Expect the unexpected when dealing with estate planning issues.
One of the most common problems involves missing paperwork – the garden variety “now where did I put that power of attorney?” error. If you can’t remember where you put your own estate planning documents, how in the world is your agent/executor going to find them? Most states have laws that address recreating missing wills and trusts, but for missing powers of attorney and burial plans, there is no recovery statute. If you are an agent, then ask for a copy of the document or, if that is unsuccessful, ask where the document is being kept and under what circumstances you will receive a copy. If it’s your estate plan, then tell your agent where the document is kept.
The second problem is paperwork that falls short on details like account numbers, passwords and advisor contact information. If it is your estate plan, then keep a master file and let your agent know where it is kept and how it can be accessed. If you have been named an agent, then strenuously urge that the information be assembled and made available.
Next up: tricky assets like ivory. The U.S. Fish and Wildlife regulations prohibit the sale of most artifacts containing African or Asian elephant ivory. It can be bequeathed but it cannot be sold and most museums will not accept it as a donation. That can leave executors in a difficult situation when they try to value or close out an estate. Another tough asset: firearms. Some firearms cannot be legally possessed without a dealer’s license. If you own a tricky asset, then write down directions on how it is to be handled upon your death. On the other hand, if you find yourself the executor of an estate containing a tricky asset, do your research before trying to value, distribute, sell or donate it. This is one problem that can land you serious jail time.
Dealing with minors is Challenge Number 4. How does an executor distribute money or assets to a minor? Usually a well-drafted will or trust spells it out, but alas, those seem to be few and far between. If in doubt, consult with a lawyer. You may need to go to court to get a court-created management trust or to request that a guardian be appointed for the minor. Do not just blithely hand over thousands of dollars to a 17- year-old or to the parent of a 5- year- old. You would not believe how unsympathetic the judge is going to be when the money goes missing and you get sued for breach of fiduciary duty.
Rounding out the top 5 is the “end of the line” issue. You have good documents, but you’ve managed to outlive your named beneficiaries or agents. That’s the same as having no documents. Revisit your documents every 5 years or whenever someone you’ve named passes away.
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The information contained in this article is general information only and does not constitute legal advice.