Hooper Law Office Estate Planning Blog

This is where there is a big difference between real estate and everything else. Personal property (everything that is not real estate) is handled by the decedent’s state of domicile. However, the rule is different for real estate. Each state will require a licensed attorney to administer any out-of-state property. This is one 

This can be a real problem because a beneficiary who is less than 18 years old cannot own property. If your mother left either a Will or Living Trust it will usually contain provisions so that a minor’s property can be maintained in a trust. However, if your mom either died intestate (no Will or trust) or if the bequest was part of the beneficiary designation, then the answer depends upon the amount of the inheritance. Generally, if it is a small amount you will be able to put it into a Uniform Transfers to Minors Act account. If the inheritance exceeds the statutory limit you will need to initiate a probate proceeding to have a guardian named for each minor beneficiary. The named guardian will then manage the money for the benefit of the ward (the minor) until they reach the age of 18.

As a personal representative, once all matters are settled, a Personal Representative’s Statement to Close must be filed with the court. Final steps leading up to the statement are:

-Paying any outstanding debts;

-Filing the estate income taxes and receiving approval (a Closing Certificate) from the IRS;

-Distributing all assets to rightful beneficiaries; and

-Completing the sale of any property

If any matters need to be handled after the statement is filed, the personal representative would need to petition the court to reopen the probate. Generally the same steps apply for trust settlement; however there is no need to file a statement with the court. The trustee would not have to file any sort of petition to reopen a trust settlement because technically the trust is still “living” many years after distributions have been made and any property is sold.

Cost will depend upon the size and complexity of the trust assets, how much of the work your family does and how much is done by attorneys and accountants. Most of the tasks associated with doing a trust settlement are the same as probate. One thing can be said however, and that is that the cost will be significantly less than if the identical estate went through the probate process. By having your family in charge, rather than some judge, many of the tasks are simplified and streamlined.

As a rough guide figure that estates between $300,000 and $700,000 will probably wind up paying about 3% in attorney and accountant fees. Because some of the probate work does not vary with estate size, smaller estates usually pay a larger percentage and larger estates lower one. In addition, by Wisconsin Statute the personal representative is entitled to a 2% fee.

Before you hire an estate planning attorney to assist with probate please be certain to get a written fee agreement. The fee can be quoted at either an hourly rate or as a fixed fee. If hourly it should specify both the attorney and the paralegal billing rates. There should also be a dollar amount specified that cannot be exceeded without your approval. If the agreement specifies a fixed fee it will probably be for a range to accommodate the many uncertainties that can pop up in a probate administration.

The time it takes for either probate or settlement may differ for many reasons. In our experience the average probate takes approximately 7 to 11 months and the average trust settlement can take anywhere from 4 to 7 months. The length of time for probate is generally longer due to court involvement. Often times the sale of real estate can also cause considerable delays. Other factors could include uncooperative heirs, out-of-state property, or obtaining tax clearance.

Providing this type of assistance can be a lot of work, and it is often appropriate to be compensated. A personal representative’s right to be paid is specified by Statute, whereas the trustee’s right to be paid is authorized in the trust. Typically the amount you can receive is limited to what a professional fiduciary in your area would charge for similar services. On the other hand, reimbursement of expenses you incur is almost always appropriate. If you do choose to receive compensation  for acting as a personal representative or trustee be aware that this is taxable income to you, unlike the reimbursement or expenses.

This is a difficult area because, unless the loan is documented. There can be a difference of opinion as to whether it was meant to be a loan or a gift. If your brother either signed a note for the loan, or does not dispute that it was meant to be a loan, then the remaining value of the loan is added back into the estate to be included in the total value.

The real problem occurs if there is no note and your brother insists that your Father mean the $50,000 to be a gift. In this case you will need to look for other evidence of your Dad’s intent. Without evidence you have to decide whether this is something worth fighting over. Whatever your Father’s intent, a divided family was certainly not part of it. 

Personal property is a person’s “stuff”- the couch, rings, tools, etc…It does not include cash accounts, cars, or land. You must first read the will or trust to see if your parents left any instructions regarding how their personal property should be divided. Often a personal property memo is authorized by the estate plan, which provides that specific items be given to certain people. These are called “specific distributions.” Any items that are not specifically distributed will pass to the beneficiaries of the estate plan. If there is no plan, distribution pattern will be determined by state law. Diving the personal property does not mean you have to cut the couch in three pieces and give one to each heir. Rather, it requires the trustee or personal representative make sure the personal property is divided so that each person receives an amount of property in proportion to their share. The children will often decide among themselves what is fair and the trustee or personal representative has the authority to settle disputes. If certain property is unwanted it is often sold and the proceeds are divided between the beneficiaries.

Personal property is a person’s “stuff”- the couch, rings, tools, etc…It does not include cash accounts, cars, or land. You must first read the will or trust to see if your parents left any instructions regarding how their personal property should be divided. Often a personal property memo is authorized by the estate plan, which provides that specific items be given to certain people. These are called “specific distributions.” Any items that are not specifically distributed will pass to the beneficiaries of the estate plan. If there is no plan, distribution pattern will be determined by state law. Diving the personal property does not mean you have to cut the couch in three pieces and give one to each heir. Rather, it requires the trustee or personal representative make sure the personal property is divided so that each person receives an amount of property in proportion to their share. The children will often decide among themselves what is fair and the trustee or personal representative has the authority to settle disputes. If certain property is unwanted it is often sold and the proceeds are divided between the beneficiaries.

It is not uncommon, with today’s high medical costs, for the debts to exceed remaining assets. The only way to resolve this dilemma so you get paid and don’t incur and liability is to pay the debts based on an order to not use or disperse funds. This is one of the rare instances where you want to go through probate, and with a deficit estate it is more complicated than usual. In this case you are going to want to hire an estate planning attorney.

The good news is that, if done properly, you will not be liable for your father’s debts and can get repaid for the funeral. In addition, the cost of hiring an attorney will not be borne by you, but rather by the creditors. This is because there is a hierarchy in the order of paying expenses and debts. The first to get paid are the expenses of administration such as attorney and accountant fees. Without this supervision you wouldn’t be able to get anyone to help you. The next to get paid is the funeral home. Following the funeral expenses come the creditors, and finally the heirs. In a case such as this the family will get nothing and the creditors will get a fraction of what they are owed. It is up to the judge to approve any payments and the creditors are bound by the judge’s decision, so you will be off the hook.