Removal of a Personal Representative

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WHEN IS IT APPROPRIATE TO REMOVE THE PERSONAL REPRESENTATIVE?

The most basic duty of a personal representative to act in “the best interests of the estate.” This means that the personal representative must be loyal to the to the estate, as well as to the heirs and devisees, and not co-mingle his or her assets with the assets of the estate.  A failure to act in a manner that is within the best interests of the estate may result in removal of the personal representative, or even separate legal action against the personal representative.

WHAT TYPE OF ACTION RESULTS IN REMOVAL OF A PERSONAL REPRESENTATIVE?

Montana Code Annotated (MCA) section 72-3-526 sets out the grounds for removal of a personal representative. According to Montana law, the breach of a single duty is sufficient to remove a personal representative. A simple failure to provide a timely inventory, or failure to give notice to all heirs can result in removal.

Recent Montana Case Law on the Removal of a Personal Representative

Recent case law in Montana in the case of the Estate of Hannum, illustrates a failure by a personal representative to properly administer an estate (see , DA 12-3, 8/10/12). In Estate of Hannum, the personal representative provided an accounting of the estate that was “highly speculative,” and included undocumented and unverified loans and gifts. The unverified gifts and loans increased the value of the estate by more than $1.3 million, resulting in increased personal representative fees to himself in an amount over $32,000, as well as over $49,000 in attorney fees to his daughter. The personal representative also claimed that other heirs owed the estate over $300,000, while he and his brother were to be awarded $600,000 from the estate, leaving a relatively minimal amount for distribution among the other heirs.

Additionally, the court determined that the personal representative in Estate of Hannum breached his duties by: failing to follow the plan of disposition set out in the Last Will & Testament; failing to file an estate inventory within 9-months of appointment; and failing to send notice of his appointment to all heirs as required.

Although this case illustrates an instance in which the personal representative breached multiple duties charged to him, a simple failure to follow any of the basic duties of a personal representative can result in removal. It is important for every personal representative to understand all of the duties and obligations of a personal representative and precisely follow Montana law. An attorney experienced in Montana probate law can guide a personal representative through the probate process to avoid removal, or even separate legal action.

With questions about the duties and responsibilities of a personal representative, or the probate process in general, contact Kalispell, Montana probate attorney, Kelly R. O’Brien, Measure, Sampsel, Sullivan & O’Brien, P.C. at (406) 752-6373 to schedule an appointment.

What Does a Personal Representative Do?

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The Duties and Obligations of the Personal Representative in the Probate Process

In general the personal representative of an estate, also known as an executor or administrator, is the individual responsible for gathering up the assets of the decedent; paying off debts and expenses of the estate; and distributing assets either to the individuals named in the will, or in the event the decedent did not leave a will, according to state law. How the distribution of an estate is accomplished depends on the specific nature of the estate and assets, and whether or not there was a will. However, there are a few key tasks and duties that are essential to every probate process.

Tasks of a Personal Representative

First and foremost the personal representative should attempt to locate the Last Will & Testament, and all other financial information of the decedent. Ideally, the decedent would have provided the location of this information to the personal representative. If not,  his or her attorney may have this information. It is important to locate the original Will and not a copy, as  the personal representative must file the original Will with the probate court.

To actually carry out the role of personal representative, the individual appointed must file an application for appointment with the probate court. Often this is accomplished with the assistance of a probate attorney that will draft the application and appropriate documents to file with the court.

Upon approval of appointment by the probate judge, the court clerk will issue testamentary letters or letters of administration (depending on whether or not there is a will), certifying the appointment of the personal representative. The Letters verify that the personal representative is authorized to deal on behalf of estate for actions such as opening a bank account, selling property, and collecting and paying debts.

Once the personal representative has been appointed by the probate court, it is important that the personal representative take immediate action to further the probate process. One of the first actions after appointment as personal representative is to notify the interested parties and potential creditors of the estate. No later than 30 days after appointment, the personal representative must provide notice to heirs and interested parties of his or her appointment as personal representative; information regarding the court where the personal representative filed the probate documents of the estate; and whether or not a bond was filed.

In addition, the personal representative must publish a notice to creditors in a local newspaper. As soon as possible after appointment, the personal representative should publish the notice to creditors. The notice puts creditors on notice that they have four months within which to file claims against the estate for payment of their accounts.

