Debunking 9 Living Trust Myths

Revocable Living Trusts (or simply, living trusts) are a powerful, yet often misunderstood estate planning tool. Many people miss out on an important estate planning document simply because of preconceived notions about living trusts.

In reality, living trusts offer many benefits and are one of the most useful estate planning strategies available to protect you and your family’s future. Let’s debunk some common myths surrounding living trusts so you can consider whether or not this estate planning tool might be right for you and your loved ones.

Myth #1: Living trusts are only for the very wealthy

For many, the word ‘trust’ conjures an image of wealth. You may think of billionaires leaving large inheritances and sprawling estates to their children, and immediately brush the word aside.

But the reality is, a living trust can provide benefits to many ‘regular’ people who are not among the super wealthy. A living trust is a fantastic foundation for many estate plans. If you want to make things easier and provide protection your family in the event of your incapacity or death, a living trust may be the right tool for you.

Myth #2: You give up control of your assets when you create a trust

Many believe that creating a living trust transfers control of assets away from the creator of the trust. Fortunately, as the grantor (creator) of the trust, you’re still in charge.

Once the living trust is created, you maintain control of your assets, including how they are distributed to beneficiaries, when they are distributed, and who will control your trust in the event of your incapacity or death.

You will also have continual access to the funds in the living trust. As a trustee of your own living trust, there is no need to worry about someone else spending or investing your assets without your knowledge, and you’ll be able to retrieve funds when you need them. Remember, as a trustee you are still the boss.

Myth #3: Living trusts only benefit beneficiaries, not the trust creator

While living trusts are designed to pass assets to beneficiaries, grantors (the trust creators) also benefit from setting up a living trust. You’ll be able to control how your affairs are handled and how your assets are distributed in the future, giving you peace of mind now.

You’ll also be able to maintain your privacy. Unlike a will, a living trust is a private legal document that will not become a part of the public record in Minnesota. You’ll be able to keep your estate details private, including information about your assets and beneficiaries.

Myth #4: Creating a living trust is complicated and expensive

It’s true that living trusts are more involved legal documents than wills. They have to be to provide you and your loved ones with benefits like avoiding probate and avoiding court control of assets at incapacity. Thankfully, they can be efficiently set up by an estate planning attorney.

While living trusts are typically more expensive than wills up front, they can actually save you and your loved ones significant amounts of money by avoiding probate expenses. They’ll also save large amounts of time, and help your loved ones avoid aggravation and stress in the future by smoothly distributing assets without the need for probate proceedings in court.

Myth #5: A living trust can’t be updated

Many believe that once it’s set up, a living trust is written in stone. However, since it’s a ‘revocable living’ trust, it can be continually updated and even revoked.

With the help of an estate planning attorney, you can modify or revoke your living trust when changes occur in your life to ensure your assets are handled correctly and your loved ones are protected.

Myth #6: Living trusts automatically avoid probate

Living trusts can help you avoid probate, but setting one up doesn’t guarantee this automatically. With the help of an experienced estate planning attorney, you’ll need to make sure your trust is set up correctly and ensure you fund or transfer your assets to the living trust.

Any asset that isn’t properly funded to your living trust may be subject to probate. Thankfully, as long as you fund your assets into your living trust, you’ll likely be able to avoid probate.

Myth #7: A living trust keeps your wealth safe from creditors

While a living trust can protect who controls your assets in case of your death or incapacity, you can’t avoid payments to creditors by transferring assets to a living trust. You’ll still likely need to pay your debts, and you won’t be able to make your assets off limits to creditors by setting up a living trust.

Myth #8: Living trusts protect your assets from nursing homes

Living trusts are self-settled, meaning that you maintain control of your assets and receive the benefits of owning them. This is a central advantage of creating a living trust, but it does mean that a trust won’t protect your assets if you need to pay for a nursing home.

Setting up a trust won’t help you qualify for benefits like Medicaid or Medical Assistance. Assets held in your living trust are still yours. Accordingly, you would still need to pay for a nursing home or long-term home care services.

