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"Is It Time for an Estate Plan Checkup?"

アメリカ 弁護士 法律事務所 法律  相続計画の見直しLife doesn't stand still, and after you've crafted an initial estate plan, your circumstances are likely to change-you may acquire more assets, the executor you originally selected may pass away, or you may contract a serious illness. Your children will grow up, or you and your spouse may split up. And the law may change, making some of your estate planning obsolete, or even counterproductive.

So it's a good idea to review your estate plan at least once a year to make sure any changes are accounted for. (You can pick a certain day, like your birthday or the Fourth of July or some other date that will jog your memory to do this annually.) To get you started, US Legal News is including a checklist detailing those life events that may impact your estate plan. If you answer "yes" to any of the following questions, it may be time to contact your attorney.

- Have you married or divorced?
- Have your children married or divorced?
- Do your children or any other beneficiaries need protection from creditors?
- Have your relatives, other beneficiaries, or executor died, or have your relationships with any of them changed substantially?
- Has the mental or physical condition of any of your relatives, other beneficiaries, or executor changed substantially?
- Have you had more children or grandchildren, or have your children gone to college or moved out of, or back into, your home?
- Have you moved to another state?
- Have you bought, sold, or mortgaged a business or real estate?
- Have you acquired major assets (car, home, bank account)?
- Have you inherited significant property?
- Have your business or financial circumstances (estate size, pension, salary, ownership) changed significantly?
- Has your state tax law (or have federal tax laws) changed in a way that might affect your tax and estate planning?
- Have you changed your ideas about what to do with any of your assets?
- Have you decided to do more (or less) charitable giving?
- Have you made gifts that should be taken into account, such as reducing bequests that were to occur under your will?

When you do update your estate plan, you should also update your will and final instructions with updated addresses and phone numbers of beneficiaries, trustees, executors, and others mentioned in the estate planning documents. This will make settling your estate much easier. Estate planning is an incredibly important part of planning for your and your family's future; but it is just as important to make sure that any estate plans that you already have are accurate and up to date.

(Winter 2009)

"The Workhorse Executor"

The Workhorse ExecutorA will can impose additional duties on the executor that are not required by law.
These might include requiring the executor to develop post-death tax strategies, to choose which specific property goes to which beneficiaries, and even to decide how to invest funds.

(Winter 2006)



"Choosing an Executor"

Choosing an ExecutorCreating an estate plan requires you to put on your decision-making cap. You’ll obviously need to make decisions about the distribution of your assets. You will also need to spend some time choosing the person (or institution) to be in charge of your assets after you’re gone: the executor of your will.

The law requires an executor because someone must be responsible for


  • collecting the assets of the estate,
  • protecting the estate property,
  • preparing an inventory of the property,
  • paying valid claims against the estate (including taxes),
  • representing the estate in claims against others, and
  • distributing the estate property to the beneficiaries.

These last two functions may require liquidating assets; that is, selling items like stocks, bonds, and other valuable assets in order to have enough cash to pay taxes, creditors, or beneficiaries.

In most states, you can name anyone you please as your executor, as long as he or she is over eighteen and not a convicted felon. There’s no consensus, even among lawyers, about who makes the best executor; it all depends upon your individual circumstances. It often makes sense to choose someone who is a major beneficiary under the will, because he or she is likely to do a conscientious job of managing your affairs. Many people name their spouse or adult child as an executor. However, appointing your spouse as an executor can cause problems if he or she is incapacitated by grief, illness, or disability, or has sole responsibility for any minor children. Executors may be faced with some duties that may be particularly unpleasant for family members, including the job of retrieving money or property you lent to other relatives or friends. If you think the role of executor would be too much of a burden on your spouse or adult child, you may wish to appoint a professional executor, even though it means paying a fee.

The quality most desirable in an executor is perseverance in dealing with bills (especially the hospital, Medicare, and ambulance and doctor charges incurred in a last illness). These often require a lot of paperwork, up-front payment, and subsequent reimbursement from insurance companies. Choose someone who has the time and inclination to deal with bureaucrats and forms. Also, the executor may have to cope with relatives who may be wondering why it’s taking so long to receive their inheritance or why their bequests are smaller than expected.

In most estates, no significant legal expertise is required to serve as executor; the issues are all financial. The executor will generally work with a lawyer to probate the will. Your will can direct that your executor use a lawyer’s services for court appearances, filings, and other technical matters requiring legal expertise. The lawyer handles all the court appearances and filings while the executor provides information and input. Estate fees paid to the lawyer may be set by law (some states specify an hourly rate, some a fee based on a percentage of the estate).

