Analysis/Commentary:

• Core Distinction—Court vs. Contract
  • Probate is a court-supervised legal process to administer an estate under a will or intestacy.
  • Trust administration is a non-court, fiduciary process governed by the trust instrument and state trust law.
  • The client’s asset titling before death usually dictates which path controls.
• Timeline and Predictability
  • Probate often follows statutory waiting periods and local court calendars, extending timelines.
  • Trust administration can proceed faster when assets are properly funded into the trust.
  • Bottlenecks commonly arise from missing paperwork, unclear beneficiary designations, or contested issues.
• Cost and Fee Dynamics
  • Probate can involve court filing fees, publication costs, and potential statutory or percentage-based fees in some jurisdictions.
  • Trust administration costs are typically professional fees (legal, tax, advisory) without court fees, but disputes or poor funding can erase savings.
  • Early organization and clear documentation reduce both paths’ costs.
• Privacy Considerations
  • Probate filings may become public records, revealing asset information and beneficiaries.
  • Trust administration is generally private, limiting public exposure and minimizing unwanted outreach to beneficiaries.
  • Privacy can be a decisive factor for public figures or families with sensitive holdings.
• Creditor Claims and Notices
  • Probate often includes formal creditor notice and a defined claim window, offering clearer liability cutoff.
  • Trust administration may require similar notice procedures under state law, but practices vary.
  • Advisors should coordinate timely notice to mitigate lingering creditor risk.
• Funding and Titling Pitfalls
  • A well-drafted trust fails if assets are not re-titled or beneficiary designations are not aligned.
  • Pour-over wills can capture stray assets but may force those assets through probate.
  • Audit account titles and designations during lifetime reviews to prevent post-death surprises.
• Tax Reporting and Compliance
  • Both estates and trusts may require fiduciary income tax returns (Form 1041) and valuation work.
  • Funding choices affect basis, income allocation, and distributable net income timing.
  • Coordinated CPA and attorney involvement avoids mismatches in elections and reporting.
• Multi-State and Specialty Assets
  • Real property in multiple states can trigger ancillary probate; trusts help consolidate administration.
  • Closely held business interests, IP, and mineral rights benefit from trust planning to avoid fragmented probate.
  • Confirm governing law and situs provisions to streamline cross-border issues.
• Dispute Risk and Forum
  • Probate offers a built-in forum for will contests and judicial supervision.
  • Trust disputes typically proceed via trust litigation without initial court oversight, which can be quicker—or just as contentious.
  • Clear no-contest clauses and communication strategies reduce litigation incentives.
• Incapacity Coverage
  • Revocable trusts provide continuity during incapacity, reducing the likelihood of guardianship or conservatorship.
  • Powers of attorney complement, but often do not replace, the need for trust-based authority.
  • Trustees’ acceptance of role and readiness is critical for seamless management.
• When Probate May Be Preferable
  • Estates anticipating heavy creditor issues may benefit from probate’s structured claim bar dates.
  • Highly contentious families may need court oversight for transparency and legitimacy.
  • Small estates in states with simplified procedures may not justify trust complexity.
• Practical Playbook for Advisors
  • Start with asset inventory, titles, and beneficiary designations; reconcile to the estate plan.
  • Set expectations on cost, timing, privacy, and creditor handling to align with client priorities.
  • Document trustee/PR responsibilities and ensure a handoff plan with tax and legal professionals.

Lessons from the Commentary:

1. Match Process to Assets: Align probate vs. trust administration with how assets are titled and where they are located to avoid unintended detours.
2. Prioritize Funding Discipline: Ensure lifetime trust funding and beneficiary alignment to capture the intended efficiencies.
3. Weigh Privacy Needs: Use trust administration when confidentiality is a priority, especially for sensitive family or business matters.
4. Plan for Creditors: Choose structures and notice strategies that provide clear, timely resolution of creditor claims.
5. Coordinate Tax Workflows: Integrate legal and tax reporting early to optimize basis, timing, and compliance across entities.
6. Anticipate Disputes Early: Draft for clarity, communicate expectations, and consider oversight needs based on family dynamics.
7. Think Across Borders: Use trusts to mitigate multi-state probate exposure and simplify administration of specialized assets.

