How to choose a Trustee

How to choose a Trustee

So you’ve finally made the decision to move forward with your estate plan and now you need to choose a trustee who will act on behalf of your heirs’ best interests. It can be a difficult choice, but there are a few notable factors in choosing the proper one that can make the process easier.

Some people begin by considering a family member or a close friend, but did you know there’s also the option to select a professional trustee such as an accountant, lawyer, trust company or corporate trustee?

A couple of notable things to keep in mind when making your decision to choose a trustee can ease the burden of choice.

Trustworthiness

A trustee’s duties include paying bills, making proper investments, keeping accounts and preparing tax returns. Therefore, a very close friend with their own unsteady financial problems may not be a good choice. Look for trustees among the financially astute, someone who is good with money; someone who is familiar with the basic concepts of investing is something to keep in mind.

Familiarity with your family dynamics

The people closest to you such as family members or dear friends that understand your family’s dynamics could be beneficial. Family members probably won’t charge a trustee fee, although they are entitled to it. So, if you’re looking to cut costs you may go this route.

Professionals have expertise in trust administration and with that knowledge comes a price. A lawyer or accountant that is not within your family is more likely to treat everyone equally. Maybe consider a lawyer or accountant who’s been working with your family for a long time if you have one. They may bill for less than a trust company or a corporate trustee.

Professionals such as these are good at making difficult decisions and telling beneficiaries “no” when appropriate. If your heirs don’t get along and there are large sums of money involved, it might be worth the fee of a professional trustee. If you feel uneasy, you can give a family member or friend the power to remove and replace a corporate trustee.

There is also the option of a co-trustee arrangement where two entities manage your trust. For example; a sibling and a professional trust company. The professional can handle the technical work while the sibling has family knowledge. It’s just another option to consider if you feel uncomfortable appointing just one trustee.

Here are a few characteristics to keep in mind when choosing a trustee option.

Traditional Corporate Trustee

  • Regulated
  • Professional
  • Rigid Policies
  • Conservative
  • Changing Personnel
  • Accountable

Individual Trustee

  • Sensitive and knowledgeable about family
  • Flexible/Subjective – saying “no” is difficult
  • Private
  • Inexpensive
  • Not Permanent
  • Individual Fiduciary Liability
  • Family Dynamics

Private Family Trust Company

  • Confidential
  • Permanent Trustee Solution
  • Institutionalize the personal, business & investment matters for a family
  • Personalized Service
  • Liability Protection
  • Flexibility in Managing Concentrated Positions

Depending on your values, one of these options could be the best one for you.
Whatever you choose, take into consideration that your trustee will likely be managing your trust for an extended time. Therefore, you’ll want someone you think will be around for a long while and has time to really devote to their trustee duties.

Don’t let the decision of who you should appoint your trustee prevent you from finalizing and signing your estate planning documents. Call around and speak to different trusted advisors, such as Chuck Bendig, to discuss your concerns and they can be worked through until you find the best solution for you and your family. You have the option to reevaluate your choice every few years.

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12 Critical Estate Planning Mistakes

12 Critical Estate Planning Mistakes

If you want to ensure that your estate plan properly protects and provides for your heirs, it is essential that you thoroughly plan ahead.

To make sure it’s “smooth sailing”, here are some important estate planning mistakes to avoid.