Myth #9: A living trust is all I need for an estate plan

A living trust is a very effective estate planning tool, and can serve as a powerful foundation to your estate plan. However, it doesn’t represent a complete estate plan by itself.

You’ll need other estate planning documents to supplement your living trust, like a ‘pour-over will,’ advance medical directives, powers of attorney, and more.

Myths Busted? Ready for a Living Trust? Mullen & Guttman Can Help

Now that you’ve seen past the myths, it’s time to talk to an estate planning lawyer to determine if a revocable living trust is the right tool to address your unique concerns and achieve your goals. Schedule a free consultation to learn more about living trusts and how you can take control of your future today.

8 Reasons to Consider a Revocable Living Trust

If you’re thinking about estate planning, a revocable living trust is perhaps the most important planning strategy you should consider. Revocable living trusts are a powerful estate planning tool that can offer protection for you and your family’s future. Let’s get into why a living trust can be such an important part of your estate plan.

What is a Revocable Living Trust?

A revocable living trust is a legal document that gives instructions for what you want to happen to your assets if you are incapacitated and when you die. Unlike a will, a living trust can help your estate avoid probate, prevent the court from controlling your assets if you become incapacitated, and give you control of the assets you leave to your loved ones.

Living trusts allow flexibility and customization, so you can choose where and when your assets are distributed and make changes any time.

Do I Need a Revocable Living Trust?

There’s a perception that living trusts are primarily for the very wealthy, but the reality is that living trusts can provide benefits to many “regular” people who are not wealthy in the traditional sense. A revocable living trust is a great foundation for an estate plan. In the long run, setting up a living trust can even end up costing you less than a will, since your loved ones should be able to avoid expensive probate procedures at both incapacity and death.

Reasons to Consider a Revocable Living Trust

1. Avoid probate

Unlike a will, a living trust can allow your loved ones to avoid a long and costly court-managed probate process when you pass away. When setting up a living trust, you’ll transfer title of assets from your individual name to the name of your trust. As the grantor (creator) of the trust, you still have total control of your assets, meaning you are still the “boss,” but the court will not be involved in controlling and transferring your assets upon incapacity and your passing.

If you happen to own real estate in multiple states, using a living trust should allow you to avoid multiple probate proceedings and save your family even more potential headaches in the future.

2. Can save you and your loved ones money

While living trusts are initially more expensive than wills since they’re more involved legal documents, they can save you and your loved ones a lot in the long run. Probate expenses typically add up to 3%-7% of the total estate value, so helping your family avoid these fees can save them a substantial amount of money after your passing.

Revocable living trusts are also harder to contest than a will, which may also save your loved ones both time and money. Additionally, if you are married, a living trust can be used to reduce or even eliminate your estate taxes, depending on the size of your estate.

3. Avoid court control of your assets at incapacity

Living trusts allow you to put a contingency plan in place in case of your own incapacity. When you set up the trust, you’ll appoint a trustee and successor trustee to manage your assets.

Typically, you would be your own trustee. However, in certain circumstances you might appoint a person or organization as your trustee. Either way, you can also name multiple successor trustees to manage your assets if you become incapacitated, allowing you to give control to someone you trust instead of the court.

4. Maintain your privacy

A living trust is a private legal document, and in most states, including Minnesota, it will not become a part of the public record. No one should be able to find information about the distribution of your estate without your consent. A will, on the other hand, is a public record that prevents you from keeping your estate details private, including information about your assets and names of your heirs and beneficiaries.

5. Flexible distribution to beneficiaries

A living trust allows you to control who will receive your assets, as well as when and how they will receive them. Upon your death, assets can be distributed to beneficiaries as soon as your successor trustee wraps up your final affairs, often a much quicker process than court-managed probate.

However, you can also choose to keep your assets in the trust, managed by your successor trustee, until your beneficiaries reach a certain age. You can even have the money distributed in installments to help ensure your beneficiaries spend it wisely. This flexible distribution of assets is an effective and customizable way to protect your family’s future.

6. Can be changed or revoked at any time until your incapacity/death

As the name implies, you can revoke or modify your revocable living trust at any time. The flexibility to update your plan when changes occur in your life allows you to ensure your family is being protected. For revisions to your living trust, like naming a new trustee, successor trustee, or beneficiary, you’ll want the guidance of an experienced living trust attorney.