For tax and estate planning professionals, understanding when trust administration meaningfully reduces time, cost, and public exposure—and when probate’s structure is advantageous—is essential to designing plans that perform under real-world pressure and reduce administrative friction.

The full article is available here.

Analysis/Commentary:

• Why These Documents Matter
  • A will directs how probate assets pass, names guardians for minor children, and appoints an executor to administer the estate.
  • Trusts can streamline administration, avoid probate, plan for incapacity, and tailor distributions for beneficiaries.
  • Powers of attorney empower trusted agents to act during incapacity, preventing court-appointed guardianship.
• Will Essentials and Formalities
  • Core elements of a will include specific bequests, a residuary clause, fiduciary appointments, and backup successors.
  • Execution requirements vary by state (witnesses, notarization, self-proving affidavits); mistakes can invalidate the will.
  • Clear executor powers and tax/administrative authorities reduce delays and disputes.
• Financial Powers of Attorney
  • Durable POAs remain effective during incapacity; springing POAs activate upon defined conditions.
  • The scope of a POA can be broad or limited (banking, real estate, retirement plans, gifting authority, tax filings).
  • Choose capable, trustworthy agents; consider naming co-agents or successors for continuity.
• Health Care Directives
  • Health care proxies/POAs authorize medical decision-making if you cannot decide.
  • Living wills/advance directives guide end-of-life care preferences and treatment limitations.
  • HIPAA releases ensure agents and family can access protected medical information.
• Revocable Living Trusts
  • RLTs offer probate avoidance, privacy, continuity during incapacity, and centralized asset management.
  • They do not provide asset protection by themselves; assets remain accessible to the grantor.
  • RLTs must be funded properly (retitle assets, assign personal property) to achieve intended benefits.
• Irrevocable Trust Use Cases
  • Irrevocable trusts may address estate tax, creditor exposure, long-term care planning, and special needs.
  • Common structures include ILITs for life insurance, SNTs for disabled beneficiaries, and spousal lifetime trusts.
  • Trade-offs include loss of control, gift tax considerations, and administrative complexity.
• Beneficiary Designations and Titling
  • Coordinate retirement accounts, life insurance, and TOD/POD accounts with the estate plan to avoid conflicts.
  • Naming a trust as beneficiary requires care to preserve tax deferral or special needs planning goals.
  • Joint ownership has pros/cons; it can bypass probate but may cause inequities or tax issues.
• Updating and Triggers
  • Review documents after marriages, divorces, births, deaths, liquidity events, or relocations.
  • Revisit plans for tax law changes (e.g., expiring exemptions), asset growth, and beneficiary maturity.
  • Financial institutions may reject stale POAs; periodic refresh helps with acceptance.
• Tax and Basis Considerations
  • Understand estate/gift/GST frameworks, portability for spouses, and the impact of state estate taxes.
  • Step-up (or step-down) in basis at death affects capital gains on inherited assets.
  • Lifetime gifting shifts growth out of the estate but may forgo basis step-up—model trade-offs.
• Practical Implementation
  • Create a consolidated asset/beneficiary inventory, digital vault access, and fiduciary instruction letters.
  • Store originals securely and tell fiduciaries how to access them promptly in an emergency.
  • Align advisors (attorney, CPA, financial planner, insurance) for coordinated execution.

Lessons from the Commentary:

1. Start with Fundamentals: A coordinated will, trust strategy, and both financial and health care powers of attorney form the backbone of an effective plan.
2. Fund the Trust: A revocable trust only works if assets are retitled or assigned; otherwise, probate avoidance and continuity benefits may be lost.
3. Align Beneficiaries Thoughtfully: Keep account and policy beneficiary designations synchronized with the will or trust to prevent conflicts and surprises.
4. Choose Agents Wisely: Name capable, trustworthy fiduciaries and backups; define powers clearly and refresh POAs to ensure acceptance.
5. Plan for Incapacity: Durable financial POAs, health care directives, and HIPAA releases are essential to avoid guardianship and delays.
6. Weigh Tax Tradeoffs: Consider estate, gift, and GST exposure, basis step-up, and the pros/cons of lifetime transfers versus testamentary transfers.
7. Use Irrevocable Trusts Selectively: Deploy irrevocable trusts for targeted goals like asset protection, special needs, or insurance ownership with eyes open to trade-offs.
8. Review After Life Events: Update documents after major changes and in light of evolving laws to keep plans current and workable.

