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What Executors Should Not Do As Important As What They Should Do

An executor of an estate can easily get into trouble for not doing certain things, but an executor can also find themselves in trouble if they do certain things. An experienced estate planning attorney can help with navigating the do’s and don’ts of the executor’s tasks.

There are no lack of guidelines to help an executor or personal representative of an estate to understand the specific tasks and responsibilities that he or she has when managing an estate. Most guides, available online, at personal finance websites, in magazines and books, are written with an eye to the positive and provide a good outline of the tasks that need to be taken.

That can leave a lot of important information out, however, if the executor is not also given advice about what not to do doing during the process.

Recently, the Wills, Trusts & Estates Prof Blog published a list of some of thing things that should not be done in an article titled, "Seven Things Personal Estate Representatives Should Avoid Doing."

The list includes:

• Distribute Assets Early - Do not distribute any estate assets until all assets and potential debts are accounted for.
• Use Estate Assets for Personal Issues - This will lead to having to pay the estate back at best and criminal charges at worst.
• Ignore Taxes - Make sure all applicable taxes are paid.
• Disobey Court Orders - If the judge in the case tells you to do something, you must do it.
• Distribute Assets Before Paying Bills - Pay the estate's liabilities before distributing anything to heirs.
• Ignore Claims Against the Estate - Creditors cannot be ignored unless a court says to do so.
• Proceed Without an Attorney - Having the assistance of an estate attorney is the best way to make sure that everything is done properly and that mistakes are not made.

That last point is essential to steering clear of missteps. Find out more by speaking to Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney.

Reference: Wills, Trusts & Estates Prof Blog (July 25, 2015) "Seven Things Personal Estate Representatives Should Avoid Doing."

Legacy Contact Available on Facebook

Facebook offers a feature that will allow a designated person to have increased access to a Facebook account when its owner passes away. Facebook realizes there is a growing need to support those who are grieving the loss of a loved one and those who want a say in what happens to their account after death.

Facebook responded by launching a feature called: "Legacy Contact." This feature may help your loved ones through the grieving process in the event of your death and allows you to designate what will happen with your account upon passing.

If you are a Facebook user, you may want to go into your account now and designate your Legacy Contact to manage your account when you pass away. Here is how it works when someone passes away:

1. A friend or family members lets Facebook      know by submitting a Memorialization Request here: https://www.facebook.com/help/contact/651319028315841
2. Once Facebook memorializes the account,      the Legacy Contact can:

• Write a post to display at the top of the memorialized Timeline (for example, to announce a memorial service or share a special message)
• Respond to new friend requests from family members and friends who were not yet connected on Facebook
• Update the profile picture and cover photo

You also may designate whether your Legacy Contact can download an archive of your social posts. Alternatively, you can tell Facebook that you prefer to have your account deleted upon your death.

For specific instructions about how to name a Legacy Contact, visit Facebook's newsroom at: http://newsroom.fb.com/news/2015/02/adding-a-legacy-contact/

Of course, many state legislatures are currently wrestling with how to handle digital accounts after the user passes away.

Consequently, this issue might eventually be taken out of Facebook's hands entirely. Until then, contact Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney to help you make arrangements for your “digital assets” pending future legislation.

Reference: Facebook Newsroom ( February 12, 2015) "Adding a Legacy Contact"

Can You Control Your Children’s Lives After You are Gone?

It is not unusual for wealthy parents to guide their children in their life choices while they are alive, and it’s also not unusual to control how heirs spend their inheritances. But using an inheritance as an incentive to reach specific benchmarks is a new one on us – and perhaps typical of the type of personality it takes to amass great wealth.

When New York real estate tycoon Maurice Laboz passed away, he left behind an estate worth approximately $35 million dollars, two daughters, 21 and 17, and an unusual estate plan.

As is often the case, Laboz did not leave all of that money to his daughters right away. Instead, they must wait until they are 35 years old to receive their inheritances.

However, what is somewhat unusual is that Laboz left ways for his daughters to get some of the money early if they will do things he approves of. For example, they can receive early payments if they get married, only having children in wedlock, and graduate from an accredited university.

The Daily Mail has more details on the Laboz estate plan in a recent article titled "Tycoon's daughters must wait ten years to inherit his $20m fortune."

