Probate

Tuesday, May 24, 2011

NEET Tips

NEET Tips answers questions posed by visitors to the NEET website

What is the procedure for ancillary probate administration in Vermont?

In Vermont, an interested person begins an ancillary estate proceeding by filing: (1) the ancillary petition signed by the home state fiduciary or other interested person; (2) a list of interested persons; (3) a description of the ancillary property; (4) the filing fee; and (5) an authenticated copy of the will and the probate thereof from the home state court, or other acceptable proof that the will is effective in that jurisdiction. Once the ancillary proceeding has been initiated, the probate process is much the same as a regular probate proceeding.

For more information on ancillary probate administration in Vermont, see the NEET web page:

Probate Administration

Thursday, May 19, 2011

NEET Tips

NEET Tips answers questions posed by visitors to the NEET website

How is an attorney paid for probating an estate in Vermont?

Attorneys who engage in probate work in Vermont typically charge by the hour. How much an attorney charges is up to the attorney, but limited by what’s considered reasonable for the work performed. The Vermont Rules of Professional Conduct provide some guidelines for what is “reasonable,” including: (1) the time and labor required, (2) whether taking on the case will preclude taking on other work, (3) fees customarily charged for similar legal services in the area, (4) the amount of money involved and the results obtained, (5) time limitations imposed by the client, (6) the nature and length of the attorney/client relationship, (7) the attorney’s experience and reputation, and (8) whether the fee is fixed or contingent.

Monday, May 16, 2011

NEET Tips

NEET Tips answers questions posed by visitors to the NEET website

Does a vehicle have to go through probate in Vermont?

There are several ways for vehicles to avoid the probate process in Vermont. One of the more common methods is to ensure a vehicle is jointly owned, so that upon the death of one owner, title to the vehicle automatically passes to the surviving owner(s). If a vehicle is owned by an individual, a recent law change allows a Transfer on Death (TOD) designation to be added to the vehicle’s title. Under this arrangement, upon the vehicle owner’s death, the vehicle can be re-registered in the name of the TOD beneficiary without having to pass through probate first. Finally, a vehicle can be placed in a trust, although this approach is generally not advised given the simpler approaches above.

For more information on vehicles and probate in Vermont, see the NEET article:

New Law Allows Vehicles to Pass Probate Free

Tuesday, April 19, 2011

NEET Tips

NEET Tips answers questions posed by visitors to the NEET website

Is it necessary to have the probate court appoint an executor if the executor has already been named in the deceased person’s will or trust?

Yes, because an executor is not authorized to act in the capacity of executor until being appointed as the executor by the Probate Court. The will states the decedent’s preference that the named person serve as executor, but it will be the Probate Court that makes the final decision. If the person named to fulfill the role of executor files the will with the Probate Court and no interested persons object to that person being executor, the Probate Court usually acts very quickly to issue Letters Testamentary appointing the person as executor of the estate. If any of the interested persons object, then the Probate Court usually holds a hearing to discuss the objections and whether the named person should nonetheless be appointed executor.

Tuesday, April 12, 2011

NEET Tips

NEET Tips answers questions posed by visitors to the NEET website

How long does probate court take in Vermont?

The probate process can be straightforward or contentious and complicated, depending principally on three factors: how large the estate is, the types of assets included, and whether anyone contests the will.  Small and uncomplicated estates usually take 3 – 12 months in Vermont, while complicated estates can take years. The Vermont Probate Courts have said the average probate takes one year.

Monday, April 11, 2011

NEET Tips

NEET Tips answers questions posed by visitors to the NEET website

What are the duties of an executor?

Executors are tasked primarily with gathering together the decedent’s estate, determining the extent of the decedent’s debts, filing the estate’s final tax forms, managing the estate assets prudently during the probate process, filing accountings with the probate court and distributing estate assets according to the court’s final distribution order. During this process there are numerous tasks that must be completed, often on a schedule set by the probate court. The executor’s responsibilities will vary depending on the types of assets in the estate, whether certain items should be sold during probate, and whether there are any challenges to the will.

For more information on this topic, see the NEET web page:

Probate Administration

Thursday, February 17, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

How long does a person have to contest a will in Vermont probate?

