Naming an Executor

The executor or, in many states, personal representative sees that your will is carried out. It is tiresome, detailed, time-consuming, thankless job. You are doing no favors for the person you name. All the property has to be tracked down and assembled (no easy job if you did not keep good records). Creditors notified. Heirs dealt with tactfully. Arguments settled. Bills and taxes paid. Property appraised and distributed or sold. Life insurance claimed if it is payable to the estate. Investments managed until they can be distributed to their new owners. Final accounting to be made, to the heirs and, perhaps, to the courts.

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The executor usually works with a lawyer, so you do not need an expert in estate law or high finance. You need virtues that are much harder to find. An executor has to be willing, reliable, well organized, honest, responsible about money, fair-minded, and sensitive to the worries of the heirs. The usual practice is to ask able heirs (or friend) to do the job. If you name a professional executor a bank or a lawyer include a family member as co-executor, just to keep things moving along. Get permission before putting down someone’s name. If money is misspent or errors made, the executor can be held personally responsible.

A friend or family member usually doesn’t ask for compensation. But you should specify this in the will; otherwise, they may claim the commission allowed by law, even though you expected them to serve for nothing. (In large estates, it may be cheaper for a family member to take a commission than to take the same amount of money as an inheritance. The income tax on the commission may be lower than the death tax on the net estate.)

When banks or attorneys are executors, however, they may charge, and charge, and charge sometimes by the hour, sometimes a fixed fee, sometimes a percentage of the assets in the estate that goes to probate. Your estate will pay less if you keep the executorship at home and let your family hire a lawyer by the hour or by the job. (Executors should shop lawyers, asking more than one what they will charge; like any other business people, lawyers cut fees for jobs they want and that they know are up for bid. Your family may not even need an attorney.

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More Living Trust Facts

Trust facts

Trust facts

The states have different title loans rules and taxes affecting trusts, so see a lawyer if you move. Your trust document should specifically allow for a change of state so the laws that govern the trust can change, too. Otherwise, the laws (and taxes) of your former state apply unless you get a court order allowing a change.

There’s a lot of legwork involved in transferring property into a trust. Your lawyer will prepare the new deed for your real property, as well as transfer letters for assets held by your bank, broker, and other financial connections. But you will have to follow up.

Don’t make the trust the beneficiary of your 401(k) or Individual Retirement Account. If you died, that whole sum of money would go into the trust and be taxed right away. By contrast, a spouse or other individual beneficiary can roll the 401(k) into an IRA and take payments over many years. That spreads the taxes out.

You can name the trust beneficiary of your life insurance policy. The proceeds would then go into the trust to be distributed as you directed. Before doing this, however, married people should ensure that a surviving spouse will have plenty of ready cash in case there is a delay in getting the trust paid out.

Your trust should define what it means to be disabled, requiring a successor trustee to handle your affairs. For example, “I shall be deemed to be disabled when two physicians licensed to practice medicine in my state sign a paper stating that I am disabled and unable to handle my financial affairs.” The same language can be used to determine when your disability has passed.

To change the terms of a living trust, you prepare a written amendment. Don’t scratch in the changes on the trust document; they won’t be accepted. In some states, the amendment has to be signed and, maybe, witnessed just like a will. But in most states, a notarized signature will do.

A married couple should ask an experienced estate-planning lawyer (not a lawyer or insurance agent who is hard-selling trusts) whether they need one trust or two. In community property states, it is common to have a single trust document for all the property; each spouse’s separate property interests are segregated within the trust; at the death of the first spouse, the trust divides into multiple trusts include the title loans.

Granting the Power, Durably

Everyone needs a backup, a person to act for you if you are away, if you are sick, if you get hit by a car and can’t function for a while, or if you grow senile. That means giving someone, a spouse, mate, parent adult child, or trusted friend your power of attorney. A lawyer can get an Atlanta title loan in a jiffy. . It is probably in his word processor and just needs printing out. Young people need a power of attorney as well as the old.

Limited powers of attorney grant narrow right, such as: “Christopher can write checks on my bank account to pay my bills while I am out of the country for six months.” Ordinary powers of attorney give broader powers over your finances. But both limited and ordinary powers expire if you become mentally disabled, however, which is exactly when you need the help the most.

So protect yourself against doomsday by asking a lawyer to draw up a durable power of attorney. It lets someone act for you if you are judged senile or mentally disabled, if you fall into a coma, or if illness or accident damages your brain. A durable power lasts while other powers don’t. As long as you are mentally capable, you can revoke a durable power whenever you like.

The person who holds your power of attorney could, theoretically, exercise it at any time, even if you are healthy. He or she could sell your investments and clean out your bank account. But that is not as easy as it sounds. Banks and brokers normally check on what has happened to you before accepting a power of attorney. Besides, you would not give the power to someone you did not trust.

Be sure to execute copies of the durable power maybe even 10 or more. Some institutions want an original for their files (photocopies won’t do) before they’ll cooperate with the attorney in fact. In many states, you have to execute new durable powers every 4 or 5 years to show that your intention holds. Insurance companies and financial institutions probably won’t honor an old power. A few won’t honor any durable power of attorney at all, or any power more than 6 months old, or any power not written on their own form. In my view, that is harassment, but they sometimes do it and you might be stuck with Atlanta title loan.