The following is an article discussing the various components and process of completing a will or estate plan, featuring commentary from Lane & Waterman attorney, Diane Puthoff and republished with permission from The Catholic Messenger, by Anne Marie Amacher, Davenport, Iowa.
Whatever your age, a written will states exactly how you want your assets to be divided upon your death. Without a will, the state makes that decision, said Diane Puthoff, an attorney with Lane & Waterman LLP, in Davenport.
Your will specifies who you want to receive your assets, whether some distributions should be done over time or all at once and, if minor children are involved, designates guardians in case both parents are deceased. A will also names an executor, who runs the estate and reports to the court. Wills can be as short as two pages or a long as 20 pages, Puthoff said. “You put in as much detail as you want.”
Often people prepare a will when they start having children, update it when children start moving out of the house, and revise it again in their mid-60s or upon the death or serious illness of someone close to them. Without a will, the assets of the deceased may be distributed in a way that individual did not intend. Intentions must be specified in wills.
Within a month after an individual’s death, family should be in contact with the attorney of the deceased. “We often want them to have some time to grieve before we start the next process,”Puthoff said. Even if the spouse is still alive,paperwork must be filed with the court.
When the family meets with the attorney, it is decided if probate is necessary. Probate is a court process through which all of the assets of the deceased are gathered, the will is filed, and creditors can file claims. The process takes around 10-12 months to complete. Probate must be opened within five years of death. The longer the process is held off, the harder it is to remember the location of assets and families may pay unnecessary bills. Whether or not probate is filed, wills must be submitted in court.
Assets also need to be transferred to the sole living spouse if that person is alive. It’s relatively simple paperwork to take the deceased spouse’s name off the title to the home, for example. Not removing the name before the second spouse passes can add to delays in selling property, for example, Puthoff said.
Probate is determined based on how assets are titled, not necessarily their amount or value. If the assets are titled (i.e., named) in one person’s name, then probate will be required to pass the asset to the named beneficiary in the will. Also, if assets are payable to the “estate,” then probate will be needed in order to pass the assets to the beneficiary of the will.
A person’s will should be filed with the court after they pass away. This creates a record of a person’s wishes at their death — this is true even if no probate is required. In some instances, probate is not immediately thought to be required, but a year or two later an asset is found that requires probate. With the will already filed, probate can be more easily commenced.
Trusts are similar to wills and are not necessarily for the rich, she noted. It is a longer document that can help care for individuals with special needs and family members who are minors and it helps avoid probate. To avoid probate, however, all accounts need to have titles in the trust name. Probate may be required if any asset is not listed in the trust name.
Estate tax returns are due nine months after an individual’s death. This is separate from federal and state income tax forms, Puthoff noted.
What if a will cannot be found but family knows one has been written? What if the most recent one cannot be found? Puthoff said to contact the deceased person’s lawyer. If that’s not possible, lawyers in Scott County can send an inquiry to all in the Scott County Bar Association to determine if anyone in the association holds the will. “People move around and change attorneys,” she noted. The best thing to do is to try and find the will; otherwise the estate will follow the state law, in which the state decides where assets go.
Some other documents Puthoff said people should consider having are durable power of attorney for financial affairs, living wills and durable power of attorney for health care. Durable power of attorney for financial affairs pertains to finances only and is not for health care decisions. An individual appoints someone to handle his or her finances simultaneously or until the individual can no longer handle the finances. When the individual dies, the durable power of attorney for finances ceases. Checks cannot be written from accounts. This is when the estate process begins.
A living will tells physicians and hospitals the desires of an individual for medical treatment when that individual cannot express consent. Durable power of attorney for health care appoints someone to make an individual’s health care decisions when that individual is unable to do so. This does not override a living will.
These forms must be on hand in order for these duties to be executed. For health care decisions, it is suggested that the person who will make the decisions have one copy on hand. Copies should be provided to the primary care physician, the hospital and family members.