Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Saturday, July 25, 2015

Seven Things Personal Estate Representatives Should Avoid Doing


Estate planningWhen acting as a personal representative for a decedents estate there are things that you need to remember not to do.  Here is a list of seven things a personal estate representative should avoid doing:

  1. Avoid early distribution of assets. Make sure to make a full assessment of potential claims the estate could face.
  2. Do not spend estate assets on personal expenses.  This should be self-explanatory, but some people may need a reminder of why this would be a bad idea.
  3. Never ignore tax issues.  Tax liabilities can pile up, so it is always important to stay on top paying them.
  4. Obey court orders.  A personal representative has to submit to the jurisdiction of the court and disobeying court orders can open him or her up to personal liability.
  5. Do not distribute funds until all bills are paid. It can often be difficult to get money back from somebody once it has been paid out. 
  6. Do not ignore any claims.  It is a good idea to stay on top of any potential claims that you might face.
  7. Do not go forward without seeking attorney advice.  Seeking out expert advice from somebody who understands probate law can be a good strategy.

See Unique Estate Law Blog, What [Not] To Do After A Death: Seven Things Personal Representatives Should Never Do, Wealth Management, June 1, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.  

July 25, 2015 in Estate Planning - Generally, Estate Tax, Income Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Friday, July 24, 2015

Ex-Wife Ordered To Turnover Life Insurance Proceeds After Interest Was Extinguished

JusticeIn 2008, the State of New York made revisions to the Estate Powers and Trusts Law (EPTL).  The new statute was intended to correct the inadvertent failure of a divorced spouse to eliminate an ex-spouse as beneficiary.  This article discusses The Matter of Suggs which dealt with a situation of a court dividing life insurance proceeds between the decedent’s estate and his divorced spouse.  The divorced decedent had carelessly forgotten to remove his ex-spouse as a beneficiary of his life insurance policy.  Under the new statute the ex-spouse is treated as having predeceased the testator and her interest in the life insurance proceeds were extinguished.  The New York Court decision can be read here.  People should not be overly reliant on the new law and should make sure to periodically review their insurance policies. 

See Philip Bernstein, Ex-Wife Compelled To Turnover Life Insurance Proceeds After Her Interest In Decedent’s Insurance Policy Was Extinguished, The New York Probate Litigation Blog, July 16, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

July 24, 2015 in Estate Planning - Generally, Non-Probate Assets, Wills | Permalink | Comments (0)

Saturday, July 18, 2015

Estate Planning For Blended Families

Blended familiesThings can get complicated when planning for the estates of blended families, and with the number of remarriages on the rise these issues are going to become more common.  One of the biggest issues that people in blended families face is planning where their assets will be distributed after they die.  This article offers some estate planning advice for blended families. 

Getting the beneficiary designations right is crucial for making sure property is correctly distributed.  It is common for remarried couples to use revocable or irrevocable trusts to spell out distributions.  Having a prenuptial agreement is also good way to make sure estate planning is done right.  People should also not forget to make plans for issues like guardianship or power of attorney in the event someone loses capacity.  These are all issues a person needs to consider when designing an estate plan for a blended family.

See Judy Martel, Estate Planning Tips For Your Blended Family, Forbes, June 23, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.   

July 18, 2015 in Disability Planning - Health Care, Estate Planning - Generally, Guardianship, Intestate Succession, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Friday, July 17, 2015

More Americans Are Turning To Combination Life Insurance And Long-Term Care Policies

End of lifeLong-term health care policies are a huge expense for many middle class families.  This article discusses how more Americans are getting hybrid products that tack long-term care onto a life insurance policy.  These combination policies, which industry insiders call the “live, quit, or die” option, have been increasing in sales recently.  Hybrid life insurance-long-term-care policies have also been referred to as the “SUV of insurance” because they might not be as efficient but they still get the person to their destination.  Whether it is better to get a hybrid or traditional insurance policy depends on individual circumstances of the person’s estate.   People should weigh their options and consider what is best for them. 

See Elizabeth O’Brien, New ways to pay for long-term healthcare, Market Watch, July 9, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention. 

July 17, 2015 in Current Affairs, Disability Planning - Health Care, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

Tuesday, July 14, 2015

Choices To Make Concerning Inherited Retirement Accounts

IRAThe first instinct of a person who just inherited money is to take the entire amount under control and withdraw it from any retirement plan it might have been in. However, simply taking the entire corpus is not always a wise move depending on the circumstances. Surviving spouses can easily roll over an IRA from the deceased spouse but many do not opt to keep the money invested and tax free. It is also little known that an IRA can continue after the death of the owner as long as the required minimum distributions are made. As more Baby Boomers go to the grave, the post death options of retirement plans will grow in importance. Heirs should be given the best available facts to decide if keeping the money in the plan or taking it all out is the best option in any particular scenario.

