If you die and leave behind a Last Will and Testament, it is typically required to be admitted to a probate court for administration. Once the will has been admitted, interested parties are allowed to file a will contest if they feel that have grounds to do so. State laws vary with regard to what grounds can be asserted to contest a will and who may file a will contest; however, if a will contest is successful, the will is declared invalid and the assets distributed according to the laws of intestate succession.

In many states, only a beneficiary or heir may file a will contest. This includes anyone specifically mentioned in the will as receiving something or anyone who would otherwise inherit if no will existed. The person filing the will contest must give a valid legal reason for contesting the will as well. Being left out of a will is generally not a legal reason for contesting a will. Valid legal grounds for a will contest are often things such as the testator lacked the mental capacity to sign the will or was under duress at the time the will was executed.

If the petitioner is able to prove his or her case to the court, then the court declares the will to be invalid. Once a will is declared invalid, it is as if the will never existed. At that point, the estate assets are distributed according to the laws of intestate succession in the state where the will is being probated. Intestate succcesion laws also vary by state; however, the spouse, children and other blood relatives typically inherit the assets under intestate succession laws.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

If you die owning assets in your individual name and located in more than one state, your estate will not only go through probate, but ancillary probate as well.  This means two sets of probate fees, two probate attorneys, and two times the hassle.  With good planning, you can avoid ancillary probate, quite easily.

• What is Ancillary Probate?

The term, “ancillary probate,” refers to probate in second (or third) state, in addition to your state of residence at death.

• What Triggers Ancillary Probate?

To avoid ancillary probate, you need to understand what causes it.  Ancillary probate is triggered by you owning property in another state in your individual name, not joint names and not in the name of your revocable living trust.

• Vacation Homes and Investment Real Estate often Trigger Ancillary Probate

Real estate such as vacation homes or investment real estate often causes probate.

• What’s the Best Way to Avoid Ancillary Probate?

The best way to avoid ancillary probate as well as probate in your state of residence is to plan with a fully funded revocable living trust.  This means that all of your potential probate assets are titled in the name of your trust, not your individual name.  Be sure that your contract assets such as life insurance, retirement accounts, pensions, and annuities are payable to your trust or another individual beneficiary, and not your estate.  Assets that flow into your estate at your death trigger probate.

• Are there Other Ways to Avoid Probate?

Yes, you can also avoid probate by other means, but, unlike the revocable living trust, these methods all have pitfalls; so, get good advice before implementing any of these techniques.  You can avoid probate with lifetime gifts, pay on death and transfer on death accounts, and joint ownership (i.e. joint tenants with right of survivorship.)

If you would like to avoid the hassle and expense of ancillary probate, consult with a qualified estate planning attorney.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Probate law traditionally deals with the ownership of assets like bank accounts and real property. But in this increasingly online age, ownership of “digital assets” like your Twitter and Facebook accounts present increasingly difficult legal questions for estates. Last year Oklahoma became the first state to pass a law expressly designed to deal with digital rights post-morten.

The one-sentence law adopted in December 2010 states, “The executor or administrator of an estate shall have the power, where otherwise authorized, to take control of, conduct, continue, or terminate any accounts of a deceased person on any social networking website, any microblogging or short message service website or any e-mail service websites.”

Although this sounds cut-and-dry, many social networking sites have Terms of Service agreements that claim ownership of any information you post. It remains unclear if the Oklahoma law, and any similar laws passed by other states in the future, will force service providers to change their Terms of Service or otherwise acknowledge an estate’s control over existing accounts. This ever-changing area of probate law is why you should always consult with an estate planning attorney who can advise you on the most recent changes in the law.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Part two of two

In part one of our blog about “Seniors and Probate” we talked about how a Will results in probate (in other words, going to court), what it entails, and that there are alternatives to probate.  About 90% of probate cases involve estates of people who are at least 60 years old.

While probate is meant to offer a consistent, legal procedure for verifying a Will, taking inventory (and appraising) your assets, then transferring title to heirs, it comes with some significant drawbacks – and it can absolutely be avoided.

Remember that when a Will is your Estate Planning tool, it does result in probate; this is how the law works.  But there are legal tools that offer more flexibility, better asset protection, more control – as well as privacy – when compared to a Will.

One thing we should point out is, sometimes a law firm will use the creation of a Will as a “loss leader”, meaning they offer a discounted price for creating a Will because they know they’ll probably handle your probate process upon death.  Usually such firms are known as probate attorneys (as compared to Estate Planning attorneys.)

