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Hooper Law Office,LLC Estate Planning Blog

Friday, April 5, 2013

We have a living trust. How much is it going to cost after one of us dies?

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.


Friday, March 29, 2013

How much does it cost to go through probate?

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.


Wednesday, March 27, 2013

How long does probate / settlement take?

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.


Monday, March 25, 2013

I’ve been named by my parents as their Personal Representative and successor Trustee. Can I get paid for this and also be reimbursed for my expenses?

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.


Tuesday, March 19, 2013

Dad loaned my brother $50,000. After Dad’s death how to we even things up?

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. 


Wednesday, March 13, 2013

Probate&Settlement

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.


Wednesday, February 20, 2013

How do my siblings and I divide personal property?

 

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.


Thursday, February 14, 2013

My father died and his medical and credit card bills exceed his assets. I had to pay the funeral home. How do I get reimbursed and will I be liable to his debts?

 

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. 


Wednesday, February 6, 2013

As Personal Representative / Trustee, when can I make distributions or pay bills?

 

If the estate is being probated the court and all heirs have to approve the nominated personal representative. Once approved, the personal representative is issued Domiciliary Letters which signify the personal representative’s authority. After these letters are received, the personal representative can carry out the responsibilities required to close the estate, such as; pay bills, file claims on any of the decedent’s policies, and make distributions. A trustee has the same authority as a personal representative, but can act almost immediately without the process of approval from the heirs or court. Keep in mind, when you make distributions and pay bills, you will need to have a full accounting before the estate can be closed. 


Monday, February 4, 2013

Do I really have to do a probate when there is just a small amount to be transferred?

 

If often seems like taking a small estate through probate is like driving a tack with a sledge hammer. There is no need for the formalities of a full probate process just to transfer the decedent’s car and a few miscellaneous checks that always seem to come in after death. For that reason there is a simplified procedure known as a Transfer by Affidavit which can be used.

The way the affidavit works is that someone (usually the personal representative nominated in the Will) lists all of the probate assets on the affidavit, and under Wisconsin Law those assets are transferred to that person. The person who executed the affidavit then pays the final expenses and any creditor claims before distributing what remains according to the provisions of the Will.

If you use the transfer by affidavit approach it is probably advisable to still do the creditor notification to prevent becoming liable for the decedent’s debts. You also need to make certain that all income taxes are paid and the proper tax returns filed. 


Monday, January 28, 2013

We searched everywhere but can’t find my Mom’s Will. Now what do we do?

 

If your Mom’s will cannot be found after a reasonably diligent search she will be considered to have died intestate. The first step is for someone (usually one or more of the children) to commence a probate for your Mom and ask to be appointed as Personal Representative. All of your Mom’s heirs at law will be notified about this. Unless someone objects, the petitioner is usually appointed. From this point on it operates just like a probate where there is a Will. Administrative expenses need to be paid and the creditors need to be notified.

Unlike with a will, where there can be many interesting and unique patterns, with an intestate administration the heirs and the amount they each get will be determined by statute. If there is a surviving spouse and all of the children are with that spouse, he or she will get everything. If there is no surviving spouse, the children will inherit equally. What gets very complicated is second marriage situations where each spouse has children. If this is your situation you are well advised to retain an experienced estate planning attorney.


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