  • Failure to plan. Without a thorough estate plan, you’re risking the financial future of your estate and your loved ones.
  • Not reviewing your documents. It is essential to make sure they’re exactly as you want them and also not out of date.
  • Not discussing your plans with family. Sometimes even a brief conversation can shed some light on which of your wishes are likely to be controversial, giving you a chance to rethink certain plans.
  • Don’t name just one beneficiary. Just in case your only heir dies before you, you’ll want to have a contingent beneficiary. According to Ohio State Law, here is the designation or qualification of a beneficiary.
  • Don’t forget that your retirement plan accounts or life insurance can’t be included in Wills or Trusts. You’ll need a beneficiary designation form to name a revocable trust as the beneficiary.
  • Don’t forget about a power of attorney or health care representatives. These professionals step in to make decisions if you become incapacitated. Typically, the roles dissolve on your death.
  • Lack of a funeral plan. Lack of communication for your funeral plans places an extra burden on your already grieving family. Be sure to give some indication of what you’d like to happen at your funeral or with your burial arrangements. Let them know what they can do to honor you.
  • Failure to include your digital assets. Include a digital estate plan that specifies how you want all your digital assets (i.e. social media accounts, online banking, email, etc.) handled upon your death, and name a digital executor to get it done.
  • Not planning for all contingencies. A will often leave an estate to the testator’s “surviving children”, but that raises questions if one of the testator’s children dies. Does the money go to that child’s heirs or is it split among the survivors? Unthinkable as it may seem, your Will should plan for those possibilities.
  • Failure to fund your trust. Simply put, a trust is useless unless it’s funded with your assets.
  • Don’t forget about taxes. Understand the limits of potential state estate taxes or inheritance taxes before you write your Will or trust.
  • Failure to properly store your estate plan. Even a perfect estate plan is absolutely useless if no one knows where to find it. Safes and safety deposit boxes are popular options, but it is vital to tell someone that it’s there and how to access it.

Get a qualified Estate Planning Attorney.

 

Help your family save money in unnecessary taxes and probate fees by sidestepping errors. By including an estate planning attorney such as Charles Bendig, you’ll have help in drafting your plan and making any changes you want to essentially carry out your wishes as you see fit.

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What exactly does an Executor do? (Checklist)

What exactly does an Executor do? (Checklist)

If named the executor in a Will, you’ll be the final administrator of a deceased person’s estate and have many details to manage. Below is an estate executor checklist that can help you navigate the process while making sure none of your duties slip through the cracks:

Obtain copies of the death certificate. You’ll need them for a number of tasks:

  • Filing life insurance claims
  • Filing tax returns
  • Accessing financial accounts
  • Notifying organizations like the Social Security Administration

Ensure that the funeral arrangements are carried out according to the deceased wishes.

File a copy of the Will in probate court. Here’s how to go about it:

  • Ask the court to confirm you as a personal representative. Probate court clerks will commonly answer basic questions about court procedures but won’t provide legal advice particular to your case.
  • In some courts, staff lawyers will look over probate documents, pointing out errors in your papers and advising you on how to fix them.
  • Send notice of the probate proceeding to the beneficiaries named in the will and to close relatives as a surviving spouse and children who would have been entitled to property had there been no valid will.

Locate and secure all assets and manage them during the probate process. This commonly takes about a year and could involve deciding whether to sell property or securities owned by the deceased, depending on the contents of the will as well as the financial condition of the estate.

Close out day-to-day finances:

Establish an estate bank account to hold any money owed, such as paychecks and stock dividends.

Pay any debts that are legally required to pay.

  • Notify creditors of the probate proceeding
  • Creditors then have a certain amount of time to file a claim for payment of any bills or other obligations you haven’t voluntarily paid
  • As executor, it’s your job to decide whether a claim is valid

Supervise the distribution of property to those named in the Will. This includes any cash, personal belongings, and real estate.

An executor will then ask the probate court to formally close the estate when debts and taxes have been paid and all property distributed to beneficiaries. It is advised that you have support from an estate attorney, accountant, investment adviser, insurance agent, and others to file the necessary paperwork.

Some items to note:

  • Continue to pay mortgage payments, utility bills, homeowners insurance premiums, and income taxes for the year the person died.
  • You may even need to file an income tax return for the full year.

While possibly a bit overwhelming at times, you’ll find that being an executor is a labor of love and is about honoring the deceased and serving the heirs.

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Will Contest: Undue Influence and What You Need to Know

Will Contest: Undue Influence and What You Need to Know

I’ve seen it time and time again, someone dies and divides up their assets among family and beneficiaries in a way they believe is fair, only to ultimately have one of the beneficiaries contest their inheritance. Some of these reasons include fraud, suspected forgery, lack of capacity, or even undue influence.

What is Undue Influence?

Undue influence is defined as “excessive persuasion that causes another person to act or refrain from acting by overcoming that person’s free will and results in inequity.”

More simply put, it’s when someone uses manipulative actions or tactics to convince the victim to change financial documents in their favor. Unfortunately, the mentally disabled and elderly are at risk for this type of manipulation.

