Saturday, July 7, 2012

Executors of Wills and Their Duties

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In Victoria, and most states of Australia, the role of Executor of a Will is to:
1. Organize or assist with the funeral arrangements for the deceased.
2. Ascertain whether the deceased left a Will and if so, the whereabouts of the original document.
3. Ascertain the assets held by the deceased and any liabilities owed as at the date of their death.
4. Notify the following parties of the death, although this task is often carried out by family members:
• Medical Practitioner.
• Solicitor
• Accountant / Australian Taxation Office
• Banks and other financial institutions
• Insurers
• Health Insurance / Medicare
• Electoral Office
• Vic Roads - Vehicle registration and cancellation refund (if any) of drivers licence.
• Libraries
• Dentist
• Optometrist
• Post Office
• Clubs and other organisations.
• Subscriptions to Newspapers or magazines.
• Cancel taxi card.
• Utilities - electricity, gas, telephone, municipal office (rates) water supply company.
• Veterans Affairs (if relevant)
5. Obtain a Grant of Probate from the Victorian Probate Duties Office (if required). In some instances obtaining a Grant of Probate will not be necessary and a lawyer experienced in this area will be able to advise if so.
6. Until the Estate assets are called in and the debts of the Estate paid, the beneficiaries under the Will have no right to the assets of the Estate, even if they are specifically bequeathed to them.
7. On winding up the Estate the Executor is required to provide an accurate record of the monies received and disbursed by the Estate and to prepare a Distribution Statement reflecting same.
8. On the winding up of the Estate the Executor is responsible for the preparation of Releases, which are required to be executed by the beneficiaries of the Estate acknowledging receipt of their entitlement in the Estate.
9. An Executor must discharge his or her duties with all due care for the good and benefit of the beneficiaries and to ensure the interests of the beneficiaries, and particularly the interests of any minor child or children or disabled beneficiary are protected.
10. An Executor has an obligation to avoid a position of conflict between his/her own interests and the interests of the Estate in general and the interests of beneficiaries in particular.
11. The Executor should make arrangements with an Accountant to obtain a tax file number for the Estate and for a taxation return to be prepared for the Estate for the current financial year. The Executor or their Lawyer or Accountant should also contact the Australian Taxation Office to ascertain whether a final tax return for (the deceased) is required to be lodged. In the event tax is assessed as being payable, this will be classed as debt of the estate and will need to be paid from the proceeds of the estate, prior to any distribution taking place.
12. Due to the complexity of obtaining Probate, the administration of and the winding up of an Estate, it the usual practice for Executors to appoint Solicitors to attend to all these matters on their behalf. The Executor is entitled to be reimbursed for all such reasonable expenses incurred by them from the Estate.
Role of Trustees: (this is normally the same person as the executor unless the will provides otherwise ):
1. The Trustee's role is to ensure that the directions of the deceased are carried out in accordance with the terms of the deceased's Will and pursuant to Law.
2. This can range from merely having to pay out stipulated adult beneficiaries after payment of the debts of the Estate to overseeing and administering trusts, which may last for many years.
3. If there are beneficiary children who are minors, their share in the deceased's Estate will need to be held in trust on their behalf until they attain the age of 18 years or older if specified so in the Will.
Probate applications- what paper work and information is required:
1. The original Will of the deceased.
2. The full Death Certificate of the deceased.
3. The date of birth and country of birth of the deceased.
4. The date of death and place of death of the deceased.
5. The occupation of the deceased as at the date of death.
6. Executor's occupation and full residential address.
7. Whether the deceased was married, living in a bona fide domestic relationship, was widowed, separated or divorced at the time of death.
8. Whether the Executor is aware of any other persons who may legally be entitled to a share in the estate or be making a claim or contesting the Wife.
9. The full details of the make and model of any motor vehicle owned by the deceased and estimate of the value of same.
10. Whether the deceased was in receipt of any Centrelink (Social Security) payments, or benefits or any other pension either in Australia or overseas and whether the Executor has notified these agencies of the deceased's death.
11. Whether the deceased had any accrued salary entitlements, holiday pay entitlements, long service leave, retirement or superannuation benefits accruing from date of death. (Superannuation does not fall into the estate but is usually paid to the beneficiaries nominated therein, however payment to any beneficiary is at the discretion of the Trustee of the Fund).
12. Full details relating to any shares held by the deceased, inclusive of the name of the company with whom the shares are held, the number of shares held, and the SRN numbers of the holdings.
13. Full details relating to any life insurance policy over the life of the deceased. Proceeds of life insurance do not fall into the Estate but are paid to the beneficiary nominated therein.
14. Full details of all debts owed by the deceased at the time of death.
15. Full details of any other investments, bank accounts or other assets held by the deceased. All bank accounts will be frozen by the relevant institution once they have been notified of the death, with the exception of payment of funeral expenses. The bank will release these funds upon provision of a tax invoice from the funeral parlour. Any funds which may be withdrawn from the deceased's account after death, with the exception of funeral expenses, will need to be repaid to the Estate by the person who withdrew the funds.
16. Full details of any real estate owned in Victoria or elsewhere by the deceased. In the event the property is owned with another person as a joint proprietor, then the property does not fall into the estate of the deceased, but automatically passes to the surviving proprietor. If the property is owned by the deceased solely or as a tenant in common with another person, then the property does fall into the deceased's estate. A current market appraisal of the property from a local real estate agent should be obtained, so that the value of the property can be accurately recorded in the Inventory of Assets and Liabilities. Legal and accounting advice should be sought on any capital gains tax implications on selling the property.
17. Full insurance details relating to any real estate owned by the deceased are required. It is important to ensure that any building insurance does not lapse whilst Probate is being obtained and the Estate is being wound up.
18. In the event a decision is made by the beneficiaries jointly that they wish to sell the real estate, the Executor should bear in mind when placing any property on the market for sale that until such time as a Grant of Probate has been obtained and an Application by Legal Personal Representative has been lodged with the Land Titles Office, an Executor will not have the legal capacity to deal with the property. In the event of a sale being secured prior to this occurring the Executor should allow sufficient time for Probate to be granted, when determining the settlement date. This can take several months depending upon the size and complexity of the estate.
To claim your free legal consult for any new probate or deceased estates enquiry, simply email your request for an appointment to info@rigolilawyers.com.au or telephone Rigoli Lawyers on (03) 8742 3199.
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Friday, July 6, 2012

