John Lane Law

As an Executor, How Fast Do I Need to Settle an Estate? - John M. Lane Law, PLLC

“How quickly do you need to settle an estate when you are serving as an executor?”

If you’re accustomed to setting timelines in your life, when it comes to serving in the executor role, you’ll likely find it difficult because settling an estate can be impacted by many things far beyond your control.

The probate process is discussed in executor.com’s “How Quickly Do I Need to Settle an Estate?”

The answer to how long it takes to settle an estate when you are serving as an executor is, well, it depends. The process can typically take about a year, but there are several factors to think about.

When a will is filed with the court, it starts the process called probate. The probate court oversees the executor’s actions as he or she completes every step of closing the decedent’s estate. There are many things the probate court does, including making sure that the assets are properly distributed to beneficiaries. Of course, you have no control over the pace of the court. This includes such things as when your file will be reviewed, when hearings will take place and so on. That’s all up to the judge and his or her staff.

As executor, you’ll need to get letters of testamentary from the probate court before you can do anything with estate assets, such as bank accounts, autos, property, and investment accounts. You have to wait for the court’s approval to proceed. On the other hand, the probate court may set deadlines for the executor to accomplish specific tasks, like the distribution of the estate assets after an accounting of those assets has been completed.

 Larger estates obviously take more time to settle than smaller ones. As the asset types become more complex, the time required to spend settling the estate can increase dramatically. For example, if the deceased had ownership interests in a small business, extensive property holdings, or complex investments, it may take longer to organize these, so the beneficiaries receive their distributions as outlined in the will.

Another factor impacting the time to settle an estate has to do with whether or not the person died without a will. If that happens, it can take longer because the probate court has to appoint an estate administrator and more closely monitor the estate.

Some people are great about keeping records in their lifetime. This can really help to expedite the work of an executor.

Beneficiaries and surviving family members who are set to inherit, can delay things for several reasons. Some may be grieving and unable to provide required paperwork and information. Others may dispute the will, and some beneficiaries may be hard to locate. Keeping beneficiaries updated about the process and understanding that there will likely be obstacles can be useful, when it comes to both dealing with and avoiding beneficiary-related issues.

Patience, flexibility, and understanding will be vital to you when working through this challenging, complex process.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: executor.com (November 1, 2017) “How Quickly Do I Need to Settle an Estate?”

A Friend Indeed May Not Always be the Trustee You Need

"With so many estate plans being built around trusts, selecting the right trustee is a key decision."

Implementing a trust can be an indispensable estate planning tool. There are a number of reasons to incorporate trusts as part of your estate plan, says a recent article in Wilmington Business, "Selecting the Right Trustee." These include privacy, avoidance of probate, full management of personal finances, monitoring of investments and tax planning, and some tax-saving techniques for trusts.

Selecting the right trustee to execute your plans is just about the most critical decisions you can make—maybe even as important as the terms of the trust itself. Think about these qualifications when selecting your trustee:

• Administrative Skills and Knowledge. Your trustee must perform a lot of different tasks, like safeguarding assets, collections, reinvestment and distribution of income, document interpretation, bill paying, and many others.
• Investment Expertise. He or she has to put together an investment program that satisfies the requirements of all the trust beneficiaries. In today's changing and volatile investment environment, this is a big responsibility.
• Tax and Accounting Skills. A trustee is required by law to maintain detailed and accurate records, as well as to submit reports to the trust beneficiaries, the probate court, and the IRS. In addition, he or she has to assist with decisions that will have the most beneficial tax results for the trust and beneficiaries.
• People Skills. A trustee must be able to cultivate a strong relationship with both the creator of the trust and the beneficiaries to serve as a trustworthy financial adviser. Communication among all parties is important so that the stated trust purpose and needs of the beneficiaries are met.
• The most important qualification for a trustee is to abide by his or her fiduciary duty and keep high business standards. A trustee is expected to be loyal and treat each beneficiary fairly and impartially.

