Medicaid law imposes a penalty period if you transferred assets within five years of applying, but what if the transfers had nothing to do with Medicaid? It is difficult to do, but if you can prove you made the transfers for a purpose other than to qualify for Medicaid, you can avoid a penalty.
You are not supposed to move into a nursing home on Monday, give all your money away on Tuesday, and qualify for Medicaid on Wednesday. So the government looks back five years for any asset transfers, and levies a penalty on people who transferred assets without receiving fair value in return. This penalty is a period of time during which the person transferring the assets will be ineligible for Medicaid. The penalty period is determined by dividing the amount transferred by what Medicaid determines to be the average private pay cost of a nursing home in your state.
The penalty period can seem very unfair to someone who made gifts without thinking about the potential for needing Medicaid. For example, what if you made a gift to your daughter to help her through a hard time? If you unexpectedly fall ill and need Medicaid to pay for long-term care, the state will likely impose a penalty period based on the transfer to your daughter.
To avoid a penalty period, you will need to prove that you made the transfer for a reason other than qualifying for Medicaid. The burden of proof is on the Medicaid applicant and it can be difficult to prove. The following evidence can be used to prove the transfer was not for Medicaid planning purposes:
The Medicaid applicant was in good health at the time of the transfer. It is important to show that the applicant did not anticipate needing long-term care at the time of the gift.
The applicant has a pattern of giving. For example, the applicant has a history of helping his or her children when they are in need or giving annual gifts to family or charity.
The applicant had plenty of other assets at the time of the gift. An applicant giving away all of his or her money would be evidence that the applicant was anticipating the need for Medicaid.
The transfer was made for estate planning purposes or on the advice of an accountant.
Proving that a transfer was made for a purpose other than to qualify for Medicaid is difficult. If you innocently made transfers in the past and are now applying for Medicaid, consult with your elder law attorney. Medicaid Planning without a qualified attorney can lead to costly mistakes. To read more about common Medicaid Planning mistakes people make visit my website by clicking here.
While the execution of Wills requires formalities like witnesses and a notary, the reality is that most property passes to heirs through other, less formal means.
Many bank and investments accounts, as well as real estate, have joint owners who take ownership automatically at the death of the primary owner. Other banks and investment companies offer payable on death accounts that permit owners to name the person or people who will receive them when the owners die. Life insurance, of course, permits the owner to name beneficiaries.
All of these types of ownership and beneficiary designations permit these accounts and types of property to avoid probate, meaning that they will not be governed by the terms of a Will. When taking advantage of these simplified procedures, owners need to be sure that the decisions they make are consistent with their overall estate planning. It’s not unusual for a Will to direct that an estate be equally divided among the decedent’s children, but to find that because of joint accounts or beneficiary designations the estate is distributed totally unequally, or even to non-family members, such as new boyfriends and girlfriends.
It’s also important to review beneficiary designations every few years to make sure that they are still correct. An out-of-date designation may leave property to an ex-spouse, to ex-girlfriends or -boyfriends, and to people who died before the owner. All of these can thoroughly undermine an estate plan and leave a legacy of resentment that most people would prefer to avoid.
These concerns are heightened when dealing with retirement plans, whether IRAs, SEPs or 401(k) plans, because the choice of beneficiary can have significant tax implications. These types of retirement plans benefit from deferred taxation in that the income deposited into them as well as the earnings on the investments are not taxed until the funds are withdrawn. In addition, owners may withdraw funds based more or less on their life expectancy, so the younger the owner the smaller the annual required distribution. Further, in most cases, withdrawals do not have to begin until after the owner reaches age 70 1/2. However, this is not always the case for inherited IRAs.
Following are some of the rules and concerns when designating retirement account beneficiaries:
Name your spouse, usually. Surviving husbands and wives may roll over retirement plans inherited from their spouses into their own plans. This means that they can defer withdrawals until after they reach age 70 1/2 and take minimum distributions based on their age. Non-spouses of retirement plans must begin taking distributions immediately, but they can base them on their own presumably younger ages.