When an executor or other person submits a will and a petition to commence a probate proceeding to the relevant Probate Court in Vermont, they must also send notice of the proceeding to all interested persons. Often the executor will have obtained all of the interested person’s consents to the validity of the will. Interested persons in Vermont include heirs, devisees, legatees, children, spouses, and such other persons as the Probate Court directs. Notice should also be sent to the trustee of any trusts to which assets of the decedent’s estate may be distributed, as well as other fiduciaries representing interested persons, such as a guardian.

If not everyone consented to the validity of the will, the Probate Court will schedule a hearing date no less than 14 days after all interested persons were served proper notice. Anyone contesting the will should file a written answer to the petition prior to the hearing, and may provide an oral answer at the hearing, unless the court directs otherwise. Thus, there is no set number of days allowed to contest a will in Vermont, instead a written answer should be filed with the Probate Court before the first hearing is scheduled.

Friday, February 11, 2011

Press Coverage of Estate Planning this Week (February 11, 2011)

David Cay Johnston of the New York Times writes that estate plans need to build in flexibility because the estate tax laws are constantly changing. For instance, many estate planning attorneys don’t think the current $5 million exemption level will be reduced, but they nonetheless suggested it would be imprudent to draft a plan that did not take the possibility of a reduced exemption level into account. See Certainty on Tax, But Just For Two Years (Feb. 9, 2011).

Andrew and Danielle Mayoras write in Forbes about what happened to some celebrities who died in 2010 without proper estate planning in place. Stories include what to avoid, such as not updating your estate plan after a significant life event such as divorce. See Estate Tax Lessons From George Steinbrenner, Gary Coleman and More (Feb. 4, 2011).

René A. Guzman of Hearst Newspapers suggests adult children should have a conversation with their parents about estate planning. One way to bring up the topic is to suggest that the conversation is about avoiding unnecessary burdens on their loved ones, including their spouse. See Preparing Parents for the Inevitable (Feb. 8, 2011).

Tuesday, February 01, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

What is an estate inventory?

An estate inventory is most often used in the context of probate proceedings. It is the list of assets owned by the decedent before death, which will be subject to the probate court proceedings, as compiled by the executor. This might include bank accounts, vehicles, real estate and miscellaneous property. Some assets avoid probate, such as real estate that passes to a joint owner by operation of law or financial accounts that have a valid beneficiary designation. Non-probate assets would not appear on the estate inventory.

Typically, the probate court requests an estate inventory shortly after the executor is named, and then requires regular accountings of what changes, if any, affect the estate inventory. At the end of the probate process, the executor must account for all probate assets listed on the original estate inventory, and any added since then, as well as indicate the proposed distribution plan. Following the probate court’s approval of the final estate accounting, the executor distributes the estate assets pursuant to the distribution plan.

Thursday, January 06, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

What is undue influence, and what factors determine if undue influence was exerted?

Undue influence occurs when a donor no longer exercises free will, and the resulting transactions are thus considered tainted, according to Vermont case law. In essence, when undue influence is being exerted, the donor is being coerced, and the donor’s judgment and desires are not being reflected in the resulting transaction.

Charges of undue influence may arise in probate or related court proceedings, particularly when there are suspicious circumstances surrounding the execution of the relevant documents. Suspicious circumstances include relations of trust and confidence whereby the opportunity for one party to abuse the other exists, such as between a person writing a will and their beneficiaries, guardian and ward, and spiritual advisor and persons turning to them for advice.

In determining if undue influence was present, the courts look to see if the transaction was made at arms length, i.e. the donor and the donee are not related or on close terms, and are presumed to have equal bargaining powers. Additionally, the courts will want to know if the donee profits financially from the transaction, whether the donee was acting in a fiduciary capacity to the donor, and if the transaction is consistent with the donor’s wishes expressed prior to the time when undue influence became a concern. Courts may also consider other factors as determined relevant to the specific circumstances of the case.

Wednesday, January 05, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

Does real estate that is devised or bequeathed go through probate in Vermont?

Yes, in fact devise and bequest (or bequeath) are terms of art that specifically related to probate assets. Devise means the act of giving property, usually real property (land), by will. Bequest means the act of giving property, usually personal property, by will.

If an asset was transferred to an heir outside of probate, for example a financial account that passed via beneficiary designation, it would not be a bequest in the traditional sense of the word because it is not passing by one’s will. So, all devises and bequests, by definition probate assets, would have to pass through probate in Vermont.