7. Can be managed by an experienced trustee

If you don’t have the time, ability, or desire to manage your own trust, you can appoint a professional corporate trustee. A corporate trustee may also be a good fit if you do not have people in your life that you would “trust” to manage your trust. Corporate trustees are banks or trust companies that are experienced in managing trust assets, and also government-regulated, objective, and must follow the instructions in your trust.

Although professional trustees charge for their services, the fees are typically more than offset by their guidance and investment abilities. A professional trustee will give you the freedom to spend time with your loved ones, travel, or do whatever else you’d like without worrying about the day-to-day managing of your trust. A professional trustee will also give you assurance that your assets will managed and distributed in accordance with your wishes.

8. Gives you and your loved ones peace of mind

Due to its detailed and flexible nature, a revocable living trust allows you to plan for your future without worrying about unforeseen issues. Unlike a will, you can take steps to avoid an unintentional disinheritance, provide care for loved ones with special needs, control how your assets are distributed, and much more. You’ll get peace of mind now, and your loved ones will get peace of mind later.

Take Control of Your Future

Setting up a revocable living trust while you’re healthy and have the time to plan out your future is one of the best gifts you can give to your family. You may not think you need one yet, but taking this step proactively will give you control over your assets now and after your death or incapacity, giving you the assurance that your family will be protected.

Speaking with an experienced living trust lawyer will allow you to learn about the benefits of revocable living trusts in depth and apply them to your unique situation. Schedule a free consultation today to start taking control of your future.

5 Reasons Why DIY Estate Planning Can Do More Harm Than Good

If you’re considering a do-it-yourself estate plan, you’ve already taken an important step: proactively seeking to help your loved ones avoid hardships upon your incapacity or death. Establishing an estate plan is essential in helping your family and friends avoid disputes over your care and assets, higher estate taxes, a difficult court process, and more. 

Woman estate planning on a laptop

You may have utilized estate planning software, conducted research, or created your own estate planning checklist. However, without the guidance of an estate planning attorney, your efforts may be wasted. Planning for your estate may be more complex than you realize, and small mistakes can have large consequences. Let’s take a look at some of the common pitfalls you may encounter in DIY estate planning.

1. You may not realize your plan is incomplete. 

Estate planning documents are complex. Documents like wills and revocable living trusts take a significant amount of time to complete correctly, and it may not be clear when an estate planning document is complete or if a particular document has been properly executed, giving you a false sense of security. Additionally, you need to make sure your assets are actually funded or tied into your estate plan

2. Small mistakes might go unnoticed. 

Small changes in wording could have a massive impact for your family in the future. These errors can get lost in the estate planning document and may not be detected until it’s too late, leaving your family to deal with the fallout. For example, you could inadvertently disinherit a child or name the wrong person to settle your estate.

3. Online services aren’t state specific. 

Estate planning software is designed for a broad audience. However, each state has its own estate planning intricacies. For example, Minnesota law sets forth what should be included in a Healthcare Directive and statutory power of attorney. Using a general template for your estate plan could lead you to miss critical details and cause issues for your family down the road.

4. Online services aren’t customizable. 

Estate planning websites may not be customizable to your unique circumstances since they aim to appeal to a wide audience. One size simply doesn’t fit all. Your estate plan needs to be created to reflect your situation, goals, and concerns. Online services are only as good as the information entered, and there may not be options to create a full picture of your situation.

5. You get what you pay for. 

Online estate planning services are enticing largely because of their low prices. It can be tempting to get a cheap and easy will or revocable living trust, but in most cases you’ll get exactly what you pay for. Your plan may be incomplete, and you won’t have the support of trained estate planning attorneys when you get stuck. Estate plans are an investment in your family’s future security, not an area to cut costs. Doing your own planning may even cost your loved ones more money than meeting with an estate planning attorney.

Avoid an Accidental Disinheritance


At Mullen & Guttman, we’ve encountered a variety of faulty plans that were a result of do-it-yourself estate planning.

