Will executor questions: These may be on your mind

It doesn’t matter if you’re acting as the executor of a will or choosing someone for this responsibility, it goes without saying that you’ll have some questions to answer.

The more information and knowledge you collect, the easier it becomes to proceed with confidence.

To start, it’s important to understand the primary responsibilities of an executor.

In short, an executor is a person named in a will who has the legal authority to take care of the deceased individual’s remaining financial obligations. These obligations can include but are not limited to the following:

  • Distributing all assets to the appropriate individuals, as outlined in the will
  • Paying any taxes or bills for the estate
  • Maintaining all property until the estate passes over to the beneficiaries
  • Making all necessary court appearances on behalf of the estate

Can an executor say no?

Just because a person is named as an executor in a will doesn’t mean he or she has to take on the responsibility. The individual has the legal right to decline for any reason.

Furthermore, even if a person originally accepts the role of executor, he or she can quit on the process at any time, thus forcing the court to name a replacement.

Is there compensation for acting as an executor?

While not always the case, most people perform the responsibilities of an executor free of charge. However, this person is allowed to seek payment.

The reason why this is uncommon is that most people name a close family member, such as a spouse or an adult child, as the executor of their will.

Can an executor do everything on his or her own?

Even though an executor has many duties, it doesn’t mean he or she can handle everything that comes one’s way without outside assistance.

Even in the event of a routine will, it takes a special level of knowledge in order to make all the right decisions along the way. This is why many executors consult with an experienced legal team.

If you’ve been named the executor of a will and it’s time to take on your responsibilities, learn more about probate , the tasks you need to handle and how to prevent common mistakes.

Why parents of the disabled should consider special needs trusts

If you are a New York parent of a disabled or special needs child, your estate planning needs will likely differ considerably from those of your friends and colleagues. A special needs trust is one method many parents of special needs children use to make plans for the future, and at the law offices of Joseph A. Ledwidge, we have helped many clients with similar concerns consider this and related estate planning options.

According to CNBC, covering the  lifetime care of your special needs child can cost millions of dollars. However, a special needs trust may help you set aside assets for your disabled child without worrying about whether those assets will disqualify your child from being able to receive public assistance.

Many people with disabilities or special needs also utilize public assistance programs such as Medicaid or Supplemental Security Income, but your child typically must pass “means testing” in order to receive said benefits. In other words, whether he or she will have access to public assistance depends on how much money he or she has at his or her disposal – and leaving assets to your child in a standard will may make your disabled child ineligible for these benefits.

Should you leave your special needs child assets in a special needs trust , however, you can effectively safeguard those funds and make it so that they do not factor in during means testing for public benefit eligibility. An additional benefit of the special needs trust is that the assets placed inside are not the direct property of the trust’s beneficiary. This means that once the beneficiary passes away, the funds in the trust can go toward other family members or charitable organizations. Find more about estate planning on our webpage.

Getting your affairs in order is critical

Many people in New York, do not except to be placed in a situation where their life may be cut short. Whether people are the recipient of a terminal medical diagnosis or are involved in catastrophic collision, they may find out that they do not have much longer to live. If this type of situation should occur, it may be best if people prepare their estate in such a way that their family members will have everything they need when they are gone.

One of the most important things is to get organized. People should make sure they have critical documents, including their last will and testament, financial account information, real estate, insurance policies and estate information, in one place. Contact information for lawyers, financial advisors, accountants and insurance agents should also be included.

There are different programs and options that allow people to invest their money in a way that will minimize the amount of taxes taken out. Furthermore, it may be beneficial to pay off the mortgage and other debts that could transfer over to remaining family members.

People may want to designate a beneficiary who will oversee the estate once they pass. It is important to notify the future beneficiary and make sure they are up for the position. Having an estate administrator in place may simplify the process of distributing possessions, money and estate to heirs.

Although people may not think of what will happen to their property and finances once they pass away, it is helpful to have everything organized just in case an unexpected event should occur. An attorney in New York may be helpful in exploring your options and answering any questions you may have regarding estate planning .

Source : CNBC, ‘ When end-of-life planning is suddenly a lot closer than you thought, ’ Jill Cornfield, Jul 18, 2018.

What constitutes a breach of fiduciary duty?

If you are the executor of someone’s New York estate or the trustee of his or her trust, that makes you a fiduciary. In other words, you are someone entrusted with the power and authority to handle assets for the benefit of others. Because the decedent or trust settlor trusted you to manage and distribute his or her assets, you owe a duty to the estate or trust to do so competently, appropriately and for the benefit of the designated heirs and/or beneficiaries.

Becoming a fiduciary is serious business and entails many duties on your part. As FindLaw explains, should you fail to fulfill those duties by properly managing and distributing the assets entrusted to your care, the heirs and/or beneficiaries can sue you for breach of fiduciary duty

Breach versus mistake

You need not be perfect as a fiduciary. You can make an occasional mistake and you also can sometimes fail to make the best possible decisions with regard to asset investments, etc. Such things are not breaches of your fiduciary duties and responsibilities. Instead, a breach amounts to a deliberate act on your part that is detrimental to the estate or trust such as one of the following:

  • Failing to disclose pertinent information to the heirs or beneficiaries
  • Acting in your own self-interest rather than those of the heirs or beneficiaries
  • Acting in any manner contrary to their best interests

Proving breach

In order to prevail in their suit against you for breach of your fiduciary duty, the heirs or beneficiaries must prove the following four things:

  1. That the decedent’s will appointed you as executor or the settlor’s trust appointed you as trustee
  2. That the will or trust set forth your fiduciary duties
  3. That you breached one or more of those duties
  4. That the heirs or beneficiaries suffered financial damages because of your breach

Should the heirs or beneficiaries win their lawsuit, you may have to personally pay them the amount of their damages. In addition, you could have to pay them punitive damages if the judge or jury decides that your breach amounted to fraud or malice.

This is general information only and not intended to provide legal advice.

What can you accomplish with an irrevocable living trust?

If you live in New York and are currently trying to determine the best way to preserve your wealth for your loved ones once you pass on, you may be considering establishing different forms of trusts as one method of doing so. While different types of trusts offer different benefits and drawbacks, you may be giving some thought to creating what is known as an irrevocable living trust, which many consider a solid, important estate planning strategy.

Per the Motley Fool, an irrevocable living trust, as the name implies, is one that you cannot change once you create it. While some might see the binding nature of an irrevocable trust as a negative, there are actually  numerous benefits associated with this type of trust that for many, negate the main drawback.

For example, placing assets in an irrevocable trust effectively safeguards them from creditors, so if you go bankrupt, or if someone sues you, the money in the irrevocable trust stays safe and untouched. This differs from revocable living trusts, which offer considerably less legal protection.

Assets in irrevocable trusts also do not count toward the overall value of your estate, so, depending on how much money you place in the trust, you may realize a substantial savings on estate tax. In other words, money that would typically have to cover estate taxes after your passing instead goes directly to your beneficiaries. While these are some of the main benefits of irrevocable living trusts, please note that this is not an exhaustive list of all possible perks.

This information about irrevocable trusts is informative in nature and does not constitute legal advice.