Setting up a DD-WRT robust router by author Matthew Robinson

For today’s small business or home computer user, sometimes an ordinary router just doesn’t cut it. Many of us require the manageability and flexibility of a more robust router.  Whether we are setting up a home VPN/SSH server, have the need to manage who can access the network, or desire the ability to configure every aspect of our network, ordinary will just not do.  This is where DD-WRT steps in. Today, I am going to walk you through the basic setup of a DD-WRT router and explore the feature rich interface that it has to offer. Before we get started there are a few questions that need to be answered.

First of all, what exactly is DD-WRT?

DD-WRT is a Linux-based, OpenSource firmware that is made for wireless routers.  It offers all of the functionality for which a home user or small business could ask.  Some of the highlighted features include:

·         Configuring QoS (Quality of Service) to regulate which users or applications take priority.

·         Enable Port forwarding: This option allows you to access your local network from anywhere. The use of a VPN/SSH server gives you secure access to your network or you could enable your home/small business webserver to be accessed from anywhere in the world

·         Access restrictions based on time or destination

How do I get a DD-WRT router?

Currently there are a few ways to get your hands on a router running DD-WRT.  The first option is to buy a router that has the software pre-installed. Due to DD-WRT’s growing popularity there are several places to find a router with it preinstalled.  Manufacturers such as Buffalo http://www.buffalotech.com/products/wireless offers pre-installed DD-WRT routers straight from their website, while other manufactures, such as Asus http://promos.asus.com/US/ASUS_DD-WRT are offering a wider range of products with DD-WRT compatibility.  A simple search on Amazon or eBay will show dozens of results for routers with DD-WRT ready to go.

The other option is for the DIYers out there.  All you need is a router that is compatible with DD-WRT and the latest version of the firmware.  Flashing your router with the new firmware is beyond the scope of this post.  The process can be a little tricky and the steps to complete the task can differ between the various manufactures.  You also risk turning your new (or repurposed) router into a nice paperweight if things don’t go as planned.  For this reason, I recommend buying a router with DD-WRT pre-installed.  It may cost a few dollars more but it’s worth the peace of mind (and the warranty) that comes with it.

DD-WRT.com http://www.dd-wrt.com/wiki/index.php/Installation has extensive documentation on flashing (upgrading/installing) DD-WRT including hardware specific instructions.  It is strongly encouraged that you read through this documentation before upgrading or installing DD-WRT on your router. Installations and upgrades do have specific instructions that vary between different manufacturers.

How do I know if my router is supported?  Where can I find the latest version of DD-WRT?

If you still wish to do it yourself, you can download the latest version of the firmware direct from DD-WRT’s website: http://www.dd-wrt.com/site/index.  Using the router database http://www.dd-wrt.com/site/support/router-database you can check to see if your router is supported.  By selecting your router you will be presented with a list of files containing the firmware that is available for download.

Now that you know what DD-WRT is and where to find a router of your own, let’s explore the basic setup.  For my setup I will be using a Buffalo AirStation N600 router with DD-WRT pre-installed.  The first step is to plug the router in and wait for it to boot up.

Once the router is up and running, go to your wireless enabled device and search for the network.  On Windows 7 Go to Start > Control Panel > Network and Sharing Center and click on Connect to a Network or click on the arrow in the bottom right of the screen > then click the network icon (stepped bars).  This will populate a list in the bottom right of the screen with the available wireless networks.  Select the network that pertains to your router. (Mine was Buffalo-7FB212_A.  The default network name will be listed on the back or bottom of the router as SSID: networkname) > Click Connect.  You will be required to enter the encryption key, which you can find on the back or bottom of the router.

After entering the key, your default web browser will open and prompt you for a user name and password (If your browser does not open automatically, open your browser and type in 192.168.11.1 (192.168.1.1 for other manufacturers) in the search bar.  This will take you to the router interface.)  The default username/password for DD-WRT is root/admin.  This also varies by manufacturer.  For example, the default username/password combination for my router was admin/password.

Immediately after being granted access to the router web interface the wireless Setup Assistant will pop up.  This allows you to change the default SSID and Encryption Key (Password) to whatever you like.  For now, keep it as the default.

As you will notice, there are numerous tabs across the top including Setup, Wireless, Services, Security, Access Restrictions, Nat/QoS, Administration, and Status.  Clicking on each tab reveals a submenu that has even more options.

The first thing you will want to do is check for firmware updates.  To do this Go to the Administration tab > Select Firmware Upgrade from the submenu > under Online Updates click Check for Upgrades.  After checking for upgrades, if there are any that need to be installed click the Radio button next to the file and then Upgrade at the bottom of the screen.  This will take a few minutes to complete.

Note: These directions assume that the router is new and already set to factory default settings. It is recommended to set the router to default settings before upgrading the firmware. During the upgrade process do not power down the router or press any of the buttons on the router.  Doing so could interrupt the upgrade and leave the router in an unusable state.

Once the router is finished with the upgrade process you will need to restart the router for the changes to take effect.  To do so, with the router powered "ON", press and hold the reset button for 30 seconds, which is located on the outside of the router. Then, unplug the router from the power source and continue to hold the power button for another 30 seconds.  Finally, plug the power source back in and continue to hold the reset button for another 30 seconds.

When this is complete the router will boot up using the new version of the DD-WRT firmware.  The default IP address to access the web interface for Buffalo routers is 192.168.11.1 (This can vary between manufacturers).  Type this into your browser search bar and again you will be prompted for a username and password. Enter the password as before and you will be granted access.

There are two more important configurations you need to change before anything else. The default username and passwords for the router and for your wireless network. This can be done by utilizing the Wireless Setup Assistant or changing the configuration under the Administration tab.  Clicking the Setup tab shows you the current configuration of your wireless network.  From this page you are able to change the default SSID and the Wireless Passphrase.  Clicking Apply Settings and Save at the bottom of the screen will allow you to save all configurations.

At this point, you are ready to start configuring your router towards your specific needs.  Take some time to explore the tabs and different options offered.  There are far too many options to list here.

