A testamentary trust is a trust set out in your will that only takes effect when you die.
Testamentary trusts are usually set up to protect assets. A trustee must look after the assets for the benefit of the beneficiaries until the trust expires.
How to fulfill your legal duty to someone's estate.
The expiry date of a trust will be a specific date such as when a minor child reaches a certain age or a beneficiary achieves a certain goal or milestone e. Powers of attorney depend on which state or territory you are in: they can refer to just financial powers, or they might include broader guardianship powers.
You will need to check with your local Public Trustee. You can prepare a few other documents to help your legal appointees and family as you grow older, including an:. The documents you choose to draw up will depend on your situation, and the responsibilities you're happy to entrust to others.
The Role and Duties of the Executor of an Estate
Get legal advice if you are not sure. Nominate people that you know are trustworthy, financially responsible, and likely to be around when you need them.
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Once your paperwork is in order, it will help your executor and family if you list the legal documents you have and where they are kept. The NSW Government's Planning Ahead tools website gives more detailed information on advance care directives, wills, power of attorney and enduring guardianship. A good will and estate plan can help make sure your wishes are carried out after you die, or if you are no longer able to make your own decisions. Here are seven tips to keep you on track.
Executor’s checklist: What are the duties of an executor?
The executor of an estate is responsible for funeral and burial arrangements and pays those costs out of the estate. Those copies will be required when notifying banks, investment firms, life insurers, the U. Whoever informed you that you are executor will likely know the location of the will or trust documents. If the deceased person had a living trust, you might be able to avoid probate court if the trust was set up properly. Trust assets can be disbursed immediately without court approval, while a probate judge must decide on the distribution of assets covered by a will.
The time required for the probate process varies by state and ranges, on average, from six months to two years. The living trust can be kept out of probate court because the trust owns all the property, not the deceased person. So, in effect, the trust never dies even though the person does. An attorney can advise you on legal steps and help answer questions from beneficiaries who might be pushing for a quick distribution of assets.
Among the more grueling tasks, you may be called on to sort and value the contents of the person's home. How do you take care of their interests and make sure they're treated fairly? Being an executor requires a high degree of organization. One executor recalls keeping a notebook and recording every single communication with lawyers, bankers and other contacts. Like a private eye, you may have to know how to dig for assets. Finding dusty stock or bond certificates in a drawer, rather than at a brokerage firm, may be a clue there are more awaiting discovery.
As you sort through legal and financial matters, you'll confront a range of personalities, so it helps to be calm. But she began to question that decision and recently changed her will. She named one daughter as the sole executor to help the process go more smoothly. The daughter is easygoing, Zwang says, and she's married to an accountant, whose skills would be helpful.
Pros and cons of nominating your executor
I don't want there to be any disharmony. Some lawyers say it's best to appoint one executor, as Zwang did. But it depends on the family dynamics. There's no set formula. To keep peace and create trust, it's important that the executor settle the affairs openly, says elder law attorney Margolis. Each state has specific laws on executors' responsibilities, along with timetables for them to perform their duties.
Paying the funeral expenses, publishing death notifications and filing estate tax returns are a few examples of what might be required. Your state may have an online law library that details the rules and requirements. The American Bar Association website also offers guidance about settling an estate — search online for "ABA guidelines for individual executors and trustees. Many executors find certain tasks so daunting that they consult lawyers for help. Others hire lawyers to manage the entire process, which is of course much more expensive.
Either way, you need to follow the law strictly — you are personally liable for the proper administration of the estate. If you misrepresent the value of any assets, you could be held accountable by the IRS or by the beneficiaries. If you're found to have shortchanged the heirs, you could be required to reimburse them out of your own pocket or pay fines. Will the estate cover travel expenses?
Crim made repeated trips from her home in Alexandria, Va. The estate will pay for those travel costs. It would be an expensive proposition otherwise, Crim says.
What about the value of your time? Will you be expected to do this work for free? In most states, executors are entitled to take a percentage of the estate's value, even if a fee wasn't specified in a will. But with those legal guidelines, it's still common for executor fees to become a source of conflict with heirs. Some family members may view the money as their own or be unaware of the time you've invested. Elizabeth Haase, a Washington, D. Yet at least one extended relative balked at her taking the fee specified in the will — 2 percent of the estate's value.