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.