Additional Considerations for Your Durable Power of Attorney for Finances

29 Monday Jan 2018

Posted by Robert Dowling in Planning Tips

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Agent, Attorney, Common Estates, Doctors Statement, Durable Power of Attorney for Finances, Estate Attorney, Estate Planning, Estates, Financial Institutions, HIPAA, HIPAA Release Form, Springing Power of Attorney

After choosing an agent for your Durable Power of Attorney for Finances, you must also consider the type. There are two types of Durable Powers of Attorney for Finances to consider:

The type that takes effect immediately. The Durable Power of Attorney for Finances takes effect immediately after signing the document.
Otherwise known as a Springing Power of Attorney, this type takes effect only when and if you become incapacitated.

Moreover, each type functions differently and your choice depends on how you feel about your selected agent. Therefore, if you selected a reliable agent according to the article Considerations for Choosing an Agent for Your Durable Power of Attorney for Finances, it will be a painless decision.

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Considerations for Choosing an Agent for Your Durable Power of Attorney for Finances

04 Monday Dec 2017

Posted by Robert Dowling in Planning Tips

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Agent, Common Estates, Durable Power of Attorney for Finances, estate, Estate Administration, Estate Plan, Executor, Financial Authority, Grant Authority, Power of Attorney

Choosing an agent for your Durable Power of Attorney for Finances deserves as much consideration as choosing the right executor. As described in the article A Coherent Estate Plan Consists of More Than Just a Will, estate planning involves taking care of yourself first. As such, the Durable Power of Attorney for Finances becomes an integral document for your estate plan.

The Durable Power of Attorney for Finances is a document that allows you to designate an agent to handle your finances in the event you become incapacitated. Additionally, the agent you choose has only the financial authority that you grant them in the document. Therefore, choosing an agent for your Durable Power of Attorney for Finances is vital to building a solid estate plan.

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A Coherent Estate Plan Consists of More Than Just a Will

30 Monday Oct 2017

Posted by Robert Dowling in Planning Tips

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Advance Health Care Directive, Burial Arrangements, Common Estates, Durable Power of Attorney for Finances, estate, Estate Plan, Estate Planning, Funeral, Health Care Proxy, Living Trust, Living Will, Medical History, Military Discharge Papers, Safe Deposit Box, Tax Returns, Will

Many people with common estates believe that a coherent estate plan consists of just a will. This perception about estate planning emanates from the idea that estate planning is only about transferring property after death. Unfortunately, if you believe in this misguided perception about estate planning, you will never complete a coherent estate plan.

Before planning your estate, you must understand that estate planning involves taking care of yourself first, then your property. Sadly, at some point in your life, you may become too ill to handle your own affairs. Therefore, you must provide instructions to manage this possibility in your estate plan; otherwise, the state court will intervene. So, to avoid state court interference, a coherent estate plan must consist of more than just a will.

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Small Business Owners: Don’t Leave Your Executors in the Dark

23 Monday Oct 2017

Posted by Robert Dowling in Planning Tips

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Attorney, Business Accounts, Business Registration, Common Estates, Common Executors, Corporation, CPA, decedent, estate, Estate Administration, Estate Plan, Executor, Final Taxes, Schedule C, Small Business, Small Business Owners, Sole Proprietor

While constructing their estate plans, small business owners should advise their executors about changes in their business. Although the executors don’t need to know the day-to-day business operations, small business owners should inform their executors of the following:

Any sale of the business.
A change in registration of the business.
The succession plan for the business, if any.

Consequently, if the small business owners overlook their executors, the executors will experience a chaotic estate administration.

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Two Reasons Why a Beneficiary May Become Belligerent

11 Monday Sep 2017

Posted by Robert Dowling in Beneficiaries

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Abatement, Abatement Process, Ademption, Ademption by Extinction, Belligerent Beneficiary, Beneficiary, bequest, Claims, Common Estates, Contest The Will, Doctrine of Ademption, estate, Estate Assets, Executor, Expenses, Identity Theory, Probate Avoidance Strategy, Taxes, Threaten Lawsuit, Will

There are many reasons a beneficiary may become belligerent. However, according to the article How to Handle a Belligerent Beneficiary, one way a beneficiary acts out towards an estate is to exercise their right to contest the will or threaten a lawsuit. Moreover, there are two legitimate reasons why a beneficiary may exercise such a right: abatement or ademption.

Unfortunately, the executor must inform each beneficiary named in the will that they are part of the estate. If the beneficiary understands the bequest they may receive, the beneficiary will expect that bequest at some point. So, if abatement or ademption affected a bequest, the intended beneficiary may become belligerent. As a result, the belligerent beneficiary may contest the will or sue the estate.

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How to Avoid Abatement and Ademption

04 Monday Sep 2017

Posted by Robert Dowling in Planning Tips

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Abatement, Ademption, Ademption by Extinction, Beneficiaries, Bequests, Common Estates, Contest The Will, Estate Planning, General Bequests, Heirlooms, probate, Probate Avoidance Strategy, Probate Court, Residuary Beneficiaries, Specific Bequests, testator, Will

Typically, careful estate planning will avoid abatement and ademption. However, people with common estates know little about abatement and ademption and fail to plan properly. As a result, the probate court ends up deciding the distribution of bequests through abatement or ademption.