Tuesday, January 04, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

In Vermont, how long does it take to be appointed executor of an estate?

If the person seeking to be named executor was named in the will as the decedent’s choice to be executor, and none of the interested persons or others protest the choice of the executor, the probate court often acts within a matter of days or weeks in formally appointing the executor. Where there is no will, or where there might be concerns about the proposed executor named in the will, or where more than one person seeks to be the executor, the probate court may seek to hold a hearing or receive written comments on the matter, and subsequently make a ruling. The latter process might take a month or more, although the probate court usually seeks to resolve the issue of appointing an executor fairly quickly so that someone can manage the deceased person’s estate during the probate process.

Monday, January 03, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

What is abatement?

Abatement is a term used in wills and the probate process for a situation where there are insufficient assets in the probate estate to pay all of a decedent’s debts and legacies. The concept is similar to the priority of creditors claims, where certain creditors are paid (or not paid) before others.

When insufficient assets exist, the Vermont probate statutes require that gifts be “abated”, i.e. not paid, in the following order: first, the decedent's property not mentioned in the will goes unpaid to who would otherwise have received it; second, property making up the residuary estate is not paid, even if someone is named to receive the residuary estate; third, general devises and bequests, which are gifts that don’t specify or describe the gift, e.g. “my real estate,” are not paid; and fourth, specific devises and bequests, or gifts of specifically identified real property or personal property. When abatement ends at a certain level, gifts within that level are pro-rated.

Wednesday, December 29, 2010

NEET Tips

NEET Tips answers questions posed online to the NEET website

In Vermont, do vehicles have to pass through probate?

Generally yes, because title to the vehicle must be transferred to the new owner before the new owner can register the vehicle in his or her name. This would normally happen if the vehicle is owned by an individual. If the vehicle is jointly owned, for example with a spouse, the vehicle would pass to the surviving joint owner by operation of law, without having to pass through probate.

When a vehicle is owned by an individual, there are still two ways to avoid having a vehicle pass through probate. The first is to place the vehicle in a trust, such as a revocable living trust. However, this is discouraged by most estate planning attorneys because if you end up in a car accident and the other driver sees that your vehicle is in a trust, often they assume you must be rich, and therefore they hire the best attorney they can to win a big judgment against the “deep pockets.”

The better approach is to leave vehicles outside of your trust even if you have a trust, and instead take advantage of a recent Vermont law that allows a transfer-on-death beneficiary designation to be added to the vehicle title. Upon the vehicle owner’s death, the designated beneficiary may re-register the vehicle in their own name, but because of the addition of the transfer-on-death beneficiary designation, there is no need to transfer title of the vehicle through the probate process.

For more information on this topic, see the article:

New Law Allows Vehicles to Pass Probate Free

Tuesday, December 28, 2010

NEET Tips

NEET Tips answers questions posed online to the NEET website

In Vermont probate, what is the priority of creditors’ claims?

When the assets in a probate estate are insufficient to pay all creditors claims in full, Vermont probate law states that the executor must make payment in the following order:

1.    Costs and expenses of administration of the estate; then

2.    Reasonable funeral, burial, and headstone expenses, and perpetual care not to exceed $3,800 (exclusive of government payments), and reasonable and necessary medical and hospital expenses of the last illness of the decedent, including compensation of persons attending him or her; then

3.    Wages due to employees that have been earned within three months prior to the decedent’s death, not to exceed $300 to each claimant; and then,

4.    All other claims, including the balance of wages due but unpaid to employees under #3.

When there is more than one claim in the same class, and insufficient funds exist to pay all claims in the class, no preference may be given to one claimant over another, rather a prorated amount must be paid to each claimant in the class.

Monday, December 27, 2010

NEET Tips

NEET Tips answers questions posed online to the NEET website

In Vermont, if someone dies without a will, is probate necessary?

Whether probate is necessary depends on whether there are any probate assets. If all of a deceased person’s assets pass to a surviving spouse or someone else because the assets were jointly owned, then probate may not be necessary. Also, if a person had a trust and all of the deceased person’s assets were in the trust, then probate may not be necessary.

Most often, when a person does not have a will or a trust, probate becomes necessary to allow creditors an opportunity to ensure the deceased person’s legitimate debts are paid off, and to transfer real property, titled assets and other personal property to the deceased person’s survivors. When the deceased did not have a will or trust, Vermont's intestacy laws determine how the deceased person’s assets will pass to the survivors.