Depending on the nature of assets and type of probate proceeding, an inventory of the estate assets may be required. An inventory must be filed within 9 months of appointment of the personal representative. The the inventory accounts for the estate assets, which consists of all property owned, individually, by the decedent.

Upon the expiration of the four month creditor claim period, the personal representative can pay the creditors. In the instance of a formal probate the personal representative must file a final accounting with the court which accounts for all receipts and disbursements during the probate process. Once judge approves the accounting, the personal representative pays the creditors and taxes of the estate. Then, the remaining assets of the estate can be distributed to the heirs and devisees.

Duties of A Personal Representative

The personal representative has a duty to act in the best interests of the estate. The personal representative also has a duty of loyalty to the estate, as well as to the heirs and devisees. These duties are of the utmost importance as failure to act in a manner that is within the best interests of the estate may result in removal of the personal representative, or separate legal action against the personal representative.

This means that the personal representative must: avoid conflicts of interest; use reasonable care, ordinary skill and prudence in carrying out the duties of the personal representative; direct any benefit derived from the appointment to the decedent’s estate to the beneficiaries; and  not use any of the assets of the estate for his or her own, personal benefit.

Montana law requires that a personal representative specifically acknowledge these duties. The personal representative must sign and verify, before a notary public or under penalty of perjury, an acknowledgment of fiduciary relationship in the application for appointment.

Perhaps one of the best ways for a personal representative to avoid breaching his or her duties is to maintain detailed records of the estate assets and accounts. The assistance of a probate attorney can be beneficial in maintaining records of the estate, and keeping up with the probate timelines and requirements.

If you have questions about the role of a personal representative, or probate in general contact Kelly O’Brien, Measure, Sampsel, Sullivan & O’Brien, P.C. (406) 752-6373.

 

 

Estate Planning for Blended Families

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Tips & Techniques for the Modern Family

The idea of the “typical” American family has changed significantly over the last several decades from the traditional nuclear family to blended families of countless variations. Now-a-days, a blended family, or a family where one or more spouse has children from a prior marriage is commonplace.

Blended families face unique challenges when it comes to estate planning. Parents of blended families should take extra precautions to adequately consider what would happen to the family upon the death of one spouse and take steps to avoid disinheriting a spouse or children.

Perhaps one of the more famous estate disputes in recent history surrounded the estate of J. Howard Marshall who was married to the much younger Vickie Lynn Marshall, more widely known as Anna Nicole Smith.  Upon Mr. Marshall’s death, his will left almost all of his estate to his son from a previous marriage. However, Ms. Marshall sued, claiming her elderly husband promised to give her more than $300 million and the court battle went on for several years.

This case illustrates one of the more common scenarios in blended families, where one spouse leaves everything to their children from a prior marriage and completely leaves out his or her spouse. This leaves the estate subject to claims from the surviving spouse, as well as other disputes between family members that can have lasting impacts.

Another common problem occurs when the children are disinherited by virtue of joint ownership of property.  This commonly occurs because married couples often decide to hold property such as houses, bank accounts, or cars jointly. However, in a family of a second marriage joint ownership with a spouse can result in unintended consequences. In the case of joint ownership, the surviving spouse obtains sole ownership of the property by operation of law, thereby excluding the predeceasing spouse’s children from ownership of the property.

If you have remarried and have children from a prior marriage, what can you to reduce the chance for disputes between your spouse and children after you are gone?

First, it is essential that you talk to your spouse and children about your wishes, as well as discuss potential issues that may arise with the distribution of your estate. In addition to communication with family members, a blended family should consider the following techniques for reducing conflicts:

Update your Estate Plan & Beneficiary Designations

At a minimum each spouse should have an estate plan containing a will with Powers of Attorney for finances and health care. However, a will only goes so far with a blended family. It is also critical that each spouse updates their estate plan and beneficiary designations to ensure that ex-spouses are disinherited or no longer listed as beneficiaries of assets such as retirement accounts or life insurance policies. Then review your beneficiary designations to make sure that the proper beneficiaries are named, and the beneficiary designations fit within your overall estate plan. Remember, a beneficiary designation trumps a will, so keeping your beneficiary designations updated to reflect your current life situation is essential.