People automatically turn to a close friend or relative as their choice of trustee. However, you need to ask yourself, "Will he or she meet all the qualifications I require my trustee to perform?" In many instances, that go-to person may not be in the best position to carry out the duties necessary to be an effective trustee. In that case, talk with your estate planning attorney for suggestions on the right trustee.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Wilmington Business (December 15, 2015) "Selecting the Right Trustee"

Who Owes On a Lease When the Tenant Passes Away?

Fewer and fewer Americans own their homes and instead are choosing to sign leases. What happens when someone passes away and money is still owed on the lease?

The New York Times runs a regular column where people can write in and have their real estate questions answered by an expert. In a recent such column, titled “A Noisy Cafe Next Door,” an elderly woman wrote and asked whether her daughter would be responsible for a recently signed lease if the writer passed away during the term of the lease.

The expert’s opinion?

The woman’s estate would owe on the lease and need to make regular payments. However, New York law does provide that the tenant’s estate can attempt to find a new tenant which the landlord must accept if reasonable.

This is fairly standard for any contract that you sign, and a lease is a form of contract.

Unless the terms of the contract state that it terminates upon death, then the person’s estate is normally responsible for that contract.

Naturally, there are exceptions, such as when a contract would be impossible to perform after one of the parties passes away. For example, a contract for a celebrity to make a personal appearance would be impossible to perform if the celebrity passed away.

One thing to note, however, is that like New York, many states do have special provisions in the law regarding how to handle post-death leases.

Before paying on a lease, an estate administrator should consult with an estate planning attorney in his or her jurisdictions to see how local law applies.

Contact John M. Lane Law, PLLC to help you discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: New York Times (September 19, 2015) “A Noisy Cafe Next Door,”

New Estate Tax Requirements Postponed

New reporting requirements for estates subject to the estate tax were supposed to go into effect in August. However, the IRS was not ready at that time and has officially postponed the new requirements.

A law was recently enacted that required estates to report the value of the estate within 30 days of filing an estate tax form with the IRS. This law was intended to affect any estates that filed Form 706 after July 31, 2015.

However, the IRS never issued any implementing regulations for the law. As a result, the IRS has recently announced that the requirements will be postponed until February 29, 2016. Mondaq.com reported this development in an article titled “IRS Postpones New Requirements For Estates To Report Asset Values.”

This does not mean that estate administrators should do anything different than they were already planning to do. It is still important to get proper valuations of estate assets as they will have to be reported for estate tax purposes.

The IRS will eventually implement regulations for the new rules and estate administrators should be ready to file at that time. On the upside, the postponement may give some administrators a little more breathing room.

Remember that it is important to speak with the estate’s attorney about all matters concerning the estate tax and proper valuation of estate assets.

Contact John M. Lane Law, PLLC to help you discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Mondaq.com (September 8, 2015) “IRS Postpones New Requirements For Estates To Report Asset Values.”

Be Mindful of the Statute of Limitations

Every civil action in the United States is subject to a statute of limitations. That is a time period within which a lawsuit must be filed after the complained of activity took place. Failure to file within that time period may have cost one estate millions of dollars.

 

Wealthy copper heiress Huguette Clark was likely a troubled woman. For 20 years before her 2011 death at the age of 104, she had lived in a private room at Beth Israel Medical Center in New York. However, it appears that there may have been no medical reason for her to have been confined to that room.

Her executor filed a lawsuit against the medical center alleging that it had unnecessarily bilked Clark out of millions of dollars due to the confinement and through smarmy friendships. In total, the estate was seeking $95 million from the hospital.

According to The New York Post‘s article, "Hospital doesn't owe Huguette Clark's estate due to loophole," the case has been thrown out because it was not brought within the statute of limitations. It is important to note that this is not a decision on the merits of the case.

Even if the case had not been dismissed because of the statute of limitations, Clark's estate still would have had to prove its case against the hospital. The statute operates to block the estate from getting to argue the case on its merits.

The lesson here is that anytime you think that you have a potential legal action against someone else, you need to speak with an attorney as soon as possible. This is especially true for people administering an estate because they can potentially be held personally liable for mistakes made in the administration.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: New York Post (August 24, 2015) "Hospital doesn't owe Huguette Clark's estate due to loophole."