FAQs

The process can be summarized into Six Basic steps: 1. Inventory and Marshall the Assets of the Estate; 2. Determine Liabilities and Creditors of the Estate; 3. Determine if there is an Estate Tax Liability; 4. Divions of the Trust Assets; 5. If there is estate tax, file FORM 706; 6. Set-up Sub-Trusts or Distribute to Beneficiaries. While this seems straight forward there is a great deal of work in assembling the assets of the estate and other related items. Utilzing a trust and estate lawyer will be a great asset to you in the trust administration process.

For the years after 2009, you're allowed to give away up to $13,000.00 annually without having to file a Form 709 - gift tax return. If you're married, you and your spouse can gift $13,000.00 each, for a totally of $26,000.00 to one individual. This is a great way to help adult children purchase their own home by helping with a down payment. Or it can also be a way to fund a college plan for grandchildren, nieces and nephews (you'll want to look into a 529 Plan when funding college for younger children).

Probate can take as little as nine months if everything goes like clockwork and there are no complications. However, for the average probate it's not unusual for it to take at least a year to get through the entire process. The process starts with a petition to the Court, the setting of the initial hearing, publication of the probate in a newspaper, notifiy creditors (creditors receive a minimum of four months to file claims), appraisals, filing of the estate inventory, notifications to various government entities, preparation and filing of final accounting and report and then, if there are no contest and everything goes well the Court Order can be issued.

There are many types of trusts, the most common is a Revocable Living Trust or sometimes referred to as a Living Trust. A Trust is simply an agreement that spells out the rules that must be followed regarding the property held in the trust for the named beneficiaries. By establishing a trust you vest the trustee's with the power to protect the estate from probate, reduce estate taxes and to a certain extent protect the property in the trust.

Yes, by having a Will in combination to a Revocable Living Trust you provide for any assets or tangible property to be governed by the trust in the event the trust is not named on the title for the property. Life happens and there are times property is acquired after you've put your estate plan in place. Because life happens it is a good idea to review your estate plan on a regular basis.

A Living Will is somewhat of a misnomer and is unrelated to a Last Will and Testament or Will. A better title would be Advance Health Care Directive. The Advance Health Care Directive is your pre-determined health care decisions and choices set out in writing directing your physician, family and friends on the extent of the medical treatment, including special treatment you want or do not want at the end of life.

Yes, according to the IRS you simply need to have the intent to make a profit to be in business and this is normally done by being a sole proprietor. While it's easy to start a business it requires careful planning to be successful in business.

It is an unincorporated business owned by a single individual. They are easily formed and may be a good starting point; however, there are numerous disadvantages to operating a business as a sole proprietorship that should be understood before beginning a business.

It is an association of persons or an unincorporated business that is created by agreement, either an oral or written agreement, where the partners intend to make a profit. One of the major concerns of a partnership is that the partners are subject to unlimited liability for any legal actions or debt related incurred by the partnership. While there are different types of partners, a partnership is not necessarily a good place to begin when forming a business.

There isn't an easy answer to this question simply because there are numerous variables to consider. Are you a professional seeking to start a practice in medical, law, accountancy or architecture? Business entities for these types of professions may be bettered served by one form, while if you have a high-tech product and you hope to sell the business at some future date or take the business public, then another form of business entity would be more suited to accomplishing this goal. Then there are real estate professionals who may find an LLC more advantageous. So when choosing a business entity it's important to review all of the advantages and disadvantages in light of your particular circumstances before making a final decision.

While having a Living Trust can significantly reduce costs compared to probate, there is still a considerable amount of work to be done in properly administering even a simple Living Trust. The services of an attorney are usually needed, and that person or firm should be compensated fairly for their services. It is important to remember that the fees allowed for trust administration are usually much lower than those for probate, and there is generally less work involved, as there is less involvement of the courts and state bureaucracy. In some instances, not all assets were transferred to the Living Trust before the decedent’s death. In this case, you may need to go through the probate process to validate the pour-over will and allow you to transfer the assets to the trust. In this case, fees and costs associated with the probate process will need to be paid.

Like most assets, how you transfer title to vehicles depends on how the vehicles were titled before the decedent died. If you owned the vehicles as joint tenants with the decedent, then in most states you can simply take a copy of the death certificate to the state Motor Vehicle Department (MVD) and perform the transfer, paying whatever fees are required by MVD. If the vehicles were titled in the name of a trust, the vehicles are administered by the Trustee of the trust, as are the other assets. If the vehicles were in the decedent’s name alone, you may be required to go through the probate process if a non-probate affidavit cannot be used.

The answer depends upon the language of the trust document. Certain trusts include “pick and choose” language that allows trustees to selectively place assets into the “B” trust.

To summarize the process, trust administration can be broken into five basic steps: 1. Inventory of assets 2. Determination of estate tax 3. Division of trust assets 4. Filing of federal and state tax forms 5. Distributions to the beneficiaries Although the trust administration process seems relatively straightforward, there are several reasons it can sometimes be drawn out over several months or even years. The first step, the inventory of assets, must be completed before the trust administration can begin, and this can be difficult to complete depending upon the prior organization and the size and complexity of the decedent’s assets. Next, the 706 estate tax return must be filed within 9 months, or 15 months if an extension is filed. Often, it is prudent to wait until the last minute to file this form. If the spouse of the decedent is in failing health and may pass away before the deadline, then both 706 forms can be used to maximize tax advantages to the estate. The final step, asset distribution, cannot take place until the 706 has been filed, and even then should not take place until the “Closing Letter” is received from the IRS certifying acceptance of the 706 return. This closing letter will take a minimum of 6 to 8 months, and as long as 3 years, to arrive after the 706 is filed. In addition, there may be a state estate or inheritance tax returns required, even if a federal return is not required.

Social Security will continue to send out benefit checks until they are notified of an individual’s death. The personal representative/spouse/trustee should contact the local Social Security Administration office and notify them of the death, or if a benefit check is received, send it back with a letter notifying them. This is important. If checks continue to be deposited, the recipient can incur liability later when Social Security learns of the recipient’s death.

Probate begins and ends with the special Probate Court set up in each state to handle estate issues. (Sometimes known as the Surrogate, Orphans’ or Chancery Court in certain states.) All actions taken regarding the estate are accountable to this court, and must be noted and reported regularly. This court is staffed by judges qualified to oversee estate resolution issues.

Depending on the complexity of the estate and the thoroughness with which accounting has been carried out before death, probate can either be a relatively simple task or a daunting one. Be aware that no matter the situation, probate may be a lengthy process often taking months or possibly years to play out, and one which may take a considerable amount of time. To summarize the process, probate can be broken into six basic steps: * Validation of the Will * Appointment of personal representative (executor) * Inventory of the estate * Payment of estate taxes * Payment of claims against the estate * Distribution of remaining assets Each of these steps involve legal documentation and validation, and more importantly, proper accounting each step of the way.

No, if you have a fully funded Revocable Living Trust going to the Probate Court can be avoided.