The Petrosewicz Law Firm Estate Planning Blog

When Should You Have Your Estate Plan Done?

But don’t pat yourself too much — you’re not done yet. A will is not a static instrument, says The Item in its recent article “Don’t wait until high noon.” If laws change, which happens regularly, or your life changes, you need to review your will and be aware of any significant changes that may have an impact on your will and its goals.

Marriage, divorce, birth, adoption and death are some of the key trigger events in life that call for a review of your will. Some of these events seem very obvious, but others aren’t. That is when problems can arise. For instance, if a widow or widower remarries, the will needs to be updated to clarify how the new spouse and the children from prior marriages are to be provided for.

Welcoming a new child into the family is an event to celebrate, whether by birth or adoption. The will needs to add the new child. However, there’s another step that may be even more important. A will is used to name a guardian for the child, so the parents may name a person to rear their child in their absence. If a guardian is not named, then the court will select someone who might have not been the parent’s first (or even second) choice.

The death of an executor, beneficiary, guardian or trustee named in the will also means that the will needs to be updated. If the person who has died is a beneficiary, their name needs to be removed.  You may want to reconsider how assets are distributed. For executors, guardians or trustees, remember to add a secondary person for each role.

What if you inherit an unexpected fortune? You’ll definitely need to review your will, since your estate tax liability may have changed. Even if you don’t owe federal estate taxes, there may be state estate taxes to plan for. If you suffer a large financial loss, you’ll need to review your will, since the generous gift you had planned on leaving to a nonprofit. may no longer be available.

Some changes to wills occur because people change their minds about how they want to distribute their assets, or who they want to handle their post-mortem responsibilities. If you have a falling out with an executor, for instance, that change needs to be made in a timely manner.

If you have not reviewed the beneficiaries who are named on your life insurance policies and retirement accounts, and any other accounts where beneficiaries are named, you’ll want to do that too. If your will says cousin Andrew gets your life insurance policy proceeds, but his sister Stella is the one named as the beneficiary, then only Stella receives the proceeds. The named beneficiary is a contract that cannot be challenged or changed, regardless of what your will says.

If you don’t yet have a will, now is the time to make an appointment to meet with an estate planning attorney in your community. Remember that estate laws are set by the state of your residence, so an experienced estate planning attorney in your area is your best source.

The Petrosewicz Law Firm can assist you with your estate planning and trust needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: The Item (Feb. 15, 2019) “Don’t wait until high noon”

What Does a Fiduciary Do?

It sounds a little like something financial, like maybe something you do at a bank. But a fiduciary relationship is a legal relationship that includes responsibilities that can be enforced, reports the Denton Record-Chronicle in a detailed article with the edgy headline “What is the “F” word?” The article addresses this serious topic that is often glossed over.

In a fiduciary relationship, whether between a lawyer and a client, a CPA and a client or two non-professionals, one person has a duty to act only in ways that will benefit the other person or group of people. The fiduciary is required to be loyal, act in good faith, be completely honest and refrain from doing anything that would benefit the fiduciary, instead of the person they are responsible for. This is required, even if the people are not aware of being in a fiduciary relationship.

The fiduciary may not use their position, as trustee or financial advisor or executor, to “self-deal,” or take actions that benefit the fiduciary and not the other person or people. The fiduciary must also share all relevant information with the beneficiary.

So, who are these fiduciaries? They could be business partners, someone who has power of attorney for another person, trustees or estate representatives, attorneys or employees. These formal relationships are created by legal agreements in the shape of partnership agreements, estate planning documents, retainers (for attorneys) and employment contracts for employees.

Some fiduciary relationships come with more responsibilities than others. Trustees and personal estate representatives, like executors, are charged with tasks in addition to general fiduciary duties. They are usually given the responsibilities of handling money, property and investments. They have a duty to properly manage those assets and report on those assets to the beneficiaries and heirs.

For attorneys, the client-attorney privilege, that is, not sharing information that the client tells the attorney in confidence, is a fiduciary duty. It is also an ethical duty for the attorney.

For employees, the duty to act in an employer’s best interest may not be as limiting. Unless there is a non-compete contract, the employee may seek employment from a competitor or create a competing business, while working for the employer. However, the employee may not steal customers or other employees, before resigning from a position.

If a fiduciary does not follow through on their duties, it is called a breach of fiduciary duty. In estate planning, the executor is expected to put the interest of the estate and its beneficiaries first, and not to self-deal. The executor may charge a fee. However, the amount is determined by the laws of the state, if not addressed in the document creating the fiduciary relationship.

It should be noted that estate planning attorneys are guided by fiduciary duties and ethical responsibilities that are part of their training as attorneys. An attorney must always put their client’s interests first and keep the client fully informed, even when it’s not good news.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Denton Record-Chronicle (Jan. 16, 2019) “What is the “F” word?”

