Q&A: Can an executor withhold a copy of a will?

Dear Liz: What rights does a sibling survivor have to get a copy of a mother’s will, if the sibling is not the executor?

Answer: From the way you phrased your question, it sounds as if your sibling is serving as executor of your late mother’s estate and refusing to let you see her will. That’s unfortunate. In many states, the executor is required to give you notice of the probate proceedings, and some states also require that you receive a copy of the will if you’re named in it or the guardian of a minor child who’s a named beneficiary, said Jennifer Sawday, an estate planning attorney in Long Beach.

If you’re not a beneficiary, you could still get a copy if the estate is probated. Probate is the court-supervised process of distributing someone’s estate. Rules vary by state, but small estates may bypass probate or qualify for a streamlined version. If formal probate is required, the case is typically opened in the county where the person died and the will becomes public record. Some county courthouses make records available online, while others require you to show up in person to request a copy of the public record.

If the executor fails to file the will or open a probate case when one is required, you can go to court to force the issue. You’ll want to discuss this option with an attorney.

The rules are different if your mother created a living trust rather than a will. Beneficiaries typically receive copies after the creator’s death, but living trusts are designed to avoid probate and don’t become public documents.

If she didn’t actually have a will or living trust, the laws of your state determine who gets what. Surviving spouses and children are usually first in line.

How to write a will that won’t trigger a family feud

Creating an estate plan is a gift to the people you leave behind. By expressing your wishes, you’re trying to guide your loved ones at a difficult, emotional time.

All too often, though, well-meaning people do things destined to create discord, rancor and resentment among their heirs. What looks good on paper may play out disastrously in real life, says estate and trust attorney Marve Ann Alaimo, partner at Porter Wright Morris & Arthur in Naples, Florida.

“People want to think everybody will be nice and do right,” Alaimo says. “Human nature is not always that way.”

In my latest for the Associated Press, four things you can do to reduce the chances of family discord.

Q&A: How to ensure that assets end up with an heir — not that person’s spouse

Dear Liz: What would be the ownership status of assets covered in our will and our retirement accounts when our heirs and beneficiaries receive them? In the case of married heirs, do the asset ownership laws of their state of residence dictate whether inheritance proceeds get held individually or jointly? In addition to having a candid conversation with our kids, we are debating the need for and risk associated with a revocable living trust to provide some assurance that our wishes be honored for our direct descendants to receive and manage any proceeds.

Answer: Inherited assets can be kept as separate property, even in community property states where assets acquired during marriage are typically considered jointly owned. Keeping property separate requires some vigilance, however. If an inheritance is deposited in a joint account, or joint funds are used to improve a separately owned house, those assets could become marital property.

Even if your heirs are scrupulous about keeping property separate, their spouses may ultimately inherit should your heirs die first. If those spouses remarry, the assets could wind up with another family, rather than with your grandkids.

If you want your assets to ultimately get to your grandchildren, there are a few ways to do that, such as bequeathing assets directly to them or through generation-skipping trusts. You can use either a will or a revocable living trust.

You’d be smart to talk to an experienced estate planning attorney about what you want and the best way to achieve those ends.

Tuesday’s need-to-know money news

Today’s top story: A credit check-up for new grads. Also in the news: How couples can marry clashing investment styles, how your credit history can impact your life insurance rate, and ten steps to writing a will.

New Grads, Unlock Your Future With a Credit Check-Up
Your new world requires good credit.

How Couples Can Marry Clashing Investment Styles
Finding a happy medium.

Your Credit History’s Role in Your Life Insurance Rate
It’s all about reliability.

10 Steps to Writing a Will
Making your intentions known.

When your parents die broke

Blogger John Schmoll’s father left a financial mess when he died: a house that was worth far less than the mortgage, credit card bills in excess of $20,000_and debt collector s who insisted the son was legally obligated to pay what his father owed.

Fortunately, Schmoll knew better.

“I’ve been working in financial services for two decades,” says Schmoll, an Omaha, Nebraska, resident who was a stockbroker before starting his site, Frugal Rules. “I knew that I wasn’t responsible.”

Baby boomers are expected to transfer trillions to their heirs in coming years. But many people will inherit little more than a pile of bills. In my latest for the Associated Press, what to do when your parents leave behind debt.