The Risk of Being an Executor

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The Hidden Dangers of being an Executor
People who take on the role of an executor of either a friend or family member's estate are in most cases unaware of the damage that such an act could have on their own wealth.
The Executor must
• Ensure that the wishes detailed in the deceased's Will are complied with.
• Research and record all assets and liabilities of the Estate.
• Obtain valuations of the assets at the time of death whether solely or jointly owned. This includes shares, motor vehicles, second properties and any business interests.
• Ensure that the appropriate insurance policies are in force and will not expire before the estate is finalised, this also includes property and vehicle insurance.
• Complete all necessary tax returns for Inheritance Tax, Capital Gains Tax, Income Tax and Stamp Duty Land Tax.
• Complete and submit an application for the Grant of Probate. This will require a personal interview at the Probate Office.
• Seek confirmation from the tax office that the estate can be distributed.
• Pay all outstanding debts of the estate.
• Prepare final accounts for the beneficiaries and distribute the Estate.
• If any additional assets or liabilities are discovered after the Estate has been distributed the executors must deal with these even though it may be many years later.
• Notify DVLA
If the executor fails in any of the above duties, they could face a claim from any of the beneficiaries of the estate, HM Revenue and Customs, Credit card companies or any disgruntled person to which the estate owed money. This liability could incur many years after the estate has been finalised.
There are Insurance schemes designed to protect the nominated executors who have the responsibility of administrating the estate of the deceased. The Insurance premiums can normally be deducted from the estate and therefore will be at no cost to the executors.
A typical estate can take between 6-9 months to administer, although some complex estates can take longer, especially if they involve property here or overseas, stocks, shares or business ownership.
We automatically provide cover for 18 months and if further extensions are required this can be arranged.
We are seeing increased litigation in this sector and an executor needs to be aware that by carrying out a voluntary act, it can have a material effect on their own personal wealth; if a beneficiary suffers a loss of expected income.Executors are risking their own money from what is normally a voluntary act
David Collins
The Legacy Funding Corporation is committed to helping charities survive and grow even during difficult economic times.
We aim to assist in maximising income for the charity by offering access to legacy funds.
For enquiries or further information please call +44 (0)1702 200222 or e mail peter@legacyfundingcorporation.org.uk or visit our website http://www.legacyfunding.org.uk
Legacy Funding Corporation Limited Company No: 07536941.
Registered Office: Greenacres, Victor Gardens, Hockley, Essex, SS5 4DY
Legacy Funding Corporation Limited (FSA Register No. 568326) is an Appointed Representative of Kinetic Insurance Brokers Limited, a broker at Lloyd's, which is authorised and regulated by the Financial Services Authority (FSA Register No. 309540). Kinetic Regional Brokers is a trading name of Kinetic Insurance Brokers Limited
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Thursday, July 5, 2012

Should You Serve As an Estate Executor?

