Wills Need Probate

If you inherit something through a will, you cannot just take the will to the bank and demand they give you the contents of a bank account.

How wills actually work, is not understood by everyone.

Many people think that if something is written down in a will, then everything is settled. They think all that is required is for the beneficiary to show the will to whoever is holding the property the beneficiary is to inherit.

That is not the way it works at all.

Unfortunately, the misperception is common.

In fact, estate attorneys are used to hearing this from people named in wills, who think it all works that way and are upset when they discover that it does not.

The Times Herald recently discussed this in “Wills won’t work without probate.”

A will is only a bunch of words on paper that have no real legal authority, until the will is filed with a probate court.

The court must then agree to accept the will as representing the valid wishes of the deceased.

Once that is done, the probate court appoints a personal representative for the estate.

That personal representative is then charged with carrying out the directives in the will, under the supervision of the court.
This can result in a long and often expensive process.

It depends on the size of the estate, the ability of the personal representative and whether there are any challenges to the estate.

Of course, this can all usually be avoided by speaking to an estate planning attorney about getting a trust instead of a will.

Reference: The Times Herald (Sep. 22, 2017) “Wills won’t work without probate.”

Window Cleaner Could Go to Jail for Lying about Inheritance

A strange case out of the U.K. features a window cleaner, a fraudulent bankruptcy and the possibility of jail time.

For years, an elderly woman in Britain, Julie Spalding, had been looked after by the nephew to whom she promised to leave her estate.

She was not in good health and suffered from many falls.

The nephew said she became belligerent with him and eventually kicked him out of her life.

At that time, she grew close to the man who was employed to clean her windows. He began to look after Spalding and she changed her will to leave the window cleaner her entire estate.

When Spalding passed away, the nephew challenged the will in court and eventually won, as the Telegraph reports in “Window cleaner bequeathed £300,000 by customer faces jail for failing to hand money back to her family.”

The window cleaner was ordered to pay back all of the money he had received from Spalding’s estate.

He refused, however, and instead claimed he had already lost it all.

He even claimed that much of it had been in cash in his car, when the car was repossessed. To avoid given anything back, he obtained a bankruptcy judgment.

The window cleaner now appears to have been lying.

Through many small transactions, he transferred the money to his family members for safekeeping and opened many small bank accounts to stash some of the money.

He now faces possible jail time for his scheme.

The court case has been suspended, so that he can obtain legal counsel.

Reference: Telegraph (Aug. 30, 2017) “Window cleaner bequeathed £300,000 by customer faces jail for failing to hand money back to her family.”

Cutting a Child Out

It is not all that unusual for a child to not live up to the expectations of parents. Sometimes parents will be so disappointed when that happens, that they will attempt to cut the child out of their estate plans. They might want to reconsider.

Wealthy parents often have extremely high expectations for their children. They want their children to go to school, get a good job, raise a family and do all of the things that made the parents so successful.

However, sometimes a child just does not live up to those expectations.

Sometimes there is a black sheep who does everything the parents would not want him or her to do.

If the problems are severe enough, then the parents might even stop contact with the child and seek to cut him or her out of their estates.

The latter is often a bad idea, as the Globe and Mail discusses in “Think twice, wealthy family, before cutting the black sheep out of your will.”

One big thing to consider is that a child who receives nothing has no incentive to not cause problems.

A no-contest clause can prevent someone who does receive an inheritance from challenging an estate plan that they do not like, but it cannot prevent someone from doing so who is set to receive nothing or very little from an estate.

This can make cutting a child out of an estate plan a very expensive proposition. This is because the child has no reason to not launch legal fights.

A black sheep child can also be more easily controlled by using an estate plan to incentivize that child into desired behaviors.

An estate planning attorney can help you create a trust, for example, that only distributes money to the child when certain actions are taken by the child.

Reference: Globe and Mail (Sep. 19, 2017) “Think twice, wealthy family, before cutting the black sheep out of your will.”

Electronic Wills are around the Corner

Almost all business can now be conducted electronically. Wills are one of the last holdouts, but that is starting to change.

Traditionally, for a will to be accepted as valid in probate court, it had to follow very strict forms and procedures. It needed to be signed and there needed to be witnesses present who could testify that the will was signed. Normally, two witnesses were needed.