For tax and estate planning professionals, this overview underscores the importance of integrating core documents with funding, titling, beneficiary coordination, and ongoing review to manage taxes, reduce risk, and ensure plans perform as intended.

The full article is available here.

“I just want the children to get along,” say Mom and Dad in virtual unison. The ability of the children and grandchildren to get along is a direct result of the family’s functionality. Unfortunate as it may be, dysfunctionality is not an uncommon state of affairs for the estate planning lawyer. Certain steps can be taken, however, to manage family dynamics during the estate planning process and estate settlement process after death to ensure a higher likelihood of family harmony.

I. Estate Planning

Ideally, the fostering of family harmony begins during the estate planning process. This can be accomplished by selecting proper fiduciaries and conducting a family meeting after the planning is complete.

A. Fiduciary Selection

Selecting the proper fiduciary is a critical step towards promoting family harmony that is often overlooked. If you simply ask an individual who they wish to appoint as their fiduciaries, they would typically appoint their spouse, if married, followed by their children, who would serve either jointly or through an established hierarchy. Instead of brushing past this topic, one should ask probing questions and have a thoughtful conversation to determine whether an independent or corporate fiduciary would better promote family harmony. Probing questions include:

Do your children get along?

Do your children get along with each other’s spouses?

Do your children’s spouses get along?

Are your children able to work together?

Do your children communicate regularly?

How would each child react to his or her sibling administering the estate/trust?

How would each child react to his or her sibling receiving compensation for administering the estate/trust?

Are your children financially stable?

Have your children or their spouse committed any crimes or have an addiction problem?

Are your children in similar financial situations?

Is there a child you foresee demanding his or her inheritance immediately?

Do your children have time to fulfill fiduciary responsibilities?

Do your children have the financial and personal skills to administer the estate/trust?

Is there a family friend or business partner the children/beneficiaries respect?

Corporate fiduciaries are an excellent option when: (1) there is dysfunction among beneficiaries; (2) there is a blended family; (3) the estate is comprised of complex assets (e.g., closely held businesses); (4) assets are distributed in trust to be administered over a long period of time; and (5) there are significant tax considerations based upon the value of the estate. Corporate fiduciaries also have several advantages over individual fiduciaries:

1. Family harmony.

Most individuals would reduce the amount their family inherited if it increased the likelihood of family harmony. Yet these same individuals are often reluctant to nominate a corporate fiduciary because of fees and costs. Appointing a corporate fiduciary allows family members to continue to be family members and prevents dysfunction created because one family member is in a position of authority over another. Eliminating this possibility can go a long way in promoting family harmony.

2. Experience.

Corporate fiduciaries have experience dealing with difficult beneficiaries and family dysfunction. Corporate fiduciaries also have experience dealing with complex estates which may include ownership interests in corporate entities or rental real estate.

3. Expertise.

Corporate fiduciaries specialize in interpreting legal documents, preparing accountings, investing assets, and are familiar with requisite tax filings and their fiduciary duties. Whether intentional or unintentional, individual fiduciaries are more likely to breach their fiduciary duties because they are less familiar with interpreting legal documents and may not understand the intricacies of their fiduciary duties.

4. Objectivity.

Corporate fiduciaries are neutral, objective, and unbiased. An individual fiduciary is much more likely to breach his or her fiduciary duties because of a personal bias towards or against other beneficiaries or due to a conflict of interest.

B. Family Meeting.

Facilitating a meaningful discussion through a family meeting allows the client(s) to provide a narrative explaining their thoughts and decisions to the members of their family. Failing to provide a narrative often results in each family member creating their own. The goal of the family meeting is to avoid surprises and conflict between loved ones after death.