But not always. There are a few reasons you might not want to name your spouse, including the following:
He or she is incapacitated and can’t manage the account
Doing so would add to his or her taxable estate
You are in a second marriage and want the investments to benefit your first family
Your children need the money more than your spouse
Consider a trust. In a number of the above circumstances, a trust can solve the problem, providing for management in the case of an incapacitated spouse, permitting assets to benefit a surviving spouse while being preserved for the next generation, and providing estate tax planning opportunities. Those in first marriages may want to name their spouse as the primary beneficiary and a trust as the secondary, or contingent, beneficiary. This permits the surviving spouse, or spouse’s agent if the spouse is incapacitated, to refuse some or all of the inheritance through a “disclaimer” so it will pass to the trust. Known as “post mortem” estate planning, this approach permits flexibility to respond to “facts on the ground” after the death of the first spouse.
But check the trust. Most trusts are not designed to accept retirement fund assets. If they are missing key provisions, they might not be treated as “designated beneficiaries” for retirement plan purposes. In such cases, rather than being able to stretch out distributions during the beneficiary’s lifetime, the IRA or 401(k) will have to be liquidated within five years of the decedent’s death, resulting in accelerated taxation.
Be careful with charities. While there are some tax benefits to naming charities as beneficiaries of retirement plans, if a charity is a partial beneficiary of an account or of a trust, the other beneficiaries may not be able to stretch the distributions during their life expectancies and will have to withdraw the funds and pay the taxes within five years of the owner’s death. One solution is to dedicate some retirement plans exclusively to charities and others to family members.
Consider special needs planning. It can be unfortunate if retirement plans pass to individuals with special needs who cannot manage the accounts or who may lose vital public benefits as a result of receiving the funds. This can be resolved by naming a special needs trust as the beneficiary of the funds, although this gets a bit more complicated than most trusts designed to receive retirement funds. Another alternative is not to name the individual with special needs or his trust as beneficiary, but to make up the difference with other assets of the estate or through life insurance.
Keep copies of your beneficiary designation forms. Don’t count on your retirement plan administrator to maintain records of your beneficiary designations, especially if the plan is connected with a company you worked for in the past, which may or may not still exist upon your death. Keep copies of all of your forms and provide your estate planning attorney with a copy to keep with your estate plan.
But name beneficiaries! The biggest mistake many people make is not to name beneficiaries at all, or they end up in this position by not updating their plan after the originally-named beneficiary passes away. This means that the plan will have to go through probate at some expense and delay and that the funds will have to be withdrawn and taxes paid within five years of the owner’s death.
In short, while Wills are important, in large part because they name a personal representative to take charge of your estate and they name guardians for minor children, they are only a small part of the picture. A comprehensive plan needs to include consideration of beneficiary designations, especially those for retirement plans.
If you have any question or planning needs, feel free to contact me.
Straddled across Ausberto Maldonado’s backyard in Bayamon, Puerto Rico, a suburb of San Juan, is a nagging reminder of Hurricane Maria’s destructive power.
“See, that tree broke off that branch, which is as thick as a tree — and now it’s in my yard,” says Maldonado, a 65-year-old retiree.
Rats scurry from under the downed tree, preventing Maldonado from hanging his laundry. To get the tree removed, he must show up in person at a local government office. But the diabetic ulcers on his feet make it painful to walk.
After a lifetime of work on the U.S. mainland picking corn and asparagus and processing chickens in poultry plants, Maldonado returned to Puerto Rico a decade ago to help care for his ailing mother, who has since died. Today the retiree finds himself living day-to-day on the island. He receives $280 a month in Social Security and $89 a month in food stamps — or about $3 a day for food.
Six months after Hurricane Maria devastated Puerto Rico and its economy, the daily indignities are piling up, especially for people who are frail or elderly. Many are finding their current economic straits nearly as threatening as the storm.