The Basics About Caring for a Senior Parent

The reversal of roles happens when children become the caregivers of their aging mothers and fathers. In some families, it’s an easy transition, based on an affectionate understanding by children and parents that this is the natural course of life. However, it’s not easy for everyone, says Connecticut Magazine in the article “Senior Caregiving 101.”

The very idea of being in charge of the people who taught you how to tie your shoes and drive a car can be emotional. Therefore, many people put off having the talk about caregiving, until an emergency presents itself. That’s not a good plan. Those of us in our 40s, 50s, and 60s will at some point need to be involved in taking care of a parent, including their finances, living arrangements, legal issues and medical care.

Where to start? Take it one step at a time.

Begin with a conversation about these issues, long before anyone is sick. Getting started in a crisis leads to increased anxiety and sometimes outright panic.

If you are worried that your parents or siblings will think you are after their money, think again. How you approach these topics will make the difference. Once a caregiving plan, legal and financial matters are addressed, you’ll all feel more comfortable. Start with a simple thought: “I/We want to make sure that your wishes are respected.”

Is there a lot of paperwork? Yes and no. By preparing in advance, you avoid digging through a scavenger hunt for insurance policies and bills and wills. You’ll know where the documents are and will be free to focus on the important things, such as taking care of and spending time with your aging parents.

You’ll need to have a Power of Attorney prepared. A Durable Power of Attorney means that the Power of Attorney will remain in effect, so the appointed agent may continue acting, even if the principal becomes mentally incapacitated. Power of Attorney can be limited or broad. However, it’s a good idea to build in periodic reports, as a system of checks and balances.

You’ll also need an advance directive. This is a document that protects an individual’s right to refuse medical treatment or to request treatment, if they are not able to make decisions on their own. Depending on the person’s needs, they may need a living will, a health care representative, designation of a conservator and an anatomical gift declaration. This is needed, if they want to make an “anatomical gift,” which is also known as an organ donation.

A will should also be prepared with the help of an estate planning attorney. An executor needs to be named. However, it’s also important that any accounts with beneficiary designations be checked to make sure that they reflect your parent’s wishes. Any beneficiary designations supersede the will and there’s no way to undo that. If they haven’t looked at their life insurance policies in decades, it’s time for a review.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Connecticut Magazine (Nov. 23, 2018) “Senior Caregiving 101”

What Happens After You’ve Completed Your Estate Plan?

Life can change in an instant. One minute you are wondering what to make for dinner, the next you are dealing with an emergency situation for yourself or someone you love. In the face of an emergency, like a devastating medical diagnosis, things that once seemed important become meaningless. That’s when many people start thinking about having an estate plan, as discussed in the article “The will and estate plan are done, what now?” from the Brentwood Home Page.

However, once the will and the estate plan are done, the process doesn’t stop, even in the face of an urgent situation. There are still tasks that must be done, and perhaps the most important one of all is talking with family members about the plan, where it is and what your wishes are.

Many families get started on their estate plan in the attorney’s office, discussing what they want to happen to their assets, who their executor should be and how they want their end-of-life decisions to be made. However, they find it difficult to discuss with their children, and as a result, when the first parent passes, the only one who knows what the plan is (and where it is) is the surviving spouse.

Will the adult children know where to find the documents, if the surviving spouse is so bereft that he or she is not functioning well? Will the surviving spouse or the children know what the next steps should be?

Will the person who was designated the executor, know that this is their role? That’s never a good thing to learn about at the last minute.

Once you’ve completed your estate plan and other related documents, don’t leave out this critical next step. The executor and those left when you (or your spouse) have passed have a big job ahead of them, and you don’t want to make it harder.

It can take months or sometimes years to settle an estate. Here are a few facts to be aware of:

• Wills and estate plans are not filed with the court before death. The estate planning attorney may have a copy, but the court will want the original documents.
• The executor will need original death certificates.
• An attorney, possibly the same one who created the estate plan, will be able to guide you through the settlement of the estate.
• Once the will is probated and the executor is appointed, beneficiaries will need to be named and creditors notified.
• The decedent’s property will need to be managed. This can be tricky, if he or she owned a business, rental properties or other assets that require on-going management.
• Final tax returns must be filed.

As you can tell, this is not a simple process. You may try to handle it on your own, but chances are you will save yourself from a good deal of stress and expensive mistakes by working with an estate planning attorney beforehand to create the estate plan, and afterwards, to help manage the estate and all of the related tasks.

The Petrosewicz Law Firm can assist you with your estate planning and probate needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Brentwood Home Page (Oct. 31, 2018) “The will and estate plan are done, what now?”

