People close to a loved one facing death often look for help from an attorney after the loved one dies. Many estate planning attorneys provide checklists and write about what to do in such a time of overwhelming emotion and numbing grief. Contacting an attorney is low on the list. Many do not realize that action can be taken before it’s too late.
There can be a benefit to contacting an attorney before a loved one dies. Often there is at least some time to get a person’s affairs in order, particularly if the person is still able to make changes. If a valid durable financial power of attorney or trust is already in place, much can be done by the agent or trustee named. And those named can start to learn about the duties and responsibilities to come. Here are a few areas in which to take action before it’s too late:
The Estate Plan
Locate the estate plan. Make sure the location of the original Will is known. Check that it is where it’s supposed to be. If there isn’t one, does the ailing person have sufficient capacity to make one?
Read the estate plan. Are people named living and available? Is there anything blatantly wrong or out of date?
Do those named under the documents need a better understanding of their responsibilities and limits of authority?
Is there a Living Will? The health-care agent or closest relatives should go over it. If the ailing person is able, he or she should explain his or her wishes.
Other Plans
Is there a burial plan or expression for cremation? If not, talk about it now. If so, make sure the documentation can be located.
What about pets? Is there a plan in place? Are there friends/neighbors known to ailing person who can help/take them in?
Are there lists for giving personal property? Can you read them? Identify the objects?
Does ailing person want to make gifts of property or money while still living?
Respect Legal Boundaries
Do not overstep authority. Do not give away, donate, or take property or money unless you know you have the legal authority to do so. If the ailing person has the ability to understand what he or she is doing, he or she can make decisions before it’s too late to do so; however, if capacity could be questioned, take steps to minimize possible disputes.
If the plan centers on a revocable trust, consider whether the ailing person is capable of serving. If the ailing loved one is no longer serving, the trustee should be sure he or she understands how their duties change upon the death of the trustor.
Asset Issues
Assess total assets. Locate financial papers, bank statements, insurance policies, brokerage statements, year’s tax statements, and credit card statements. If there’s a trust, are assets titled in the trust? Are bank statements or other important things delivered digitally? What are usernames/passwords?
Other unknowns? Storage Units? Safety deposit boxes? Where are the keys?
Add up the assets, how they are titled, and whether they pass to beneficiaries. Totals will determine, among other things:
- Whether a probate a probate court proceeding may be necessary. Maybe it can be avoided.
- If estate tax may be due. If the total estate exceeds the estate tax exemption (currently $11.58 million), are there ways to eliminate or reduce the tax, such as making gifts?
Consider income tax. If there is an irrevocable trust, such as a “B” trust, “Credit Shelter Trust,” or “Decedent’s Trust,” explore whether changes can or should be made. (No trust is completely irrevocable.) One reason to do so: If beneficiaries would face income taxes on trust assets when sold. Steps may be taken to achieve a “stepped up basis” for the beneficiaries.
Each Case Is Different
Of course, each person’s circumstance is different. Whether loved ones can make changes depends on many factors, including the condition of the ailing person, the terms of existing documents, and the time available. An estate planning attorney can help explain and explore whether changes should or can be made. In many cases, it is possible to take action before it’s too late.