If you run a business or are self-employed, consider making your executor or co- executor someone knowledgeable in your field. Sometimes the specialized knowledge of accounting or tax laws applicable to your area of business is easier for a colleague than for your spouse or other relative to master.

It’s often advisable to use a lawyer or a bank as an executor for larger estates.
A complicated estate that involves temporarily running a business often demands an institutional fiduciary, such as a bank, that can call on the advice of lawyers, tax experts, accountants, investment counselors, even business administrators. It’s impartial and immortal. You might also consider hiring your lawyer as executor if you anticipate a will contest or know that the estate is going to require a lot of legal work.

Think carefully about the identity of the executor when you draft your will and talk to your lawyer about what your estate might require. You should also talk to your proposed executor to ensure he or she is willing to do the job.

(Winter 2006)

"Joint Ownership and Estate Planning"

Joint Ownership and Estate PlanningWhen most people think about estate planning, they think about writing a will, in which they bequeath all their worldly goods to their surviving relatives and friends. However, some kinds of property, such as jointly owned property, do not pass through a will. Instead, when one joint owner dies, the property passes directly to the other joint owner. This transfer is immediate, and no probate process is necessary.

There are many different types of property that you can own jointly, including bank accounts, family cars, and homes. Particularly in old age, people hold bank accounts or stocks in joint ownership with their spouse, with one or more children, or with friends.

Should you put property in joint ownership as part of your estate plan? The answer depends on your circumstances. Most lawyers urge caution. You may want to avoid joint ownership in the following circumstances:

1.  When you don’t want to lose control. Giving someone co-ownership gives him or her co-control. For example, if you make your son a co-owner of your house, you cannot sell or mortgage the house unless he agrees. If you do sell the house, your son may be entitled to part of the proceeds.

2.  When you cannot be sure of your co-owner. An untrustworthy co-owner could withdraw all the money from a jointly held bank account, or creditors of the co-owner could put a lien on the co-owned property. Moreover, if the co-owner were to become legally incapacitated, you would not be able to sell or transfer titled property, such as a home, without going through a cumbersome court proceeding.

3.  When you are in a shaky marriage. In most states, separate property becomes marital property once it is transferred into joint names, which means it can be divided between spouses in the event of divorce.

4.  When your intentions may change. When you transfer property into joint tenancy, you make a gift of one-half of the property to the new joint tenant. If you later change your mind, you can’t undo the gift.

5.  When you are using co-ownership to substitute for a will. Joint tenancy is seldom a complete substitute for a will. The reason is that a deceased person almost always has some property that was not jointly owned, so probate may still be necessary. Joint tenancy also does not help if all the joint tenants die at the same time. Each joint owner still needs a will.

6.  When co-ownership might cause confusion after your death. For example, it might be unclear whether a bank account held in joint ownership was created to help a child manage bill payments, or whether the money in the account was intended as a gift. This type of confusion could cause strife among heirs.

Even if none of the above red flags seem to apply to you, you still should exercise caution in using joint accounts. They may result in unexpected tax consequences for either or both owners and may also affect your eligibility for public benefits such as Medicaid. Talk to your lawyer about the legal implications of joint property ownership.

(Fall 2006)

"Estate Planning Lets You Call the Shots"

Estate Planning Lets You Call the ShotsOne of the best things you can do for your family is to plan your estate―now. You can work with your lawyer to create a will or trust that assures your family will be provided for if something happens to you. This article will give you some ideas on how you can be sure that your estate plan will carry out your wishes and distribute your property exactly as you want.

Statistics show that fewer than half of American adults have wills, and the percentages actually seem to have dropped in the past few years. If you’re one of the ones who hasn’t gotten around to it yet, you run the risk of dying intestate, which means that the state would step in to make the decisions that you didn’t make.

When the State Decides

State law specifies how your property is to be divided if you don’t have a will or trust. The specifics vary by state, but the principle is that the state will assume that you wanted a portion of your property to go to your spouse, a portion to your parents, and so on.

That may work if the state’s assumptions happen to match yours, but probably they don’t. Maybe you wanted to apportion the amounts differently, or give property to a nonrelative, or to a relative who is not in the immediate family (a favorite niece, for example). And maybe you wanted certain items―a car, a family heirloom, etc.―to go to certain people. None of this will happen if you don’t leave directions.