To highlight a few, look under the Access Restrictions tab.  Here you can create different policies to dictate which days and times access to the WAN (internet) is allowed.  You can also choose to block specific URLs or websites containing certain keywords.

Under the NAT/QoS tab you can configure port forwarding to allow services like SSH or VPN to pass through your router.  By clicking the QoS sub-tab you can change the QoS settings to give certain services priority on the network.

Another useful feature of DD-WRT is the ability to run commands from the web interface.  Go to the Administration tab > click on Commands.  Here you are presented with a “Command Shell”.  You can type commands into the shell and choose from the options along the bottom that include: Run Commands, Save Startup, Save Shutdown, Save Firewall, Save Custom Script.  This feature comes in handy during router troubleshooting, diagnostics, and advanced configurations.

One other feature worth mentioning is under the Status tab.  By clicking on the WAN sub-tab you will be able to monitor the network usage by month.  Under the Bandwidth sub-tab you will be able to monitor bandwidth/network usage in real time.

DD-WRT’s advanced functionality combined with its easy to use web interface offer an exciting solution for home users and small business networks.  It can provide the security you need and a solid platform for a controlled, more efficient network.

Your welcome for this free help from author Matthew Robinson.  Matthew gave this free advice to ThatCyberSecurityGuy, LLC, which we all must greatly appreciate.

Estate Planning and Probate: Part Five

Estate Planning and Probate:  Part Five Final Post

This is the fifth and final entry on this topic concerning experiences I had while dealing with the prospect of becoming my parents' executor.  It deals primarily with costs that can be expected.

As I have mentioned, this discussion centers around Virginia law and one should review laws in their own residences concerned.   Yet, there is general information that you can expect to deal with across all local governments.  This entry is a long one!  There is lots of detail here.

Costs of Probate and Taxes on an Estate

If the house and real estate property(s) have clearly defined living beneficiaries they do not go to probate in Virginia unless there are of extraordinary worth (millions in value).   If there is other property in the estate, in any state, as a general rule the cost of probate ranges from about 2% to 7% of the value being probated?  For example, if you are executor on a $300K estate the probate expenses may be anywhere from $6K to $21K depending on where you are and how easy or complex your estate is.

In addition to local probate costs, taxes will be paid.  According to http://www.courts.state.va.us/courts/circuit/resources/probate_in_virginia.pdf

a)      At the time of filing the will the probate tax must be paid.  (Generally $1.00 state probate tax and .33¢ local tax, if applicable, per $1,000.00 value of the estate.)

b)      State taxes.

1)      The final income tax return of the deceased must be filed.

2)      The final personal property tax return of the deceased must be filed.

3)      An income tax return for the estate (income coming to the estate after death) must be filed if there is sufficient income.

4)      A Virginia estate tax return must be filed if required (generally only required if a federal estate tax return is necessary).

c)       Federal taxes.

The executor is also responsible for the filing of the decedent's final state, federal an estate income tax return if required.  Generally estate taxes (both federal and state) are due only if the gross estate (includes life insurance and survivorship property not handled by fiduciary) exceeds the threshold established by federal and state statutes.  For example, if the life insurance beneficiaries cannot be found or are dead this could be included in the estate value.  Of course if the value of the estate exceeds values most of us would never have to deal with such as $3,500,000, the executor must also file an estate tax return within nine months of the date of death, even if no estate tax is owed.

Distributing an Estate

The work of distributing an estate can be substantial, thus, the executor responsible for the filing of the decedent's final state, federal an estate income tax return should seriously consider having two financial assistants.  This is based of course on the value of the estate.  If the estate is small or has been used up by health issues prior to passing, then one should not consider paid assistants that can move the estate into negative territory.

The most critical assistant is the accountant, agreed upon by all heirs, since doing the taxes may result in forms the heirs themselves will have to file and that requires coordination so all can get taxes filed in a timely fashion.  Generally estate taxes (both federal and state) are due only if the gross estate (includes life insurance and survivorship property not handled by fiduciary) exceeds the threshold established by federal and state statutes.  For example, if the life insurance beneficiaries cannot be found or are dead the value may be transferred into the estate value.  Of course if the value of the estate exceeds values most of us would never have to deal with such as $3,500,000, the Virginia executor must file an estate tax return within nine months of the date of death, even if no estate tax is owed.

The second advisor to consider, when the value of an estate warrants (I.e. Involving tens of thousands of dollars and up) will be a financial estate and/or insurance/brokerage expert.  These are commonly referred to as Financial Advisors or Certified Financial Planners (CFPs).  You should look for a fee based Certified Financial Planner (CFP) and not one who is looking for a commission off of the estate.  One type to definitely stay away from is any institution or advisor that wants 10% (weather one time or annually) of the estate for their services.  This is true whether or not it is an estate in probate or the owner is alive.

Some fee based CFPs provide the service at low cost or even gratis when distributing financial accounts to the heirs and charge the estate a nominal onetime commission/fee after setting up the estate.  Heirs may later move the accounts, but many retain them and pay the fee based CFP a yearly fee to manage and rebalance the assets.  Fee based CFPs will guide the access to the best investments for you and not to what makes them the most money like commission based financial planners do.

The accountant could act as both if qualified, though you may wish to separate the two jobs.  The reason being is that this person will advise on not only on tax issues but investments during estate distribution, like a stock broker, and may be used as a distributor of assets, thus creating a legal buffer between executor and heir distribution tasks that can be used in court in the event of disagreements.  The Advisor will only distribute estate assets as the will requires, helping isolate the executor from accusations of malfeasance.  Costs for these can vary widely.  And finding trust worthy ones is paramount.

One more point, visit the bank with proof of death and executorship and either have your name added to any existing accounts and checking account especially.  You may have to close the existing accounts and open new ones in the estate name.  The bank will work you through this if you go in person.  Keep the checking account funded until it is the last account closed and distributed.  This will take at least one year as that is how long debtors have after the legal announcement in the newspaper to seek redress for debts owed that they can prove.