Eventually, some states relaxed the strict formalities and allowed other wills to be probated, if it could be proven that the contents of the will were the intentions of the testator. However, some states kept the very strict rules.

That makes it difficult for wills to be made digitally, like most everything else can be today.

The law is now beginning to adapt in ways that will make them possible, as the New Jersey Law Journal discusses in “Electronic Wills: No Longer in A Galaxy Far, Far Away.”

In 2013, an electronic will was accepted into probate in Ohio. In that case, the person had digitally signed the will using a stylus and witnesses were present to the signing.

While Florida recently rejected an electronic wills law, Nevada has passed a law that allows them.

In other states, courts are rewriting the rules to allow more non-conforming wills to be accepted, which will eventually pave the way for electronic wills in those states.

For now, you probably do still need to make sure that your will is written on paper and that all of the formal procedures are followed correctly.

That might not be true in a decade.

Reference: New Jersey Law Journal (Sep. 11, 2017) “Electronic Wills: No Longer in A Galaxy Far, Far Away.”

No-Contest Clauses

One way to make people hesitate before challenging a will or trust, is to include a no-contest clause, which disinherits them, if they file a legal challenge.

People often get very upset when they think they have not received their fair share of a deceased family member’s estate. They can often be so upset that they decide to issue a legal challenge to the estate plan, especially if there is a substantial money involved.

These challenges can take a lot money out of the estate, since lawyers have to be hired to defend the estate from the challenge.

A way around this problem is to include a no-contest clause in wills and trusts, as Press Enterprise discusses in “The Pros and cons of the no-contest clause.”

A no-contest clause helps prevent these challenges. It simply states that anyone who challenges the will or trust will receive nothing from it.

As a result, the document will be effectively rewritten to disinherit the challenger.
This is an easy way to stop many people from challenging an estate plan.

They might not be happy with what they received, but they do not want to risk getting nothing.
Some criticize these clauses as deterring people from challenging an estate plan when they have good reason to, such as when there has been undue influence used by someone else to get more of the estate than he or she should.

However, most states will not enforce a no-contest clause, if the person challenging the will or trust has probable cause to do so.

If you want to make sure a no-contest clause is included in your will or trust, then visit an estate planning attorney and make sure the clause is included.

Reference: Press Enterprise (Aug. 5, 2017) “The Pros and cons of the no-contest clause.”

A Large Bequest for Two Cats

A woman in New York left a large sum of money for her cats in her will.

It is becoming fashionable for wealthy people to leave large inheritances for the care of their pets, after the owner passes away. Every few months, another story makes the rounds in the media.

The latest incident comes out of New York, where a widow named Ellen Frey-Wouters left $300,000 for her cats. She instructed that the money be used so the two cats, Troy and Tiger, would never be caged and would always receive good care.

Fox News reported on the story in “New York widow leaves $300G to her cats.”

While there is an obvious tabloid appeal to stories of wealthy people leaving lavish gifts for their pets, there is a very serious side to these stories as well.

More and more people are viewing their pets as something more than mere animals they possess. Pets offer companionship and many people view them with as much love as they do human family members.

This leads to the desire to make sure that pets are taken care of, after the owner passes away.

You do not have to be wealthy to leave something behind for the care of your pets.

Estate planning attorneys can draw up plans for just about anyone to leave some money and instructions for how their pets should be treated.

It can be done through wills or through specially designed pet trusts.

See an estate planning attorney to ask about what you can do for your pets.

Reference: Fox News (Aug. 22, 2017) “New York widow leaves $300G to her cats.”

Online Wills

Today you can not only purchase a will online and download a form to fill out, you can even find websites that will let you create a free will and sign it digitally. You should not use these services.

There is stiff competition for cheap online wills.

There are all sorts of websites that offer wills at various prices and even for free. There might be hundreds of these sites, if not more.

They regularly pop up and try to beat each other in search engine rankings.

One new trend is for sites to have wills that are completely digital. You can answer some questions to have the will made.

You then sign the will digitally and think you have a will, as Jewish Link of New Jersey discusses in “Why You Really Don’t Want an Online Will.”

The problem?

If you use one these sites, you really do not have a will.

You have nothing at all but lost time.

In order to be valid in court, wills must be executed in specific ways.

That means you need to sign the will in front of witnesses, who also need to sign the will.