If you have minor children, your will can specify who is to be in charge of their upbringing. If you don’t have a will, a court will have to decide, and that not only complicates the process but opens up the possibility that they may be placed in the care of someone you wouldn’t have chosen.

Finally, if you don’t have a will or trust, you’ll probably complicate the whole process of probating your estate (paying debts and taxes, distributing bequests, and wrapping up your affairs). You open up the very real possibility of increased expense and delays in distributing your property, both of which could be harmful to your family.

When You Decide

There’s no set formula for what goes into a will or trust. You and your lawyer should discuss what works for your situation in planning your estate.

Here are some suggestions on how to handle the more common clauses of a basic will or trust, assuming that the trust contains all or most of your property. This list is far from complete, but it will help you begin to plan.

Gifts of Property

The core of most wills or trusts is the section where you specify which recipients are to receive your property. Be sure to carefully identify the recipients, including their addresses and relationship to you―the last thing you want is confusion about who is to receive a gift.

Be sure to anticipate changes that might take place between when you write the document and when it comes into effect. What if one of your beneficiaries dies before you? Do you want that person’s gift to go to his heirs, or to someone else you specify? Your will or trust can handle either alternative―but your lawyer has to know what your wishes are.

And try to anticipate any confusion that might occur because of how you describe the gifts you’re making. For example, if the specific item of property might change between the time you write the document and the time you die, you might want to be general in your phrasing. Don’t specify that you’re giving someone 500 shares of a particular stock (you may sell it before you die and buy something else) but rather “my stock portfolio,” or a specified percentage of it, or a dollar amount of the stock you own at death.

Remember also that your property may include intangible assets like insurance policies, bank accounts, certain employee benefits, and stock options. Some of these may pass outside of your will or trust, because of how they are held (i.e., if held in joint tenancy with right of survivorship, the property will pass automatically to the other owner on your death). Some may pass through beneficiary designations (i.e., employment benefits that go to your spouse). But some may pass through your will or trust. It’s important for you and your lawyer to have a complete list of all the property you own and coordinate how all of it is to be passed.

You can save on taxes by using gifts wisely. This section of your will or trust can be used to give gifts to institutions and charities as well as to people.

Gifts of Real Estate

Most people prefer that their spouses receive the family home. If it isn’t held in joint tenancy, you should have instructions about what will happen to it in your will or trust.

If you die before you’ve paid off the mortgage on your house, your estate will normally have to pay it off. If you’re afraid this will drain the estate, or if you want the recipient of the house to keep paying on the mortgage, you must specify that in your will or trust.

Executors/Trustees

Your will should designate an executor and a successor in case he or she is unable to serve. (Your trust should do the same regarding its trustee.) It helps to spell out certain powers the executor can have in dealing with your estate: to buy, lease, sell and mortgage real estate; to borrow and lend money; to exercise various tax options. Giving the executor this kind of flexibility can save months of delay and many dollars by allowing him or her to cope with unanticipated situations.

Testamentary Trusts

You can set up a trust in your will (a testamentary trust), or have your will direct funds from your estate into a trust you had previously established (your will would then be a pourover will). You would normally do so in a separate clause in your will.

Residuary Clauses

This is one of the most crucial parts of a will, covering all the assets not specifically disposed of in the will or elsewhere. This is important because you may accumulate assets after you write your will, and if you haven’t specifically given an asset to someone, it won’t pass through the will. A residuary clause can give all such property to one or more beneficiaries. (If your will omits a residuary clause, the assets not left specifically to anyone would pass on through the intestate succession laws, sometimes after long delays and extensive court involvement.)

Will or Trust?

You probably have a pretty good idea what a will does. In legal terms, it’s a revocable document―which means that it can be altered as circumstances or your mind change―by which you transfer your property at death and designate someone to carry out your wishes. Wills have been around at least since the time of the ancient Egyptians.

Trusts are newer, and are gaining in popularity. Like a will, they permit you to dispose of your property at death, but they have a number of advantages that might be important to you. For example, bypass trusts are very useful in estate planning to lower taxes.

Revocable living trusts may not have tax advantages, but are helpful in several ways. They

  • Are relatively easy to set up and change (wills have more formalities)

  • Enable you to eliminate or minimize the probate process

  • Protect your privacy (unlike wills, they usually require no public record)

  • Help you manage your affairs while living (a trustee can take care of your investments and other property if you’re incapacitated, or if you simply prefer to let someone else do it)

  • Permit you to direct how your property is to be distributed for a number of years (unlike wills, which make a gift of property at one time, trusts can last many years and enable your wishes regarding how your property is distributed to continue long after you die)

Your lawyer can help you assess whether a living trust or some other trust is appropriate for your circumstances.