See Michael J.Jones, Retirement Account Death Benefits, Wealth Management, July 13, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

July 14, 2015 in Estate Administration, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (1)

Wednesday, June 24, 2015

Estate Planning Advice For Same-Sex Couples

Same sex coupleThe legal landscape that same-sex couples often face on a variety of estate planning issues is murky.  Financial advisers need to stay abreast of the latest legislative and legal developments at both the state and federal level.  Some of the estate-planning issues that affect same-sex couples include things like social security, pensions, taxation, wills, and trusts.  It is important for financial advisers to have a strong grasp of the state laws relating to all of these issues, state policies are not consistent, and estate planners will need to understand the local regulations.  The national policies governing same-sex relationships are going to continue to change with future court decisions.  Estate planners will need to have the latest information to provide better advice to clients who are in same-sex relationships.   

See Mark P. Cussen, Top Retirement Planning Tips For Same Sex Couples, Investopedia, June 23, 2015.  

June 24, 2015 in Current Affairs, Estate Planning - Generally, Estate Tax, Income Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Saturday, June 20, 2015

How Estate Planning Issues Can Divide Families

WillConflicts over money and inheritance can often drive families apart.  It is important to discuss estate planning issues ahead of time to avoid unpleasant surprises for the heirs.  Family members often have unrealistic expectations about what they are going to inherit.  Friction in families can develop when people feel like the distribution of money and assets is not fair and just.  A person who is writing a will and planning their estate should be open with their family so that they can have realistic expectations.  By being prudent, and planning ahead, an estate planner will have an easier time keeping their family together. 

See Robert Laura, How Your Kids Really Feel About The Way You Plan To Divvy Up Your Assets, Forbes, June 19, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention. 

June 20, 2015 in Estate Planning - Generally, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Monday, June 15, 2015

How The Upcoming Supreme Court Same-Sex Marriage Decision Will Affect Couples

Same-sex marriageThe Supreme Court will come out with a decision this month that could potentially legalize same-sex marriage marriages nationwide.  If the Supreme Court does rule in favor of same-sex marriage it will impact affected couples in a number of ways.  Married same-sex couples will be able to file joint tax returns.  The upcoming Supreme Court decision would also cause major changes in the way States will treat same-sex estate planning and divorces.  Same-sex couples would also be treated equally to heterosexual couples on matters dealing with social security and veterans’ benefits.  A change in the law would also give same-sex spouses the ability to make important medical decisions. 

See Tara Siegel Bernard, The Same-Sex Marriage Decision: What’s at Stake for Couples, The New York Times, June 14, 2015.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

June 15, 2015 in Current Affairs, Estate Planning - Generally, Estate Tax, Guardianship, Income Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Wednesday, June 10, 2015

A Life Insurance Mistake People Should Avoid

WidowIn this column Ted Jenkin writes about his own experience working with a surviving spouse who received no life insurance because her husband died before he was able to accept and pay for a policy that he was setting up.  There is a period of time between the date a life insurance policy application is signed, and the date it is approved.  A person may submit a first month’s premium with the application; this is called a “conditional receipt.”  An applicant should attach a conditional receipt to the life insurance application to make sure that the policy is in effect once is is received.      

See Ted Jenkin, A Common and Costly Mistake With Life Insurance, The Wall Street Journal, June 10, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention. 

June 10, 2015 in Estate Planning - Generally, Non-Probate Assets, Wills | Permalink | Comments (0)

Wednesday, June 3, 2015

Dealing With Inherited Savings Bonds

US bondInherited savings bonds can often create complications for the beneficiaries who receive such instruments. There are a wide range of choices that a person has to make with the savings bonds they inherit.  The inheritor should first use the ‘savings bond calculator’ to determine the instrument’s worth.  The individual then needs to decide whether to redeem or reissue the savings bonds.  The decisions that a person makes about savings bonds will have a major impact on what sort of taxes they would have to pay.  The savings bond beneficiary would have to choose whether to report the income to the decedent or the estate.  A prudent person who inherits savings bonds should be careful and well informed about the choices that they make. 

See Deborah L. Jacobs, Inherited Savings Bonds: What You Need To Know, Morningstar, June 2, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

June 3, 2015 in Estate Planning - Generally, Income Tax, Non-Probate Assets | Permalink | Comments (0)