One of the best ways to avoid probate is to create a Living Trust, which allows you to:

• Avoid the probate process (in almost all cases.)
• Keep your estate matters private (unlike probate, which is a public process.)
• Change the terms of the document at any time.
• Craft very specific inheritance wishes for your loved ones; as many variations as you like, even care-giving directions for special needs loved ones or educational disbursements.
• Appoint someone who you trust to be your successor trustee.  This person uses the Trust as the legal tool to carry out your wishes (as compared to having this done in court, which is what happens with probate.)
• Minimize tax implications for your loved ones.

There are actually many other ways to use a Living Trust to clarify wishes for your loved ones.  You can even leave gifts for a charity, a religious organization, an institution, whatever – and ensure that your gift is delivered promptly and intact.

The cost?  A Living Trust will probably cost more than a Will to create, but in most cases the up-front fee more than pays for itself.  Plus, you’ll have peace of mind knowing that your clearly-stated wishes will be carried out, and that the process will be a private one.

Note that a Living Trust should be crafted by an attorney with specific training in Estate Planning and Living Trusts.  He or she will explain more about the benefits and uses of a Living Trust.  By all means, don’t fall for a “cheap Will” offer from a probate attorney.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Part one of two

Anyone who has a Will as their Estate Planning tool – and of course those with no Will or a legal Estate Plan – will encounter probate, the process where your estate is settled in court.

Probate affects seniors more so than any other age group: a 1989 study by the AARP (American Association of Retired Persons) found Americans who are 60 years of age and older account for 90% of all probate cases.

Let’s look at what probate really entails, then look at alternatives that may be right for you if you’re a senior who wants to have more control over your estate.

Let’s say that you’ve been married for a long time and your husband dies.  The law allows his assets to be automatically transferred to you, free of estate tax.  You draft a Will and you state how you’d like your estate’s assets (property, savings, stocks, retirement accounts, etc. ) to be distributed among your loved ones or maybe to a charity.  Regardless of the size of your estate – small or large – your estate will be settled in court.

With probate:

• Your Will is a matter of public record; anyone can learn about your Will and your estate.  Sometimes this can lead to unscrupulous pouncing by con artists.
• There are several steps in probate, each of which takes time; usually probate takes about a year.
• Claims against your estate can be made by creditors.
• Heirs, or those who feel they should have been named an heir, can challenge your Will.
• There are fees to pay to the court, very likely fees to an attorney also, and there will be costs for appraisals of assets such as a home, land, valuables, etc.
• If a Will is challenged or if a Will is unclear (or if there was no Will) it usually leads to delays in court as well as extra costs that eat into the value of your estate.

To be clear, we’re not saying that probate is a bad thing; it’s simply the legal “default” process for settling an estate.  But it’s by no means the only process!

If you’re a senior who wants much more control and privacy over the way your estate is settled and you don’t want to subject your loved ones to the probate process, learn about alternatives to probate, including the Living Trust.

Living Trusts are discussed in part two…

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

When you are having your will drawn up, one of the questions that will be asked of you is who you would like to choose as your executor. This person will be the representative over the estate, handling many different aspects of how things are distributed. Before choosing your executor, you might want to think more about the duties that will be required so that you can pick the best person for the job.

The executor will first take possession of your fiduciary assets. They will maintain control of those assets throughout the process. They are bound to keep those assets completely separate from all other assets. The executor also has to keep very accurate records and accounts so that all of the numbers are tracked. There will be beneficiaries involved in the will process, so the executor will be required to interact with those beneficiaries to keep them informed.

One important characteristic of a good executor is being able to have complete trust in their ability to exercise care when distributing your belongings and assets. There is a level of trust and loyalty that needs to be in place because you never want to have the executor feel as though they are in a place where their own personal interests conflict with the duties required.

The executor must also avoid violating the law or being non-compliant with any of the terms of the will or trust. That means you need to choose someone who is so loyal to you that they would carry out your wishes no matter what they think or feel about your choices. As you can see, choosing the right executor is critical to making sure that the process goes as smoothly as possible.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

There’s a somewhat common estate planning myth that passing away with a valid Will in place keeps your property out of probate. Unfortunately, this is just not true.

In fact, probate is designed for two different scenarios.

The first scenario is one in which a person dies with a valid Will. In this scenario, the Will is admitted to probate, proven to be authentic, and then the terms of the Will (in conjunction with state law) are used as guidelines for distributing the deceased person’s property.