What a Good Candidate for Executor Looks Like

Chances are slim that your favorite topic of conversation with loved ones, centers on what you’d like them to do if something unexpected happened to you and you were unable to speak for yourself. These are some of the most important conversations you’ll have, according to the article “Your Money: Qualities of an appropriate estate plan executor” from the Twin Cities Pioneer Press. One of those conversations needs to concern naming your executor.

Selecting an executor is not a decision to make in a hurry. This is an important decision with far-reaching consequences for your family and should be made thoughtfully.

Your estate planning attorney has walked down this road with many clients before. A conversation to explore possible individuals who would be able to serve in this role could be helpful in clarifying your understanding of the responsibilities and the best person to ask.

Most of the tasks of the executor relate to distributing your assets after you are gone. Consider who you would trust, right now, to handle all your money and property, because that person is the one who will be overseeing everything. They’ll be serving as your legal representative, making decisions as you have directed in your will. The right choice will give you the confidence that your final wishes will be followed.

One fact to keep in mind: the person you select as your executor will need to outlive you. That means they ought not be a parent or older sibling. Most people name their spouse, a child, niece or nephew or a trusted friend, preferably one who is a little younger than you.

Your executor will need to have an intimate knowledge of your life, your goals and your relationships. Someone who is a dear friend to you, one you trust unquestionably, is a good candidate. They should be someone who knows about any debts, financial or otherwise, that you’d like to address in your estate plan.

Just because you want someone to serve as your executor, does not mean that they want to take on this role and the responsibilities. Depending on the size of your estate, or your family’s dynamics, this could be a very time-consuming effort. Have an in-depth discussion, to make sure they understand the responsibilities, if they choose to accept the role.

Keep in mind that the person you select may have to stand up to various family members. If your family has some tough dynamics or headstrong personalities, you’ll need someone who will be comfortable with unpopular decisions. Some individuals relish this kind of a challenge, while others shrink easily. Keep that in mind, when making your selection.

Reference: Twin Cities Pioneer Press (Oct. 6, 2018) “Your Money: Qualities of an appropriate estate plan executor:

How Do You Want to Be Remembered?

The passing of Aretha Franklin and the news that she did not have a will, shines a bright light on a common issue for families: parents who do not have an estate plan in place. No one likes to think about death, notes New Orleans City Business in the article “Is your estate in order? 5 Key takeaways to consider.”

If you have a will, you can ensure that your legacy will live on and your loved ones will be protected. Proper planning can help your family avoid additional stress, family battles and complications you can’t even imagine.

Here are a few takeaways to help you get your estate in order.

Talk with your estate planning attorney, CPA, and financial advisor. These three professionals should work together to educate you on tax and legal structures that will best provide for beneficiaries, while minimizing tax consequences. Your situation may benefit from one of the many trusts that are used by estate planning attorneys. The estate tax exemption for 2018 is $11.2 million, increasing annually for inflation. There have been several other changes to the tax code in recent years. Therefore, if you have not reviewed your will in recent memory, it is time to do so.

Make gifts while you are living.  This can help you to take advantage of tax savings and reduce your total gross estate. Gifts can be made with a value up to the annual gift tax exclusion each year, without ever touching the lifetime exclusion. The exemption amount for 2018 is $15,000.

Do you know your net worth? Understanding your real net worth can determine what your beneficiaries will be responsible for upon your death, whether estate taxes will need to be paid and how to maximize exemptions and deductions.

Name an executor. Who do you trust to run your estate and ensure that your wishes are carried out? You need to select someone who you trust to make the hard decisions, even if they are not the first choice of other family members. Name alternative executors, in case the person you name dies before you, declines the position or cannot serve for reasons of incapacity.

Change your wishes if you want. Just as people change over time, or events cause us to rethink our choices, your will and any other estate planning documents can change. Review estate plans and beneficiary designations every few years to be sure they still reflect your wishes. Failing to do so, can result in the same unnecessary expenses and family turmoil as not having a will in the first place.

The Petrosewicz Law Firm can assist you with your estate planning and trust needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: City Business (Aug. 31, 2018) “Is Your Estate In order? 5 key takeaways to consider”

Why You Need a Last Will and Testament

There are three documents at the core of estate planning that allow people of modest means and people of great wealth to protect and convey their health care and financial wishes during incapacity and death: the durable general power of attorney, the durable health care power of attorney and the last will and testament.

This is the subject of an article from The Daily News that asks “How Useful is a Last Will and Testament?” According to the article, a will is an individual’s post-mortem (death) plan to distribute one’s assets. They are almost always written down. There have been instances of verbal wills in other states, but verbal wills are not valid in Texas.  A will can be used to dispose of nearly anything which the person, known as the “testator” (if male) or “testatrix,” (if female), owns or has an ownership interest.

