Estate Planning & Trusts Frequently Asked Questions (FAQs)
After an individual has died, their estate must be distributed according to their wishes and usually the laws of the state where they resided at the time of their death. However, many loved ones of the decedent choose to argue over the terms of the will or asset distribution documentation and require legal assistance to deal with the resulting litigation.
When you’re faced with an estate or trust issue, it can be very intimidating and emotional. Below are some frequently asked questions (FAQs) to help soothe your concerns regarding estate planning. However, nothing can replace the help of an experienced estate and trust attorney.
1. What is estate planning, and why it is important?
Estate planning is the process of planning for one’s death by strategically evaluating how best to administer all of the assets of the potential estate. Estate planning includes contemplation of pre-death transfers as well as how assets existing at death are handled thereafter, whether they pass by a will to individuals, trusts, or other entities. Estate planning also addresses the tax implications for such transfers for the transferor pre-death, the estate, and the recipients.
2. What estate planning documents do I need?
Every estate and every person has their own needs, which are determined by the size, type, and character of the assets held, the basis in those assets (for those with appreciable gains in value), the tax bracket of the transferring and receiving entities, and the asset holder's desires and interests. The basic tools of estate planning are a will but may also include different types of trusts, such as those which are already in existence and those created upon someone’s death. Estate planning documents also include those documents which may be helpful before one dies but which could become necessary if they are disabled or incapacitated, whether temporarily or permanently. They may also include the directions one wishes to be followed should they desire certain end-of-life treatments, such as living wills or advanced directives for healthcare.
3. When should you start estate planning?
It is never too early to start estate planning, but it can easily be too late. While death is inevitable it is rarely predictable. Today is the day that one should start his or her estate planning. Once initial estate planning is done, it should be revisited any time there is a material change in life circumstances, such as divorce, death, or marriage (of a spouse or any beneficiaries or children), or when there is a material change in types or amounts of assets.
4. What is involved in handling an estate?
There is a great deal involved in handling even the simplest estates. But the demands become significantly greater with an estate’s size and complexity. An estate administrator (personal representative or executor in a will or an administrator if there isn’t a will) must secure the authority to handle the estate. This is done by filing certain papers with the appropriate probate court. Letters testamentary or letters of administration are then granted which confer authority upon that administrator. The administrator must gather and preserve the assets of the estate, pay the appropriate debts of the estate, then handle any distributions as called for by the will or provided by applicable law. The estate administrator is a fiduciary who is held to a high standard of care. They are responsible financially for the proper administration of the estate.
5. Can a will be contested?
Wills are not automatically admitted to probate. Alabama law allows a procedure whereby the authenticity or enforceability of a will can be challenged. This is a litigation procedure involving lay witnesses, expert witnesses, documentary evidence, discovery, and trial. The court will determine whether a will should be probated as presented or whether another will should be given effect or perhaps that there is no will that can be proven as enforceable and thus administered. While there are many lawyers who handle estate administration, few are also seasoned, courtroom lawyers. The lawyers at Jinks Crow and Dickson are not only familiar with estate administration but are experienced courtroom advocates as well.
6. What if there is no will?
If a will is not admitted to probate or if there is no will, then Alabama law sets forth the process for handling that estate, which is called an intestate estate. The law prescribes what debts are to be paid and how any remaining assets should be administered. The statute is specific about who is to get what in the event there is no will.
7. What if an executor doesn’t do what they are supposed to do?
An executor or personal representative is held to the standard of a fiduciary, treating the assets of the estate with the same due care they would afford their own property. But serving self-interest or profiting from their position can often lead to a breach or violation of that duty. Likewise, a failure to properly carry out the functions of their position can expose a personal representative or estate administrator to removal at a minimum and financial liability to the estate as well. The probate code has procedures for challenging an executor’s actions, which may result in litigation. While there are many lawyers who handle estate administration, few are also seasoned courtroom lawyers. The lawyers at Jinks Crow and Dickson are not only familiar with estate administration but are experienced courtroom advocates as well.
8. Do I need an estate planning attorney? Do I need an attorney to probate a will? Do I need an attorney if an executor is not doing what they should do?
As with any legal matter as important as estate planning and estate administration, having the advice and counsel of an experienced estate attorney is critical. It is important to have a seasoned attorney who can speak for you and ensure that your wishes, desires, and legal obligations are met. While the courts are very effective in administering estates and resolving conflicts, they cannot give legal advice.
9. How does a trust work? What if the trustee isn’t doing what he is supposed to do?
A trust is simply and generally a document by which assets are held by one party for the benefit of another. The person or entity responsible for the assets is called the trustee. The person, entity, or multiples for whom the assets are held are called the beneficiaries. The property that the trustee holds is called the res. The trust document or instrument will generally prescribe the terms and conditions on which the res is to be held and also what is to be done with the res and its proceeds upon the occurrence of some future event, which may also trigger the termination of the trust. Trusts may exist presently or come into being via some future occurrence, event, or document, such as a will. Trusts can be revocable or irrevocable. A revocable trust means that the person or entity establishing the trust can cancel it and get their property (the res) back. An irrevocable trust cannot be canceled or revoked. A trustee is a fiduciary, which means that he or she is held to a high standard of care with respect to the property (the res) which is entrusted to them. If they fail to protect the assets of the trust or mishandle them, they can be liable or financially responsible to the trust and/or its beneficiaries. Likewise, a trustee may be subject to removal from that position if they do not properly perform their duties and obligations.
10. How much does a trust and estate lawyer cost?
The cost of legal representation in a trust or estate matter depends on many factors, such as the complexity of the issues. Some matters may be handled on a contingent fee while others may be handled on an hourly rate. In some cases, some special fee arrangement or hybrid model may be most appropriate. The estate or the trust may be responsible for the attorney’s fees in some cases. Sometimes, court approval is required when hiring a lawyer, if the lawyer’s fees are to be paid by the estate. The estate and trust lawyers at Jinks, Crow and Dickson regularly represent parties in estate and trust matters on a wide range of fee arrangements. We are happy to discuss the particulars of your case with you.