Q&A: Why setting up a living trust may be wise, especially in California

Dear Liz: Is there a minimum amount of assets required before a revocable living trust is advisable? I am retired but my wife is still working. If we do not include our 401(k) plans, our total liquid assets (my wife’s monthly salary, my monthly Social Security benefit and my pension check) are below $100,000. We do not own a house or other real estate and do not have any major outstanding loans. We own our only car, a 2009 non-luxury vehicle.

Assuming we need a trust, do we still need to make out a will? If so, can we use a state-specific form online or just make out a handwritten will? Lastly, can a will be “until further notice” or do we have to update it each year? It should be obvious that we are trying to save expenses where we can.

Answer: Living trusts allow estates to avoid probate, the court process that otherwise oversees the paying of creditors and distribution of someone’s assets. (The sources of income you listed aren’t considered assets, by the way, since those will cease upon your deaths and can’t be transferred to other heirs.) Living trusts offer privacy, because probate is a public process, and can make it easier for a designated person to take over for you if you should become incapacitated.

There’s no specific dollar amount of assets for which a living trust becomes a good idea. In many states, probate isn’t a big deal, while in others — including California — probate is expensive enough that the cost of setting up a living trust can be worthwhile. Even in California, smaller estates (those under $150,000) can avoid probate or qualify for a streamlined process that can make living trusts unnecessary.

Those with larger estates may be able to avoid probate using other methods.

The money in your 401(k)s, for example, will pass directly to the beneficiaries you name. In many states, you also can name a beneficiary for a vehicle right on the registration form so your car could avoid probate. Some states also offer this “transfer on death” option for real estate.

“Plan Your Estate,” an excellent primer from self-help legal publisher Nolo, details your options.

Living trusts typically replace the need for a will, although a lawyer likely would recommend creating a “pour-over” will to include any assets accidentally left out of the trust. If you don’t have a living trust, you’ll definitely need wills to outline how you want your property distributed.

You also should create powers of attorney for healthcare and for finances, so that someone you name can make decisions for you should you become incapacitated. These documents are probably more important than a will because they can determine your quality of life at the end of your days rather than just what happens to your stuff when you’re beyond caring.

Do-it-yourself options are fine if your estate is small, simple and unlikely to be challenged by contentious heirs. Each state has specific requirements for making a legal will, which will be detailed in the software or online forms you use. You don’t have to update a will yearly but it’s a good idea to at least review your estate documents annually to see if any changes might be needed.

Wednesday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: Probate, and how to avoid it. Also in the news: A Class of 2016 Postgrad student loan checklist, how to haggle down your rent by offering to do your own maintenance, and a few things to consider before moving to Canada.

Probate, and How to Avoid It
Learn the three common ways.

Class of 2016 Postgrad Student Loan Checklist
Get ready to start paying back those loans.

Haggle Down Your Rent By Offering to Do Your Own Maintenance
All they can say is no.

6 reasons to think twice before moving to Canada
Some things to consider.

Q&A: Clash over the state of their mother’s estate

Dear Liz: My husband’s mother passed away in January. His younger sister was executor of the estate. His mother had investments of close to $1 million prior to 2008. She supposedly lost half her investments with the downturn. When she passed away, my husband’s sister said that there was nothing left in the estate. What documents can he ask to see in order to make sure the estate is totally depleted? There wasn’t even a will shown to him.

Answer: If your mother-in-law had a will, or if she died “intestate” — without any estate planning documents — the sister would be required to open a probate case to settle the estate. Probate proceedings are public so your husband would be able to see an accounting of what’s left.

If your mother-in-law had a living trust, the sister wouldn’t have to open a probate case but she may be required to provide trust documents and an accounting of the estate to beneficiaries and heirs. The exact rules depend on the state where your mother-in-law died.

If the sister balks at providing this information, your husband may need to take her to court. He’d be smart to consult an attorney familiar with the relevant state’s laws.

Friday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: Checking your credit doesn’t hurt your scores. Also in the news: Personal finance tips from NerdWallet moms, why you should prepare now for the death of a spouse, and the benefits of easing into a new savings budget.

Checking Your Credit Doesn’t Hurt Your Scores
Not checking your scores could hurt much more.

NerdWallet Moms Share Their Personal Finance Tips
Sharing lessons learned.

Why You Should Prepare Now for the Death of a Spouse
Making things easier down the road.

Boost Your Savings By 1% At a Time to Slowly Adjust to a New Budget
Easing into a new budget spares you from a shock to the system.