Estate Planning as a Career

Understanding How the Probate Proceeding Works

A probate proceeding refers to estate settlement procedures. The average length of time required to settle an estate depends on several factors. Probate can be settled quickly when decedents engage in estate planning strategies and execute a last will and testament. Estates of individuals who die without a Will require additional time because extra steps are necessary.

Although the probate proceeding varies, all estates must be settled according to state probate laws. Every estate must have an estate administrator who is either appointed within the decedent’s last Will or confirmed through the court.

Probate executors can be anyone aged 18 or over, as long as they have never been convicted of a felony. It is best to designate an estate administrator who is good with finances and able to make important decisions while working under pressure.

Estate administrators are responsible for a wide range of duties. The first duty involves opening a case by submitting the last Will to probate court. When a person dies without a Will in place, the estate executor submits the decedent’s death certificate. Some states prohibit individuals from performing estate management duties until confirmed through the court. Those who are unsure of the process should seek counsel from a lawyer.

The second phase of probate proceedings involves confirmation of the estate administrator. Many states require Administrator’s to be bonded since they act as the estate fiduciary. Some states require estate executor’s to obtain court approval for all estate-related transactions, while others allow estate management to proceed without court interference.   

Probate administrators often require assistance from a lawyer, but should strive to do the bulk of the work on their own to minimize expenses. However, when family disputes arise or if heirs contest the Will it is best to hire a lawyer to manage the estate. Oftentimes, probate attorneys can negotiate with disgruntled heirs to avoid the lengthy and expensive process of contesting a last Will.

Estate executors must open a bank account on behalf of the estate to document all income and expenses. Banks sometimes use the decedent’s current bank account, while others require the opening of a new account. Funds are usually frozen until the estate administrator provides Letters Testamentary which grant authority to manage the estate.

The third phase of probate involves securing property owned by the decedent. This can include real estate, automobiles, business assets, and personal belongings. Oftentimes, estate administrators are required to obtain property appraisals to determine the value of inheritance assets. When real estate is involved, Administrators must maintain mortgage payments, property taxes and insurance to ensure the property does not fall into foreclosure.

The fourth phase of probate proceedings involves contacting creditors. In some instances, the surviving spouse assumes the decedent’s debt. This is common when decedents own real estate or have secured loans for a business that transfers to the spouse. If no spouse exists, or if the spouse does not want to assume debts, the estate administrator is required to pay debts through the estate.

If the estate is incapable of paying off debts, the probate executor can attempt to reduce the outstanding balance or hire a lawyer to engage in debt settlement strategies. In some instances, the probate judge will order assets sold to pay creditor debts. This is common when decedents own real estate with a mortgage note.

The Internal Revenue Service requires estate administrators to file a final tax return on behalf of the decedent within nine months from the date of death. It is recommended to use the services of a tax accountant to prepare estate tax returns. If taxes are owed, the estate is responsible for remitting full payment with the return.

Distribution of inheritance property occurs after all debts and taxes are paid. Beneficiaries are required to sign a statement acknowledging receipt of gifts. Statements are presented to the judge, along with estate settlement documents. Once the probate judge approves documents, the estate is considered settled and estate administrators are relieved of duties.

Simon Volkov is a California real estate investor and probate liquidator. His website includes an all-inclusive article library focused on helping visitors understand requirements of the probate proceeding, along with strategies to avoid probate. Learn more about estate planning and how to protect inheritance assets by visiting www.SimonVolkov.com.

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Living Trusts Do You Need a Will Too?

Studies Show About 70% of Americans Die Without Leaving Behind a Will… This Means Financial Advisors Have a World of Opportunity!!

I’ve always said that financial advisors should “practice what they preach”. I say this because the harsh reality is that most professionals don’t have their own “house in order”. For example, the homes of most landscapers are not immaculate when you drive by. If you visit the house of a painter, it’s usually not painted immaculately as a model home. Although we see doctors regularly to maintain our health, if you visit the home of most doctors, you will see they don’t always eat, drink, or exercise in a way that promotes a “perfectly healthy lifestyle”.

So it should come as no surprise that, just like our client’s, most financial advisors…even estate planning attorneys…don’t have their estate planning “house in order”. Some have a Will…but it is out of date. Some may have a Trust…but it is not properly funded. Some may have some major life events (such as new children or grandchildren in the estate, a divorce, a remarriage, someone’s son or daughter got married, they received an inheritance, or maybe they lost a close loved one)…which has not been adjusted to reflect their new or changing estate planning needs and objectives.

