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Probate & Estate Administration During COVID-19

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Probate Challenges and Estate Administration Roadblocks During COVID-19 Corona virus Pandemic

Many of our clients are in the midst of settling the estate of a deceased loved one or have just had a loved one pass away and are wondering what comes next. An event such as this has both personal and legal consequences. Below are observations on issues that may immediately present themselves.

Immediate steps may be limited by circumstance. If someone has just died and the cause of death is unknown, public health officials may limit the immediate steps one would usually take until the cause of death is determined and no known COVID-19 risk exists. Depending on circumstances, there may be some delay in physically getting access to the premises, securing them and searching for a will and other documents if they are not in possession of the family or the decedent’s attorney. It is always wiser to have one’s original estate planning documents safely secured off the premises and make sure a trusted individual has access to the storage place.

Once access is permitted, secure the premises if they become unoccupied. Subject to the necessary steps to ensure everyone’s safety (which may include disinfecting) the nominated personal representative may take steps, such as changing locks, necessary to secure the physical contents and financial documents which may remain in the home. These steps can be taken before one’s official appointment. If additional or condominium fees must be paid to allow enough time for an orderly inspection, appraisal, or the like, this can be treated as an expense of the estate.

The legal process of estate administration can begin and continue. While the probate courts of the states in which we conduct estate administrations have limited or closed off physical access to the public, emergency hearings (conducted telephonically) continue and many routine documents can be e-filed. Routine non-contested wills can still be allowed; while reduced staffing at courts may stretch the time frames somewhat, these processes, at least for the present, continue as before. Where that time frame may cause harm to a beneficiary or in some cases, the assets, if the court deems such circumstances an emergency, a hearing to rush the appointment of a temporary fiduciary, called a “executor” or “special personal representative,” can be requested.

Most financial activities can be conducted. With overnight shipping, and technologies such as scanning, secure e-mail, electronic funds transfers, and electronic document signatures, most financial transactions can be conducted virtually once the identities of the parties are established in a fashion compliant with the financial institution’s practices. Thus assets can be transferred to estate or trust accounts, sold and reinvested if desired in order to properly pay estate expenses and distribute funds to beneficiaries. Notarizations still require physical presence although there is a move afoot to accept signatures performed over a videoconference.

Once appointed, electronic communications are vital. As a fiduciary, personal representatives and trustees must take special care to maintain transparency and good chains of communication with each other and the beneficiaries. In a typical administration, one or more introductory or status meetings may occur between co-fiduciaries and the attorney, some with beneficiaries present. Since these will not occur during this unprecedented time, most communication should be in writing. Email has become the standard, often with multiple co-recipients.

Need to speak to an attorney about issues your confronted with during the Pandemic, call our office 401-274-0300 for a no cost phone consultation.

What are the Trustee’s Duties?

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The Trustee’s Duties

Congratulations. You have been appointed trustee of a trust. That is a strong vote of confidence in your judgment and probity. Unfortunately, it is also a major responsibility. Following is a short description of your duties.

1. Fiduciary Responsibility. As a trustee, you stand in a ‘‘fiduciary’’ role with respect to the beneficiaries of the trust, both the current beneficiaries and any ‘‘remaindermen’’ named to receive trust assets upon the death of those entitled to income or principal now. As a fiduciary, you will be held to a very high standard, meaning that you must pay even more attention to the trust investments and disbursements than you would for your own accounts.

2. The Trust’s Terms. Read the trust itself carefully, both now and when any questions arise. The trust is your road map and you must follow its directions, whether about when and how to distribute income and principal or what reports you need to make to beneficiaries.

3. Investment Standards. Your investments must be prudent, meaning that you cannot place money in speculative or risky investments. In addition, your investments must take into account the interests of both current and future beneficiaries. For instance, you may have a current beneficiary who is entitled to income from the trust. He or she would be best off in most cases if you invested the trust funds to generate as much income as possible. However, this may be detrimental to the interest of later beneficiaries who would be happiest if you invested for growth. In addition to balancing the interests of the various beneficiaries, you must consider their future financial needs. Does a trust beneficiary anticipate buying a house or going to school? Will she be depending on the trust income for retirement in fifteen years? All of these questions need to be considered in determining an investment plan for the trust. Only then can you start considering the propriety of individual investments.

4. Distributions. Where you have discretion on whether or not to make distributions to a beneficiary you need to evaluate his current needs, his future needs, his other sources of income, and your responsibilities to other beneficiaries before making a decision. And all of these considerations must be made in light of the size of the trust. Often the most important role of a trustee is the ability to say ‘‘no’’ and set limits on the use of the trust assets. This can be difficult when the need for current assistance is readily apparent.

Trustees Has Many Responsibilities

5. Accounting. One of your jobs as trustee is to keep track of all income to, distributions from, and expenditures by the trust. Generally, you must give an account of this information to the beneficiaries on an annual basis, though you need to check the terms of the trust to be sure. In strict trust accounting, you must keep track of and report on principal and income separately.

6. Taxes. Depending on whether the trust is revocable or irrevocable and whether it is considered a ‘‘grantor’’ trust for tax purposes, the trustee will have to file an annual tax return and may have to pay taxes. In many cases, the trust will act as a pass through with the income being taxed to the beneficiary. In any event, if you keep good records and turn this over to an accountant to prepare, this should not be a big problem.