Oftentimes, this occurs when a family member, caregiver, or close friend unduly influences an elderly person during a time of mental or physical distress to change their estate plans. This is usually not discovered until after their passing and beneficiaries are surprised to find they have inherited less than anticipated or written out of the will completely.

Who can Claim Undue Influence?

Only an “interested party” may bring a claim of undue influence. An interested party is someone who suffers some kind of financial damage from this exertion of undue influence.

For example, there could be a case where a child influences their elderly mother to leave a piece of property to them. Whereas previously it would have been split between all of her children. In this example, only the children left out of this specific inheritance would be considered “interested parties.”

While other family members may be aware of the undue influence and be angered by it, only the damaged parties may file a claim.

How to prove undue influence

The burden of proof in an undue influence case lies with the challenger. It is their responsibility to prove that the will or trust is invalid by supplying proper evidence.

There may not be one single piece of evidence that proves manipulation or influence, but several small pieces that align together.

This evidence may include

  • Witness or expert testimonies from family members, caregivers, or healthcare providers.
  • Physical evidence such as documents, written or recorded conversations, and previous statements of intent.
Representation for Undue Influence

While knowing the signs of undue influence is the first step to identifying if you have a case, it’s important that you seek the help of a qualified attorney as soon as possible. There is a statute of limitations for when claims can be made and gathering proper evidence before it’s lost or destroyed is essential.

I have years of experience in defending and representing claimants in will contest undue influence cases. Schedule a consultation today to begin discussing your case.

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How to Choose Your Power of Attorney

How to Choose Your Power of Attorney

One of the most important healthcare decisions you will make is choosing your healthcare power of attorney. Your healthcare power of attorney is someone you choose to make health and medical decisions for you in the event you become incapacitated and are unable to make them for yourself.

Having this legal designation brings peace of mind. However, the decision of who to designate as your healthcare power of attorney is not so simple. We provide detail in this article to help guide your decision.

Healthcare Power of Attorney vs. Legal Power of Attorney

Let’s say that you enter a hospital and learn that you need immediate surgery, and surgery always has risks. Under many U.S. jurisdictions, you may designate a “Healthcare Power of Attorney (POA)” to make medical decisions on your behalf when you are unable to do so. Unlike an attorney-drafted “Legal Power of Attorney”, your delegate’s legal authority is limited to medical decision-making (not finances, administration of the will, etc.). Assigning a Healthcare POA may be done in a hospital setting and just needs two witnesses to complete it. You do not need a lawyer.

However, a Legal Power of Attorney is a more formal document that will have medical as well as legal and financial complexity. This requires a lawyer.

Who Should I Pick as my Power of Attorney?

Most people immediately jump to selecting their spouse, a relative, or a close friend to be their power of attorney, but you can choose anyone you want. Remember, selecting a legal power of attorney is not about choosing the person closest to you, but rather the one who can represent your wishes the best, with a clear mind, when it really matters. You should trust this person completely and feel comfortable discussing your long-term wishes with them.

Your power of attorney has to be willing to follow through even if they disagree. If you feel pressured to change your opinions, then that is a sign that this person would not make a good representative for you. The last thing you need is to deal with family peer pressure or to worry that your wishes may not be carried out. Remember, legal power of attorney can be revoked at any time by serving written notice on the POA.

Characteristics to Look For in a Legal Power of Attorney

Your legal power of attorney will be handling your legal affairs. So, you’ll want to choose someone who either has some experience in that area or has the needed skills to handle those types of decisions. Look for the following characteristics before making your selection.

1.Choose someone who will respond to a call.
Consider where your potential healthcare power of attorney currently lives. Are they in a home they intend to be in the long term or do they move around a lot? For Healthcare POAs, how close are they to you or your preferred hospital? This is important because a power of attorney might need to get to the hospital quickly in an emergency. Therefore, choosing someone who lives out of state may not be the best choice. With modern cell phones, a better question might be ‘Do they pick up and respond to calls from an unknown number?’

2. They should be trustworthy.
It is important to consider the person’s character and values. Ask yourself if this person can be trusted with such a big responsibility. Will they follow your wishes? After all, you’re trusting this person to speak on your behalf and to make decisions that will impact your life.