The second scenario is one in which a person dies without any kind of valid estate plan. Here, an administrator or personal representative is appointed to manage the distribution of the deceased person’s property. This is done with the oversight of the probate court. Instead of a Will guiding the distribution of assets, the provisions of state law determine which of the decedent’s relatives will receive a share of the estate.

So, how can you avoid probate?

There are a few different methods. One option is to own property jointly with another person as what’s known as Joint Tenants With Rights of Survivorship. This means that, when you pass away, the property will go directly to your co-owner outside of the probate process.

Another option is to name beneficiaries to directly inherit your property. This only works with certain types of property, like life insurance policies, retirement accounts, and “payable on death” financial accounts.

Yet another very common option is to create a Living Trust. Property that is transferred into a Living Trust during your lifetime passes to the beneficiaries of the trust after your death, without the need for probate.

Which estate planning tools are right for you? A qualified estate planning attorney can help you decide.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Each state has its own requirements for what constitutes a valid Will.  When it comes to signatures, the basic requirements in Massachusetts are that you, as maker of the Will, must sign the document, plus it must be signed by two witnesses who are not beneficiaries of the Will.  There’s no legal requirement that a Will itself be notarized.

However, Massachusetts does allow you to attach a Self-Proving Affidavit to your Will. This is a document signed by you and both witnesses in which the witnesses acknowledge that they watched you sign your Will, and that you appeared to be of sound mind and old enough to make a Will.  A Self-Proving Affidavit does have to be notarized in order to be effective.

What’s the advantage of having a Will with a Self-Proving Affidavit?  It helps your Executor to begin the probate process quickly and easily.  A “Self-Proved Will” is assumed to be validly signed, and is admitted to probate immediately. On the other hand, if a Will lacks a Self-Proving Affidavit, then your Executor will need to locate the witnesses to your Will, so that they can verify to the court that your Will signing was conducted in accordance with state law.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

If you have a loved one who has passed away and left behind debt, you may wonder how that debt will be handled during the probate process. And, more specifically, who is responsible for paying the debt.

More Assets Than Debts

How the probate process unfolds with regard to the debts of a deceased person really depends on that person’s total financial picture as of his or her death. If the deceased left behind enough assets to pay off all of his or her debt, then that’s exactly what will happen. During probate, the assets of an estate are used to pay off any valid debts (or taxes) before they can be distributed to heirs or beneficiaries. So, in this situation, inheritances may be reduced in order to pay off the debts of the deceased.

More Debts Than Assets

What if the debts of the deceased outweigh the value of all his or her assets? Then the debts are placed in priority as provided by state law, and the estate assets are used to pay off as many of the debts as possible, starting at the top of the list. When the assets run out, the remaining creditors are left out in the cold. Can they come after heirs of the deceased to collect on these debts? Generally, no.

But, there are a few exceptions. For example, if you and the deceased were joint borrowers, then you’ll be on the hook for paying off the debt, because you signed up to share in that responsibility. The same is true if you guaranteed or co-signed a loan for the deceased.

If a loved one has died and you’re not sure whether a particular debt is your responsibility, or the responsibility of the estate, check with an estate planning lawyer.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

If you own property here in Massachusetts, plus you own property in one or more other states, you need to know about ancillary probate.

What Is It?

Ancillary probate is the process through which property that’s titled in your name, and owned in a state other than Massachusetts, will be distributed after your death. When you pass away owning property in multiple states, the laws of the state where each piece of property is located will govern how that property is passed on to your heirs and beneficiaries.

So, if most of your property is here, but you own a home in Florida and have a car that’s titled in Florida as well, then not only will your loved ones have to deal with the probate process here, your Florida property will be distributed by way of a probate proceeding in Florida.

The Trouble With Ancillary Probate

Ancillary probate poses a few challenges for your loved ones after your death. The first is that dealing with the probate process in more than one state means additional court costs, attorney’s fees, time, and hassle spent settling your estate. And this is if you die with a will.

Without a will, there’s an additional complicating factor – the laws that govern how an estate is distributed vary from state to state. So, your out-of-state property could end up going to a completely different set of heirs than your in-state property.

Your Estate Planning Attorney Can Help

Fortunately, just like you can arrange your estate to avoid probate here in Massachusetts, there are methods you can use to avoid ancillary probate, as well. Your estate planning attorney can help you develop an effective plan.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.