Here’s an example of a small mistake that would have caused major issues had it slipped through the cracks.

A number of years ago, our firm met with a gentleman to review his estate plan. The man had two biological and two step-children he had raised from an early age and treated the same. Prior to meeting with Mullen & Guttman, this man created his will using an online estate planning software. He had intended for his assets to be split equally among all four children.

Unfortunately, the estate planning tool he used employed language that passed his assets down ONLY to his biological descendants, disinheriting his other two children. During his meeting with our firm, this oversight was caught immediately, and a new estate plan was drafted to pass his assets to all four children.

Avoid Unfixable Issues

Sometimes, do-it-yourself estate plans go wrong, and there’s no way to fix them. Here’s an example.

A client came to see us after her mom died suddenly at a relatively early age. The mom had done her plan with an online estate planning tool. She had a fallout with her oldest child, and attempted to disinherit this child from her will. However, she did not realize that the will would not control assets that passed by beneficiary designation. In fact, the mom’s largest asset was a life insurance policy, which she wanted to go to her youngest child.

Without the guidance of an estate planning attorney, she failed to update the beneficiaries on the life insurance policy, and the policy was split between the oldest and youngest child equally. Although her goal was to have all assets go to her youngest child, the oldest child ended up receiving a significant inheritance.

How the Estate Planning Attorneys at Mullen & Guttman Can Help

While helping hundreds of Minnesota families address their estate planning goals and concerns, the lawyers at Mullen & Guttman have encountered a myriad of DIY estate planning errors. Fortunately, most of these errors can be corrected with an updated estate plan prepared by an experienced estate planning lawyer.

Whether or not you’ve started creating your own estate plan, we can help you ensure that you’re effectively protecting yourself and your family. Schedule a free consultation today.

What to Do When a Loved One Passes

The time immediately following a loved one’s passing is never easy and can often be overwhelming. In addition to sorting through a variety of emotions, you may find yourself with an extensive list of confusing and draining responsibilities, so it’s important to stay in touch with family and friends for support and encouragement. If your loved one passes in the midst of shelter-in-place orders, connecting with family and friends virtually can help you through this difficult process.

Make sure to discern and honor the final wishes of your loved one. Final wishes may be included in an estate plan, but often are recorded separately. These include whether the deceased is an organ donor, whether they want to be cremated or buried, and other instructions for the funeral. Be sure to contact immediate family to clarify final wishes.

Arranging the Funeral

Once the family has been contacted, you can begin funeral preparations. Where possible, divide responsibilities among family members. If the deceased left no instructions, seek the advice of family members as you plan for the funeral. While keeping in mind the wishes of the deceased and family, follow these general guidelines:

  1. Set a clear budget. Costs can add up, with the average funeral coming in between $7,000-$15,000.
  2. Research funeral home options that align with your budget. Consult family or friends who have experience making funeral arrangements.
  3. Choose a funeral home.
  4. Meet with the funeral director and clearly communicate the plan for the funeral: embalming or cremation, open or closed casket, burial site, religious traditions, and any other details you’ve gathered from final wishes or family.
  5. Arrange for the headstone. You can do this through the cemetery or an outside vendor.
  6. Prepare an obituary. You can do this through the funeral home, write one yourself, or ask a family member.
  7. Spread the word. When a date and time are set for the service, prepare a list of well-wishers to invite. Note that during the current COVID-19 crisis funerals and memorial services are often being streamed online. Include an address to send flowers and donations in the invitation.

Tasks to Complete and Documents to Gather

After the funeral, you and your family will have further tasks to complete. These tasks may include:

  • Securing Real Estate: Make sure to secure any real estate owned by your loved one. This may include changing locks, forwarding mail, updating utility services, and updating homeowner’s and automobile insurance. You may need to make arrangements for lawn care and/or snow removal.
  • Contacting Family and Friends: Keep friends and family informed of funeral and memorial details.
  • Contacting Your Loved One’s Professionals: Locate information for your loved one’s attorney, accountant, and financial advisor.