To avoid abatement and ademption, the testator must prepare a coherent estate plan and keep it updated. If the testator uses the process described in the article The First Step to Estate Planning: Estimate Your Net Worth, then avoiding abatement and ademption is possible.

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Closing an Estate in a Formal Probate Process

19 Monday Jun 2017

Posted by Robert Dowling in Probate

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Assent Forms, Attorney, Beneficiaries, Common Estates, Distribution, Estates, Executor, Final Account, Final Distribution, Formal Probate Process, Informal Closing, Inventory of Assets, Partial Distribution, Probate Court, Schedule A, Schedule B, Schedule C, Simplified Probate Process

When closing an estate, some states that use a formal probate process, allow for an informal closing for common estates. These states simplified the probate process for estates that are straightforward; not complicated or contested. Fortunately, Massachusetts is one of those states. In Massachusetts, closing an estate using the simplified probate process involves the following tasks:

Complete a final Inventory of Assets.
Using the Inventory of Assets in the final accounting, complete the final accounting.
Under cover of an assent form, send copies of the Inventory of Assets and the final accounting to each beneficiary.
After receiving the signed assent forms from each beneficiary, the executor must sign the form called Account (MPC853). The signed Account form, with the original Inventory of Assets and final accounting attached, essentially closes the estate.
Make the final distribution to the beneficiaries.

In Massachusetts, the simplified probate process allows straightforward, common estates to avoid the probate court when closing an estate. Instead, the approval of the Inventory of Assets and final accounting from all the beneficiaries informally closes the estate.

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Track the Administration Expenses of the Estate

10 Monday Apr 2017

Posted by Robert Dowling in Record Keeping

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Accounting Fees, Administration Expenses, Aministration Expenses of the Estate, Attorney Fees, Capital Losses, Charitable Deductions, Common Estates, estate account, Estate Taxes, Estates, Executor Fees, Executors, Federal Estate Income Tax Return, Fiduciary Income Tax Return, Gross Estate, Gross Income, Income Distribution Deduction, State Income Tax Return, Tax Preperation Fees, Will

Executors needing to file a federal estate income tax return must track the administration expenses of the estate. In general, the IRS allows for the deduction of administration expenses from the gross income of the estate. Therefore, in addition to tracking income of the estate, the executor must also track the administration expenses of the estate.

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Communicating with Beneficiaries: Executors Should Use Common Sense

03 Monday Apr 2017

Posted by Robert Dowling in Beneficiaries

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Assent Forms, Beneficiaries, Beneficiary Rights, Common Estates, Communicating, Communicating with Beneficiaries, Details of the Estate, estate, Executor Rights, Final Accounting, Poll Beneficiaries, Polls, Reading of the Will, Sharing Details of the Estate, Will

When communicating with beneficiaries, executors should use common sense. To have a smooth administration the executor should communicate regularly with the beneficiaries as revealed in the article Communicating with the Beneficiaries is Essential for the Executor. However, when it comes to sharing details of the estate, the executor should use common sense. Otherwise, sharing too many details with the beneficiaries may cause confusion and turmoil in the estate.

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Handling Found Property from a Different Estate

27 Monday Mar 2017

Posted by Robert Dowling in Estate

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Attorney, Beneficiaries, Common Estates, Distribution, Distribution Plan, Estate Administration, Estates, Executor, Forgotten Assets, Found Property, Holographic Will, Inventory of Assets, personal possessions, Property

In some common estates, executors may find themselves in unique situations such as handling found property from a different estate. Early in the estate administration, while sorting through possessions, my Uncle’s stepdaughter found a large, bulky envelope. In the envelope was a blue topaz ring and fifty-four hundred dollars in cash. As the stepdaughter handed me the property, I asked, “Where did you find this?”

The stepdaughter replied, “I found the envelope” – as she looked towards a box – “on top of the box near the stairs.”

So, I quickly went over to the box to sort through the contents. The box contained property and documents associated with the estate of my Uncle’s cousin in which my Uncle served as executor. Apparently, the cash and the ring were the contents of the cousin’s safe deposit box. Moreover, my Uncle forgot to include the property in the cousin’s estate for distribution before closing the estate. So, confused about how to handle the property, I put the matter aside until I could discuss the dilemma with my attorney.

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The Common Executor

~ A Journey into Estate Administration

Tag Archives: Common Estates

Additional Considerations for Your Durable Power of Attorney for Finances

Considerations for Choosing an Agent for Your Durable Power of Attorney for Finances

A Coherent Estate Plan Consists of More Than Just a Will

Small Business Owners: Don’t Leave Your Executors in the Dark

Two Reasons Why a Beneficiary May Become Belligerent

How to Avoid Abatement and Ademption

Closing an Estate in a Formal Probate Process

Track the Administration Expenses of the Estate

Handling Found Property from a Different Estate