Prenuptial or Other Marital Agreements

Perhaps one of the best methods of preventative maintenance for a blended family is to execute a prenuptial or other marital agreement with your spouse that addresses estate planning issues. By clearly defining which assets you want to remain separate after the marriage and which assets you agree will pass to each of your children you can reduce disputes later, Moreover, marital agreements allow you to maintain more control over the how and when your assets are distributed.

Life Insurance Policies

Life insurance can be a great tool for providing for your children, while also providing for your spouse. By specifically naming children as beneficiaries of a life insurance policy it creates immediate benefit to children upon death, rather than having to potentially wait many years for inheritance. With the life insurance proceeds going to children, the remainder of the estate may pass to the surviving spouse, thereby eliminating or reducing potential inequities.

Create a Trust

Consider a joint revocable living trust or Qualified Terminable Interest Property Trust “QTIP” Trust. A QTIP or other trust can provide income and principal for a surviving spouse’s care during his or her lifetime. However, upon the death of your spouse, the remaining assets in the trust can be distributed to your children according to your wishes.

Life Estates

Another option to consider is to provide your spouse with a life estate in your home.  A life estate allows a surviving spouse to live in the house for his or her lifetime, but allows the remainder interest in the home to pass to your children.

Talk with your Family & Seek Professional Advice if Necessary

These are just some of the techniques to consider when planning an estate with a blended family. It is critical that you and your family discuss these issues together and have an overall plan to addresses any potential disputes or inequity problems. Your particular estate may also have estate tax or other considerations, so I always recommend seeking the professional advice of your attorney, CPA or financial planner.

These types of estate planning issues may not always be easy issues to talk about, especially with a blended family. However, communication and planning now can provide peace of mind that you are sparing your family from conflicts or hurt feelings down the road.

Contact Kelly O’Brien for more information or questions about estate planning at  Measure, Sampsel, Sullivan & O’Brien, P.C. at (406) 752-6373/ www.measurelaw.com

 

 

Transferring Your Family Farm or Business to the Next Generation, Part II

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Planning for the Retirement or Unexpected Death of an Owner: Advice from a Montana Business and Estate Planning Attorney

Business succession planning is the process whereby the business, and its owners, to agree in advance to issues such as what consent is required to transfer business interests, to whom may an owner transfer business interest to, or how to determine the value of those interests. Two major considerations in this process are what happens in the event of a death or incapacity of an owner, and what happens upon retirement.

Planning for the Unexpected Death or Incapacity of an Owner or Manager

While most individuals do not want to think about death, planning for an unexpected death or incapacity of an owner or manager will enable the business to carry on even if a key individual in the business may no longer be able to manage the business.

When discussing how to plan for an unexpected death or incapacity of an owner or manager, consider the following:

  • Buy-out: Do you want the business to buy-out the heirs or family members?
  • Financing: What resources are available upon death? How to finance the buy-out of family members? Some options may include: installment payments, life insurance or the creation of a separate fund.
  • Price: How do you establish a price to buy out? Price can often be calculated as book value, multiple of annual earnings, by appraisal, or otherwise by agreement of all owners.
  • Control & Management: If the business decides to buy out heirs, does it want those heirs to have an active role in managing the day-to-day operations of the business or simply receive income from the business?

Planning for Transfers of Ownership Pursuant to Retirement

While retirement may seem to be a long ways off for many small business owners, planning for retirement of an owner or manager will ensure that the business has both the funding available and capable individuals in place to handle retirement. Some of the same considerations discussed above also apply to retirement, and in addition the business should consider the following:

  • Who Will Take Over Leadership: Decide who will be the successors will be. Identify key individuals who may already have a role within the business. Discuss whether family members may have a role in the business and the potential role of current owners, managers and third parties.
  • Timelines & Transitions: Discuss the ideal timeline for retirement and what gaps in management may exist upon retirement. Discuss what training may be necessary and how to accommodate the different skills and interest of those taking over.