The emergency government support that helped pay for some health care and medically related transportation needs of Puerto Ricans after Hurricane Maria is running out. Private donations of water and food have slowed. And it’s not clear who, if anyone, will carry on with that work.
Maldonado opens the cupboards in his tidy kitchen. There are a few cans of corned beef, SpaghettiOs and beans. When I ask him what he usually makes for himself, he sounds wistful.
“When I have enough food, when I do my groceries,” he says, “I have eggs and bread and coffee and juice for breakfast. I would make spaghettis or some sort of salad and maybe a little dessert.”
But, in truth, the oven is unplugged, there is no juice or eggs or lettuce. It has been months since Maldonado has had fresh vegetables in the house.
“When there’s very little, then I kind of go on a diet,” he says.
It was hard enough for the retiree to fill his cupboards before the storm, but now, as many aid groups are winding down their donations, Maldonado needs to find money to buy clean, bottled water and to replace his refrigerator, which was ruined during the hurricane.
To buy groceries, he must wait two weeks for his next Social Security check.
“I’m waiting until the 10th so I can go do my grocery shopping again — if I can find a way to get there,” Maldonado says. “That’s when I would have food again, enough to make three meals — lunch, breakfast and dinner.”
Maintaining a decent diet isn’t simply about staving off hunger; diabetes is consuming Maldonado’s foot, and unless he eats healthy food and takes his insulin, doctors have warned him, his foot will need to be amputated.
Maldonado opens the door to his broken refrigerator and points to a vial that holds a few drops of insulin — the last of his supplies until he can afford the $3 copay for his refills and find a ride to the pharmacy.
“The pharmacist said it could be stored in a dark place [without refrigeration] for a couple of weeks,” he says.
Ideally, insulin should be kept cool, but broken refrigerators and a lack of power in many homes in Puerto Rico pose grim hazards for the island’s expanding population of people with diabetes.
A visiting nurse, Leslie Robles, shows up for her monthly visit to Maldonado’s home. She examines the 3-inch gaping wound on his foot. They sit at the kitchen table under a painting of The Last Supper and sift through piles of paperwork for Maldonado’s upcoming cataract surgery.
Robles tells him that the free medical transportation service that the government made available to large numbers of people after the storm is expiring soon, and he’ll no longer qualify for free rides.
What Robles does not say is that the visiting nurse program she works for, operated by VarMed, a health care management company whose services had been paid for by the government, is shutting down too.
VarMed has been helping to coordinate medical care, social services and housing for thousands of Puerto Ricans for four years. But, already, in recent weeks, the company has laid off more than 100 nurses and social workers across the island as the local government seeks to overhaul its Medicaid contract with insurance companies.
It is unclear how much longer Robles will be able help Maldonado and other patients like him who are on Medicaid and have complex medical needs — the so-called “high cost, high need” patients on the island.
The government wants Medicaid-contracted insurers to develop their own programs for these patients, but the earliest that would happen is this fall.
In the meantime, Maldonado says he has no one to help him grocery shop, fill prescriptions and get to doctor’s appointments; the volunteers who helped him survive Hurricane Maria are returning to their own lives. In many ways, he, too, is returning to the same spartan life he had before the storm. But with a weakened island safety net that continues to unravel, and with his own health increasingly tenuous, Maldonado feels alone.
Sarah Varney is a senior national correspondent at Kaiser Health News, a nonprofit health newsroom that is an editorially independent part of the Kaiser Family Foundation.
Rochelle Youner, who lives at the Hebrew Home at Riverdale, a nursing home in the Bronx, walked up to a kiosk in a common area of the home’s first floor and pressed a button below a small icon depicting a baseball glove.
“That’s the real stuff — that’s a mitt, all right,” Ms. Youner, 80, said, smelling the leathery fragrance emitted from the kiosk, which attempts to bring the ballpark, or at least the smell of it, to the residents.