(Fall 2005)

"Many States Now Allow Dynasty Trusts"

Many States Now Allow Dynasty TrustsCharitable trusts can last indefinitely―like the trusts that fund the Rhodes Scholarships and Pulitzer Prizes―but it used to be that private trusts (trusts set up to benefit private beneficiaries) could be no longer than the life of a person alive at the time the trust was created, plus twenty-one years. This provision―known as the rule against perpetuities―effectively limited trusts to around 100 years.

All that is changing now. In a growing number of states, the law now permits you to set up trusts that can last hundreds of years, if not indefinitely. That may permit you to avoid estate tax on the money as it passes from generation to generation, shelter the money from creditors (in lawsuits, bankruptcy, or divorce), and benefit your descendants for many generations.

Check with your lawyer to see if such trusts are available in your state. You may also be able to establish a trust in another state that has no rule against perpetuities, even if yours does.

(Fall 2005)

"Trigger Events for Changing Your Estate Plan"

Trigger Events for Changing Your Estate PlanAn estate plan is your blueprint for where you want your property to go after you die. As part of planning your estate, you might need to write a will, create a trust, and name beneficiaries to your life insurance, among other things. Planning your estate properly ensures that your hard-earned property will be distributed in accordance with your wishes, and can help ensure that your loved ones will be provided for.

Everyone should take the time to plan their estate. But even after you’ve created an estate plan, you cannot sit back and relax. Life does not stand still, and your circumstances are likely to change―you may have more children, acquire more assets, lose some assets, or some beneficiaries under your will may predecease you. Your children will grow up, you and your spouse may split up. Most of these life changes will occasion a change in your estate plan. You may also move to a different state―from New York to Florida, say―and different state laws might affect your tax and estate planning. And state or federal law may change, making some of your estate planning obsolete, or even counterproductive.

Changes in the value of your assets might also be a trigger for changing your will. Many people who had large portfolios in the boom years of the 1990s might have suffered drastic reductions in the value of their stock, and might want to reconsider how much of their diminished estate they want to leave to charity, for example. Or if you left stocks to one child and an equivalent value of real estate to another, those values may change drastically with fluctuations in the stock or real estate market. The law also changes―changes to the estate tax law (which may change again depending on the nation’s budget deficit or even military actions) should make many people think about updating their estate plans.

It's a good idea to review your will and your inventory of assets and recipients at least once a year to make sure everything is accounted for. You may want to pick a certain day, such as your birthday or the Fourth of July, or some other date that will jog your memory, to help remind you to do this annually. Remember that this area of the law differs, often drastically, from state to state, so it’s especially important to check―or have your lawyer check―how your state’s law affects your estate plan.

Changing Your Will

If you have relatively few changes to make, you may be able to change your existing will. An amendment to a will is called a codicil. (It sounds a bit like a cold medicine, and you might think of it as a cure for an obsolete will.) You can’t simply cross out old provisions in your will and scribble in new ones if you want the changes to be effective; you have to formally execute a codicil, using the same formalities you used when executing the will itself. This means that you must have witnesses to your signing of the codicil, and the signatures must usually be notarized. Of course, it’s vital that codicils be dated so the court can tell that they were made after your will. Codicils should be kept with the will.

Writing a New Will

Sometimes when you undergo a major life change, such as divorce, remarriage, having more children, or winning the lottery, it’s a better idea to rewrite your will from scratch rather than making a lot of small changes through codicils. It’s best to do this by executing a new will that states that it revokes the old one. There are two schools of thought about what to do with the old will. Some lawyers recommend that you destroy it, if possible in front of your lawyers and the witnesses of your new will. Others do not recommend destroying prior wills: A prior will can be very useful in avoiding arguments that there was undue influence in changing a will. If there are a number of wills that have similar provisions, prior wills are often very good evidence.

When you write a new will, be sure to include the date it’s signed and executed, and put in a sentence that states that the new will revokes all previous wills. Otherwise, the court is likely to rule that the new one only revokes the old where the two conflict―which could cause problems.

If you fail to change or rewrite your will to account for changes in your life, the courts will give as much effect to your old will as possible. Some changes may be accommodated by the law, regardless of what your will says. For example, if you have a new child and don’t explicitly say you don’t want her to inherit anything, then the law may give that child a share of your estate. Likewise your spouse is entitled to a certain percentage of your estate (that varies by state), no matter what you say in your will.

(Spring 2006)

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