My father is a veteran he is entitled to burial in a VA national cemetery, a flag, a headstone and honors.  All I would need is his DD-214 showing he was honorably discharged.  However, he prefers to be buried with family where there are the funeral expenses to consider which includes services, burial, and much more.  According to the National Funeral Directors Association, the average cost of a funeral is more than $7000 which has the potential to escalate rapidly.  You have to make sure your designated representative will quickly have access to the funds necessary to cover these short term expenses.  Best case scenario would be to set up a joint account with a trusted relative or friend.

Property Appraisals

An appraisal by a court-appointed independent third party (a probate referee) is sometimes necessary if there is real property or other non-cash (personal property) assets in the estate, such as jewelry, artwork, etc. of substantial value.  The probate referee fee may be statutory or set by custom in the area.  Often the fee is a small percentage (e.g., 1/10 of 1%) of the appraised value of the asset, plus miscellaneous charges, such as mileage, photos, etc.

Attorney Fees

This is usually the largest portion of probate fees.  In some states the attorney’s fees are set as a flat amount.  In others, they are based on the size and/or complexity of the estate.  They may amount to 2-4% of the estate’s value, but can be higher depending on how complex the estate is.  They will never be fixed cost values.  If you are doing much of work as executor, like contacting brokers and other account administrators, sending out proof of death and proof of executorship, and the like, that work can be the bulk of an attorney's charges.  So, the cost incurred by having the attorney deal with the court documents can end up being billed as hourly.  Again, the estate may hire any it can afford to ease and speed work along.

Surety Bonds

As discussed, if my parent's estate went into probate I would need a co-executor or surety bond to assume responsibility for my parent's estate and debts.  Since I would be dealing with a will there did not seem to be a way to waive the bond in Virginia which some states allow.  If you have to take one out you will probably have to have it insured before traveling to the clerk's office to qualify as an executor (personal representative) of the estate.  Make an appointment with the county/city clerk prior to the final acceptance meeting to confirm what documents and information you need to bring with you.  Those documents will probably be a death certificate, the original will (which will be kept by the court), and an estimate/inventory of the estate assets, a probate information form filled out (often found online), documentation to identify you and a checkbook to pay court costs.

Things can get confusing as the bond can go by different legal names.  An Estate Bond is a type of surety bond, also known as a Probate Bond / Waiver of Probate Bond, Executor Bond, Administration Bond and Fiduciary Bond.  Estate Bonds are mandated by the court in order to provide assurance that the executor of an estate correctly allocates the assets for an incapacitated or deceased person with whom they have been assigned fiduciary duty.

In other words, Estate Bonds are directed by the court in order to guarantee the honest accounting and faithful performance of duties by a fiduciary or trustee.  Estate Bonds provide assurance that the executor of an estate appropriately handles, and distributes, the assets of the disabled or deceased person whom they are duty-bound to act on behalf of.

If an executor is asked to post bond, this is to insure that if the value of the probate property declines as a result of the executor’s misconduct, the bond will make the estate whole again.  It is like an insurance policy.  Obtaining such a probate bond can be costly and depends on the value of the property subject to the bond.  It can be $500 or much more if it is a sizeable estate.  You can now see why a Financial Planner acting as a buffer can be a legal assist to your actions as executor.

How to apply for an Estate Bond

The licensed Surety will provide the court with a bond subject to receipt and satisfactory review of the following documentation:

• completed Fiduciary Bond Application and Indemnity Agreement
• completed Independent Legal Advice form, if required
• completed Personal Net Worth Statement

Supplemental documentation may include:

• copy of the Application to Court for Certificate of Appointment of Estate Trustee
• copy of Will, if applicable
• copy of Consents to Appointment, if applicable
• copy of Nominations and Renunciations, if applicable

How much do Estate Bonds Cost?

Costs of the Estate Bonds vary slightly, Surety Company to Surety Company and from applicant to applicant; given the size and circumstances of the estate. A good guide is the following:

Rate: $3.50 per $1,000 of surety bond amount.  Two to three years premium payable in advance; the first year premium is considered fully earned.  The 2^nd and 3rd year premiums are pro-rated returned upon receipt of the original bond.  The amount of the bond will need to be twice the personal property in the estate or guardianship.  If real estate is involved you will not need a bond to cover that unless you are going to sell the property.

Probate Court Appearances

The named executor under the will of the decedent will have to take an appointment with the probate division of the Circuit Court where the decedent used to live.  Depending on the locality you should be able to get an appointment within less than two weeks.  If you are out-of-town, the probate division will often adjust to your schedule.

If you live out of state as I do, understand you will likely need to travel the decedent's state to carry out some of your executor duties.  The named executor under the will of the decedent will have to take an appointment with the probate division of the Circuit Court where the decedent used to live, or have a local attorney make the appearance for you.   As the vultures descend on the estate they will care little about your work or family obligations.  You can seek reimbursement from the estate for travel and expenses but this will all have to documented and shown to the court.

Some out-of-state executors may be inclined to use the estate's attorney to handle many estate matters but this is irresponsible as the legal fees incurred will mean the decedent's heirs will receive less of the estate once distributed.  If you are inclined to do this because of medical, business, job or family obligations it may be best to reject being named executor on the will.  If for any reason you believe you cannot effectively do the duties of executor, then it would be senseless to take on the legal obligations by doing so.

If the estate is subject to probate as it will likely be where a will is involved, the state may want someone (another executor) involved who is subject to that states jurisdiction.  This may require the out-of-state executor to hire a probate attorney, financial advisor, or appoint someone local as co- or alternate executor.  The website http://miorinilaw.com/lawyer/Commonwealth-of-Virginia_cp2607.htm states the following:

• You will then receive your Letters of Administration, proof of your appointment and a booklet to assist you with your new duties
• Give notice of your appointment to the heirs-at-law within a month from your appointment and file a certificate of notice with the court
• File an inventory of assets within four months of your appointment
• File an accounting within sixteen months from your appointment unless you can file a “Statement in Lieu of an Account"

How much is Executor Compensated?

Compensation for an Executor in Virginia is determined in the sole discretion of the court which has jurisdiction over the estate.  As a general guideline, courts have determined that an executor is entitled to whatever fee is fixed by the will.  Where a specific fee was not fixed, the courts have considered reasonable a fee equal to 5% of the assets.  This could be reduced to a 2.5% commission, where the executor was not entitled to sell the real property of the estate, but only to deliver it in kind.