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Costs and the Benefits of Serving as an Executor of a loved ones estate
It's been several weeks since the funeral. But grief remains on the hearts of the family members and friends. Nobody can "prepare" themselves for the death of a loved one. No one knows quite how they may emotionally feel in the weeks and months that follow. It is a one day at a time process for most bereaved families and friends.
For the named executor they will carry a very heavy burden of responsibilities and duties that will constantly remind them of their loss. The executor will need a lot of silent determination and courage to face many issues and circumstances that others may never be aware of. Certainly, it is an honor to be chosen as the executor of an estate, but there are significant costs paid by the executor.
Costs to the Executor
  • Time
  • Emotional capital energy
  • Need for education
  • Acceptance of the leadership role in family
  • Potential family disputes
  • May require travel
  • Potential legal and financial liabilities

To Serve or not to Serve? ... That is the QuestionAfter the executor has done a preliminary review of the estate with the aid of a qualified attorney it may make sense for the executor to ask themselves: Do you have the ability, emotional capacity and time to devote to the process?
The executor can hire attorneys, accountants, trust companies and other "agents" and assign them tasks to perform for a fee. Professional service providers can step in and assist in performing many duties, but there will likely be "judgment calls" that in the final analysis. can only be made by the executor or personal representative.
The testator (decedent) may have designated the executor many years in the past and circumstances change; people move, grow older and health issues arise. If the burden will be too much for the will stated primary executor; resigning may be the best solution. An executors resignation will allow the estate settlement process to move forward.
In many cases, the testator will name a secondary executor to step in, if the primary executor passes on their appointment. Please note, that the executor is responsible for their actions taken, (and not taken) during their time of service to the estate.
Also to be considered is whether there other family members who are better suited to perform the duties of executor? If the named executor resigns and there in not a secondary executor the probate court will determine the party best suited to complete the process. Appointment of a outside professional executor (usually an attorney), is also a prerogative of the court.
All beneficiaries may or may not be 100% satisfied with every action (although it would be nice) that the executors takes. This is not the primary duty of the executor. The executors duty is to apply; prudence, loyalty, fairness and reasonable care. The executor must be mindful of applicable laws, taxes and probate procedures; these are the standards by which the executor will be judged.
Benefits of Serving
There are some important benefits in serving as an executor of an estate.
  • The top reward is knowing that your honored the wishes of someone who trusted you with the resources they spent a lifetime to accumulate.
  • A private executor may understand the decedents "unique assets" better than an outsider. A farmer certainly understands the intricacies of farming better than an: attorney, banker or accountant.
  • They may have intimate knowledge of their business affairs and know how to maintain and enhance asset values for the benefit of all beneficiaries.
  • The private executor may also have a greater ability to navigate the waters of family disputes and calm the cross currents of personalities within the family.
  • Reducing the billable hours of an attorney (and other professionals) may be a significant cost savings to the estate.
  • In addition, the executor, is entitled to receive compensation in the form of a fee, for the duties they perform. (see state statutes and consult an attorney for details).
Overall the process can be rewarding, educational and emotionally satisfying. Successfully completing your duties as an executor is a noble tribute to your loved one, for which, the decedent would be eternally grateful.
Have more probate questions?
Visit: http://www.EstateSettlement.com
Brian French CEO, Estate Settlement LLC
Estate Settlement.com is a free resource for those going through probate and estate settlement. The site offers directory listings for probate attorneys.
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Wednesday, July 4, 2012

Estate Planning Basics - What Is An Estate Executor?

