Estate Planning SAQs

We are all familiar with Frequently Asked Questions (FAQs), but sometimes those do not answer more specific questions we have about our unique situations that we don’t want to ask for one reason or another. This month, we thought it would be fun to list the uncommon questions we have received at Holly Lynch Law in the areas of estate planning and probate. Next month, we will focus on school law. And if you have one to ask or share, please let us know! We may address it in a future newsletter.

I can’t decide on naming a guardian. Can we create our wills without that information?

Yes. You don’t ever have to nominate a guardian in your will. But if you do not, then anyone can petition to be a guardian, and the court will decide who takes care of your minor children. It is better to name someone now—the person you would choose if you were to die tomorrow—and change it later if circumstances change. You can also add “if/then” language so that you don’t have to modify your will later, e.g., “If Prince is no longer living in Minnesota, then I appoint Sheila E. to care for my minor children.”

If my trust has nothing in it right now, do I need to open a bank account?

No. Many families, especially those with young children, create “pourover” trusts, which are funded after the death of both spouses. These are created primarily to care for minor children for a predetermined number of years if something should happen to both parents. Although the trust is effective as of the date it is signed, it does not have to contain any assets. So you do not need to open a bank account for it until there are assets in it, which in most of these cases, is after the second spouse dies. You can, however, choose to fund it prior to death, and then you would open an account.

I would like to protect my house, but I may sell it and buy something less expensive. Does that undo any estate planning I do now to protect it?

No. If you transfer your house into an irrevocable trust, you are still able to sell it later, but the proceeds must remain inside the trust. It is common for many older couples to downsize. The irrevocable trust allows the trustee to sell the property and buy something else, but the new property and any excess proceeds must all stay inside the trust.

My father’s will names me as Executor. Do I need to also get a Personal Representative?

In Massachusetts, they mean the same thing. In 2012, Massachusetts adopted the Model Uniform Probate Code, which replaces the term “executor“ with “personal representative (PR).” This change does not invalidate any nomination in wills created prior to 2012—if you are nominated in the will as executor, you have priority to serve as PR.

Should I compensate my personal representative and trustee? If so, what is a typical amount?

That is completely up to you. Generally, if the PR is a beneficiary of the will, most clients do not compensate. But there is some work involved in probating a will, so it is not unfair to reward the child who is doing the work but splitting the estate with siblings. When clients do choose to compensate, the amount usually varies from a “reasonable hourly rate” to $5,000 or $10,000, depending on the size of the estate.

A trust, especially one that is drafted to last for years after the grantor’s death, is more work, and a trustee is usually compensated for this work, especially one who is not the beneficiary. Clients may also choose to compensate on an hourly basis, an annual flat fee, or a lump sum.

I am probating my father’s estate. Everything goes to my brother and me equally. When can I make distributions?

The answer to that could depend on the type of probate administration, but in all cases, creditors have one year to file any claims against the estate. If you are confident that all debts have been paid, and none are likely to come forward within the year, then you may distribute when and as you feel comfortable. As PR, however, you bear the liability if a properly filed claim does arise before one year has passed.