While there is no specific rate set by statute in Virginia, many jurisdictions have established guidelines for determining an Executor’s Commission, based on the complexity of the estate, the responsibilities assumed by the executor, and the amount and type of professional services required to administer the estate.  For example, the Commissioner of Accounts of Fairfax County has established guidelines for Executor Commissions, which are published.  In general, these guidelines allow for an Executor’s Commission as follows:

On income: 5% of income receipts (not including capital gains) realized during each accounting period.

On principal: A fee based upon the inventory value, including amended inventories, of the decedent’s probate assets in accordance with the following schedule:

• First $400,000 - 5% 
• Next $300,000 - 4% 
• Next $300,000 - 3% 
• Balance over $1 million - 2% 
• Balance over $10 million - By prior agreement with the Commissioner

 The Fairfax County website includes further details regarding Executor’s Commissions.  Note that such compensation may be increased or decreased in the Commissioner of Accounts’ sole discretion, based on various factors.  Executors are not required to wait until the estate is closed to take their compensation; however, compensation may be forfeited if the proper account is not timely filed.  Keep track of duties, time spent, and costs personally incurred as evidence of due diligence in seeking adequate compensation, particularly where complications occurred.  (Note: Fund managers and account administrators will typically NOT tell you when and where you have made a mistake.  They will simply reject your distribution request without notice.  When you call to find out what happened they will often just send you blank forms to fill out from scratch.  Rule:  Don't make mistakes!  This eliminates the most common complication.)

Reasonable fees for attorneys, accountants and/or investment advisors may be reimbursed if necessary for the proper administration of the estate.  However, if an executor chooses to use an attorney or accountant for the basic administration of the estate, this may be deducted from the Executor’s Commission, depending on a number of factors considered by the Commissioner of Accounts.  Factors can include how well documented your time and expenses are, and believability of the documentation.

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Administrator and Executor bonds (also called Probate Bonds) are required by county courts in Virginia of persons appointed to handle a deceased's estate. These bonds generally guarantee that all the estate debts will be satisfied and that the remaining assets will be properly distributed to the appropriate heirs. Because of the complexities involved, the surety usually requires that the applicant obtain the assistance of an attorney, although we do have markets that will consider bonds for qualified applicants without an attorney.  Bond amounts are determined by the court.  Bond premiums must be paid annually until the estate is properly settled.

Summary

There are many costs that can easily build up in managing and distributing an estate.  This article does not pretend to cover them all.  For example, we have not gone into detail about burial costs, and others for which the estate is responsible. Instead, we have tried to discuss a variety of costs related to an executor's distribution and management of the estate in question.  There is much more to learn and be familiar with in Virginia and elsewhere.  I hope this series has provided some insight into these matters and given your ideas on where to go from this point to make your executorship a successful one.

(See:  http://www.vaela.org/for-the-general-public/71-the-probate-process-in-virginia.html,http://www.courts.state.va.us/courts/circuit/resources/probate_in_virginia.pdf, http://www.tax.virginia.gov/site.cfm?alias=Probate,http://law.freeadvice.com/estate_planning/probate/virginia-probate-basics.htm,http://www.usafa.edu/superintendent/ja/LivingTrust.cfm?catname=JA, http://info.legalzoom.com/can-executors-live-out-state-22047.html)

Glossary:

Probate - is the process of "administering" and distributing a deceased person's assets.  Probate includes recording the will in the records of the Clerk's Office, and usually includes appointing an executor, who is supervised by the court in the administration and distribution of the estate.

Decedent - An individual who has died.  The term literally means "one who is dying," but it is commonly used in the law to denote one who has died, particularly someone who has recently passed away.  A decedent's estate is the real and Personal Property that an individual owns upon his or her death.

Surety - A person who assumes legal responsibility for the fulfilment of another's debt or obligation and himself becomes liable if the other defaults.  2. Security given against loss or damage or as a guarantee that an obligation will be met; a pledge, guaranty, or bond.

Fiduciary - Of or relating to a holding of something in trust for another:  a fiduciary heir; a fiduciary contract.

Estate Planning and Probate: Part Four

Estate Planning and Probate:  Part Four

Although I am dismayed as to why my parent's attorney has not recommended a living trust to them, I have determined that dealing with their will, probate and the estate will be manageable.  However, almost any estate will benefit from using a trust in the distribution of assets following death reducing the burden on the executor.  To put it simply, the trust is used to incorporate a person's wealth for use during their life and to provide for adequate management (usually distribution) upon death.  Since the trust is considered as a person, for legal purposes such as making payments, owning assets, and buying or selling property, it goes on after death of the original owner by naming a trustee executor, the equivalent of a CEO, to continue with its management.  We will now discuss how that is done.

What is a Living Trust?

A Revocable Living Trust aka Living Trust aka Family Trust is a way to turning over assets to legal independent entity that is considered separate from you as an individual.  In other words it is a legal document that holds title or ownership to the property and assets you give it.  You are transferring your assets from yourself or family and titling them in the name of the trust.  This is much like how setting up a corporation creates a separate legal entity from the people who run or manage it.  People can sue the corporation and perhaps put them out of business but the employees or managers of the corporation personal assets are protected.

By definition a corporation is, "A body that is granted a charter recognizing it as a separate legal entity having its own rights, privileges, and liabilities distinct from those of its members."  A living trust is similar to a corporation in that it is a separate entity that requires management, typically you, who retains unlimited access to and full control of the assets during your lifetime even though the trust holds title.  Of course, depending on size, you can manage the trust with any size of a management team you feel is justified, and people often employ lawyers and financial advisers in that capacity.

A revocable living trust looks very much like a will as its purpose is detailing and instructing how your estate is to be handled at your death.  The difference between a will and living trust is how they are handled legally at the time of death.  Note that a living trust can also be non-revokable.  In which case it would go on with continued management and other purpose, like charitable or political foundations, or cease if all assets are lost, as in a bankruptcy.  Suffice to say that trusts come in various sizes and shapes to suit a wide variety of causes.