Most of these tasks require some kind of documentation. Here are some of the documents to gather:

  • Death certificate: You may need up to a dozen copies for various tasks. You can work with the funeral director to do this, or contact the Minnesota Office of Vital Records.
  • Personal Documents: Birth certificate, marriage or divorce certificates, military discharge papers.
  • Financial Documents: Financial or retirement account records, IRS returns, property deeds, vehicle titles.
  • Insurance: Locate life insurance policy and contact company, stop health insurance and update other insurance policies as needed.
  • Will/Living Trust: Locate the will or living trust of the deceased.

The Probate Process

If your loved one created their will or living trust with a lawyer, locate the original documents. It is usually beneficial to speak with an estate planning attorney. Be sure to find a law firm with experience in estate planning and administration, and a reputation for compassion and empathy.

It may be difficult to begin a legal process shortly after a loved one’s death. However, if your loved one had a will, you may need to go through probate to carry out their wishes and distribute their assets. If they had a living trust, you likely won’t need to go through probate, but you can still get guidance from estate planning lawyers.

So, what is probate? Probate is the legal process of settling an estate after a loved one dies. The property of the deceased is gathered and inventoried, their debts are paid, and everything left is either distributed in accordance with the will or divided among their heirs.

It’s a common misconception that if the deceased has a will, their estate doesn’t have to go through probate. Though a will can name a personal representative to allow the probate process to go more smoothly, the estate will still have to go through probate. If the deceased doesn’t have a will, the probate court will appoint a personal representative.

Since each estate is unique, the probate process is slightly different in every situation. However, the process generally follows these steps:

  1. Gather information and documents, including will, death certificate, and asset information.
  2. Meet with a probate attorney to prepare probate application or petition.
  3. File the probate application or petition with the proper probate court to appoint a Personal Representative (sometimes referred to as Executor or Administrator) for the estate.
  4. Publish notice of the probate in the appropriate newspaper.
  5. Give notice to heirs and beneficiaries under the will or to statutory heirs (if no will exists).
  6. Inventory and appraisal of estate assets by the Personal Representative.
  7. Payment of estate debt to rightful creditors.
  8. Sale of estate assets.
  9. Payment of estate taxes, if applicable.
  10. Final distribution of assets to beneficiaries or heirs.

Probate typically takes between nine and twelve months, and can drag on much longer if someone contests the will, if there are disputes between the personal representative and alleged creditors, or if the estate is complex and enters formal probate proceedings.

How Does Probate Work During the COVID-19 Crisis?

The ongoing COVID-19 pandemic has impacted many legal processes, including probate. Currently, many hearings are being conducted by remote technology and certain fees and fines are delayed by 60 days. Since the coronavirus pandemic is a rapidly developing situation, it’s important to keep track of how the virus could impact your probate process by contacting your lawyer and checking the Minnesota Judicial Branch website.

How Mullen & Guttman’s Probate Attorneys Can Help You

The experienced Minnesota probate attorneys at Mullen & Guttman can assist you with your loved one’s living trust or will, and guide you through both the informal and formal probate processes. During the COVID-19 crisis, we are fully equipped to communicate with you by phone, Zoom, email, and mail, as well as conduct limited in-person meetings that observe social distancing and other appropriate safety precautions.

Even when the estate being administered appears to be straightforward, unexpected roadblocks can slow down the process. The experienced and compassionate Minnesota probate attorneys at Mullen & Guttman have helped many families through the probate process. We can assist you through each step of probate, from filing an application to distributing assets, as well as assist with the administration of a living trust and updating the estate plan for a surviving spouse or beneficiary.

Contact the probate lawyers at Mullen & Guttman to start your probate process today.

Gun Trusts: Targeted Estate Planning

If you have a gun collection, your estate plan may be missing the mark if it fails to include a specially drafted gun trust. The typical estate plan provides for tax saving strategies, probate avoidance and beneficiary designation of various assets. However, some assets pose additional issues that must be carefully addressed to avoid unintended consequences in the future. Firearms, in particular, are regulated under federal and state laws and demand careful attention from your estate planning attorney.

Your gun collection may include weapons used for sport, self-defense or investment purposes. America’s long history with firearms means your collection may include family heirlooms that have been passed down from generation to generation.