Many of the Hebrew Home’s residents were born and raised in the Bronx and are lifelong fans of the Yankees, with memories of visiting Yankee Stadium stretching back to the eras of Mantle and DiMaggio, and even earlier to Gehrig and Ruth.
But many of these older fans also suffer age-related memory loss. So the home, which often finds seasonal pegs for its reminiscence therapy programs, has timed its latest program to opening day at Yankee Stadium on Monday by erecting the kiosk with the therapeutic goal of recreating the distinctive smell of the ballpark.
“Too bad we can’t be there in person,” Ms. Youner said.
This is the point of the kiosk: to once again take these fans out to the ballgame.
For residents who followed the Dodgers, the scents recalled childhood days at Ebbets Field in Brooklyn, and for Giants baseball fans, they brought back afternoons at the Polo Grounds in Manhattan, in the days before both teams decamped for the West Coast.
The kiosk features six ballpark scents — hot dogs, popcorn, beer, grass, cola and the mitt — in separate push-button dispensers installed at a height accessible to residents in wheelchairs.
It was recently installed in the permanent “Yankees Dugout” exhibition of team memorabilia at the nursing home, which includes seats, a turnstile and a locker from the old Yankee Stadium.
The olfactory exhibit, called “Scents of the Game,” is meant to evoke long-forgotten memories from the home’s 785 residents, many of whom have Alzheimer’s disease or dementia.
Many have difficulty with short-term memories but with some prompting can summon long-term ones, such as detailed recollections of childhood visits to ballparks decades ago, said Mary Farkas, director of therapeutic arts and enrichment programs at the Hebrew Home, where baseball has also been used in art therapy and poetry workshops.
Prompting these ballpark memories helps connect many residents with the joy they felt at the time and also helps stimulate their cognition, Mrs. Farkas said.
Dr. Mark W. Albers, a neurologist at Massachusetts General Hospital in Boston, who studies the effect of scent on patients with neurodegenerative disease, said the Hebrew Home’s memory exhibit touches on fairly new territory in sensory therapy in trying to resurrect positive recollections in a small population of patients who share certain common memories.
Memory loss in older patients can often cause “an erosion of familiarity” and be accompanied by feelings of disorientation, he said. Unearthing pleasant memories from earlier years through sensory stimulation may help patients feel more stable, Dr. Albers said.
Of course, he added, memories of Yankee Stadium might bring back very different emotions for fans like him, who root for the Boston Red Sox.
For Renee Babenzien, 89, the hot dog aroma triggered recollections of vendors selling franks with mustard and sauerkraut.
“The way they smelled at the game,” she said, “you couldn’t help but stop the guy walking up the aisle selling hot dogs.”
Al Cappiello, 68, smelled the fragrances and recalled the sensory explosion he experienced the first time he walked into Yankee Stadium as a boy.
“I couldn’t believe the colors,” he recalled. “The green grass, the brown dirt of the infield — man, I was in heaven.”
Up until then, he said, watching the Yankees meant watching games on a black-and-white television set, with the action being called by Mel Allen, the Yankees broadcaster.
And so, during his first time at the stadium, Mr. Cappiello recalled, “I told my brother, ‘I don’t hear Mel Allen,’ and he said, ‘No, that’s only on TV.’
He did see Yogi Berra, tossing a ball with teammate Johnny Blanchard, and he managed to get Berra’s autograph.
Ms. Youner also recalled being surprised by how different the ballpark seemed in person.
“The first time I walked into the ballpark, I noticed that everything was bigger — even the basepaths were so much wider,” she said.
For Terry Gioffere, 90, who grew up in the Bronx, the smells evoked memories of watching her hero, Roger Maris — although in more recent decades she became a Derek Jeter disciple.
For Joan Jackson, 84, the smells took her back to her first trip to Yankee Stadium, at age 6, but also reminded her of the role that the stadium played in helping her raise five children in the Bronx after her husband died in 1973.
