their family instead of fighting over inheritance or the family home.
Once parents have made their estate plan , including specific decisions on inheritance and beneficiaries, it is important to talk about these decisions with their children. While these conversations may be difficult, it can help the family understand why the estate plan was created the way it was and hopefully reduce tension and future fights over the terms of the estate plan.
Parents should inform their children about what estate planning documents they have created and what is included in these documents to allow the family to understand what will happen after you pass away and what is expected of them. While this conversation can be difficult to start, discussing your estate plan with your children should help everyone be on the same page as well as allow the family to ask questions or bring up concerns now while they still can.
Source: The Street, ” We All Say Estate Planning Is Important, Yet Here’s How Few of Us Do It ,” Brian O’Connell, August 1, 2013