by Dan McCarthy | Oct 20, 2021 | Estate Planning
Probate is the process of proving a will for a person who has deceased. While state probate laws may vary, the general process is quite similar across the country. A probate judge will also oversee cases where the deceased person did not prepare a will, known as dying intestate. Depending on the size of the estate, probate can conclude quickly or take more than a year. If an estate’s value is below a certain amount, probate may become streamlined regarding property transfer. Most probate issues are county-based decisions. Aside from property, a probate court will also render judgment regarding competency and guardianship cases. However, the primary responsibility of a probate judge deals with estates.
What Happens without a Will or Beneficiary Contests?
If a decedent leaves a will and no beneficiary contests it, the probate judge has a minor but significant role. While laws have variations, these general steps hold when entering probate.
- Opening a probate case with court – The estate’s executor will file the decedent’s will with the probate court. The probate court will make a finding as to the will’s legality and makes sure no one is bringing objections to the will. For example, a beneficiary may claim that the decedent was experiencing undue influence or coercion when making the will. In some cases, the judge may declare it a case of a contested will. Without any objections to the will, the named executor receives approval and can move forward to open an estate bank account.
- Notification of interested parties – The executor will place notices in newspapers so that creditors of the decedent are made aware of the death. Other parties interested in the decedent’s will include any possible heirs as well as creditors. The executor must contact all heirs named in the will if possible. If they cannot locate all heirs, the newspaper notices of death will have to suffice. Creditors have a specific time frame to submit any claims against the estate to the probate court, usually six to nine months.
- Estate asset inventory – The executor will inventory estate assets, both physical and financial, and assess the individuals worth on the date of the decedent’s death. The probate judge and heirs will receive the inventory filing information. Taking an estate’s inventory is often time-consuming as well as a lot of work. Some physical properties may require a sale, such as a home. Positions of stocks and bonds may also require selling or other administrative action to divide among heirs. Executors will typically receive compensation for this work by inheritance or a statement in the will addressing the form of compensation to receive. If an estate is large enough, an executor may hire a probate attorney for assistance.
- Asset distribution – Upon inventory completion, the probate judge authorizes the distribution of assets as long as the will is uncontested. At this time, the creditor’s debt, the debts of managing the estate, and minor children’s inheritance become actionable. All debts are to receive payment from the estate, even if it requires the sale of assets. Like life insurance policies or retirement accounts, accounts with a named beneficiary are liquid and distributed to the appropriate beneficiary. The executor must file final taxes for the decedent, both federal and state.
- Terminating the estate – After the estate’s distribution is complete to the heirs, the probate judge ensures all creditors receive payment and closes the estate. Although the estate is officially closed, it remains a part of the public record.
If the decedent dies intestate (without a will), these same general steps apply. However, the process is more complex, and the probate judge has considerably more input and oversight. The judge will appoint an administrator (executor) to inventory the estate and post newspaper notices for creditors and other interested parties. In the absence of a will, the law of intestate succession applies. Each state identifies the order in which the decedent’s next of kin can inherit; they receive notice, assets distributed, and the estate closed.
If one or more heirs contest the will, the probate judge’s role becomes more significant and very involved. The judge will review the evidence and listen to the arguments of the contesting heirs. This process can include discovery, multiple hearings, numerous motions and responses to motions, and be years before concluding, usually entailing significant attorney fees. Eventually, a probate judge will issue rulings and opinions and can settle the contested will. At this point, the will is actionable, taking the general steps outlined above. If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.
by Dan McCarthy | Oct 6, 2021 | Estate Planning
In a comprehensive estate plan, it is crucial to include a power of attorney assigning who will be your trusted agent to manage your affairs. These legal documents can grant broad authority to one or more power of attorney agents to transact business or make medical decisions based on your behalf.
What are the different forms of a Power of Attorney?
A “power of attorney” and “limited power of attorney” may manage your affairs until you are legally considered incapacitated or incompetent. The word “limited” narrows a power of attorney’s authority to transact business only to a specific property or with an agent’s limited access to funds. A “durable power of attorney” remains in effect until the principal revokes the document or upon their death. A “springing” durable power of attorney will not go into effect until a doctor certifies the principal incapacitated, allowing you to keep control over your affairs until you are unable. A “medical power of attorney” is always durable and permits healthcare decisions on behalf of the principal. The document includes sections similar to a living will, guiding the agent and doctors’ medical decisions to the principal’s wishes.