“I had to do something to lift the kids up, so I said, ‘Let’s do something fun and go to Yankee Stadium,’” she recalled. “The kids fell in love with baseball,” she said, and going to games helped hold the family together.
Even Joe Pepitone, a star for the Yankees in the 1960s who spoke at the kiosk’s recent unveiling, said the smells reminded him of playing in Yankee Stadium as a rookie first baseman in 1962.
He had anticipated that the stadium would smell like hot dogs and sauerkraut, he said, “and sure enough, there was that smell of the ballpark, and you could smell it all over.”
For Frances Freeman, who grew up in Brooklyn rooting for the Dodgers, the kiosk’s beer smell did provoke a reaction. The 103-year-old woman steered her wheelchair to the beverage table and grabbed a beer.
Since scent and memory are intimately linked, using the smells of the ballpark presented “a chance to reach the residents in a special way, as a tool to unlock doors in their memories,” said David V. Pomeranz, the Hebrew Home’s chief operating officer.
Mr. Pomeranz said the kiosk idea grew out of a discussion he had with Andreas Fibig, chief executive of International Flavors and Fragrances, a Manhattan-based company that creates scents for perfumes and other products, as well as flavors for food and beverages.
The company did not have to venture to any ballpark to capture the smells — its perfumers created them from the firm’s vast catalog of fragrances, said Matthias Tabert, the company’s senior manager for strategic insights.
Scents are especially powerful in stirring memories because they register with the brain in a more direct and primal way than other senses, Mr. Tabert said. “So when you smell something, it triggers memories almost instantaneously and serves almost like time travel, to bring you back to a seminal moment.”
Some ballpark staples did not make it into the array of scents, such as peanuts and Cracker Jack. Though both could be developed as fragrances with no traces of real peanuts, the home decided against it to avoid alarming people with peanut allergies, Mr. Pomeranz said.
For Al Schwartz, 91, the scent kiosk reminded him of first visiting Yankee Stadium in the late 1930s, when 60 cents could buy a seat in the bleachers and $1.10 a seat in the grandstand.
Mr. Schwartz said the smells reminded him of the joy of watching Joe DiMaggio snare a fly ball and the sadness of learning in 1979 that Yankees catcher Thurman Munson had died in an airplane crash.
Mr. Schwartz said he attended at least two monumental events at Yankee Stadium. His aunt took him on July 4, 1939, when Lou Gehrig announced his retirement because of a terminal disease and called himself “the luckiest man on the face of the earth.”
Mr. Schwartz also recalled a 1942 charity exhibition in which Babe Ruth made a post-retirement appearance and struggled to hit a home run against the great pitcher Walter Johnson in front of 70,000 fans.
“The crowd kept on him, and he finally hit it out of the park, to right field,” he recalled. “The best part was seeing him run around the bases, that way he used to.”
Although their names are confusingly alike, Medicaid and Medicare are quite different programs. Both of these programs provide health coverage, but Medicare is an “entitlement” program, meaning that everyone who reaches age 65 and is entitled to receive Social Security benefits also receives Medicare (Medicare also covers people of any age who are permanently disabled or who have end-stage renal disease.)
Medicaid, on the other hand, is a public assistance program that that helps pay medical costs for individuals with limited income and assets. To be eligible for Medicaid coverage, you must meet the program’s strict income and asset guidelines. Also, unlike Medicare, which is totally federal, Medicaid is a joint state-federal program. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state’s Medicaid costs. (The state picks up the rest of the tab.)