Why do we want at Living Trust?

Just as with a corporation a trust has to own title to any property or asset.  This means that you have to have legally transferred the title of your assets into the trust name which is called "Funding the Trust".  For example, you would change the owners name on your trust assets such as your home, IRA, 401K, life insurance policies, bank accounts from, say, John and Jane Doe to the trust name of "John and Jane Doe, Trustees of the Doe Family Trust".

The trust avoids probate because you have designated trustees and laid out in detail who will manage the assets.  If a spouse dies the surviving spouse as the surviving trustee receives full control to buy, sell, borrow or transfer assets titled in the trusts name.

Who should you have a Living Trust?

A living trust should be created by persons with two minimum desires.  First are those with significant assets for distribution who wish to avoid distribution arguments or challenges.  Although a mere will can be detailed to a great extent, wills are not as legally binding as are trusts, since they are not regarded as legal entities in and of themselves.  Hence they can be contested.

Second, as has been stated many times, it is for those with a reason to minimize probate and related costs to probate.  The trust, as a legal entity, takes the place of probate as legal method to oversee the distribution of the estate as defined in the document.  There are other reasons people might wish to fund a living trust, but these are the primary ones.

Referring back to the story about when my brother died in an auto accident you'll understand the need for a living trust.  When a loved one passes there is often a knee jerk reaction to get the pain over with as soon as possible from the people who loved the decedent.  Unless our dying wishes and estate distribution are spelled out as succinctly and in an uncontroversial manner, we may hurt the ones we love and have governments and lawyers, not loved ones, benefit from our passing.

The U.S. legal system views a living trust as a very sound legal document that manages passing assets on to whomever you designate without contention.  This is possible because your name has been taken off of the assets thus upon your death there is no need for the courts to remove your name from the assets for legal transfer.  A will on the other hand can be contested as it is considered just an expression of your wishes and will need to be vetted by the courts before assets can be passed on to your heirs.  Take, for example, a house.  When a trust owns a house, the trust executor can use trust assets to continue paying mortgages and taxes.  As the deceased, you can no longer do this from a personal (non-joint with no survivor) account.  In a trust the house can be sold and the proceeds go into the trust for disposition.

Another example might be of a family car that you want to give to one of your children.  If you keep the car in your name you have legal and liability obligations that tie you to that asset.  If you are gone you cannot sign and date any transfer.  Thus, it costs money and paperwork for the court to retitle the car in your child's name before terminating other legal ties to that property.

A living trust is very important because it:

 

• Unlike a will assets titled in the name of trust do not have go through probate.  This can eliminate the need for surety bonds or co-executor representation required in some states for out-of-state executors.
• It will prevent the courts from controlling your assets due to incapacity, where you may still be living but otherwise unable to manage your assets.
• It gives you very specific control over how you leave the assets such as to your children, grandchildren, family, friends, church and charities.

When there are five or fewer beneficiaries the Federal Deposit Insurance Corp. insures each beneficiary up to $250,000.  A trust naming four beneficiaries for example would be insured for $1,00,000.

The living trust is a written legal document that allows you, as the trustee(s), unlimited access to and full control of your assets during your lifetime.  It also enables you to name a successor trustee/executor to pass property on after your death to family, friends and/or loved ones.  In allowing you to appoint someone you make certain your property goes to the ones you choose after your death.

Summary

Just as governments and corporations have a defined line of succession set out when they are created, in the trust you set out a defined set out of successor trustees to act for the trust.  The successor trustee is tasked with managing the trust assets in manner detailed in your trust document.  This is much as the executor of a will would operate, but more specific, legally binding and thus easier for the trustee to assume control.  Note too, that one may assign major assets to a living trust and have a will for minor assets.  When heirs are listed in co-joined documents like this, it lends great credence to the legality of the will, ensuring the court will not alter or allow a successful challenge of the will.

This is very important and really simplifies the handling of the estate for the trustee.  For example, in Virginia this executor/will process is supervised through Commissioners of Accounts, and usually takes about a year.  In many cases, it is desirable to avoid some of the procedures and costs of probate which a living trust helps avoid.

How does a Living Trust work?

ust as with a corporation a trust has to own title to the property or asset.  This means that you have to have legally transferred the title of your assets into the trust name which is called "Funding the Trust".  For example, you would change the owners name on your trust assets such as you home, IRA, 401K, life insurance policies, bank accounts from the name of John and Jane Doe to the trust name of "John and Jane Doe, Trustees of the Doe Family Trust".

The trust avoids probate because you have designated who the trustees of the trust are and laid out in detail who will manage the assets.  If a spouse dies the surviving spouse as the surviving trustee receives full control to buy, sell, borrow or transfer assets titled in the trusts name.  Just as governments and corporations have a defined line of succession set out when they are created, in the trust you set out a defined set out a clearly defined set of successors trustees to act for the trust.  The successor trustee is tasked with managing the trust assets in manner detailed or made know in your trust document.  This is much like the executor of a will but much more specific, legally binding and easy for the trustee.  This is very important and really simplifies the handling of the estate for the trustee.  For example, in Virginia this executor/will process is supervised through Commissioners of Accounts, and usually takes about a year.  In many cases, it is desirable to avoid some of the procedures and costs of probate which a living trust will avoid.

Estate Planning and Probate: Part Three

Estate Planning and Probate: Part Three

The General Responsibilities, Duties, and Roles of a Nonresident State Will Executor in Virginia.

We have been discussing how to prepare an estate for probate and have centered on one aspect!  Being an out of state executor.  I would like to go into some detail here, as it is likely in today's mobile society that many people may have similar issues and this detail should help them understand pitfalls they need to look into for their own non state residency and other concerns.

If you have been named executor of an estate and accept the duties you are morally and legally obligated to make sure the wishes of the decedent are met.  However, what most executors overlook is that you are also obligated to participate in the estate planning and determine if you can accept being executor.  You may not agree with how the estate is set up, the other participants named in the Power of Attorney or other estate documentation.  Perhaps your health and life events prevent you from performing your executor role, etc.  You have to keep the owners of the estate naming you informed should a life event temporarily or permanently prevent you from representing their wishes in the future.

