Estate Planning Chapter 9

Front 1

Purpose of Estate Administration

Back 1

To resolve all outstanding responsibilities, obligations, and rights of the decedent as well as the transfer of all property to intended beneficaires

Front 2

Estate Settlement Process

Back 2

(1) Initial responsibilities
(2) Probating the will
(3) Appointing an executor or administrator
(4) Assembling property
(5) Managing the estate
(6) Paying debts and taxes
(7) Distributing the estate

Front 3

Initial Responsibilities

Back 3

Arranging and conducting the funeral, notifying relatives, immediate duties and responsibilities, occurs before the determination and reading of a will

Front 4

Probating the Will

Back 4

To prove to the court that the instrument presented is the last valid will of the deceased person

Front 5

Probate

Back 5

Matters over which probate courts have jurisdiction, including settlement of the decedent's estate, appointment and supervision of guardianship, and resolution of will contents

Front 6

Intangible Asset Examples

Back 6

Stock Certificates
Bonds
Bank Accounts
Mutual Fund Shares
Money Market Trust Assets
Social Security Benefits
Veterans Benefits
Proceeds from Life Insurance

Front 7

Advantages of Probate

Back 7

(1) Will is validated
(2) Executor's actions supervised
(3) Dispute resolution forum is provided for estate issues
(4) Inventory and valuation of the assets and liabilities are carried out
(5) Proof of legal title to property is established
(6) Time frame set for creditors' claims before asset distribution
(7) Philanthropic bequests receive public recognition

Front 8

Disadvantages of Probate

Back 8

(1) Lack of privacy
(2) Time consuming
(3) Inflexibility
(4) Court supervision costs
(5) Commissions and fees are generated for executors and lawyers
(6) Ancillary probate possible for property owned in non-domiciliary states or countries

Front 9

Methods to Avoid Probate

Back 9

(1) Joint Tenancy
(2) Property Passing by Contract at Death
(3) Government Savings Bonds
(4) Totten Trusts and Payable-on-Death Accounts
(5) Deeds
(6) Living Trusts
(7) Small Estate Administration (must exceed certain amount to be probated)

Front 10

Deed

Back 10

A written instrument that conveys an interest in realty from the grantor to the grantee

Front 11

Ancillary Probate

Back 11

A proceeding in a state other than the decedent's state of domicile and where a decedent owned property; may be avoided by putting assets in trusts

Front 12

Posting Bond

Back 12

Making some kind of security available to assure performance; generally posted in amounts up to twice the value of the probate assets

Front 13

Letters Testamentary

Back 13

Certifications by the court that the named personal representative was granted authority to act on behalf of the estate during the administration period until he or she is discharged from by the court, at which time the estate may be closed

Front 14

Typical Claim/Debt Order

Back 14

(1) pecial lien on property not exceeding the value of the property
(2) Funeral Expenses
(3) Taxes
(4) Debts owed to the US Gov't and the state
(5) Judgments of any court of competent jurisdiction to the extent that they are a lien against the property of the decedent at death
(6) Wages due to any domestic servant or mech/agric laborer for the year immediately prior to death
(7) Medical expenses and services provided during the year preceding death
(8) All other debts and claims

Front 15

Requirements of a Qualified Disclaimer

Back 15

(1) Unqualified refusal to accept the gift
(2) Refusal must be written
(3) Disclaimer must be received by donor, donor's legal rep, or legal titleholder within 9 months of the decedent's death or 9 months from the date of gift, or 9 months after beneficiary turns 21
(4) Beneficiary must not have received any interest or any benefits from the gift
(5) Beneficiary cannot direct the gift to another