Medicare and Medicaid Coverage of Long-Term Care
The most significant difference between Medicare and Medicaid in the realm of long-term care planning, however, is that Medicaid covers nursing home care, while Medicare, for the most part, does not. Medicare Part A covers only up to 100 days of care in a “skilled nursing” facility per spell of illness. The care in the skilled nursing facility must follow a stay of at least three days in a hospital. And for days 21 through 100, you must pay a co-payment. (This is generally covered by Medigap insurance.) In addition, the definition of “skilled nursing” and the other conditions for obtaining this coverage are quite stringent, meaning that few nursing home residents receive the full 100 days of coverage. As a result, Medicare pays for less than a quarter of long-term care costs in the U.S. In the absence of any other public program covering long-term care, Medicaid has become the default nursing home insurance of the middle class. Lacking access to alternatives such as paying privately or being covered by a longterm care insurance policy, most people pay out of their own pockets for long-term care until they become eligible for Medicaid. The fact that Medicaid is a joint state-federal program complicates matters, because the Medicaid eligibility rules are somewhat different from state to state, and they keep changing. (The states also sometimes have their own names for the program, such as “Medi-Cal” in California and “MassHealth” in Massachusetts.)
Both the federal government and most state governments seem to be continually tinkering with the eligibility requirements and restrictions.
This is why consulting with your elder law attorney is so important. As for home care, Medicaid has traditionally offered very little — except in New York, which provides home care to all Medicaid recipients who need it. Recognizing that home care costs far less than nursing home care, more and more states are providing Medicaid-covered services to those who remain in their homes. It’s possible to qualify for both Medicare and Medicaid. Such recipients are called “dual eligibles.” Medicare beneficiaries who have limited income and resources can get help paying their out-of-pocket medical expenses from their state Medicaid program.
Read the agreement carefully before signing.
Nursing Home Agreements can be complicated and confusing
Admitting a loved one to a nursing home can be very stressful. In addition to dealing with a sick family member and managing all the details involved with the move, you must decide whether to sign all the papers the nursing home is giving you. You don’t need to decide at the moment or alone. Nursing home admission agreements can be complicated and confusing, so what do you do?
It is important not to rush, but rather to read. If possible, have your attorney review the agreement before signing it. Read the agreement carefully because it could contain illegal or misleading provisions. Try not to sign the agreement until after the resident has moved into the facility. Once a resident has moved in, you will have much more leverage. But even if you have to sign the agreement before the resident moves in, you should still request that the nursing home delete any illegal or unfair terms.
Two items commonly found in these agreements that you need to pay close attention to are a requirement that you be liable for the resident’s expenses and a binding arbitration agreement.
The Responsible party
A nursing home may try to get you to sign the agreement as the “responsible party.” It is very important that you do not agree to this. Nursing homes are prohibited from requiring third parties to guarantee payment of nursing home bills, but many try to get family members to voluntarily agree to pay the bills.
If possible, the resident should sign the agreement him- or herself. If the resident is incapacitated, you may sign the agreement, but be clear you are signing as the resident’s agent. Cross out the words ‘responsible party’. Don’t think because it is printed the whole document will need to be re-done. Signing the agreement as a responsible party may obligate you to pay the nursing home if the nursing resident is unable to. Look over the agreement for the term “responsible party,” “guarantor,” “financial agent,” or anything similar. Before signing, cross out any terms that indicate you will be responsible for payment and clearly indicate that you are only agreeing to use the resident’s income and resources to pay.
Many nursing home admission agreements contain a provision stating that all disputes regarding the resident’s care will be decided through arbitration. An arbitration provision is not illegal, but by signing it, you are giving up your right to go to court to resolve a dispute with the facility. The nursing home cannot require you to sign an arbitration provision, and you should cross out the arbitration language before signing.
The following are some other provisions to look out for in a nursing home admission agreement.
Private pay requirement. It is illegal for the nursing home to require a Medicare or Medicaid recipient to pay the private rate for a period of time. The nursing home also cannot require a resident to affirm that he or she is not eligible for Medicare or Medicaid.
Eviction procedures. It is illegal for the nursing home to authorize eviction for any reason other than the following: the nursing home cannot meet the resident’s needs, the resident’s heath has improved, the resident’s presence is endangering other residents, the resident has not paid, or the nursing home is ceasing operations.