As an estate holder, you must ask the person you intend to appoint if he or she is willing to serve as executor before drafting your will.  You should outline the responsibility and make sure they are willing to perform the task properly.  As attorneys are very well paid they will usually volunteer to serve as your executor.  You must also properly vet your chosen executor to see if they can qualify because if they have credit problems or have committed a crime which the state may not accept if probate is required.  Co-executors are also a possibility to consider but this may create controversy in dealing with your estate if they do not agree on actions and which tasks to perform.

For example, you may cause a sibling or relative rivalry over your estate, unless you don't like them and want this (smile). You should also consider appointing an alternate executor in case the primary or secondary executor(s) cannot serve or are disqualified.  The state will appoint a paid one if necessary.  One who can charge large fees, which you may not want?

The executor or personal representative (also called administrator) you choose may also charge the estate a fee for his or her services.  Often if this individual is a relative and heir, he or she may choose not to charge a fee.  If a fee is charged, in some states the amount is regulated by statute, and in others it is what is “reasonable” for the work performed.  Therefore, executors who inherit under the will often simplify the accounting and distribution of the estate because they may not want to track their expenses and time required to bill the estate.

An executor will likely have to work with the estate's attorney and other professionals such as accountants, financial advisors, or appraisers.  This work is made simpler if the will or trust is well defined in the legal documents left by the decedent.  All these management fees associated with the estate are costs that heirs need to closely monitor as they can be used to overly expense the estate.  Never depend on the courts to make sure fraud does not take place.

Depending on the state, nonresident executors may be required to post a bond with the court in order to serve. This bond acts as a guarantee the executor will manage the estate properly, in order to protect the heirs.

In my own case, according to http://www.virginiaestatelaw.com/main/chapters/qualification/procedure.shtml 
"a personal representative may be a nonresident of Virginia, but surety is required on the bond of a non-resident personal representative, unless a resident co-fiduciary is appointed.  The Clerk must also be satisfied that the person seeking qualification is suitable and competent to perform the duties of his or her office."

Checking with two Virginia attorneys on this I determined this is an either/or proposition.  Either I purchase a surety bond to insure the estate or I bring a Virginia resident co-executor to the court.  I asked a Virginia friend of mine if he would do this and he asked what I forgot to ask the first attorney, "What would be required of me in such a role?"  Hmmm… good question so I asked the second attorney that very question and I got the simple answer:

• He has to show up in probate clerk's office for co-qualification as executor or registration as a designated agent of the estate.
• He has to make sure you do what the estate documents tell you to do.

This is not a responsibility to be taken lightly for if an out-of-state executor ripped off the estate or mismanaged the estate the Virginia resident co-executor could be held responsible.

Since my parents estate was only under a will it would be subject to probate for assets totaling over $15,000 in value.  If the estate went into probate, I now knew this would require me as an out-of-state executor to possibly have to hire a probate attorney or appoint someone local as co-executor thus complicating things and increasing expenses.

I also read that while administering and distributing the estate the executor must publish a notice to creditors in a local newspaper. I asked a Virginia attorney if this was really necessary and he explained that once a person dies the creditors have one year to pursue the estate for debts.  By posting notice in the newspaper you are legally shutting off creditors from pursuing debts after a year.  He also explained this is probably only necessary for very wealthy estates worth a million or more.  But it would also be useful in relieving any subsequent fraudulent activity in the future.  Keep in mind that identity theft is rampant and can be practiced on the deceased as well as the living.

Summary

As executor of any estate you have an obligation to administer the estate with the highest degree of fidelity and good faith for if you do not you can and probably will be held legally responsible.  Being an executor of an estate can be a daunting task as you take controls of the assets, take measures to protect and prudently invest them during administration, identify and pay debts and obligations of the decedent that are enforceable, determine and pay taxes owed by the decedent or their estate, protect and sell off probate property, distribute what remains of the estate to heirs and beneficiaries named in the decedents will or according to state law if there was no will, all the while accounting to the probate court as to how you are handling and distributing the estate assets.

If the estate is in probate, there are also deadlines and detailed responsibilities that must be met.  For example, in Virginia, the executor must contact beneficiaries within 30 days after executor qualification by the court.  Then within four months of appointment, the executor must file with the Commissioner of Accounts a detailed list, known as an "inventory," of the probate property, including the value of each item.  Within sixteen months from appointment, the executor must file another accounting with the Commissioner, showing the income and expenditures of the estate administration.   The final accounting to the court must show the distributions made to the beneficiaries named in the will.  If any inventory or accounting is rejected by the Commissioner of Accounts the executor may have to hire an attorney to help them meet state requirements.

Many of these details will be similar in states across the nation. Investigate them so when you act as executor or you name one, you can speak knowledgeably and confidently to heirs and your own nominees.

The General Responsibilities, Duties, and Roles of a Nonresident State Will Executor

If you discover that you have been named executor of an estate you are morally and legally obligated to make sure the wishes of the decedent are met.  However, what most executors overlook is that you are also obligated to participate in the estate planning and determine if you can accept being executor.  You may not agree with how the estate is set up, the other participants named in the Power of Attorney or other estate documentation.  Perhaps your health and life events are preventing you from performing your executor role and so on.  You have to keep the owners of the estate naming you as executor informed if a life event will temporarily and most certainly permanently prevent you from representing their wishes in the future.

The executor, or personal representative, is the person(s) you appoint in your will to handle the administration of your estate throughout the probate or estate allocation process after your death.  An estate without the proper beneficiary designations or properly prepared legal documents could cost the executor a great deal of unnecessary responsibility, time and effort.  Not to mention this lack of planning could rob their heirs of inheritance as assets are gobbled up in taxes, legal fees and probate.

As the estate holder ask the person (attorney, child, relative or friend) you intend to appoint if he or she is willing to serve as executor before drafting your will.  You should outline what the responsibility entails and make sure they are willing to perform the task properly.  As attorneys are very well paid they will usually volunteer to serve as your executor.  You must also properly vet your chosen executor to see if they can qualify because if they have credit problems or have committed a crime the state may not accept them if probate is required.  Co-executors are also a possibility to consider but this may create controversy in dealing with your estate as they may not agree on things.  For example, you may cause a sibling or relative rivalry over your estate, unless you don't like them and want this (smile).  You should also consider appointing an alternate executor(s) in case the primary or secondary executor(s) cannot serve or is/are disqualified.