7. Delegation. While you cannot delegate your responsibility as trustee, you can delegate all of the functions described above. You can hire financial advisors to make investments, accountants to handle taxes and bookkeeping for the trust, and lawyers to advise you on questions of interpretation. With such professional assistance, the job of trustee need not be difficult. However, you still need to communicate with those you hire and make any discretionary decisions, such as when to make distributions of principal from the trust to one or more beneficiaries.

8. Fees. Trustees are entitled to reasonable fees for their services. Family members often do not accept fees, though that can depend on the work involved in a particular case, the relationship of the family member, and whether the family member trustee has been chosen due to his or her professional expertise. Determining what is reasonable can be difficult. Banks, trust companies, and law firms typically charge a percentage of the funds under management. Others may charge for their time. In general, what’s reasonable depends on the work involved, the amount of funds in the trust, other expenses paid out by the trust, the professional experience of the trustee, and the overall expenses for administering the trust. For instance, if the trustee has hired an outside firm for investment purposes, that expense would argue for the trustee taking a somewhat smaller fee. In any case, it makes sense to consult with a professional experienced with trust work who can guide you on what would be normal fees considering all of the circumstances.

In short, acting as trustee gives you a wonderful opportunity to provide a great service to the trust’s beneficiaries. The work can be very gratifying. Just keep an eye on the responsibilities described above to make sure everything is in order so you no one has grounds to question your actions at a later date.

Peace of Mind Checklist

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Estate Planning Peace of Mind Checklist 

Please check the following questions that are important to you:

Happy senior man and woman couple dancing and holding hands after finishing medicaid with RI medicaid planning

________ I am concerned about losing my assets to the high costs of long-term care for myself and my spouse. Will we lose everything to pay for care, or are there options (Medicaid Planning)?

________ My child is disabled. How can I protect his or her future (Special Needs Planning)?

________ How can I set things up so my kids’ inheritance will be protected if they get divorced or are sued (Asset Protection Planning)?

 

________ My parents are aging. What should I know to help them to remain independent and protect their assets (Medicaid Planning)?

________ How can I minimize or eliminate paying taxes upon my death (Tax Planning)?

________ Do I have to be wealthy to benefit from a living trust? What are its benefits (Probate Avoidance Planning)?

________ If I can’t make legal and financial decisions for myself, how can I be sure my affairs are conducted in my best interest (Durable                        Powers of Attorney) ?

________ If I am too ill to make health care decisions for myself, how can I be sure my wishes will be carried out (Health Care Power of                               Attorney)?

________ How can I be sure my money and property end up in the right hands when I’m gone (Estate Planning with Trusts)?

________ My parent just passed away. What do I do now (Probate Administration)?

Many of our clients came to us with the same questions. They all seek the same thing: PEACE OF MIND FOR THEMSELVES AND FOR THE ONES THEY LOVE.

Estate Planning is a general term the encompass each of the stated questions and concerns above. The paths of Estate Planning are:

  • Medicaid Planning
  • Special Needs Planning
  • Asset Protection Planning
  • Tax Planning
  • Probate Avoidance Planning
  • Long Term Care Planning
  • Disability Planning – Powers of Attorney – Financial and Medical
  • Planning with Trusts
  • Probate and Estate Administration Planning

Contact us for estate and elder law planning solutions, PROVIDING YOU WITH PEACE OF MIND BY ADDRESS ALL YOUR  LIFE’S CONCERNS AND GOALS THROUGH DRAFTING AN ESTATE PLAN THAT ADDRESSES YOUR GOALS.

Call our office today at (401) 274-0300

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Learn The 9 Things Every Trustee of Real Estate MUST Do!

By Uncategorized

Trustee of Real Estate Checklist

Many people realize the benefits of transferring the ownership of real estate over to a Trustee of a Trust. Often times the people who create the trust serve as Trustee. However, sometimes Trustees are called upon to take a more active role in managing a property. If and when that day occurs, the Trustee must be prepared to spring in action or run the risk of being accused of breach of their fiduciary responsibilities.

FRET NOT TRUSTEES – we have a checklist of things you need to do when you are called to action.

There are a whole host of things, but among some of the more important, you should consider if a residence will be vacant for an extended time:

  1. Changing locks;
  2. Making a detailed inventory of valuables and keeping them stored safely;
  3. Installing an inexpensive security system (which will dial out to  security agency in the event of a break in);
    house

    Trustee’s who hold title to real estate have much to do!

  4. Monitoring pipes if in a colder climate;
  5. Requesting mail be forwarded;
  6. Halting newspaper deliveries;
  7. Advising homeowner’s insurance agent of the vacancy and make sure property is adequately insured;
  8. Arranging for condo and/or coop fees to be paid on a regular basis.
  9. Figuring out whether to keep utilities on or off.

Also, while seeming obvious, do not forget to check: To see if there are perishable items in the residence or in storage and address them accordingly; If there are pets or other animals that need care and/or homes.; Whether property and casualty insurance coverage continues on personal effects, motor vehicles and items in storage.

Conclusion: If you are a Trustee, it is advisable to seek assistance from a professional who can help you navigate issues that arise when taking on the responsibility of a fiduciary.