Communication is the Key to Successful Business Planning

The most critical component of successful business succession planning is communication. Communication between business owners, managers and all family members involved will facilitate a smooth transition. The business succession planning process does not have to be complicated, a simple discussion of these issues and a basic plan is better than waiting for the unexpected to happen and then trying to come to an agreement about what to do next.
If you have questions about business succession planning, contact Kelly O’Brien, Measure, Sampsel, Sullivan & O’Brien, P.C. at (406) 752-6373/ www.measurelaw.com

Transferring Your Family Farm or Business to the Next Generation

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Business Succession Planning- Passing Your Business to the Next Generation, Part I: Advice from a Montana Business and Estate Planning Attorney

Montana is a place where family values are reflected in our business practices and many successful businesses are completely family owned. However, many small or family owned businesses do not have an adequate plan in place for passing on the business. Whether considering passing the family farm to the next generation or planning for retirement, business succession planning is essential to a smooth transition for your business and your family.

Today’s entry is the first part of a two part series on business succession planning, in which I will provide a brief overview of business succession planning. Part II will address some of the specific considerations relating to an unexpected death or incapacity, or retirement, in detail.

What is Business Succession Planning?

Essentially, business succession planning is long-term planning for the transfer of your business assets; either to the next generation or to other business partners. Business succession planning is the process of planning for the unexpected occurrences, or the “what ifs,” in business such as an unexpected death or retirement of a partner or manager. It allows the business, and its owners, to agree in advance to issues such as what consent is required to transfer business interests, to whom may an owner transfer business interest to, or how to determine the value of those interests.

The end goal of the business succession planning process is to have a solid agreement in writing that reflects the long-term strategy for the potential transfer of ownership in the business.

Why should you consider business succession planning?

Every business should consider business succession planning both at the initial start-up of the business, and periodically throughout the life of the business. Mainly business succession planning allows the business and owners to have more control of the unknown and unexpected that may come up with the business. Perhaps it is more important to consider what happens without business succession planning. Without it, the business may incur significant losses or the owners may even lose the business due to issues such as liquidity problems, family conflicts or tax issues.

Initial Considerations in Business Succession Planning.

First, if you have not already done so, consider a separate entity for your family or small business. A Limited Liability Company (LLC), Family Limited Partnership (FLP), or other corporate entity is an essential step in easing the transfer of your business to the next generation.

Next, review and discuss the long-term business goals with all of the owners, managers or officers; evaluate the current status of the business and where you want it to be in the future. The most important aspect of business succession planning is clear communication between all involved, which means the business partners, owners, managers, directors, and family members.

A major consideration in this process is deciding and agreeing on who will be the successors. Will it be family members, existing owners or third parties? Especially if you own a business with partners whom are not members of your family, it is essential to make clear, and agree upon issues such as whether or not you may transfer your interests to your children. If a transfer to your children is permissible, then discuss what role your children play in the business and whether or not additional training may be necessary.

In addition, it is important to consider the timeline for transferring interests. If the business owners have agreed to allow transfers to children or other family members, then determine whether or not transfers will take place all at once or incrementally over time. Within this timeline also discuss what training may be required, and how involved family members will be at each phase of the transfer.

During this process, always be mindful of estate and gift tax issues. Speak with your accountant or attorney to determine whether a sale of your business interests is preferable to a gift or bequest. Make sure you understand the tax implications for everyone involved.

Communication about these issues ahead of time will help to reduce conflicts in the event of unforeseen circumstances and ensure the business has the adequate resources to carry on into the future. 

If you have questions about business succession planning, contact Kelly O’Brien, Measure, Sampsel, Sullivan & O’Brien, P.C. at (406) 752-6373/ www.measurelaw.com

The Benefits of Year End Charitable Giving

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Year-end Tips from a Montana Attorney

It is that time of year where we reflect on the previous year and start to plan for the year ahead. It is also a great time consider year-end donations to the charity of your choice. Not only does giving to a charitable organization provide you with the satisfaction and good will associated with giving back, charitable gifts to 501(c)(3) organizations are tax deductible. So, in addition to that good feeling associated with giving, you get the good feeling that is associated with saving on taxes. If you need to make some additional tax deductions for 2011, a gift to a charity is a great way to save.