Unlike simple bank account, real property or vehicle ownership changes, transfers of many firearms and accessories are restricted and subject to very specific requirements. For example, under Title II of the National Firearms Act (NFA), the transfer of short-barreled shotguns and rifles, silencers, automatic weapons and certain other “destructive devices” require the approval of your local Chief Law Enforcement Officer (CLEO) and a federal tax stamp. To keep your gun collection in your family, you must ensure that all transfers comply with the National Firearms Act, as well as state laws where you and your beneficiaries reside.

So how do you ensure your firearms seamlessly transfer to your loved ones after you pass on?

By establishing a revocable living “gun trust,” which holds only your firearm collection, you can retain ownership and control of your collection during your lifetime while providing for the disposition of your guns to your intended beneficiaries. During your lifetime, you remain the trustee and beneficiary of the gun trust, and appoint a successor trustee and lifetime and remainder beneficiaries. Because the trust is revocable, you are free to make changes or revoke it at any time.

As with most living trusts, a gun trust enables you to provide detailed instructions regarding the disposition of your assets upon your death. But given the unique challenges associated with transferring firearm ownership, your gun trust is most valuable in helping expedite the transfer of a firearm that is restricted under the National Firearms Act. If you use a gun trust to own and transfer Title II firearms, you are not required to obtain the approval of your local CLEO; the transfer application may be sent directly to the Bureau of Alcohol, Tobacco and Firearms.

NFA-restricted firearms are not permitted to be transported or handled by any other individual unless the registered owner is present – which can present a problem if the registered owner is deceased. However, when owned by a properly drafted gun trust, these weapons may be legally possessed by the trustee, and any beneficiary may use the firearm under the authority of, or in the presence of, the trustee. This greatly simplifies and expedites the transfer, and saves your beneficiaries from any unintended violations of the National Firearms Act – which can result in steep fines, prison, and forfeiture of all rights to possess or own firearms in the future.

Gun dealers often make trust forms available, but these boilerplate documents typically fail to specifically address the ownership of firearms. A properly drafted gun trust will include guidance or limitations for the successor trustee, to ensure he or she does not inadvertently commit a felony when owning, using or transferring the weapons.
 

Testamentary Substitutes

In states that have “elective share statutes,” a surviving spouse is legally entitled to a certain percentage of the deceased’s estate, even if that spouse has attempted to disinherit or to provide a lesser bequest, or gift, under the will.  In “separate property” states, an elective share statute is likely to be in effect.  If the estate in question is valued at $50,000 or less, the elective share is likely to be the actual amount of the net estate.

“Testamentary substitutes” are removed from particular assets that would otherwise pass to the surviving spouse.  Assets passing by will or through intestacy could cause a reduction in the elective share amount as well.  Totten trusts, such as Payable-On-Death Bank Accounts (PODs), Retirement or joint bank accounts, gifts causa mortis (“gifts made by the decedent in contemplation of death,”) U.S. savings bonds, jointly held property, and gifts or transfers that were made approximately one year prior to death, are some examples of testamentary substitutes.

If a gift was made about one year prior to death, yet involves medical or educational expenses, then the gift may not qualify as a true testamentary substitute.  With regard to PODs, the spouse, offspring, or grandchildren will be named as beneficiaries.  The funds of a POD are only distributed upon the decedent’s death.   Testamentary Trusts are listed in the will until the designated property passes to the trust upon the testator’s death.

Generally, a gift causa mortis is only active upon the decedent’s expected death and is typically revocable.  Moreover, certain elements must exist to create a valid gift causa mortis.  These include an intent to create “an immediate transfer of ownership,” valid delivery, acceptance of the gift by the donee, and the donor’s “anticipation of imminent death.”  There are also certain circumstances by which gifts causa mortis are not valid.  For example, if the donee passes away before the donor, it is unlikely that a property interest was transferred.  Gifts causa mortis are also taxed as if the testator had listed the gifts in his or her will.