1. Who should attend?

An estate plan is most effective when everyone is on the same page. To get everyone on the same page, everyone needs to be in the same room. It is beneficial if all children and their spouses attend the family meeting to control the message.

2. What should be discussed?

The focus of the family meeting is “big picture” details of the estate plan. Sending an outline prior to the meeting allows everyone to prepare questions, which results in better dialogue and ultimately a more effective meeting. Without disclosing specific financial information, summarize the distribution of assets. Also discuss why specific individuals or a corporate fiduciary was chosen.

3. Where should the meeting take place?

Given the important subject matter of the discussion, conduct the family meeting in a formal setting.

4. When should the meeting take place?

Typically, the meeting occurs after the estate planning documents are signed. Occasionally, a client requests a meeting prior to execution to obtain input from their family members regarding fiduciary selection.

II. Estate Administration.

Contrary to how Hollywood portrays what follows a death, there is no such thing as a reading of the will. Instead, the goal of the initial estate settlement meeting after a death is to answer questions and provide a clear roadmap of the steps going forward. The tone set at this meeting can go a long way in making sure family members get along throughout the process. It is especially important when the decedent died intestate (without a will) or when a family meeting to discuss the estate plan did not take place.

1. Who should attend?

The surviving spouse, children, nominated representatives, and beneficiaries who attended the initial meeting should also attend the estate settlement meeting. It is also helpful for the decedent’s financial advisor and accountant to attend the meeting.

2. What should be discussed?

In such meetings it is apparent within the first five minutes if there is dysfunction within the family, and when discussions start getting heated and you hear the phrase, “it’s not about the money,” you know it is about the money. The best practice is to get all issues on the table from the beginning and address some key topics:

a. Attorney-client relationship.

First, it is important to identify to the family that the attorney represents the individual serving as fiduciary and not anyone else. If given permission, the attorney can include others on correspondence, but the attorney should not provide legal advice to anyone other than the fiduciary. If multiple individuals are serving as fiduciary, the attorney should obtain a conflict waiver. If the individual died intestate, it is important to discuss who has statutory priority to serve as fiduciary and to determine whether he or she wishes to serve. If multiple individuals have priority, determine whether they are able to work together or if they would be better off appointing a third party or corporate fiduciary.

b. Distribution of assets.

Summarize the terms of the will or trust or discuss the rules of intestate succession regarding the distribution of assets. The attorney should identify statutory rights afforded to the surviving spouse or children regardless of the terms of the will or trust.

c. Timeline.

Set realistic expectations of when the fiduciary will be appointed and when assets will be distributed. It is important to stress this is not a quick process and it may be necessary to file tax returns which will ultimately delay the final distribution.

d. Open discussion.

To promote family harmony, it is important that everyone have an opportunity to speak and voice their thoughts and opinions.

3. Where should the meeting take place?

Typically, the meeting takes place at the attorney’s office, but convenience for the family should be considered. Individuals can also participate via phone or video conference if they are unable to attend in person.

4. When should the meeting take place?

An individual’s loved ones occasionally call the day after death. Typically, nothing needs to be done immediately regardless of whether the decedent died testate or intestate. Often the meeting takes place within the first two weeks after death.

III. Conclusion.

Lack of communication and transparency, whether intentional or unintentional, breeds suspicion. Even with beneficiaries who seemingly get along, lack of communication can result in hard feelings and speculations that something is terribly wrong or that the person in charge is taking advantage of the situation. Having a family meeting after the estate plan is completed and after death provides much needed transparency, which can go a long way in promoting family harmony.

SOURCE:https://wealthstrategiesjournal.com/2022/12/01/cant-we-all-just-get-along-fostering-family-harmony-in-estate-administration/

By Mark K. Harder

Crimes Against Deceased Loved Ones

It used to be that the main crime against deceased people was burglarizing their homes while the family attended the funeral. Now, identity theft is a common fraud against the deceased and often involves obtaining access to email accounts and the decedent’s Social Security number. With this and other publicly available information, they can request a duplicate driver’s license, access accounts at financial institutions, apply for loans in the decedent’s name, open credit card accounts and file false tax returns in the name of the deceased to claim tax refunds to which they and the decedent are not entitled.

