3/29/2016. Do My parents need a Will or Trust? Yes, no, maybe? Basic Question : Factors in place why someone would need a Will or Trust:

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1 Simple Estate Planning and Simple Probate Administration By Brian Tillema Basic Question : Do I need a Will or Trust? Do My parents need a Will or Trust? Yes, no, maybe? Factors in place why someone would need a Will or Trust: 1) Increased Federal Estate Tax Exemption 2015 Exemption = $5,430,000 If over 5.43 million, no brainer, need a credit shelter Trust. 2) Availability of non-probate Transfers. 1) Family situation. 1

2 Estate Tax Exemption Amount $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500, The more assets, the more conditions attached, the more special the children, the more fighting family members, the more advantageous to having a living trust A Living Trust: 1) Avoids Probate 2) Avoids Conservatorship 3) Minimize Taxes 4) Provides Management 5) Provides Planning for Beneficiaries 6) Maintains privacy Non-Probate Transfers Click to edit Joint Master Tenancy text styles Payable on Death Transfer on Death Beneficiary Deeds* Beneficiary Designations 2

3 Some TOD Disadvantages Click to edit Usually Master text can styles not accommodate for the death of a beneficiary. No one is in charge. Should never name a minor. Unequal distributions can happen. Not wise if have a problem child. Minors receiving Non-probate Transfers Conservatorship if over $10, Extremely expensive and time consuming. Receive entire amount at age 18. Unequal Distribution I have three children so $10,000 CD at UMB: POD to Child #1 $10,000 CD at Blue Ridge: POD to Child #2 $10,000 CD at Commerce: POD to Child #3 When you need money, who gets disinherited? 3

4 Joint Tenancy Risk Co-tenant can take out money anytime Benefit Co-tenant can easily pay bills on behalf of elderly parent/relative Wills: Your Will Can: Transfer Assets to Chosen Beneficiaries. Nominate an Executor. Nominate a Guardian for Minor Children. Peace of mind for so many parents. Avoid Intestate Succession Disadvantages of Probate Time Consuming and costly. Inventory and settlements are on Case.net for the whole world to see. 4

5 Simple situations are appropriate for Nonprobate Transfers without a will Husband, wife with adult children that get along no problem child House Bank Account IRA Cars Simple Estate Plan House Beneficiary Deed Bank Account POD IRA Beneficiary Designations Cars - TOD The one thing every Estate Plan should include: Durable Power of Attorney Either a Springing DPOA or General DPOA Avoid Guardianship/Conservatorship if have POA in most cases. 5

6 Quotations If an individual has his affairs in order during his life, his probate estate will be smooth. If a person s affairs are in disarray while living, his probate estate will be in disarray. The Honorable John A. Borron, Jr. There is no such thing as a Probate Fairy that cleans up a person s crap. Brian A. Tillema So to get your affairs in order, some simple guidelines Determine what is best for you, whether non-probate, will or trust. Click to Communicate, edit Master text styles communicate, communicate Location of Will, DPOA Who will be in charge Make a list of your assets and how they are titled and give to your loved one. Difficult part of probate is just determining the assets. If you don t know what your assets are, your Personal Representative will not know without tremendous effort. List of passwords for computer. Various Probate Proceedings Small Estate Affidavit Refusal of Letters Letters of Administration Letters Testamentary Determination of Heirship Guardianship and Conservatorship 6

7 Small Estate Affidavit Under $40,000 Over $15,000 and under $40,000, publication required. Publication for two consecutive weeks. E-file now requires Attorneys to arrange publication and file affidavit of publication. Court prepares notice. Refusal of Letters Spousal Refusals Creditor Refusals Determination of Heirship RSMo. At least one year has passed since the date of death. No Administration of the Decedent s estate has been commenced in the State of Missouri. Note: Neither refusal of letters nor small estate considered an Administration. No Will of the Decedent s has been presented for probate within one year from date of death. 7

8 Time Limitations Section : No will admitted to Probate Within 1 year from the date of death No letters of Administration shall be issued unless application is made to the Court within one year from the date of death. Time Limitations Section RSMo Click to edit Master Claim text limitation styles period Unless otherwise barred by law, all claims against the estate of a deceased person, other than costs and expenses of administration, exempt property, family allowance, homestead allowance, claims of the United States and claims of any taxing authority within the United States, whether due or to become due, absolute or contingent, liquidated or unliquidated, founded on contract or otherwise, which are not filed in the probate division, or are not paid by the personal representative, shall become unenforceable and shall be forever barred against the estate, the personal representative, the heirs, devisees and legatees of the decedent one year following the date of the decedent s death, whether or not administration of the decedent s estate is had or commenced within such one-year period and whether or not during such period a claimant has been given any notice, actual or constructive, of the decedent s death or of the need to file a claim in any court. No contingent claim based on any warranty made in connection with the conveyance of real estate is barred under this section. Section RSMo Claim limitation period Except as provide in section all claims against the estate of deceased person, other than costs and expenses of administration, exempt property, family allowance, homestead allowance, claims of the United States and claims of any taxing authority within the United States, whether due or to become due, absolute or contingent, liquidated or unliquidated, founded on contract or otherwise, which are not filed in the probate division of the circuit court within six months after the date of the first published notice of letters testamentary or of administration or, if notice was actually mailed to, or served upon, such creditor within two months after the date such notice was mailed, or served, whichever later occurs, or which are not paid by the personal representative,, within six months after the first published notice of letters testamentary or of administration, are forever barred against the estate the personal representative, the heirs, devisees and legatees of the decedent. No contingent claim based on any warranty made in connection with the conveyance of real estate is barred under this section. This six-month period does not extend any other applicable limitation periods. Factual Scenario on Time Bar Statute Husband Wife Minor Child s Natural Father Minor Child/ Ward of Husband and Wife Minor Child s Natural Mother 8

9 Probate Estate opened for Wife for Administration Click Estate to edit Master opened text styles for Wife, Heirs are Wife s siblings No Estate opened for Husband, tortfeasor Natural Parents hire PI attorney. PI attorney files claim in wife s estate for breach of duty/failure to warn to go after insurance. Claim is not filed in husband s estate because no estate opened. It is claimant s responsibility to file a petition to require administration. Factual Scenerio Click Heirs to edit Master of wife s text styles estate have a claim against husband for wrongful death. In order to file claim and open estate must all be filed within one year from date of death. Petition to require Administration and claim filed 364 days from date of death. 9