Any person who is legally competent can sign a will, provided they are aware of who they are, what assets they own and to whom they want to give those assets. Estate laws vary from state to state, so it would be wise to have your will prepared by an estate planning attorney in your state.

Wills are used to transfer tangible property as well as real estate, money and ownership interests in businesses, stocks and other entities. While most beneficiaries are humans, wills can be used to name charities, trusts, businesses and animals as beneficiaries. For animals, some people have “pet trusts” created to protect their pets, if they should outlive their companion animals.

One benefit of having a will, is the ability to decide for yourself who should inherit your possessions. If you die without a will, the state’s laws determine what happens to your possessions. That is known as dying “intestate.” Anything you own that does not have a beneficiary designation or surviving joint owner, will be passed automatically to your legal next of kin.

If you don’t have a will, aren’t married and have no children, your estate will be distributed to your next of kin.

If you have young children and die without a will, the court will appoint a guardian to rear your children. It may not be the person you would have chosen. If you have young children, you should have a will made without delay, to name a guardian and a person to be in charge of managing your money that is left for your children.

A will may be revoked, changed or amended at any time, if the person is legally competent.  However, because it is a legal document, it should be created with an estate planning attorney to make sure it complies with your state’s laws and is created to accurately and independently reflect your wishes.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: The (Memphis) Daily News (Aug. 30, 2018) “How Useful is a Last Will and Testament?”

Your Executor Is Important

People who get wills, normally put a lot of thought into how they would like their property to be distributed after they pass away. It is very important to them, that their wishes are carried out and everything goes to the appropriate heirs. However, often relatively little thought is put into who should make sure it all happens.

The person in charge is the executor. Instead of thinking about whether the person they are choosing is the right person, many people just pick a close friend or relative. This can be a very big mistake, if the person does not know what they are doing, as Forbes points out in "Choosing an Executor for Your Estate."

The executor of your estate will have a lot of work to do. There are often important tax decisions that need to be made quickly. The executor needs to determine what assets you have at the time you pass away.  However, they cannot just give those assets to the people you want to have them.

First, they need to go to probate court and be officially appointed to administer the estate. They will then need to determine, if you had any debt when you passed away. That debt normally needs to be paid out of your assets, before any property can be distributed.

Your executor needs to be someone who not only has the time to serve in the capacity, but also can handle administrative and financial tasks well. Put some thought into this important decision.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Forbes (May 16, 2018) "Choosing an Executor for Your Estate."

An Executor Cannot Make Everything Right

Imagine that you are made the executor of your mom's will. You have several other siblings and the will gives all of you an equal share.

One of your brothers has borrowed a lot of money from your mother over the years and never paid any of it back. Although there is no documentation for any of these loans, you might be tempted to use your powers as the executor of your mother's estate to collect the debt from these loans.

This is essentially the situation that a reader recently wrote into the Napa Valley Register to ask about in "Can mom make son pay debt?"

There are several problems with what the executor wants to do.

The first is that loans to children are often more gifts than they are loans. The mother probably “loaned” the money to the sibling, knowing that it would never be paid back. That makes it a gift.

The second problem is since the loans are undocumented, there is no way to prove they happened short of a court battle over them.

The third problem is that even if these were considered loans and not gifts, they would likely be well outside the statute of limitations, unless they were made recently.

It can be tempting for executors to want to redress past wrongs.  However, they should be careful before doing so.

Executors do not have unlimited powers and should consult with an estate attorney before doing anything that is outside the directions given by the probate court.

The Petrosewicz Law Firm can assist you with your estate planning needs and probate needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Napa Valley Register (Oct. 26, 2017) "Can mom make son pay debt?"

An Executor Is Powerful, So Choose Wisely

An executor needs to be chosen carefully, according to the Wills, Trusts & Estates Prof Blog in "Selecting an Executor for Your Estate."

While there are others who will have a hand in determining how the estate administration goes, the executor with handle most of the decisions. 

It is the executor who will have to make the biggest decisions and, unless someone complains, there will be little oversight from busy probate courts.

You need an executor who is trustworthy, understands financial matters, has the time to do the job properly, is willing to do the job, is patient and will seek the advice of experts, when necessary.

Finding someone who meets all of those qualifications, can be a challenging task for many people.  However, it is necessary, if you want your estate to go smoothly.

Fortunately, if you do not have a friend or family member who fits the bill, there is someone you probably know who can help steer you in the right direction.

An estate planning attorney can guide you in creating an estate plan that fits your unique circumstances.  They can also advise you on a good choice for an executor.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected]. 

Reference: Wills, Trusts & Estates Prof Blog (July 13, 2017) "Selecting an Executor for Your Estate."