One of the means for accessing a decedent’s assets at financial institutions starts with filing a change of address order to reroute the deceased’s mail to the fraudster – providing them with access to the account numbers contained in credit card bills and monthly banking/investment statements, and possibly even allowing them to receive the death certificate instead of you.

12 Steps to Prevent Post-death Identity Theft

It is better to take steps, such as the ones below, that can block fraudsters up front than to deal with and clean up problems later.

1. Restrict the information you publish in the obituary.
   • Identity thieves read the obituaries and look for a birth date, city of birth, mother’s maiden name, schools attended and other information that can be useful to steal an identity or answer security questions and access online accounts. Better to leave out this information, especially in online obituaries.
2. Have the death certificate (which contains the decedent’s Social Security number) sent to the funeral home or to a trustworthy family member’s address to prevent its theft if the deceased’s mail is fraudulently forwarded.
3. Promptly notify the national credit bureaus of the death to prevent the opening of new credit lines.
   • Call each credit bureau to notify them of the death and ask for a credit freeze. Request instructions for placing a deceased notice on the individual’s account and send each bureau a copy of the death certificate and other required information (use certified mail with a return receipt).
4. The estate settlement process typically requires opening new accounts in the name of the estate or trust using a new taxpayer identification number. Doing this promptly, and then immediately moving financial assets to the new accounts and under the control of the fiduciary, puts the assets beyond the reach of fraudsters who relied on hacked information and forwarded mail. This minimizes the amount of time assets are vulnerable to fraud attempts using a deceased’s stolen information.
5. Remove the deceased’s name from any joint accounts as soon as possible.
6. Cancel/close accounts that are not joint accounts.
   • When you notify credit card companies, banks, investment/retirement account providers, insurance providers and other companies where the deceased had accounts, have these accounts marked as ”Deceased” when they are closed to prevent reopening by a fraudster.
7. Cancel the deceased’s driver’s license or state ID card so thieves cannot request a duplicate.
8. The fiduciary settling the estate (personal representative or trustee) should arrange to have the mail forwarded to the fiduciary as soon as possible. Note that the fiduciary will need a death certificate and evidence of their authority to act to do so.
9. If you do not see mail that should be arriving for the deceased, such as statements for financial accounts, check with the post office to determine if an unauthorized mail hold or forwarding order was put in place.
10. Notify professional service providers such as attorneys, accountants, investment advisors and doctors.
11. Notify other organizations as needed, such as: Veteran’s Administration, U.S. Citizenship and Immigration Services (if deceased was not a citizen), Social Security Administration (if your funeral home did not do this) and professional licensing organizations.
12. If the deceased lived alone and the property will be vacant for a time, take some steps to prevent issues from theft, property damage or squatters:
    • Update the property’s insurance to reflect the new owner’s name and the property’s vacant status. Note: you may have to switch insurance companies in order to insure a vacant property.
    • Remove high-value and irreplaceable items and secure the windows, doors, garage doors and outbuildings of vacant property with high-quality locks and bars.
    • Set some lights on timers and do whatever else you can to make it look as though someone is living at the property (e.g., park cars in the driveway, have someone doing yardwork occasionally, post a “Beware of Dog” sign, etc.).
    • If possible, add a security system, cameras or at least motion-sensing lights and alarms at the property to alert you to possible trespassers.
    • Visit the property regularly or arrange for someone you trust to have eyes on it.
    • If the property is for sale, do not allow the realtor to use a lockbox with a key in it.
    • If your County Recorders’ office offers a service to notify property owners of any transfers of interest in the property, arrange to have notices sent to the fiduciary to enable them to act quickly if someone attempts to mortgage the property or transfer the title fraudulently.

Take Action to Prevent Post-death Fraud

A little knowledge and some quick action can go a long way toward preventing theft and fraud attempts during your time of grief.

SOURCE: https://wealthstrategiesjournal.com/2024/07/16/12-steps-for-avoiding-identity-theft-after-the-death-of-a-loved-one/