In such cases, testamentary substitutes are generally put back into the net estate total to determine the elective share amount that the surviving spouse will collect.  The aforementioned may vary if property is held jointly, as joint tenants or otherwise, because the spouse may have a right of survivorship in the property.  Estate planning attorneys are aware of all the ins and outs of testamentary substitutes and how they may affect the distribution of your assets.  It is useful, if not essential, to consult with a knowledgeable attorney when making arrangements regarding testamentary substitutes.

Preventing Will Contests

So, you have a will, but is it valid?  A will can be contested for a multitude of reasons after it is presented to a probate court.  It is in your best interest to have an attorney draft the will to prevent any ambiguity in the provisions of the document that others could dispute later. 

A will may be targeted on grounds of fraud, mental incapacity, validity, duress, or undue influence.  These objections can draw out the probate process and make it very time consuming and expensive.  More importantly, an attorney can help ensure that your property is put into the right hands, rather than distributed to unfamiliar people or organizations that you did not intend to provide for. 

At the time you executed the will, you must have been mentally competent, or of “sound mind.”  A court will inquire as to whether you had full awareness of what you were doing.   There will also be an inquiry into your understanding and knowledge of the assets in your name.  If, at the moment you executed the will, you were pressured or influenced by another individual to sign the document, it may be invalidated. 

If the document was signed under duress or undue influence, the provisions are likely to be against your intentions or requests.  Moreover, if you are trying to nullify a will on your own behalf, you are likely to need an attorney because it is very difficult and complicated to demonstrate the existence of duress, fraud, or undue influence.   If drafting a new will, counsel can ensure that your document abides by all of the validity requirements, so the will’s provisions can successfully carry out your intentions after your death.

For example, the will creator or “testator,” is usually required to sign the document before several witnesses who are over the age of eighteen, during a certain period of time.  A will or a certain bequest to a person could be deemed void if the beneficiary was also a witness.   In your state, you may be able to execute a “self-proving affidavit,” which may do away with some of the requirements in order to establish a valid will.  The testator should also designate a person to execute the document.  Consult your attorney to ensure that your will comports with your state’s particular laws and is sustainable against any future contests.  

 

What’s Involved in Serving as an Executor?

An executor is the person designated in a Will as the individual who is responsible for performing a number of tasks necessary to wind down the decedent’s affairs. Generally, the executor’s responsibilities involve taking charge of the deceased person’s assets, notifying beneficiaries and creditors, paying the estate’s debts and distributing the property to the beneficiaries. The executor may also be a beneficiary of the Will, though he or she must treat all beneficiaries fairly and in accordance with the provisions of the Will.

First and foremost, an executor must obtain the original, signed Will as well as other important documents such as certified copies of the Death Certificate.  The executor must notify all persons who have an interest in the estate or who are named as beneficiaries in the Will. A list of all assets must be compiled, including value at the date of death. The executor must take steps to secure all assets, whether by taking possession of them, or by obtaining adequate insurance. Assets of the estate include all real and personal property owned by the decedent; overlooked assets sometimes include stocks, bonds, pension funds, bank accounts, safety deposit boxes, annuity payments, holiday pay, and work-related life insurance or survivor benefits.

The executor is responsible for compiling a list of the decedent’s debts, as well. Debts can include credit card accounts, loan payments, mortgages, home utilities, tax arrears, alimony and outstanding leases. All of the decedent’s creditors must also be notified and given an opportunity to make a claim against the estate.

Whether the Will must be probated depends on a variety of factors, including size of the estate and how the decedent’s assets were titled. An experienced probate or estate planning attorney can help determine whether probate is required, and assist with carrying out the executor’s duties. If the estate must go through probate, the executor must file with the court to probate the Will and be appointed as the estate’s legal representative.  Once the executor has this legal authority, he or she must pay all of the decedent’s outstanding debts, provided there are sufficient assets in the estate. After debts have been paid, the executor must distribute the remaining real and personal property to the beneficiaries, in accordance with the wishes set forth in the Will. Because the executor is accountable to the beneficiaries of the estate, it is extremely important to keep complete, accurate records of all expenditures, correspondence, asset distribution, and filings with the court and government agencies.