For more information on this topic, see the articles:

 

Overview of Vermont's New Rules for People Dying Without a Will

New Law Allows Vehicles to Pass Probate Free

Probate and Intestacy Are Readers' Biggest Concerns

Friday, October 01, 2010

Press Coverage of Estate Planning this Week (October 1, 2010)

Bob Carlson of Retirement Investing discusses issues surrounding probate avoidance, such as the disadvantages of probate in most states, but also why probate might be a good option for some assets, the differences between what constitutes your probate estate and your taxable estate, and why living trusts are often used to avoid probate. See Avoiding Probate – Or Not (Sept. 27, 2010).

Ashlea Ebeling of Forbes notes that the Applicable Federal Rate (AFR) used for various estate planning and family loans hit historically low rates in October. The AFR is used for Grantor Retained Annuity Trusts (GRAT), which allow you to pass assets to your children estate and gift tax free so long as the appreciation of the asset in the GRAT exceeds the AFR rate. October’s AFR is 2.0 percent for GRAT purposes, and as low as 0.41 percent for family loans of three years or less. See October Opportunity for GRATs and Family Loans (Sept. 27, 2010).

Friday, August 27, 2010

Press Coverage of Estate Planning this Week (Aug. 27, 2010)

Deborah L. Jacobs of Forbes points out steps to take if a family member dies in 2010. Although there is no federal estate tax this year, in its place are new rules for income taxes on inherited assets, also known as the carryover basis rules. The article lists seven steps, including having assets appraised, finding cost basis records, delaying the selling of appreciated assets, and other steps to avoid costly mistakes. See Seven Steps for 2010 Heirs (Aug. 23, 2010).

Ms. Jacobs also writes about estate planning strategies known as estate freezes, which remove assets and their future appreciation from the owner’s estate and can be particularly effective during periods of low interest rates. Options include intentionally defective grantor trusts, grantor retained annuity trusts (GRAT), and charitable lead annuity trusts (CLAT), among others. See Five Ways to Freeze Out Uncle Sam (Aug. 25, 2010).

Tara Siegel Bernard of the New York Times addresses six questions regarding writing a will, including whether a will is necessary, whether it’s advisable to write your own will, and whether a revocable trust makes more sense than a will. See Getting a Will: Six Common Questions (Aug. 26, 2010).

Friday, September 25, 2009

Press Coverage of Estate Planning This Week (September 25, 2009)

Jamie Downey of the Boston Globe provides a checklist of 16 items to complete for an orderly closing of one’s estate, including incapacity planning documents, wills and trusts, naming an executor and trustee, and completing a power of attorney for finances. See Organize Your Estate in 16 Steps (Sept. 24, 2009).

Bob Carlson of KCI Investing notes a few common estate planning mistakes to avoid, including overlooking non-probate assets, failing to fund a living trust, and not completing a financial power of attorney. He also points out the importance of designating guardians, keeping a record of important financial accounts, and providing instructions to your executor or trustee.  See Avoiding Estate Planning Mistakes (Sept. 22, 2009).

Dennis Fordham, Esq., writes in the Lake County News (Lakeport, Calif.) about discretionary spendthrift trusts, also known as beneficiary trusts, and the advantages for your children in receiving an inheritance in trust, rather than outright. See Estate Planning: Protecting Your Beneficiaries’ Inheritances (Sept. 19, 2009).

Clare Schwemlein of the Chillicothe Gazette (Chillicothe, Oh.) discusses using college savings plans, known as 529 Plans, as part of your estate plan.  By making a five-year contribution up front, you can get assets out of your taxable estate quickly.  See Education Savings As An Estate-Planning Strategy (Sept. 20, 2009).

Tuesday, September 22, 2009

Estate Planning Tip of the Week

Do Wills and Trusts Have to Be Registered with Probate Courts?

Prior to the death of the creator of the will or trust, no.  Wills are often kept for safekeeping in the Probate Court located in the Vermont County where the creator is living, but that is not mandatory.  After a person dies, their will must be submitted to the relevant Vermont Probate Court within 30 days of their death, at which time the probate process commences. 

