Creating a will is the cornerstone of estate planning, don’t underestimate the need for a valid, legal will. It is necessary, even if you have a living trust, to name an executor for your estate, to name a guardian for any children under the age of 18 and to distribute or ‘pour over’ any property not owned by a living trust.

The popularity of do it yourself will kits and forms has increased over the past decade, but there are four things that may be missing from this estate planning document that can make a big difference on how smoothly your estate is ‘settled.’

Successor Executors and Guardians

Naming an executor and a guardian is an important part of drafting a will, but what happens if your choices are unwilling, unable or even unavailable to serve in that capacity? Naming backups, or successors, is critical to keeping these choices within your control.

Bond Waivers

Many probate courts require the executor of an estate to post a bond to ensure the estate and its assets are protected and debts are paid. Without a will that explicitly waives the need for a probate bond, courts may mandate their purchase, meaning more time and expense for your executor and your estate.

Contingent Beneficiaries

Unfortunately, wills aren’t updated as often as they should be. Life changes, and your estate planning documents should change with it. A will should have ‘backup’ beneficiaries in case one or more of your named beneficiaries has since passed away.

Self Proving Affidavits

A will needs to be properly witnessed by at least two parties. A self proving affidavit is an attached document signed by a notary public that shows the will was properly signed and witnessed and that it is the will of the person who signed it. Many states accept these affidavits in lieu of actual witness testimony, and it avoids the time and expense of the executor having to track down the witnesses.

An estate planning attorney can help you create a will that not only has all of the aspects that help your loved ones get through the administration of your estate, but they can work with you on other estate planning tools that meet your needs.

The Hammond Law Group is a member of the American Academy of Estate Planning Attorneys.

A pour-over will is used with estates that hold the bulk of their property in trust, and it has three important functions. While creating a trust will transfer property to beneficiaries and allow it to avoid probate, you will still need a will for the following:

1. Naming the Executor of your estate.

A pour-over will names an Executor and should also name at least one backup Executor, should the primary choice be unwilling or unable to serve. If you have a properly drafted and funded trust, your Executor is not going to be tasked as much as the Executor of an estate using primarily a will to transfer property, since property within a Trust avoids probate. But an Executor will still have duties, such as filing a tax return for the estate, paying debts and expenses and other administrative tasks.

2. Naming the Guardian for minor children.

Naming a Guardian for your children is one of the primary reasons parents create a will, and this task cannot be handled by creating a trust. As with the Executor, you should also name at least one backup should your original choice not be able to take on the responsibility.

3. Handling the property not currently owned by the trust.

A pour-over will normally directs an Executor to transfer all property into the Trust that is not held within the trust. This will allow the Trust to act as the main document to distribute your property.

Usually, the main assets and property of an estate are held by the Trust, while a pour-over will would cover any smaller property that was not transferred when the Trust was created. If the property covered by the pour-over will is low enough in value, that property may still avoid a lengthy probate proceeding.

If you are considering creating a trust or drafting a will, work with an estate planning attorney to not only ensure that these documents coordinate with each other, but that they meet your family’s specific needs.

The Hammond Law Group is a member of the American Academy of Estate Planning Attorneys.

You often come across the terms ‘fiduciary’ and ‘fiduciary duties’ in the course of estate planning – but do you know exactly what these terms mean?

Fiduciary

A fiduciary is an individual, a business or even an association that holds assets or power for another party with the legal authority and duty to make decisions regarding finances and matters on their behalf. A fiduciary is expected to act with good faith and honesty and is normally chosen with the premise that they have more knowledge and expertise about the particular matters being handled. Typical fiduciaries that are encountered are:

• Attorneys;
• Financial advisors;
• Real estate agents;
• Bankers;
• Stockbrokers;
• Estate executors; and
• Guardians.

A fiduciary is always expected to act in the best interest of the person to whom they are providing services or care.

Fiduciary Duties

A fiduciary duty is an obligation to act in the best interest of another party, and as such, a fiduciary is held to a higher standard of both trust and conduct than a ‘regular’ person. While it seems that a fiduciary relationship is based primarily on trust between the two parties, there is also a legal obligation involved when a relationship involves trust, confidence and reliance on the fiduciaries’ expertise. In fact, in a fiduciary relationship, laws forbid the fiduciary from acting in any adverse or contrary manner to the interests of the client, or from acting for their own benefit.

Certain relationships in the estate planning process are regarded as fiduciary, these include:

• Attorney and client;
• Trustee and beneficiary;
• Executors and the heirs or beneficiaries of a decedent’s estate; and
• Conservators and the protected person.

The term fiduciary comes from the Latin term ‘fiducia’, which means trust. Fiduciary duties not only involve trust, but they are taken further to an obligation that is taken very seriously not only by estate planning attorneys, but by many in the legal, business and financial sectors.

The Hammond Law Group is a member of the American Academy of Estate Planning Attorneys.