Like your will, durable power of attorney documents requires drafting according to the state laws you live in and some forethought of your selection of agents. Every state has laws governing the creation and use of valid power of attorney documents. Does your state abide by The Uniform Power of Attorney Act of 2006? This Act intends to standardize the approach, provide safeguards for the principal, and eliminate differences between state laws. As of 2019, twenty-six US states abide by The Uniform Power of Attorney Act. Residents of multiple states and snowbirds who routinely travel and transact business in other states may benefit from creating a valid durable power of attorney documents in both states.
Take note that if your spouse is your power of attorney, this designation does not automatically end when you finalize a divorce between you unless you live in these twelve states: Alabama, California, Colorado, Illinois, Indiana, Kansas, Minnesota, Missouri, Ohio, Pennsylvania, Texas, Washington, or Wisconsin.
What to Consider When Appointing a Power of Attorney
When appointing a power of attorney, the agent you select is a personal decision. There are things to consider, such as if your adult children are trustworthy and mature in handling finances and medical decisions on your behalf. Some adult children move away or lose touch and are not necessarily suitable candidates simply because they are your children. You may select a contemporary friend who becomes disabled themselves or pre-deceases you, so you must have a backup agent in the documentation. Always make the decisions regarding your power of attorney selection while you are in good mental and physical health.
What Role Does Your Financial Power of Attorney Play?
A financial power of attorney can have the authority to perform some or all of these tasks:
- Pay everyday expenses for you and your family with your assets
- Maintain, pay taxes on, sell, buy, and mortgage real estate and other property
- Collect government benefits including Medicare, Social Security, Disability, and more
- Invest your money in mutual funds, stocks, and bonds
- Transact with banks and other financial institutions
- Buy and sell annuities and insurance policies on your behalf
- File and pay your taxes
- Operate your small business
- Claim inheritance or other property to which you are entitled
- Transfer property to a trust you created
- Hire someone to represent you in court
- Manage your retirement accounts
There may be other actions necessary to perform; however, the above list constitutes significant duties. Your agent must act in your best interest, keeping accurate records and avoiding conflicts of interest.
What Role Does Your Medical Power of Attorney Play?
Your medical power of attorney is one type of health care directive that outlines your healthcare preferences if you are too ill or injured to do so. The agent you select must be trustworthy and mature in overseeing your medical care and healthcare decision-making. Your healthcare agent will coordinate with doctors and other healthcare providers, ensuring you receive the medical care you prefer. To make these preferences clear, you may choose to use the second type of healthcare directive known as a “living will” or “healthcare declaration.” In this document, you can make clear your healthcare preferences. In some states, medical power of attorney and healthcare declaration combine into one form known as an “advance health care directive.” With this information, your agent is legally bound to comply with your treatment preferences to ensure they are made aware in the documentation.
Choosing your agent well, appointing backup agents, and tailoring your documents to your needs and specifications can take away a lot of worry about your future care and well-being. Having valid power of attorney documents avoids guardianship issues, which are time-consuming, expensive, and limit freedoms. An elder law attorney can address any questions or concerns you may have about establishing power of attorney documents for your particular needs. If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.
by Dan McCarthy | Sep 15, 2021 | Estate Planning
Just like you should visit your doctor for a yearly check-up, you should review your estate planning documents annually to make sure they are up-to-date. Children grow up, marriages dissolve, property gets sold, residences change. That’s why we recommend that you consult us for an estate-plan check-up every five years or so.
What Happens If You Retire in Another State?
If you retire to another state, your will would probably be good, but powers of attorney vary from state to state. Documents from the “old” state might not work in the “new” one, and your documents would not be there for you when you need them.
How Does a Spouse or Ex-spouse Effect My Estate Plan?
Suppose you willed your property to your spouse and appointed that person to be your power of attorney. You got divorced, but you never got around to changing your plan. The law would usually step in to prevent your ex-spouse from inheriting, but you might be stuck with that person holding power of attorney over your property and health care.
Maybe you named your ex-spouse’s father as your executor and agent. Now he can’t stand you and blames you for the break-up.
How Do I Divide my Assets Equally to my Children?
Perhaps you willed your property to your two children equally – but now one child is addicted to opioids. Your will did not restrict how money should be spent. If your addicted child inherits a lot of money in one chunk, that money could vanish to drugs and your child’s survival might be at risk.
Or, you deeded your house to one child and made a will leaving money to your other child. Then you forgot about the deed and made another will, years later. That will split everything equally. The law would invalidate the second will as to the house because deeds supplant wills. Consequently, one child might end up receiving more value than the other. That unfairness might sour the children against each other forever.
If you got divorced, sold property, moved to another state, or did your documents more than five years ago, come see us for an estate plan check-up. When it comes to estate planning, “once is not done.” If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.
