Archive for the 'Probate' Category

The Length of Probate

Frequently, I am asked how often it takes to open, to and do the work and to finalize probate on an estate.

The lawyer’s answer? It depends.

On average, the person who is coming to my office, who is in a terrible state of shock and grieving their loved one, doesn’t realize that the average probate is estimated in Alaska to run around 400 days. They just aren’t thinking on that big of a scale, and understandably so – there is the grief of losing someone that you loved, there is the funeral, the relatives coming from out of state, the immediate bills – it can all be extremely overwhelming.

What contributes to this average is the delays. It may take up to a month or more to get the death certificate. The probate case can’t be opened without the death certificate. And then there’s the paperwork that needs to be prepared. The registrar, (the local magistrate) needs to sign off on opening the case, and letters testamentary (if the decedent had a will) or letters of administration (if the decedent did not have a will) must be issued. The court must determine if a bond is required. If there is more than one possible choice for personal representative, (such as when someone passes without a will) waivers must be signed and notarized. All this effort goes into opening the case.

Then there are the issues in the case – each one is unique. The preliminaries for all cases, however are notification of heirs and devisees, notification of creditors, preservation of the decedent’s personal information to make sure that it is not stolen, an inventory of the assets and the debts, the negotiations with the creditors, the placement of the children (if the decedent left any). These tasks can take months to get sorted out.

There is the waiting period after the notice of the opened estate is published. This is a four month time period that by law the creditors must submit their claims, or be forever barred by the Personal Representative.

After the time for the creditor claims have expired, there’s the preparation of the final inventory, the drafting of the new deeds, and the approval by the court at the closure hearing. The court has the option of keeping the case open, as per the Alaska statutes, for a full year after the Personal Representative has completed all of the tasks affiliated with the estate. In short, there are no fast and hard answers on how long an estate can take – each one is unique.

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When Drafting a Will

Consider giving the Personal Representative the power to form a Special Needs Trust (SNT) on behalf of any of your beneficiaries that are named in your will. This streamlines the Personal Representative’s ability to provide for a loved one who may later become disabled. It is better to have the clause and not to use it than to not have the clause in your will, and then have the estate expenses of petitioning the probate court.

You may also want to discuss the tax consequences of setting up a Special Needs Trust with your attorney or your professional financial consultant, as this can affect your estate planning strategy.

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Giving Gifts As Part of Planning Your Estate

Contemplate your gifting options – you can give up to $12,000 per year as a gift without tax consequences.  Now, this means $12,000 for the year, so giving your adult son $11,995 in a check at the beginning of the year, and a $30 shirt for his birthday puts you over the $12,000 transfer, and is taxable.  As a strategy if you are going to gift throughout the course of the year is to give a smaller check, say $9000  so if the birthday or holiday presents are a little luxurious, then the $12,000 threshold isn’t breached, and taxes aren’t due.

Want to pay for your grandchildren’s education at a nice private school or university? Tuition falls in the netherland for tax purposes, and are allowable gifts without large tax penalties.  Your grandchildren are two and three right now, and you are unsure if you will live to see them enter college? Setting up an educational trust is a way to get around having the assets go through probate and go to your grandchildren’s educational needs.

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