Here are 3 quick tips to make your loved one’s estate plan execution process a little easier. It’s uncomfortable to discuss estate planning with your parents or other loved ones, but these simple tips will make administration of any estate much, much easier.
Where is the Will\Trust\Etc?: This is pretty self-explanatory – but please discuss with mom where her Will\Estate Documents are located – who has the originals and how the family can get them when the time comes. I cannot tell you how many times families come into my office and have absolutely no idea where their parents’ estate documents are.
Also, if mom keeps all of her important documents in a safe deposit box, that’s great, but please be sure that she designates someone else who is able to open the box upon her passing. The bank will not open a safe deposit box for a family member just because their last names are the same or because a copy of the Will says a family member has legal authority over the Estate. In order for the bank to open a safe deposit box, mom either needs to designate someone else with the power to open the box or a Circuit Court must order the bank to open it. I won’t go into detail about how a Circuit Court makes such an order (without seeing the original Will…because it’s in the safe deposit box, after all), but it’s not cheap!
Paying Initial Expenses: There will undoubtedly be initial expenses that need to be paid upon the death of a loved one. Some that come to mind are: Utility Bills and Funeral Expenses. How will they be paid?
While an heir is not liable for mom’s debts – Mom’s Estate is. However, it may take time to re-title mom’s assets in the name of her Estate so the expenses can be properly paid. Therefore, many times, in an effort to “do the right thing” family members pay the expenses up front, and wait for the Estate to reimburse them. I have seen this cause discontent among many families, but there is another way!
What you may consider discussing with mom is the designation of a Payable on Death Beneficiary on one of her smaller checking or savings accounts. Doing so will allow the Beneficiary (or Beneficiaries) to receive the asset immediately, bypassing the Probate waiting period, and allowing the assets to be used to pay final expenses without anyone having to pay up front and get reimbursed later.
However, this is by no means a perfect solution and could cause a host of its own problems (namely, the named Beneficiary taking the money and not using it for expenses), but it is a great way to allow initial access to capital, as long as everyone agrees!
Insurance\Mutual Fund Beneficiary Designations: Make sure mom updates the beneficiary designations on any insurance or mutual funds she may own so they are consistent with her wishes. In the worst case scenario, an outdated designation could cause the asset to be paid to the completely wrong beneficiary (an ex-husband for example). In the most common scenario, if there is no beneficiary designated at all, the asset gets paid to mom’s Estate often pushing the Estate above the $50,000.00 Small Estate Limit (in Wisconsin) and forcing the family to go through Probate. I personally don’t believe that Probate is the horrible process it is made out to be by some estate planning attorneys and insurance salesman, but – especially if mom has an estate plan that cost $5,000 – suddenly having to use Probate is often an unpleasant surprise.
Preparing for the passing of our parents is uncomfortable, but we ultimately will be tasked with making sure their final wishes are honored and carried out accordingly. Having these discussions now – and most importantly – figuring out where the Will is – will save time and money and help to avoid conflict in the future.