The executor or personal representative (also called administrator) may charge the estate a fee for his or her services.  Often if this individual is a relative, he or she may choose not to charge a fee.  If a fee is charged, in some states the amount is regulated by statute, and in others it is what is “reasonable” for the work performed.  Therefore, executors who inherit under the will often simplify the accounting and distribution of the estate because they may not need to track their expenses and their time to bill to the estate.  An executor may have to work with the estate's attorney, along with other professionals such as accountants or appraisers if the will or trust is not well defined in the legal documents left by the decedent as we discussed.  The executors/attorney/accountant/appraiser management fees associated with the estate are venues that heirs need to closely monitor as they can be used to overly expense (rip off) the estate.  Never depend on the courts to make sure this type of fraud does not take place.

Depending on the state, nonresident executors may be required to post a bond with the court in order to serve.  This bond acts as a guarantee the executor will manage the estate properly, in order to protect the heirs.  According to http://www.virginiaestatelaw.com/main/chapters/qualification/procedure.shtml  "a personal representative may be a nonresident of Virginia, but surety is required on the bond of a non-resident personal representative, unless a resident co-fiduciary is appointed.   The Clerk must also be satisfied that the person seeking qualification is suitable and competent to perform the duties of his or her office."


Checking with two Virginia attorneys on this I determined this is an either/or proposition.  Either I purchase a surety bond to insure the estate or I bring a Virginia resident co-executor to the court.  I asked a Virginia friend of mine if he would do this and he asked I forgot to ask the first attorney, "What would be required of me in such a role?"  Hmmm… good question so I asked the second attorney that very question and I got the simple answer:

• He has to show up in probate clerk's office for co-qualification as executor or registration as a designated agent of the estate.
• He has to make sure you do what the estate documents tell you to do.

This is not a responsibility to be taken lightly for if an out-of-state executor ripped off the estate or mismanaged the estate the Virginia resident co-executor could be held responsible.

Since my parents estate was only under a will it would be subject to probate for assets totaling over $15,000 in value.  If the estate went into probate, I now knew this would require me as an out-of-state executor to possibly have to hire a probate attorney or appoint someone local as co- or alternate executor thus complicating things and expenses.  I also read that while administering and distributing the estate the executor must publish a notice to creditors in a local newspaper.  I asked a Virginia attorney if this was really necessary and he explained that once a person dies the creditors have one year to pursue the estate for debts.  By posting notice in the newspaper you are legally shutting off creditors from pursuing debts after a year.  He also explained this is probably only necessary for very wealthy estates worth a million or more.

Before an executor of a will purchases a surety bond from an agency, he or she must submit themselves to a credit check, have their executor application approved, and go through other screening processes.  This is all the more reason an executor does not want the estate to go into probate, which Virginia attorneys assure me is not big deal.  As we will soon discuss, the surety bond protects the estate and the family of the deceased from any fraudulent or illegal actions on the part of the executor and assures that the will is executed as expected.

As executor of any estate you have an obligation to administer the estate with the highest degree of fidelity and good faith for if you do not you can and probably will be held personally responsible.  Being an executor of an estate can be a daunting task as you take controls of the assets, take measures to protect and prudently invest them during administration, identify and pay debts and obligations of the decedent that are enforceable, determine and pay taxes owed by the decedent or their estate, protect and sell off probate property, distribute what remains of the estate to heirs and beneficiaries named in the decedents will or according to state law if there was no will, all the while accounting to the probate court as to how you are handling and distributing the estate assets.

If the estate is in probate, there are also deadlines and detailed responsibilities that must be met.  For example, in Virginia, the executor must contact beneficiaries within 30 days after executor qualification by the court.  Then within four months of appointment, the executor must file with the Commissioner of Accounts a detailed list, known as an "inventory," of the probate property, including the value of each item.  Within sixteen months from appointment, the executor must file another accounting with the Commissioner, showing the income and expenditures of the estate administration.   The final accounting to the court must show the distributions made to the beneficiaries named in the will.  If any inventory or accounting is rejected by the Commissioner of Accounts the executor may have to hire an attorney to help them meet state requirements.

Estate Planning and Probate: Part Two

Estate Planning and Probate: Part Two

In this series we are discussing personal experience with estate planning and probate; what it means to the planners and survivors.  This is neither financial nor legal advice.  It is simply a discussion to help the reader understand and consider action options on the topic.  We started out explaining why planning for probate is desirable.  Expressing ones wishes upon passing can vastly simplify work for survivors who may have issues with their emotions or be removed from the locality of the decedent.  This edition adds choosing an executor for the process of probate.

Following my knee surgery I went home to help my Mom as my Dad had entered a rehabilitation center with his own health issues.  I figured while home to examine their estate and thus make the process easier in time of need.  My parents had previously informed me I was being named executor, so I asked to see the paperwork.  Mom was proud of the will their lawyer put together.  They had been paying the firm for years to handle all their legal matters such as keeping their "will" updated, producing the Powers of Attorney, Advance Directives for Medical Decisions, and so on.  She then informed me that her understanding was that in Virginia an out of state executor would need to work with a local co-executor.  Their attorney offered his services.  To me it sounded crazy as I was unfamiliar with the rules.  Thus, as I searched the Internet for answers, I found a basis for this fact.

For example, at http://www.courts.state.va.us/courts/circuit/Bedford/probate.html  I found the following:

"A named executor residing outside of Virginia who wishes to be appointed as executor must bring a Virginia resident to the appointment with the Probate Clerk to either co-qualify or be designated as a registered agent."

Seeing this I knew I better spend time studying Virginia estate law to make my pending executorship easier and identify someone I trust as a Virginia co-executor.  If you are in a similar out-of-state position you should investigate executor rules to ensure a named executor can function in that capacity.

Trust But Verify!