3. Can they be assertive?
Being a power of attorney is not an easy task, especially when under stress and emotions are running high. Think about their communication style. Are they assertive or passive? Are they able to stand up to other people and hold their ground when needed? You’ll want someone who will not back down when it comes to supporting your wishes, no matter how much pressure they may get from family or friends. This person should be able to communicate clearly without wavering or second-guessing.

4. They should understand the medical process
Your healthcare power of attorney is charged with making healthcare decisions on your behalf. So you’ll want someone who has some form of understanding of how medical processes work. This doesn’t mean that you have to select a doctor or a nurse in the family, just that you’ll need someone who knows how to ask the right questions, especially about medical tests, prognosis, and the overall value of medical intervention. Ideally, you want someone who is willing to research your condition and learn as much as they can about it.

5. They should be articulate
Is your potential power of attorney naturally a calm person who is able to communicate clearly and effectively, even under pressure, or does this person become easily flustered when things get heated or emotional? Would they be able to communicate your wishes clearly and effectively, not only to your family members but to your medical team as well? Pick someone who has strong communication skills. Does it take them a while to get to the point? If this is the case, you may want to reconsider selecting them. In challenging medical situations, your power of attorney needs to be a decisive and strong communicator.

6. Above all else, choose someone that WANTS this role.
Being a power of attorney can be stressful and demanding, and not everyone is cut out to perform the tasks required. When choosing, talk to the person you are considering. Be sure they feel they could serve in this capacity and encourage them to be honest. The last thing you want is for someone to say yes when in reality the role would end up being too overwhelming.

This is your decision and only your decision. When you’re ready to assign a power of attorney or to begin your estate planning process, give us a call and we’ll start the process for you.

Call Chuck Bendig (614) 878-7777

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Financial Planning for blended families

Financial Planning for blended families

When it comes to blended families, inheritance can get dicey. Tensions run high. With proper planning, you may be able to avoid conflicts. Let’s go over some basic tips:

1. What are your estate planning goals?

With blended families that include stepchildren, things can quickly get complicated. Especially if your spouse isn’t the parent of your children. You’ll probably want to leave any assets to your children and your spouse, but your children may not be old enough to inherit yet.

If you’re incapacitated and unable to make these decisions, your spouse and any adult children may fight over the right to make decisions for you. However, with an estate plan in place, you can not only choose a party to give power of attorney to but also determine whether their biological parent or your current spouse takes custody of them.

2. Review, review, then review again.

Changes happen throughout life. Some of these changes can seriously change your initial goal. For example, when you married, maybe your only concern was your biological children’s safety, but now you have stepchildren who you care for as your own. In that case, it’s time to go back and change your estate plan.

3. Communication is key.

Make sure your children and stepchildren are informed and that the process of inheriting is transparent. Also, discuss it with your spouse and try to be open to their input, but don’t just bend to whatever your partner wants. This is YOUR estate plan.

4. Be Cautious.

Estate planning for blended families has its own unique problems. For example, if the wealthier partner has children of their own, there could be conflicts over an inheritance. If that sounds like your situation, you need to be cautious in your second-family estate planning.

If you’re not remarried yet, get a prenuptial agreement. Discuss inheritance with your partner and get a guarantee from your spouse that he or she won’t contest your plan. If you and your partner are not married nor do you plan to be married, there is also such a thing as a domestic partnership agreement that serves the same purpose.

If you have any gift for your children or beneficiaries, give it to them while you’re still alive. This allows you to have direct control over your funds, not leaving anything to the whim of your executor or trustee. If they’re large gifts, take into consideration that you’ll probably run into the federal gift tax. Also, keep in mind, if you give $15,000 or less to any one person in a year, you don’t have to report it to the federal government.
You should also be thinking about any heirlooms or personal property. You may love and care for your stepchildren as your own, but want family items that have been passed through the generations to go to a blood relative.

You want to be fair to everyone while still being true to what you really want. Give assets according to your values and what you feel is best. Listen to any advice your family may give, but not if it goes against what you sincerely believe is right. These will not be easy decisions, and it’s crucial that you consult with everyone involved, including your attorney and tax adviser.

Contact Estate Planning Attorney Chuck Bendig today.

 

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