Waiver of rights. Any provision that waives the nursing home’s liability for lost or stolen personal items is illegal. It is also illegal for the nursing home to waive liability for the resident’s health.
Via Quentin Fottrell https://www.marketwatch.com/story/my-stepmother-inherited-my-fathers-estate-when-he-died-what-can-i-do-2016-11-18
My dad passed away five years ago. He did leave a will on how he wanted his estate to be dispersed, but only if his current wife was also deceased. She was not, so she got everything. My question is: When she passes, is she required to honor our dad’s will? She has remarried, which is fine and I’m glad she’s happy. My dad has four biological children from his first two wives, and had none with the third wife, his widow when he passed away. We don’t want to take anything from our stepmother, we would just like our dad’s will honored when she passes. Is this even possible? Thank you for your time. They resided in South Carolina at the time of my dad’s passing.
Daughter Left Out in the Cold
When it comes to inheritance, children usually fare better than stepchildren.
Your father’s wishes were honored, I’m afraid to say. He wanted everything to go to his wife and, in the event that she predeceased him, wanted his estate divided between his four children. But she didn’t and she inherited the whole kit and caboodle. You could talk to your stepmother about anything of special sentimental (or monetary) value, but if she chose to leave you anything that belonged to your father in her will it would be out of goodwill rather than legal necessity.
It may be that your father had meant to write a will that divided his estate more evenly between his wife and children, but that’s not what happened here. In this case, any non-probate assets — jointly owned bank accounts between your stepmother and late father, and any life insurance policies or brokerage accounts where your stepmother was named as beneficiary — will go to her. Anything that goes through probate (that is, the court process) will also go to her.
You finally got around to making your Will. You deserve a sigh of relief. But did you choose the right executor? Or have you burdened an unqualified or unwilling relative and put your Will at risk to be contested?
Generally speaking, the first person that comes to mind to be one’s executor is often an adult child or other family member, followed perhaps by a close friend. These individuals may be honored that you asked them, and will often accept this important duty. Some may even accept the duty despite not wanting the burden, just so they do not insult you.
Your choice of executor may be an emotional one, but also should be chosen based upon what is best for your estate, probate, and your needs. Choosing the executor of your estate is not a task to take lightly. An executor is the person responsible for managing the administration of a deceased individual’s estate. The time and effort involved will vary with the size of the estate. Even the executor of a small estate will have important duties that must be performed correctly, or the executor may be personally liable to the estate or the beneficiaries. One of the many jobs of the executor is to take an accurate inventory of the deceased individual’s assets. This includes making a list of all bank, brokerage and retirement accounts, insurance policies, real property, and any other assets the deceased owned. An inventory of personal effects, antiques or other valuables must be tabulated as well. A list of the estate’s inventory must ultimately be presented to the probate court for review.
This can be a very time-consuming task, and it may mean going through the deceased individual’s personal data or paperwork for information, interviewing heirs, or checking ownership documents at the local town hall. The information presented to the court is expected to be accurate and complete, so that the beneficiaries receive their inheritance on a timely basis. Of course, the executor must probate the deceased person’s Last Will, which may involve locating and notifying the person’s heirs. As if the demands of the probate process aren’t enough work, creditors must be paid, and final income tax returns must be filed. If the estate is large enough, a state and federal estate tax return may be required as well. Once this is complete, distributions to the estate’s beneficiaries must be calculated and dispersed. Of course, if the deceased person’s Last Will is contested, the executor must oversee this process as well. This may put an additional wedge between friends and/or family members. Further, it can add months and perhaps even years to the process, as well as some unwanted stress for the executor.
Tax laws and state and federal estate tax exclusion rates may be different than when the Will was written. If the surviving spouse plans to file for estate tax portability, an estate tax return may need to be filed even if no tax is owed.
Feel free to call me for an opinion on your choice of executor. If you prefer, I may also act as your executor if you do not have a qualified person in mind. This may remove the potential burden it can place on others and offer many efficiencies and time saving as well.