Years ago, I had access to limited paid legal services through working for a Fortune 500 corporation.  Taking advantage of this, my wife and I contacted an attorney to check our will and other legal documents.  After reviewing them, he strongly suggested we set up a "Revocable Living Trust".  He made a convincing argument for why it was important. We went along.  For my wife and I it is a painless process.  We simply create the Trust and transfer our assets to it, called funding the Trust.  At the time I did not credit our attorney with the honesty, integrity, and intelligence I learned he deserved after doing research into a living trust for my aging parents, who do not understand the need for such documents. Which was contrary to what I had believed, so I want to help them make good decisions, but also verify they make the RIGHT decisions.

Since I have a revocable living trust, a question rose in my mind.  I wondered why my parent's attorney had not recommended as a trust to them.  After talking to theirs and another Virginia attorney I was, indeed, convinced it was not necessary.  In this case, it proved excessive as the value of the estate would not be there when they were gone.  Their wealth was in pensions and social security, which would terminate as needed.

If I had determined a change in my parent's estate was needed I would have been in store for one hell of a battle.  Dealing with them on financial matters in the past had proven impossible.  In all of my existence, they never accepted any financial advice about anything.  Given this, I was determined to do my research and employ the proper outside resources to convince them if that proved to be a good idea.  Facing this, my wife gave me the best advice I have ever received in dealing with aging parents, "if after your research with the attorneys your parents refuse to go along with your recommendations then tell them to find another executor."   Remember, the work performed as an executor carries legal as well as personal responsibilities, so it must be done with full commitment.  There is no room for doubt.

Note that if you are named an executor to someone's estate, the process will require you to accept that position.  It cannot be forced upon you.  You have multiple options:

• Accept it
• Reject it 
• Accept but hire out the work, having the estate pay for documented expenses 
• Accept and do all the work, even taking a reasonable fee 
• Several variants of the above

Many people do most or some of the work, hiring out the more complex items to an attorney, as needed. Many do it without compensation, which can be made easier if the proper documents exist to make things work, like the existence of the revocable living trust.

Faced with this daunting task I broke down the problem into manageable parts.  I decided the first thing to find out was if my mom was right about being executor of the will in Virginia.  I also would determine if there was some reason my parents only had a "Will" and not the "Revocable Living Trust".  In doing so, I would find out if a living trust was a good idea for my parents.  If I discovered flaws in their estate planning I would have to ask myself whether I should or could be executor of their will/estate.

As I have already stated, the answers showed I could be executor, but would need local representation.  A lawyer would be best for that position so hiring out the complex tasks would be efficiently handled. A trust is not needed, as the value of the estate lies in their house and pensions. There are no cash deposits or other significant properties to handle.

On whichever side you stand, working with the planner and a prospective executor is an important step to ensure each understands responsibilities involved.  The conclusion here is that a potential executor needs to determine their suitability for the work and what they may need in resources to complete it, the plan where those resources will come from.

My take:

After a knee replacement I came home to help my mother as best I could.  I figured while I was home to start getting involved as best I could in their estate.  They had informed me months earlier that I was now the executor of their estate.  When I asked to see the paperwork, my mom was very proud of the will that a high paid lawyer helped them put together.  My parents had been paying a high paid attorney/law firm for years to handle all their legal matters such as keeping their legal "will" updated, produce Powers of Attorney, Advance Directives for Medical Decisions and so on.  She then informed me that her understanding was that as an out of state "will" executor I would need to work with a Virginia co-will executor and their high paid attorney who had offered his services to help.  This sounded crazy but as I searched the Internet for answers I found some basis for my mom's statement.  For example, at multiple websites such as http://www.courts.state.va.us/courts/circuit/Bedford/probate.html  I found, "A named executor residing outside of Virginia who wishes to be appointed as executor must bring a Virginia resident to the appointment with the Probate Clerk to either co-qualify or be designated as a registered agent."   Seeing this I concluded that I had better spend some quality time studying Virginia estate law and see if I could make my possible executorship of their estate easier and perhaps find a Virginia co-executor.

Years ago, I had access to limited paid legal services as a benefit of working for a large corporation.  Taking advantage of this benefit, my wife and I contacted an attorney to check our will and other legal documents.  After reviewing all our legal documents he strongly recommended we set up what is called a "Revocable Living Trust".  He made a very convincing argument at that time for why that was important so we went along.  For my wife and I this process was painless as all we had to do was transfer our assets to the living trust (called funding the trust) as our attorney recommended.  At the time I did not credit our attorney with the honesty, integrity and intelligence that I do now after researching setting up a living trust for my aging parents who did not understand the need for this.  For example, I was wondering why my parent's high paid attorney had not recommended that they set up their estate as a revocable living trust.  After talking to him and another Virginia attorney they convinced me that trust was not necessary.

If I had determined that a change in the way my parent's estate was set up I would have been in store for one hell of a battle.  Dealing with them or financial matters, in the past, had always proven impossible.  In all the years of my existence, my parents had never accepted any financial advice about anything I have recommended, ever.  Given our past, I was determined that this time I would do my research and employ the proper outside resources to convince them of what they needed to do with their estate and legal documents if that proved to be a good idea.  Facing this frustration my wife gave me the best advice I have ever received in dealing with aging parents which was, "if after your exhaustive research an expense with the attorneys if your parents refuse to go along with your recommendations then I suggest you tell them to find another executor to their will."  This advice along with the fact that I was putting together something to benefit my blog readers inspired me to give this project every ounce of effort I could.  Even if my efforts proved to be unsuccessful I knew this project might benefit you.

Faced with this daunting task I had to break down the problem into manageable parts and determine where to start.  I decided that the first thing I had to find out was if what my mom said about being executor of the will in Virginia was true.  I also had to determine if there was some logical reason that my parents only had a "Will" and not the "Revocable Living Trust" that I thought they may need.  Then I had to find out if a living trust was a good idea in Virginia for my parents.  If I discovered any major flaws in their estate planning I knew I would have to ask myself the question of whether I should or could be the executor of their will/estate.  My first step in this process was to determine what was required of an out-of-state will executor in Virginia.