While we typically write a check to make a charitable donation, there are many other ways to give to a charity that provide significant tax benefits. CNNMoney.com recently posted an article on different methods for making charitable donations that can provide additional tax benefits. These include:

Gifts of Appreciated Securities

By donating a stock, bond or mutual fund to a charity, you will avoid having to pay any capital gains taxes on the appreciation in value. Moreover, if you have owned the security for over a year, you can deduct the full market value rather than just the amount you invested.

Give from your IRA

For those of you over the age of 70 1/2, if you have not taken the required minimum distribution from your IRA this year, you can rollover a portion of your IRA to a charity. Currently, you can donate up to $100,000 to a charity, and the portion you donate will not be included in your taxable income. A rollover of your IRA to a charity can also make it easier to claim deductions, among other added tax benefits.

Donate to a Community Foundation or Community Fund

In addition to the federal tax benefits of charitable gifts, giving to a community fund can also provide state tax benefits. The state of Montana, provides a tax credit program for donations to a community foundation. Individuals are allowed a tax credit of up to 40% of the charitable contribution, with a maximum credit of $10,000 or $20,000 if filing jointly. Business entities are allowed of up to a $10,000 a year tax credit, or 20% of the  donation amount.

Charge Donations & Payoff Next Year

Often the holidays can take a toll on our cash situation, however we still want to donate to charities before the end of the year. If this is the case in your particular situation, consider donating via credit card and paying it off next year. The IRS permits you to take the deduction when the donation is made, rather than when it is paid, so you will still receive the tax benefit this year.

If you have questions about charitable giving, contact estate planning attorney, Kelly O’Brien at (406) 752-6373.

 


Estate Planning Essentials for Women

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Simple Advice From A Montana Estate Planning Attorney

A friend of mine was recently divorced. After her divorce was finalized, she asked me whether a will or trust was necessary for her. My friend is a mother of two young children with a successful business of her own. She is fairly young, and does not own a home and does not have a large amount of wealth accumulated, so she felt that estate planning was not necessary. In response, I explained that everyone needs some type of estate plan. However, women who have recently experienced a major life change such as a divorce, or the death of a spouse, are especially susceptible without a plan that reflects their current life situation. In the case of my friend, without an estate plan, she could not direct how her money was distributed to her children in the event of her death, or who would manage her assets for her and her children in case of an unexpected disability.

Women today take on more roles in the household and more financial responsibilities than ever before. Moreover, women tend to live longer than men so the chances of outliving a spouse and being directly impacted by an estate plan (or lack thereof) are greater than for our male counterparts. With that in mind, it is crucial for women to take an active role in estate planning. Every woman should understand the essential elements of estate planning and have a plan in place that addresses what happens in the event of an unexpected death or disability. Perhaps more importantly, women need to ensure that these documents are updated when life changes.

Whether you have accumulated a large amount of wealth, or only have a few assets, everyone has an “estate.” By understanding a few key elements, you can help protect yourself, and your loved ones, from unnecessary complications.

What is Estate Planning?

Essentially, estate planning enables you to be in control of what happens to your property upon your death or incapacity. Estate planning is also the process by which you appoint who you want to be responsible for carrying out your wishes for your assets, family and heath care decisions. At a minimum, your estate plan should include the following elements:

–A Will and/or Revocable Living Trust: These are formal documents that describe how and when to divide and distribute your assets upon your death. Whether you need a simple will, or a more complex, revocable living trust, depends on your specific situation. Discuss your situation with an estate planning attorney to determine which makes sense for you and your family.

–Durable Power of Attorney for Financial Decisions: A durable power of attorney for finances allows you to appoint another individual to make financial decisions on your behalf in the event that you are unable to make these decisions yourself due to incapacity or disability.

-Durable Power of Attorney for Heath Care Decisions: A durable power of attorney for healthcare allows you to appoint another individual to make medical decisions on your behalf including decisions regarding medical consents and life support issues in the event you are unable to make these decisions yourself.

-Beneficiary Designations and Payable on Death Designations: If you list an individual as a beneficiary of a financial asset, that individual becomes the legal owner, immediately, upon your death without the need for probate.

Aside from understanding the basics, there are a couple of issues that are critical for women to address.