Choosing an Executor to handle your estate is difficult, it is tempting to name a spouse or family member – but do you know the responsibilities and duties of an Executor?

An Executor (known in Colorado as a Personal Representative) is named within a will to administer an estate, and they will be tasked with several responsibilities during the probate process, which is the legal process that takes place in Probate Court that handles the administration of a deceased’s estate. So what will the Executor’s duties be? There is a long list, but the basics include:

• Compiling an inventory of assets and bills;
• Opening a bank account and getting creditors paid;
• Obtaining a federal tax identification number for the estate and preparing the estate’s tax return;
• Ensuring all legal paperwork is filed correctly and according to state deadlines;
• Locating potential heirs, beneficiaries and creditors; and
• Distributing the assets of the estate in accordance with the terms of the will.

This process may take months, or even years to complete, and unfortunately, the process also coincides with a time of grief for loved ones. But an Executor does not have to do this alone, a Probate Attorney is able to assist them with the various administrative and legal tasks that take place in probate. In fact, a probate attorney may perform nearly all of the functions of the executor, although the Executor may still have to sign off on court documents, and the fees for the Probate Attorney can be paid from the estate.

Choosing an Executor who can handle these tasks is going to be difficult, and it is best to discuss your choice with the person you choose. It is also important to give a second choice within your will, should the first choice be unwilling or unable to serve in that capacity.

Executor duties can be time consuming and difficult, make sure to speak with an estate planning attorney to discuss estate administration options.

The Hammond Law Group is a member of the American Academy of Estate Planning Attorneys.

Asking someone to be the Executor of your estate is a crucial part of creating a will and the basis for beginning the estate planning process. While the question may seem fairly benign, many don’t realize exactly what is required within an Executor’s duties.

An Executor is named when a will is drafted, their duties begin once the testator, the person who had the will created, dies. Once the estate begins probate, the legal process that settles the estate of a deceased, the Executor duties will include:

• Appearances and filings in Probate Court;
• Notifying beneficiaries and heirs;
• Sending death notices;
• Opening a checking account to pay the estate’s bills;
• Filing a tax return;
• Inventorying assets;
• Identifying and paying debts of the estate; and
• Distributing bequests to beneficiaries.

Obviously, it can be a labor-intensive process for an Executor, and unfortunately it also comes during a time of grief. But the Executor does have options, such as hiring a Probate attorney or accountant to assist with the Executor’s duties. The fees are paid for by the estate.

If you are choosing an Executor for your estate, make sure you speak with your choice and let them know of the responsibilities and duties that come with the task. You also have the opportunity to make the Executor duties easier, such as keeping records and instructions up to date, and having a comprehensive estate plan in place that eases the burden of your passing on your loved ones as well as your Executor.

An estate planning attorney can help you prepare a plan to meet the needs and goals of your family, as well as discussing options in choosing an Executor while creating a will.

The Hammond Law Group is a member of the American Academy of Estate Planning Attorneys.

Has a loved one named you as the executor (or “personal representative”, in Colorado)of their Last Will and Testament? If so, you may wonder what your probate responsibilities will be. As the executor you will protect all assets, pay all debts, and pass inheritances to beneficiaries.

You must be honest, impartial and follow the letter of the law. You will have the guidance of your probate attorney throughout the process. Before you even contact an attorney, however, you should find and list all estate assets, debts, accounts, properties, and guardians or beneficiaries listed in the Last Will and Testament. Once you have a good picture of the entire estate, you can determine, with the help of an attorney, if the holdings are small enough for a shorter, simpler version of probate.

Once probate is open, you will have some estate maintenance duties. This includes paying regular bills, such as mortgages, upkeep of estate property, and notifying all necessary agencies, account holders and bill collectors of the deceased’s passing.

You will also need to open a bank account in the name of the estate. This account will be used to pay all bills, attorney fees, court fees, and taxes. You must be very meticulous about your bookkeeping in order to maintain the integrity of the estate and to be fair to all beneficiaries.

Did you know you are also responsible for all taxes? You must file and pay income taxes for the deceased’s final year as well as for any years after that the estate earns money while probate is open. You will also be responsible for paying all state and federal estate taxes.

Once all bills, taxes and court costs have been paid and the court or your attorney give you the go-ahead, you may distribute estate holdings to the correct beneficiaries. Be certain that all expenses have been paid, or any cost that comes up after the estate is settled must be paid by you. In Colorado, the probate process takes an average of 9-24 months, so you need to be patient.

During the process you must be loyal to your loved one’s memory, able to settle any family bickering, and oversee all paperwork and activities to settle the estate promptly. Being the estate executor can be a big job, especially if documents are not in order or if it is a large estate. Always ask your attorney any time you have a question, and don’t forget your loved one truly trusted you to have named you to such a position.

The Hammond Law Group is a member of the American Academy of Estate Planning Attorneys.