Here are the three main points I hope every financial professional can take away from this article:

First…Practice What You Preach:

We really need to take a look at our own practice first and “practice what we preach”. Make sure your personal estate plan is established properly, and kept up-to-date. The is not only the right thing to do for you and your family, but it allows you to gain credibility with your clients by explaining to them what you’ve done, showing them your personal documents and details, letting them know that “you’ve been there”, and what you’ve accomplished because you know this is an integral part of every financial plan.

Second…Review the Basics First:

By discussing the basics about how Wills and Living Trusts work and how they differ (whether with a client or prospective client), this will help:

•Strengthen the financial plans of your existing clients

•Discover new opportunities to help your clients through regular estate planning reviews

•Since a complete estate plan must be coordinated with all aspects of your clients financial lives, this means that it must be coordinated and integrated with you, an estate planning attorney, and even a CPA. Therefore, this provides you the opportunity to help your clients, and at the same time meet and network with many of the estate planning attorneys and CPAs in your area

•Ask for referrals. Once you have finalized, funded, and coordinated a sound estate plan, a client should be extremely pleased with the great things you have accomplished together. Having said that, this opens the door for a great chance to say something like; “Can you think of any co-workers, neighbors, friends, or family members that might also need to make these kinds of improvements? If not, keep me in mind if this conversation comes up because I’d love to help the people you care most about.”

Third…Keep It Simple:

Since 70% of people in America die without creating or leaving behind as much as a Will, what this tells me is that we need to start with the basics…and keep it very simple. Help your clients understand the basic concepts of how this works, the way it works, and why it is necessary.

Therefore, I firmly believe that every financial professional should have a basic informational piece that they can use, which the can review with their clients or mail to them. This piece is the foundation that helps get their clients started in the right direction. This can be used for both their existing clients, as well as for generating new clients and referrals.

This piece should be designed to address what I have found to be the four most common questions that most people need answers to when it comes to estate planning, and choosing Wills and/or Trusts:  

Four Most Common Questions Regarding the Basics of Estate Planning:

1.  Why Do I Really Need a Will?

2.  What Will Happen If I Don’t Have a Will?

3.  What is the Best Choice for Me…a Will or a Trust?

4.  How Do I Get Started?

What’s Next?  5 Easy Steps to Getting Started:

Step One: Spend some time with your existing financial advisor, or an experienced financial advisor in your local area, so you can review the basic details your “big picture financial plan” together

Step Two: Your financial advisor will review this information and help you assess confirm exactly what your estate planning needs and preferences are

Step Three: Once your financial advisor reviews your overall estate planning needs, they can help you understand exactly how Wills and Trusts work, as well as which one they feel fits your situation best

Step Four: After you are fully comfortable and confident with their recommendation, you can consult with a seasoned estate planning attorney who can help you properly draft these documents and details 

Step Five: Arguably the most important step, and often overlooked, is making sure that your estate planning attorney, financial advisor, and CPA are all working together to ensure all of your estate plans and preferences are coordinated and working properly with your “big picture financial plan”.

So to summarize this article, I hope every financial professional who reads this is able to see this fantastic opportunity to grow your practice and help families add a valuable and necessary addition to their comprehensive financial plan. What a win-win situation for everyone involved!

As a parting thought, think about this fact: If approximately 70% of people who die in America are failing to leave their loved ones a simple Will, what this says to me is there are lots of people and families out there who need your help.

The reality is that, as a financial advisor, when you review an estate plan, recommend a Will or a Trust, and refer your clients to a qualified estate attorney…you are not typically compensated for doing this type of work. However, by doing “the right thing” for your clients, the most important rewards will come back to you in more ways than you can imagine. It is these kinds of selfless rewards that can extend far beyond any revenue you could ever receive.

Christopher P. Hill, Founder of FuneralResources
http://www.funeralresources.com/financial-planning/wills/
http://www.funeralresources.com/financial-planning/funeral-estate-planning/

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Review: Professional Real Estate Development, Second Edition: The ULI Guide to the Business

Buy it now $99.95 $90.00

Thoroughly updated, the second edition of Professional Real Estate Development explains the nuts and bolts of the real estate development industry. You will learn how to develop and manage five types of real estate products: land, residential, office, industrial, and retail uses. Focusing on small-scale projects, the authors show you practical methods for developing each major type of real estate, including feasibility analysis, design and construction, financing, marketing, and management. Photos, site plans, diagrams, and case studies provide examples of actual projects and how the process works. Information is specific and detailed, with costs, rents, and financing information included by product type.

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