First, Take Care of Yourself

Women often prioritizing caring for their children and family over caring for themselves, but making sure that you have appointed a power of attorney both for financial and health care decisions, is vital both for you and your family.  One of the most overlooked issues in estate planning is how to manage your estate in the event of an incapacity or disability. Planning ahead, with durable powers of attorney for financial and heath care decisions, allows you to be in control of your life. These documents allow your life to carry on during a disability; your bills will be paid and your care will be provided for by the person you choose. Moreover, powers of attorney provide your family with the peace of mind that they are carrying out your wishes, instead of being left to question what you would have wanted them to do.

Take Care of Your Children

If you have children, especially if they are minor children, it is essential to plan ahead. If your children are minors, make sure that you nominate a guardian. This is one of the most important estate planning decisions, so take the time to think it through. Have conversations with your spouse and family members about who would raise your children in a manner most like you. Think about issues such as age, education, lifestyle, religious preferences, geographic location and parenting style.

In addition to determining who would care for your children, think about who would manage the finances for your children if you are unable to do so. For younger children, consider setting up a trust for their inheritance.  With a trust for minor children, a trustee of your choosing will mange funds for your children. The trustee will distribute funds for their general care until they reach the age of majority, or until such age or life event that you deem appropriate. The trustee could be a friend, relative, or even a financial institution; anyone whom you feel can be responsible with money and respectful of your wishes for your children’s future.

Designate Beneficiaries & Keep the Designations Updated

Perhaps one of the easiest and most important things you can do to take control of your estate plan is to make sure that you have designated beneficiaries for all of your financial assets, and keep these beneficiaries updated. Keep a list of all of your financial assets, including life insurance policies, retirement accounts, investment accounts, stocks, bonds, and bank accounts, along with the specific beneficiary for each account.

If you experience any major life change, such as a divorce, death, or major change in assets, review this list and make the appropriate changes. After a divorce or death of a spouse, updating your beneficiaries is especially important. The last thing you want your family to have to deal with is removing an ex-spouse or other unintended beneficiary after you are gone. Work with your financial planner, or check with your specific financial institution on how to make and update beneficiary changes.

Plan ahead

Whether you are a working mother or a retired widow, keeping up with a busy life can be a challenge. When a major life change occurs, such as a death or divorce, it can be overwhelming. Take a bit of time, now, to prepare yourself and your family for the unexpected so that you control these important decisions. Your family will thank you.

If you have any questions about estate planning contact Kelly O’Brien, Measure Law Office, P.C. at (406) 752-6373/ www.measurelaw.com

Article previously published in the October/December issue of

406 Woman Magazine http://406woman.com/

New Federal Estate Tax Exemptions for 2012

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The IRS recently announced that it will increase its federal estate tax exemption amount for 2012. For an estate of an individual that dies during calendar year 2012, the basic exclusion from estate tax amount will be $5,120,000, up from $5,000,000 in 2011.

The federal estate tax is a tax on property transferred pursuant to a death. Essentially, it is the tax that the family or beneficiaries of a deceased person must pay on that inheritance. Only those estates that exceed this amount must pay estate taxes, and the estate is only taxed on that portion of that exceeds the threshold amount.

For purposes of determining whether or not a federal estate tax return is required, it is important to determine the value of the “gross estate.” The “gross estate,” consists of the fair market value of everything owned on the date of death. The IRS also allows adjustments for taxable gifts and certain deductions including deductions for mortgages, debts and the expenses to administer the estate. Moreover, all property that passes to the surviving spouse or a charitable organization with federal 501(c)(3) exempt status is excluded from the taxable estate. After these adjustments and deductions are accounted for, only those estates with a “gross estate” that exceeds $5,000,000 (or $5,120,000 in 2012) need to file a federal estate tax return and pay estate taxes.

In addition, the IRS permits reductions in value for certain real property in determining the value of the estate. The total decrease in value permitted will decrease in 2012. For Special Use Valuation for qualified real property, the aggregate decrease in the value of the property resulting from the election cannot exceed $1,040,000, in 2012, up from $1,020,000 for 2011.

There are a number of other exemptions and reductions permitted in determining the gross value of the estate for federal estate tax purposes. For a complete list of the increases in tax benefits for 2012 see http://www.irs.gov/newsroom/article/0,,id=248485,00.html, which lists all of the income tax benefit increases, exemptions, standard deductions, and tax brackets for 2012.