These types of pre-conditions to receiving an early inheritance are not normally encouraged by estate planners. One potential issue is that they might have a tendency to make heirs resentful.

By and large, people do not like being told how they should live their lives and do not like feeling manipulated when it comes to things like getting married and having children.

Thus, while the conditions Laboz set might not seem like anything particularly harmful, their mere existence could have unintended consequences. In this particular case, these conditions might become moot.

Laboz was in the process of divorcing his wife when he passed away. The divorce was not finalized and he cut her completely out of the will. She is likely to challenge it.

Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney can advise you on the benefits and detriments to “incentivizing” an estate plan.

Reference: Daily Mail (July 27, 2015) "Tycoon's daughters must wait ten years to inherit his $20m fortune."

Can a Trust Lead to Good Behavior?

A trust that rewards heirs for desired behavior is known as an “incentive trust.” These kinds of trusts are popular among those who fear that their beneficiaries will not treat their inheritances with respect and are likely to waste vast amounts of resources. If you are considering setting up an incentive trust that will succeed, it needs to be done correctly.

Some wealthy families worry that their heirs may not be capable of handling large inheritances, and are concerned that the money may be squandered. In an effort to guide their heirs, they turn to incentive trusts to reward heirs who follow in what they consider to be the correct path.

For example, if you are creating a trust for a minor child, you might want to create a trust that rewards the child for graduating from college or getting a job.

Not all incentive trusts are created equally, however, and it is important to set one up properly or it is likely to fail.

Recently the Wills, Trusts & Estates Prof Blog published some tips in an article titled "Use An Incentive Trust to Make Sure Beneficiaries Stay On The Up And Up."

The tips include:

• Decide whether you want to create specific things for beneficiaries to perform to receive distributions or if you want to leave everything up to the discretion of the trustee.
• Determine whether payments should be made directly to the beneficiary or to a third party. For example, if the trust is to provide money for school, should the trustee distribute that money to the school in the form of tuition or give it to the beneficiary to pay the school?
• Decide how long the trust should exist. You can keep the trust in place for the beneficiary's entire life or you can set the trust to terminate at a certain point.
• Decide what will happen to the trust assets if the beneficiary does not live up to expectations.
• Make sure that all key conditions are spelled out in the trust.

It is important to note that some courts will not enforce incentive trusts that point to actions that are against public policy, such as requiring a person to marry a person of a certain race or religion.

Make sure to consult with Robert A. Gordon of Redkey Gordon Law Corp, an experienced attorney about what types of conditions you can make.

Reference: Wills, Trusts & Estates Prof Blog (July 27, 2015) "Use An Incentive Trust to Make Sure Beneficiaries Stay On The Up And Up."

No Brotherly Love Here – And a Lot of Family Trouble Ahead

Wealthy mining magnate Harry Magnuson thought that his estate plan was all settled, and it was, while he was alive. But his wife did not follow the plan he had created, and as a result, one of the Magnuson children is now suing his siblings over an inheritance.

When Harry Magnuson and his wife Colleen had their estate plan created in 2002, the structure was relatively straight-forward:  if Harry died first, everything would be left to the surviving spouse. When Colleen died, the entire estate was to be divided equally among the couple’s five children.

Harry passed away in 2009 and Colleen received everything as planned. However, when she passed away, everything was not divided equally between all of the children.

Colleen had signed a new will in 2011 that revoked the 2002 will and disinherited her son Thomas, while the remaining four children inherited everything. Thomas was not amused.

Apparently the new will was prepared by a notary working in the law office of one of the other Magnuson siblings. This has predictably led to problems.

Thomas Magnuson is suing his siblings claiming that they conspired to unduly influence their mother to have him cut out of the will. The Spokesman-Review reported this story in a recent article titled "Magnuson son sues siblings."

It is too soon to know what will happen in this case. This is yet another example of what happens when there is a lot of money at stake and a family member does not think that he or she was treated fairly in an estate plan.

Even if the other four siblings are found to have not unduly influenced their mother to rewrite her will, this case will likely cost the family a lot of money and hurt feelings.

If you really want to disinherit one of your descendants, be sure to contact Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney.

Reference: The Spokesman-Review (July 24, 2015) "Magnuson son sues siblings."