Estate Administration 101 - preparing your estate to make it easier on your familyIf something happened to you, how would your family feel about the way you left your affairs? Are your financial assets and legal affairs in order or are they a mess. Have you carefully considered who you have appointed to be in charge of your estate, or is it possible that you don’t even have a will yet?

While it is very vital to have your affairs in order in the event that you are incapacitated, it is equally as important to be sure that you’ve arranged to have your assets distributed as desired in the unfortunate event of your death. We all know someone who passed away unexpectedly, and we all say “That won’t happen to me.” Unfortunately, it does happen.

It is likely that you need a will to leave your assets outright to your spouse or other family members or charities immediately upon your death. You may have minor children and need to establish a trust to have the funds they inherit remain in an account with a Trustee to invest them, manage them, and distribute them as needed until your kids are of a certain age and mature enough to receive their assets in a lump sum, or in specific increments.

One of the most important decisions is the appointment of an executor or personal representative. This person or people, whether family members, friends, professional advisors, or perhaps a bank, will be in charge of settling your estate. It is their job to gather all assets, determine which debts and liabilities should be paid and which should not, attend to the filing of all income and estate tax returns, and then make distribution as set forth in your will and trust. It is important to be sure that the person you have named is appropriate. 

Also, if your will old, you may wish to revisit it to determine whether the named executor is still the right one at the current time. You may question whether the person you have appointed has a good relationship with family, is competent to serve, or knows that they may need to contact attorneys, accountants, and investment individuals in settling the estate, as opposed to having them do it on their own. 

You should have a complete listing of your assets and liabilities, along with account numbers, that you keep in a safe and secure place, so that if something does happen to you, your executor will have immediate access to all of your information. This could be kept on a disc or on a program within your computer, but then it is important to be sure that someone knows how to access that information with passwords, login information, etc. 

It is estimated that approximately 50% of the public dies without a will, leaving a mess of issues such as who will be in charge, who will pay taxes on assets, should assets be sold or maintained, should the real estate be kept, rented, or sold, and who should receive all of the tangible personal property? Now consider the 50% of the population that create an appropriate plan and keep it up to date. Which 50% would you rather put your family into?

Hyman G. Darling, Esq.


Photo credit: Microsoft

This post originally appeared on Bacon Wilson, P.C.'s blog entitled, "Estate Planning Bits."