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An estate executor is responsible for settling decedent estates and distributing inheritance property to designated beneficiaries. Estate administration can encompass everything from making funeral arrangements to selling real estate. Duties vary depending on the types of inheritance property and whether the estate must undergo probate or is protected by a trust.
In most cases, the estate executor will require help from a probate lawyer or estate planner. Settling probate estates is generally more time-consuming than settling estates protected by a trust. Estate management can be more complicated when decedents die without executing a last will and testament.
The probate process can take several months to complete. Estate administrators must secure and inventory personal property. Valuable assets such as real estate and automobiles must be appraised to determine the date-of-death value. All outstanding debts must be paid and a final tax return filed. Once estate matters are settled, inheritance property is distributed.
Decedents designate heirs and beneficiaries within their Will. If no Will exists, distribution of assets occurs based on state probate law. Property is usually transferred to the decedents surviving spouse or direct lineage heirs such as children, siblings, or parents.
Some states require estate executors who are managing probate estates to obtain court confirmation. This means that all transactions must be presented to the court for approval. Other states allow estate administrators to manage the estate without court approval. Additionally, many states require estate executors to become bonded because they act as a fiduciary. By law, estate executors must be at least 18 years of age and never convicted of a felony.
Individuals should give careful consideration when designating an estate administrator. Sadly, death often brings out the worst in people and can lead to family squabbles over who should receive inheritance gifts. Heirs who feel slighted or were left out of the Will can contest the Will, which will prolong the probate process and add additional legal expenses to the estate.
When heirs contest a decedent's last Will they are responsible for legal fees. If a judge rules in their favor, the estate may be required to reimburse legal fees. Contesting a Will often causes financial hardship to the estate and reduces the amount of inheritance cash available. When possible, estate executors should strive to reach an amicable agreement to prevent the Will from being contested.
Individuals who choose to disinherit an heir from their Will should include a disinheritance clause. Stating the reason for disinheritance can lessen the chance of having the Will contested. When family strife exists, individuals should consider retaining the services of a probate attorney to manage estate settlement duties. Heirs are often less inclined to initiate a lawsuit when lawyers are appointed to manage the estate.
Individuals can engage in estate planning strategies which allow certain assets to avoid probate. These can include life insurance policies, retirement accounts, checking and savings accounts, and investment portfolios.
It is important to advise estate administrators of the location of important documents and provide a copy of the last Will. When records are stored in a safe deposit box, a key should be given to the probate executor. It is also smart to provide copies of real estate deeds, automobile titles, and life insurance policies.
Individuals should update their Will when major changes occur. These might include buying or selling real estate, adding new heirs, or taking out individuals previously named within the Will.
Many people procrastinate about estate planning. However, dying without a Will prolongs the probate process and places additional duties on the appointed estate executor. Taking time to put affairs in order is one of the greatest gifts anyone can leave their loved one.
Real estate investor, Simon Volkov has published an extensive estate planning and probate article library via his website. Topics include tips to avoid probate, designating an estate executor, and hiring probate lawyers. Learn more about the probate process at www.SimonVolkov.com.
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Tuesday, July 3, 2012

Executors Liability

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The Dangers of Household Insurance to the Executors of an Estate
People who take on the role of an executor of either a friend or family member's estate are in most cases unaware of the damage that such an act could have on their own wealth.
The Executor has a number of roles that he has to perform and these include
Ensure that the wishes detailed in the deceased's Will are complied and that he researches all assets and liabilities of the deceased's estate
They must obtain valuations of any assets at the time of death whether solely or jointly owned, and this will include any investments in companies, stocks and shares, end motor vehicles
One of the most important roles of the executor is to ensure that Insurance on any of the assets is in force until the estate is finalised.
The estate will have tax liabilities and the executor must complete these returns
Ant money owed by the estate must be paid before the beneficiaries
If any assets or liabilities are discovered after the estate has been distributed the executors will have to sort out the areas even if it is many e many years later.
The failure of any of the above duties, the Executors could face a claim from any of the beneficiaries of the estate and that will include, HM Revenue and Customs, or any disgruntled person to which the estate owed money.
Many household polices in the UK have an exclusion clause in respect of vacant property. This means that in the event of the property being unoccupied for more than 30 days, the cover under the household insurance policy may be invalid.
If the Asset is destroyed and there is not a valid insurance policy in force any beneficiary of the estate could decide to take legal action against the executors.
The Legacy Funding Corporation Ltd (LFC) has a bespoke Household Property Policy designed to protect the executors of the estate. This can cover buildings, contents and has options to be extended to include Squatters and Identity Theft cover.
The squatter's extension covers the costs to pursue a Legal Action to evict a person or persons who have gained unlawful entry to the Insured Property.
The Identity Theft extension covers the costs incurred to deal with all organisations that have been fraudulently applied to for credit, goods or services in the name of the deceased.
This Insurance Premiums can normally be deducted from the estate and therefore will be at no cost to the executors.
David Collins - Managing Director
He launched the first Charity Trustee Insurance scheme for both corporate organisations and individuals in the UK. His company, St Olaf Insurance Brokers Ltd. was a founder corporate member of the Charity Finance Directors Group and the company's papers assisted the Government and the Charity Commission when they were considering the financial implications of Trustee Liability in the UK. His company has designed a number of bespoke insurance schemes for the "Not for Profit" sector.
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Tuesday, August 24, 2010

3 Ways an Executor Can Stay Out of Trouble

By Wayne Jordan

Estate probate is a process. Your job as executor is straightforward: locate all the assets and debts, sell what property can be sold, use the money to pay all the confirmed debts, distribute what is left over, and file a tax return. By straightforward, I do not mean easy. The ease of settling an estate will depend on three things:

  1. how much money is involved
  2. the type and location of the assets and debts
  3. how well the family gets along.

