Month: June 2014

When do I need a probate attorney?

When a loved one names you as the administrator of their estate, it’s a sign that they trust you and believe you’ll carry out their wishes. Unfortunately, even the best administrators can find themselves overwhelmed by the probate process. The probate process comes with its own set of rules and regulations to follow, some of which aren’t always easy to understand.

 

In many cases, hiring a probate attorney can help relieve some of the anxiety and ensure your loved one’s estate is handled the way they intended. Here are some questions to ask yourself to decide if you need a probate attorney’s help:

  • How large is the estate? In Wisconsin, if the estate is worth less than $50,000, there are simplified probate options available. While $50,000 sounds like a lot of money, most estates are worth more than that. Large estates will have to deal with estate taxes.
  • Are there creditor issues? If an estate can’t pay all creditors or if you expect a creditor to cause problems, talk to an expert. Remember: some creditors will have priority over others.
  • Are there family issues? While rare, contested wills are difficult and expensive to deal with. If you expect a fight, consult an attorney ahead of time to limit the financial and emotional fallout.
  • Is there a business involved? Managing, valuing and transferring a business are extremely complicated and shouldn’t be done on your own.
  • Are there other “special” assets? If the estate has assets that are unique (such as rental or commercial property), these should also be managed, valued and transferred with the help of professionals.

Serving as administrator of an estate is an important job. While it can be tempting to go it alone, sometimes asking for help is the best thing you can do to ensure your loved one’s wishes are met.

Now or Later? Leaving Wealth to Family

Many people who intend to leave their wealth to children and grandchildren assume they can only do so when they pass away. The problem with a traditional inheritance is that you won’t be around to see your family enjoy it. Sometimes, you may want to help out a family member facing a difficult time now instead of down the road.

The good news is that there are ways to distribute your wealth during your lifetime. These “nontraditional” inheritances allow you to help out family when you want to (or when they need it) and see the benefits. In addition, lifetime distributions can reduce the size of your estate, which can help avoid hefty estate taxes. The most common option is through gifting: you can gift up to $14,000 each year to each individual family member (and your spouse can gift the same) without incurring gift taxes.

 

However, there can also be drawbacks to making distributions during your lifetime. The biggest concern is that you give so much you’re unable to support your own needs and those of your spouse. Before you begin making distributions, you should seriously consider if you can afford to. Unfortunately, many people make lifetime distributions only to find they can’t afford their own long term care or other expenses.

If you decide you want to distribute part of your wealth during your lifetime, it’s important to plan those distributions just as you would plan traditional inheritances. Discuss your decisions with family members so they understand your choice (especially if you aren’t making gifts to everyone) and know what to expect. With a little planning, you can easily accomplish your goal of sharing your wealth with family now, while making sure you can meet your needs later.