The executor is also responsible for filing all tax returns for the deceased person including federal and state income tax returns and estate tax filings, if applicable. Additional tasks may include notifying carriers for homeowner’s and auto insurance policies and initiating claims on life insurance policies.

The executor is entitled to compensation for his or her services.  This fee varies according to the estate’s size and may be subject to review depending on the complexity as well as the time and effort expended by the executor.

 

When is a person unfit to make a will?

Testamentary capacity refers to a person’s ability to understand and execute a will. As a general rule, most people who are over the age of eighteen are thought to be competent to make and sign the will. They must be able to understand that they are signing the will, they must understand the nature of the property being affected by the will, and they must remember and understand who is affected by the will. These are simple burdens to meet. However, there are a number of reasons a person might challenge a will based on testamentary capacity.

If the testator of a will suffers from paranoid delusions, he or she may make changes to a testamentary document based on beliefs that have no basis in reality. If a disinherited heir can show that a testator suffered from such insane delusions when the changes were made, he or she can have the will invalidated. Similarly a person suffering from dementia or Alzheimer’s disease may be declared unfit to make a will. If a person suffers from a mental or physical disability that prevents them from understanding from understanding that a will is an instrument that is meant to direct how assets are to be distributed in the event of his or her death, that person is not capable of executing a valid will.

It is not entirely uncommon that disinherited heirs complain that a caretaker or a new acquaintance brainwashed the testator into changing his or her will. This is not an accusation of incapacity to make the will, but rather a claim of undue influence. If the third party suggested making the changes, if the third party threatened to withhold care if the will was not changed, or if the third party did anything at all to produce a will that would not be the testator’s intent absent that influence, the will may be set aside for undue influence. Regardless of the reason for the challenge, these determinations will only be made after the testator’s death if the will is presented to a court and challenged. For this reason, it is especially important for the testator to be as thorough as possible in making an estate plan and making sure that any changes are made with the assistance of an experienced estate planning attorney.

6 Events Which May Require a Change in Your Estate Plan

Creating a Will is not a one-time event. You should review your will periodically, to ensure it is up to date, and make necessary changes if your personal situation, or that of your executor or beneficiaries, has changed. There are a number of life-changing events that require your Will to be revised, including:

Change in Marital Status: If you have gotten married or divorced, it is imperative that you review and modify your Will. With a new marriage, you must determine which assets you want to pass to your new spouse or step-children, and how that may relate to the beneficiary interest of your own children. Following a divorce it is a good idea to revise your Will, to formally remove the ex-spouse as a beneficiary, and also change your beneficiary on any life insurance policies, pensions, or retirement accounts.

Estate planning is complicated when there are children from multiple marriages, and an attorney can help you ensure everyone is protected, which may include establishing a trust in addition to the revised Will. Depending on jurisdiction, this may also apply to couples who have established or revoked a registered domestic partnership. If one of your Will’s beneficiaries experiences a change in marital status, that may also trigger a need to revise your Will.

Births: Upon the birth of a new child, the parents should amend their Wills immediately, to include the names of the guardians who will care for the child if both parents die. Also, parents or grandparents may wish to modify the distribution of assets provided in their Wills, to include the new addition to the family.

Deaths or Incapacity: If any of the named executors or beneficiaries of a Will, or the named guardians for your children, pass away or become incapacitated, your Will should be revised accordingly.

Change in Assets: Your Will may need to be changed if the value of your assets has significantly increased or decreased, or if you dispose of an asset. You may want to modify the distribution of other assets in your estate, to account for the changed value or disposition of the asset.

Change in Employment: A change in the amount and/or source of income means your Will should be examined to see if any changes must be made to that document. Retirement or changing jobs could entail moving to another state, thus subjecting your estate to the laws of that state when you die. If the change in income modifies your investing, saving or spending habits, it may be time to review your Will and make sure the distribution to your beneficiaries will be as you intended.

Changes in Probate or Tax Laws: Wills should be drafted to maximize tax benefits, and to ensure the decedent’s wishes are carried out. If the laws regarding taxation of the estate, distribution of assets, or provisions for minor children have changed, you should have your Will reviewed by an estate planning attorney to ensure your family is fully protected and your wishes will be fully carried out.