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Palm Beach Estate Planning Blog

Probate administration: Make a list and check it twice

When it comes to closing out the estate of a deceased loved one, numerous tasks require the attention of surviving family members. In order to make sure that nothing is missed during the Palm Beach probate administration process, it would probably make sense to make a list and check it often. As tasks are completed, they can be marked off the list.

Whether it is an executor or another family member, someone needs to inform -- well -- everyone of the death. This means creditors, banks, the Social Security Administration and anyone else that requires notification. The sooner this task is completed, the better, since failing to do so in a timely manner could cost the estate money, which would reduce the amount of distributions later.

Were digital assets accounted for in estate-planning documents?

One of the primary duties of a Palm Beach executor is gathering all of the decedent's property. In most cases, he or she can look to the estate-planning documents for clues as to what property there is and where it may be located. However, if a plan fails to include the digital assets, then matters could get more complicated.

Most people have at least some small online presence, but they may not think it is important to account for that presence in estate planning documents. Many Palm Beach residents are tech savvy, but still consider only physical assets as those that need to be dealt with upon death. Believe it or not, even a Facebook or Twitter account will require some sort of disposition after death.

Does probate always take a long time?

It could take months or even years to close out an estate. Many Palm Beach residents hear that when a loved one passes away. Fortunately, not all probate administration takes that long. In some cases, it could happen more quickly.

Florida has what is called a summary probate administration. It could reduce the time it takes for property to be distributed to heirs if the decedent passed away at least two years prior or the estate meets the statutory definition of small. In fact, the typical turnaround time under this process could be as little as a week.

What is breach of fiduciary duty?

If you have agreed to become the executor of someone’s Florida estate or the trustee of his or her trust, you have assumed a fiduciary role whether or not you realize it. While you may have many fiduciary duties depending on the specific provisions of the will or trust in question, your most important duty is to always manage and disburse the estate or trust assets for the benefit of the beneficiaries or heirs. They are the people for whom you serve as fiduciary.

As a fiduciary, you are not required to perform your duties perfectly at all times. Fiduciaries are human beings, and humans make occasional mistakes. No one will blame you or sue you if you make an inadvertent arithmetic error or if one of your investments of estate or trust assets fails to live up to its expectations. The beneficiaries or heirs can only sue you if you deliberately do or fail to do something that is not in their best interests. That is the classic definition of breach of fiduciary duty.

Some trusts are not really irrevocable

During their lives, many Palm Beach residents create an estate plan that they can change and that will serve them. Part of those plans may include revocable trusts, which means they can be changed, and that become irrevocable, which means they cannot be changed, upon their deaths. Because the name implies that they cannot be changed, beneficiaries and heirs may not realize that the possibility exists.

The avenues available for revoking, terminating or canceling an irrevocable trust depend on a particular individual's status. Heirs are people that could legally inherit, but are not specifically identified in a trust or other estate-planning documents. Heirs cannot request a revocation of a trust unless they are also beneficiaries. Instead, an heir would contest a trust in much the same way that a will would be contested.

Wills can either help or hinder the administration of an estate

Many in Palm Beach and across the country were saddened by the recent death of music legend Aretha Franklin. It's surprising that someone of her status and wealth did not even have a will. Without at least that document, the administration of her estate will likely be challenging. The challenges her surviving loved ones face may make it clear why wills are important for every adult no matter how many assets exist.

Without a will, Franklin's estate will be subject to the intestacy laws of her home state. That means that it will be up to the state to determine who inherits her estate. In addition, taxing authorities may receive a significant portion of her estate since no efforts were made to reduce the amount of her taxable estate.

Protecting yourself as a guardian often means keeping everything

When a Palm Beach resident realizes that a loved one may no longer be able to make decisions for him or herself, that person may step up to help. From the moment he or she does that, it may be a good idea to begin creating a paper trail. Once an individual officially becomes a guardian for a loved one, keeping good records is essential.

Because a guardian takes over the decision making for another person, called the ward, the courts take these responsibilities seriously. A Palm Beach resident will want to keep every receipt, piece of paper and document pertaining to the guardianship. It may seem like overkill to do so, but if anyone should question the trustworthiness or actions of the guardian, any action taken on behalf of the incapacitated person can be substantiated.

The primary difference between revocable and irrevocable trusts

As Palm Beach residents begin their estate planning, they will more than likely be confronted with numerous decisions to make. If it turns out that one or more trusts would work best for a particular situation, then one other decision will need to be made -- whether to make a trust revocable or irrevocable. The trust creator needs to decide whether it would be more advantageous to be able to change, modify or terminate a trust rather than not be able to do so.

Revocable trusts are quite popular. People like the idea of retaining more control over the trust and the assets in it. This provides the ability to fix any mistakes or tweak the trust provisions while the grantor (the trust creator) is still alive. One of the major downsides to a revocable trust is that the IRS, creditors and possibly an ex-spouse retain the right to come after the assets in the trust since the grantor remains the owner. However, this type of trust still provides privacy, the ability to avoid probate and the ability for someone to immediately take over in the event of incapacity.

3 types of guardianships to consider

If you have a loved one who is in need of physical assistance, you might be wondering what your best options are. The answer to this depends on the specifics of your situation. An aging parent who needs help planning her or his estate will have different needs than a mentally-disabled adult who requires assistance with managing daily responsibilities. In either case, though, a guardianship may be best.

Guardianships are not one-size-fits-all. On the contrary, several options exist when it comes to tailoring a guardianship to its ward. Consider the following three options if you believe a guardianship might be the right legal step for you and your loved one:

Trusts are nothing without the right trustee

Many Palm Beach residents go beyond a last will and testament when it comes to providing for their families after death. They also use trusts to pass on assets to loved ones in a more controlled, private and protected manner. Regardless of how carefully such documents are drafted, executed and funded, without the right trustee they may not be worth the paper upon which they are written.

This makes choosing a trustee one of the most important tasks for the trust creator, also known as the grantor. The first decision is whether to choose an individual or a company to serve in this capacity. More than likely, many Palm Beach residents will choose an individual. That person could be a spouse, child or friend. The main criteria is that the grantor has faith that the person chosen will abide by the terms of the trust, which are his or her wishes.

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