If you’ve been appointed as personal representative (formerly known as an executor) of a loved one’s estate, or a successor trustee, and that person dies, your heartache – not to mention your to-do list, including tasks ranging from planning the funeral service, coordinating relatives coming in from out of town and eventually meeting with a trust administration or probate lawyer – can be quite overwhelming. First and foremost, you need to take care of yourself during this emotional time.
To help you with the “business” side of things, here’s a quick checklist of crucial details that will make the trip to our office to handle the legal affairs easier. We know it can be difficult, but some of these things have a deadline, so make sure that you reach out sooner rather than later:
● Secure the decedent’s personal property (vehicle, home, business, etc.).
● Notify the post office.
● Get copies of the death certificate. You’ll need them for some upcoming tasks.
● Notify the Social Security office.
● Take care of any Medicare details that need attention.
● Contact the decedent’s employer to find out about benefits dispensation.
● Stop health insurance and notify relevant insurance companies. Terminate any policies no longer necessary. You may need to wait to actually cancel the policies until after you’ve “formally” taken over the estate, but you can often get the necessary paperwork started before that time.
● Get ready to meet with a qualified probate and trust administration attorney. Depending on the circumstances, a probate may be necessary. In Minnesota, probate is necessary if the decedent owned real estate in his/her name alone OR if the decedent owned assets in his/her name alone that total more than $75,000.
● Even if a probate is not needed, there is work that needs to be done to administer the trust properly. Here’s what you need to gather:
1. The decedent’s will and trust. If the original of the deceased’s will or trust can’t be located, contact us as soon as possible and bring any copies you do have.
2. A list of the decedent’s bills and debts. It’s often easier to bring the statements or the actual credit cards into the office rather than try to write out a list, but do whatever is easiest for you.
3. A list of the decedent’s financial advisors, insurance agent, tax professional, and other professional advisors.
4. A list of the decedent’s surviving family members, including their contact information when available. Even if they’re not named in the trust, the attorney will need to know about everyone in the family.
● Cancel your loved one’s driver’s license, passport, voter’s registration, and club memberships.
● Close out email and social media accounts, and shut down websites no longer needed. Depending on circumstances, to take these steps, you may need to wait until you’ve “formally” taken over the estate, but you can often learn the procedures and be ready to take action.
● Contact your tax preparer.
You may be thinking about handling all the paperwork yourself. It’s a tempting thought – why not keep things as simple as possible? – but a “DIY” approach to this process might cost you and your family dearly. Read on to understand why.
CONSEQUENCES OF MISHANDLING AN ESTATE: EXAMPLES FROM REAL LIFE
Example #1: Failing to disclose assets to the IRS. Lacy Doyle, a prominent art consultant in New York City, inherited a large estate when her father passed away in 2003. He allegedly left her $4 million, but she only disclosed fewer than $1 million in assets when she filed the court documents for the estate. Per the New York Daily News: “She opened an ‘undeclared Swiss bank account for the purpose of depositing the secret inheritance from her father’ in 2006 — using a fake foreign foundation name to conceal her identity… [she also] didn’t report her interest in the hidden accounts — nor the income they generated — from 2004 to 2009.” As a result of these alleged mischiefs and Doyle’s failure to report the accounts to the IRS, she was arrested, and she now faces a six-year prison sentence.
Example #2: Mishandling an estate during life using a power of attorney. Another famous case of an improperly handled estate involved the son of famous New York philanthropist and writer, Brooke Astor. Her son, Anthony Marshall, was convicted of misusing his power of attorney and other crimes. According to a Washington Post obituary: “In 2009, Mr. Marshall was convicted of grand larceny and other charges related to the attempted looting of his mother’s assets while she suffered from Alzheimer’s disease. He received a sentence of one to three years in prison but, afflicted by congestive heart failure and Parkinson’s disease, was medically paroled in August 2013 after serving eight weeks.”
Example #3: Naming Your Butler as Personal Representative. Doris Duke was the heiress to a 1.3 billion dollar tobacco fortune. When she died in 1993, she left a great majority of her estate to her charitable foundation established through her will and trust. Rather than naming a qualified professional to handle her foundation, she named her butler, Bernard Lafferty, as the executor. Lafferty was an alcoholic and an improvident spender and he routinely commingled his own personal assets with the assets of the estate despite being entitled to a $500,000 per year annual payment from the estate. The legal challenges came flooding in and the estate paid over $10 million dollars in legal fees following an eventual settlement with Lafferty agreeing to step down as executor. You can read more here.
KEYS FOR HANDLING A PROBATE
1. Seek professional advice from a probate attorney to avoid even the appearance of impropriety when handling an estate.
2. Errors of omission or accident can be costly – even if your intent was good. An executor who makes distributions from an estate too soon can get into serious trouble, for instance. An executor’s personal assets can wind up in jeopardy if his or her actions cause an estate to become insolvent.
3. Even if you’re well organized and knowledgeable about probate law, it’s difficult to anticipate what can go wrong. There are many ways to end up in hot water when you’re handling the estate or trust of a loved one.
We are here to help you steer clear of the obstacles and free you to focus on yourself and your family during this difficult time. Contact us for assistance. We can help you manage estate and trust related concerns as well as point you towards other useful resources like our free e-guide: Checklist After Death – What to Do Following the Death of a Loved One. Contact our office today at (952) 658-6503 for assistance with administering an estate of a loved one.
Zach Wiegand is a Burnsville, Minnesota estate planning attorney who also handles probate in Dakota County and other counties in the greater Twin-Cities area. Zach is the owner of Gold Leaf Estate Planning, LLC, which is a Minnesota estate planning law firm that handles probate and trust administration in Minnesota. Zach was named a 2017 Minnesota Super Lawyer – Rising Star and he is a member of WealthCounsel – a national organization of estate planning attorneys dedicated to practice excellence. You can contact Zach via e-mail at email@example.com or by calling (952) 658-6503. Gold Leaf Estate Planning is located in Burnsville at 3000 County Road 42 W., Suite 310, Burnsville, MN 55337.