Federal estate tax calculations are complicated, so I always recommend working with CPA to determine whether or not an estate tax return is required for a specific estate. However, the best way to ensure that your family avoids paying federal estate tax is to plan ahead with the use of trusts and other estate tax reducing tools. Work with a team including an estate planning attorney, financial planner and accountant to determine how you can plan your estate to reduce taxes and other complications for your family.

For questions or advise on federal estate tax and estate planning contact Kalispell, Montana attorney Kelly O’Brien at (406) 752-6373.

When should you update your will or trust?

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Reviewing & Updating Your Will or Trust

Advice from a Montana Estate Planning Attorney

Wills and Trusts are highly effective tools in distributing assets upon your death and reducing family stress and conflicts. However, Wills and Trust are only effective estate planning tools if they are kept up to date. An outdated Will or Trust and be just as ineffective as nothing at all, or worse.

Instead of thinking of your Will, Trust or other estate planning documents of something you do once, then lock away, I always recommend you keep copies of these documents in a safe, but in a handy place. It is important to review and update these documents on a regular basis. In addition, there are some specific instances where it is especially important to take some time to review, and if necessary, update your estate plan. Some examples of these situations include:

 

  • After the death or incapacity of an individual nominated in your will or trust as a personal representative, trustee or beneficiary
  • After you are married or divorced
  • After birth or adoption of a child
  • After purchasing or selling real estate or other large asset
  • Prior to a major operation or other medical procedure
  • After receiving a large inheritance
  • After moving to another state or purchase assets in another state
  • After any major change in your income or income earning capacity
  • After a minor child reaches the age of majority or completes college
  • Upon the marriage of a child or other beneficiary
  • Anytime you change you change or mind about how your want to distribute your assets and to whom you want to distribute those assets 

There are many other situations where you might need to update your estate plan, but the important thing is to get in the habit of reviewing your estate planning documents when your life changes. If you have questions about how or when to update an estate plan, speak with a local estate planning attorney. Making a change to your estate plan is usually quite simple and reduces complications for your family later. 

 

How to Choose the Right Guardian for Your Minor Children

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Choosing a Guardian for Minor Children- Advice from a Montana Estate Planning Attorney

For many people their largest concern in estate planning is providing for their children. Everyone who has a child under the age of eighteen should consider who would raise their children if there were unable to do so. However, determining who would act as a guardian for minor children is perhaps the most difficult decision in estate planning, and the one with the most potential impact. That is why it is critical to take some extra time to make this decision.

Perhaps the best place to start by making a list of good potential candidates for the role of guardian. Initially this list may include brothers, sisters, aunts, uncles, grandparents or even family friends, basically anyone you can think of that may act as a guardian.

Then consider the factors that are most important to you in deciding on a guardian. Some considerations may include:

-Do they have similar philosophies about child rearing?

-What are their religious beliefs or do they possess the ability to follow your desires for your children’s religious upbringing?

-Do they possess the ability to follow your instructions about education, activities and child rearing, in general?

-What is their age, stamina, and maturity level?

-What is their relationship with your children and do they have a genuine interest in your children’s well being?

-What is their level of stability and integrity?

-Are they physically capable of caring for your children?

-What is their current job situation and do they have time available to care for your children?

-Are they willing and interested in acting as a guardian for your children?

-Do they have children of their own and are their children compatible with your children?

-Do they live in the same geographic area as you?

-What are their social, political and moral values?

-Are they financially responsible?

-Do you children enjoy their company?

-Is their overall lifestyle compatible with yours?

Once you have considered these factors, I recommend prioritizing the factors that are the most important to you and your spouse (or other co-parent as the case may be). Understand that you and your spouse may have conflicting ideas about the most important attributes, however the discussion is important to have within this process. Once you have decided on a few key factors you can compare these to your list of candidates and determine who would best fit based on your priorities.

Open discussion with your family members, including your spouse, children and potential guardians is a key component in this process. While the discussion may be difficult at times, keep in mind that this is one of the most important life decisions you will have to make, so discussion is important.

If you have additional questions about choosing a guardian for your minor children, or if you would like additional assistance from a Montana estate planning attorney in nominating a guardian for your minor children or other estate planning techniques to provide for your children, call me at (406) 752-6373.