In some states, a notary public must also be present to certify that you and the witnesses signed the will.

If these steps are not taken, then the will cannot be entered into probate court.
Online wills are not worth your time.

Even if they do not make the basic error above, you cannot trust them to not make other mistakes.

Wills need to be carefully crafted legal documents. You should see an estate planning attorney to get one.

Reference: Jewish Link of New Jersey (August 24, 2017) “Why You Really Don’t Want an Online Will.”

Before You Have a Baby

If you are expecting your first child, there are a few things that you need to do before the due date to make sure that you are financially prepared.
Having your first child is an exciting time in anyone’s life.

People make all kinds of plans about the child. Names are picked out. Nurseries are built. Detailed plans about how to get to the hospital on the big day are decided. Plans to have grandparents come out to help take care of the new baby are often made.

All of those things are important.

In the frenzy of making those plans, people often forget that they need to make some financial arrangements before the baby is born, as Business Insider points out in “The first 3 things to do with your money before you have a baby are easy to overlook.”

Things that you should do include:

•Make sure that you understand health insurance and how to get your new child on your plan as soon as you possibly can. If your employer provides your insurance, then speak to your HR representative about what you will need to do.

•Make sure that you have plenty of access to cash. Children often require parents to spend cash in emergencies. You will need to have liquid assets, so you can do that. A financial advisor should be able to assist you in getting those liquid assets.

•Think about who you would want to be the guardian of your child, if anything should happen to you. You should then go to an estate planning attorney and get a will, so the person you want to be guardian will be appointed by the court.

Reference: Business Insider (August 22, 2017) “The first 3 things to do with your money before you have a baby are easy to overlook.”

Why You Should Fund a Trust

If you have a trust, you might find by looking carefully at the estate planning documents that you do not really need to put assets into the trust while you are alive. Don’t let that fool you.

When you get a living trust, the estate planning attorney who drafted the trust will tell you that you need to fund the trust. That simply means that you need to transfer your assets to the trust.

This can be difficult at times, because you have to figure out what goes into the trust and what should stay out of it for various reasons.

The estate planning attorney can help you in making those determinations. Unfortunately, instead of asking for that help, many people end up not funding their trusts.

They see that they were also given a pour-over will at the same time as they got the trust.

That is a will that says any assets in an estate should be transferred to the trust, after the owner of the assets passes away.

Since the assets will be transferred later by the pour-over will, people think there is no reason to do it now.

That is a mistake, as the Times Herald-Record discusses in “Importance of funding a trust.”

The biggest problem is that one of the main reasons to get a living trust is to avoid having your estate go through probate court after you pass away.

However, if you rely on the pour-over will to fund your trust, then the place your trust gets funded is in probate court.

It is the probate court that will have to direct assets to a trust. By not funding the trust on your own, you defeat one of the primary reasons that you got the trust in the first place.

If you have difficulty funding your trust, then talk to your estate planning attorney about what you need to do.

Reference: Times Herald-Record (August 17, 2017) “Importance of funding a trust.”

Trusts Are Cheaper Than Wills

If you are looking to save money on your estate plan, then you might think that you should get a will since they are cheaper to get than a trust. However, trusts are actually cheaper overall.

Estate planning can be expensive for some people. Estate planning attorneys do not always come cheap and not everyone thinks they can afford to hire one.

In most cases, a will is less expensive to get than a trust. This is because trusts normally require more of the attorney’s time to draft. This leads many people to get wills to save time and money.

The problem with is that a will is more expensive overall than a trust, as the Times Herald-Record explained in “Trusts will cost you less at settlement time.”

When someone passes away, someone must then administer either the will or the trust to make sure that property is distributed as the deceased directed.

Using a will requires going to probate court and having an executor, who can charge for the service, go through the process of administering the estate.

On the other hand, using a trust means that a trustee, who can also charge for the service, is required to distribute everything.

The trustee normally does not have to go to court, which makes it a much faster process. The speed means that the trustee may charge much less overall.

In the end, the trustee may be a lot cheaper than any money that might have been saved by getting a will instead of a trust.

When getting an estate plan created, it is important to use the instruments that work best for your situation. Do not be afraid to get a trust because of the initial expense.
It just may be cheaper in the long run.

Reference: Times Herald-Record (August 2, 2017) “Trusts will cost you less at settlement time.”