Many trusts, including most revocable living trusts, need not ever be provided to the Probate Court.  In most instances, a revocable living trust is a will substitute.  In practice, this means that administering the trust settlor’s estate is done outside of probate, which is one of the primary reasons people choose a trust over a will when first engaging in estate planning.

If a person dies without a will or trust, known as dying intestate, the probate process usually begins in the relevant Vermont Probate Court following submission of a petition to open a probate estate by a survivor of the decedent.

Friday, September 18, 2009

Press Coverage of Estate Planning This Week (September 18, 2009)

Jon Tevlin of the Star Tribune (Minneapolis, Minn.) recounts a cautionary tale of misapplied trust in naming an agent on a power of attorney for finances to manage funds for an adult with autism.  When naming a power of attorney for finances, choose someone whose trustworthiness is beyond doubt.  See What Happened to a Vulnerable Man’s Money? (Sept. 12, 2009).

Nolan Baker and Mark Clair write in the Toledo Free Press on the importance of planning when you have a blended family.  If you are not careful, your children could be left with no inheritance.  See If You Re-Marry, Make Sure to Protect Your Children (Sept. 18, 2009).

Charles Ross of the St. Louis American lists several problems with the probate process that many people would prefer to avoid, including delays in receiving an inheritance, costs of going through probate, and the lack of family privacy.  See What Are the Pitfalls of Probate? (Sept. 18, 2009).

James P. O’Malley writes in The Ledger (Lakeland, Fla.) about how too many family businesses fail after the first generation, and how to prevent that from happening to you. His advice includes writing a buy-sell agreement, gifting the family business to the next generation to reduce estate taxes, and most importantly, starting the planning process now instead of putting it off.  See Working on Your Estate Plan Now Will Pay Off Later (Sept. 14, 2009).

Michaela Cavallaro of Dow Jones Newswires recounts how an Irrevocable Life Insurance Trust paired with creative funding mechanisms to pay for a new insurance policy allowed an elderly widow to save her beneficiaries a big chunk of her estate from estate taxes.  See A Sophisticated Solution to a Tax Issue (Sept. 15, 2009).

Friday, May 01, 2009

Press Coverage of Estate Planning This Week (May 1, 2009)

Michael G. Shinn writes in The Seattle Medium that estate planning is the most overlooked area of financial planning.  He quotes a funeral home director who claims that 80-90 percent of decedents don't have any estate planning.  See Your Money Really Matters: "An Encounter with the Undertaker" (Apr. 29, 2009).

Paul Sullivan of the New York Times writes about the basics of life insurance and disability insurance, and how they sometimes function as estate planning tools.  See Life and Disability Insurance: What You Need to Know (Apr. 29, 2009).

Kathleen M. Rehl writes in Investment News how a legacy letter, also known as an ethical will, can enhance what you leave to your children, and also be a profound experience for the writer.  See Passing on More Than Just Money (Apr. 26, 2009).

Kirk Shinkle of U.S. News and World Report discusses ways to efficiently make lifetime and testamentary gifts to those most important to you, including your pets.  See How to Give: Tips for Passing on Wealth to Kids, Your Charity, and Your Dog (Apr. 28, 2009).

Shaila Dani of the Associated Press discusses how the depressed economy makes this a good time to pass on assets to your children through gifts, intra-family loans, family limited partnerships and charitable lead trusts.  See Downturn Markes it a Good Time to Share Wealth (Apr. 26, 2009).

Friday, April 24, 2009

Press Coverage of Estate Planning This Week (April 24, 2009)

Jeff McKenna, Esq., writes in TheSpectrum.com about the basics of probate: why probate exists, what it accomplishes, and why having a will does not avoid probate. See Probate -- What is It? (Apr. 2, 2009)

Phyllis Furman of the New York Daily News discusses estate planning for blended families, with some tips on what to do before meeting an estate planning attorney. See Remarried and Have Kids?  You Need a Detailed Plan for After You're Gone (Apr. 20, 2009).

Jane M. Kim of the Wall Street Journal discusses how Barack and Michelle Obama have used an often overlooked feature of a college savings plan to front load five years worth of annual exclusions into a fund to pay for college.  Aside from funding the savings plan, the technique  is an excellent way to get assets, and their future appreciation, out of your taxable estate.  See Obamas Pump Up College Savings (Apr. 18, 2009).