Executors and Estate Administrators (henceforth referred to only as executors) are not immune to the conflicts; indeed, they are often the target. But, executors take heart: you don't have to make every member of a quarrelling family happy. By your appointment as executor, you receive all legal authority to act on behalf of the decedent in matters pertaining to closing out the estate. Whether the heirs like it or not, the decisions are yours to make. You were placed in this position of trust by the court. Executors are held to what is known as the "reasonable person" standard: the executor owes the estate a duty to behave as a reasonable person would under the same or similar circumstances. Your obligation is to act honestly and prudently and execute your duties in a timely fashion. As long as you don't violate that trust, the court will likely support your actions.

If challenged, you need to be able to provide evidence as to when and why you made a certain decision or performed a certain act. The best way to provide evidence is to keep a contemporary record of your actions. If a legatee claims that a conversation with you never took place, it helps immensely to be able to pull out your journal and say "according to my written record we spoke on June 30 at 2pm; we discussed XXX and you said XXX". It's doubtful that anyone else will be taking notes; the fact that you are helps establish your conscientiousness and credibility. To establish a good contemporary record, do the following:

  1. Keep track of your phone calls and conversations. When you make a call, write down the details. When did you call? What did you discuss? What was the substance of the conversation? What action items resulted from the conversation?
  2. Keep all the ancillary papers that you acquire in the execution of you duties; not just receipts, but bank & investment brochures, bills of sale, and repair estimates; you never know when you may need to explain why you chose a particular bank, repairman, or investment.
  3. When you conduct estate business face-to-face with anyone, take notes.

Remember, executors: you don't have to keep all the family members happy, you just have to keep the Judge of the Probate Court happy. His Honor is a busy man, and if you have kept good records, acted prudently, and kept to the schedule he will be happy.

Wayne Jordan is a Virginia licensed Auctioneer, Certified Personal Property Appraiser, and Accredited Business Broker. He specializes in the Valuation and Liquidation of Estate and Business assets. Learn more at his website http://www.waynejordanauctions.com or his blog http://www.wayne-jordan.blogspot.com.


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Will Executor - Things to Consider When Establishing Your Estate

By Simon Volkov Platinum Quality Author

Will executor refers to an individual or organization that has been designated to administer the estate of a deceased person. Other common names to describe this position include personal probate representative, estate executor, administrator, estate agent, and probate administrator.

Regardless of the label, a will executor wears many hats and is responsible for a variety of duties. Typically, estate executors are appointed through a Last Will and Testament. When decedents die intestate (without a Will), the administrator will be appointed by a probate judge.

Nearly every estate must undergo the process of probate. The only way to keep assets out of probate is by establishing an irrevocable life insurance trust or living trust. Even when trusts are executed a will executor must be designated to make certain assets are distributed to designated heirs.

When selecting an individual to oversee an estate, it is important to talk to the person and obtain their permission. Administering an estate can be challenging, time-consuming and emotionally-charged. Will executors must be of legal age and cannot possess any felony convictions.

Most people appoint a close family member or personal friend. Others hire professionals such as estate planners or lawyers. In any case, will executors are compensated for their time. Estate administration fees are regulated by each individual state. Some states compensate executors on an hourly basis. Others pay a percentage of the estate value or a flat-fee.

Many considerations exist when appointing an estate executor. One factor to consider is family dynamics. Death can bring out the best and worst in people. It is not uncommon for family disputes to erupt over who should receive an heirloom necklace or piece of antique furniture.

Estate planning experts recommend appointing two will executors. If the primary administrator is unable to fulfill their duties, the second named executor can rapidly take charge. In most cases, will administrators work with an estate planning service or probate attorney to ensure documents are properly filed through the court system.

Duties of will executors include securing estate assets, notifying creditors, paying outstanding debts, obtaining property appraisals, and distributing assets to designated beneficiaries. If heirs exist who are missing, administrators must work with an attorney and attempt to locate and notify them of impending inheritance.

Estate planning is an important part of life planning. Regardless of how much or how little property you own, it is important to draft a will and state who should receive your belongings in the event of death.

If you die without a will, a judge will appoint an executor and determine who receives assets based on probate laws. Don't leave this to chance. It is relatively easy to draft a Will and most attorneys charge a nominal fee to legally execute the documents on your behalf.

Simon Volkov specializes in buying probate assets from will executors. This valuable service allows administrators to sell estate assets in exchange for a lump sum cash payment, which can expedite the probate process. See what options are available by visiting http://www.SimonVolkov.com today!


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