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FAQs about Estate Planning

What property is subject to the probate process?

In Mississippi, any property titled in the name of the decedent is subject to the probate process. Probate is the process of orderly transferring title to these assets from the name of the decedent, into the name of the beneficiaries, and providing creditors of the decedent an opportunity to assert their claims against the estate in order to get paid. Titled property such as automobiles and real estate pass through probate, as do non-titled assets such as furniture and jewelry.

How is the probate process started?

The probate process begins with a petition before the Chancery Court seeking permission to admit the will of the decedent and appoint the chosen executor, if the decedent died with a will, or seeking appointment of an administrator in the event the decedent died without a will.

In which Chancery Court is a will filed?

Probate is filed in the Chancery Court of the county in which the decedent resided or owned some property.

What does the executor do?

Executors are responsible to the heirs and creditors of an estate, to oversee the orderly management of the estate prior to the ultimate distribution of its assets. They are further responsible for the administration of the estate so that the estate can be valued and ultimately distributed to the heirs and creditors. For example, the Executor would be responsible for collection of any rents owed on estate assets during the pendency of an estate, and would be responsible for locating all heirs and creditors to inform them of the estate’s existence and contents.

What happens if someone dies in one state and owns a vacation home or other real estate in another?

In dealing with multi-state estate property, it is necessary to probate an estate in every state in which the decedent owned property, in order to effectively transfer title to that property over to the heirs. Such proceedings in other states are often called “ancillary probate” proceedings, although they frequently involve the same procedures, such as notice to creditors, as a full probate procedure, depending on the laws of the state in which the property is located.

Can an individual probate an estate without help from an attorney?

While the law does not require the participation of an attorney, the probate laws are very technical, and failure to fully abide by such laws can result in catastrophic consequences. By accepting the position of “executor” or “administrator” of an estate, that individual is acting as a “fiduciary” to the heirs and creditors of the estate, meaning that he owes them the highest duty of care and fair dealing. A failure to properly administer the estate, even if only a technical failure, could result in injury to one of these groups, and could subject the executor or administrator to personal liability. The court and the court clerks will not assist an individual with the probate process, as this would be tantamount to them practicing law.

Does the executor have personal liability?

Generally the executor or administrator acting in his fiduciary capacity is not personally liable for his acts. However, by accepting the position of “executor” or “administrator” of an estate, that individual is acting as a “fiduciary” to the heirs and creditors of the estate, meaning that he owes them the highest duty of care and fair dealing. A failure to properly administer the estate, even if only a technical failure, could result in injury to one of these groups, and could subject the executor or administrator to personal liability.

Can probate be avoided?

Yes. There are a number of ways to avoid probate, including lifetime gifting of assets, multi-generational titling of assets, such as “joint tenants with rights of survivorship” and “life estate with remainder interest”, or simply adding the heir as co-owner of a bank account. However, none of these methods permit the testator to retain any control over the assets once the gift is complete. Some of these methods can have adverse gift tax consequences, or adverse consequences for purposes of qualifying for Medicaid later on. And many of these methods result in exposure of your assets to the creditors of your heirs. For all of these reasons, the best method of avoiding probate is forming a revocable living trust and re-titling the assets into the name of the trust. The trust document will provide instructions for how the assets are to be held or disbursed upon your death, and you retain the right, during your lifetime, to change those instructions. The assets held by the trust are not subject to claims by your heirs’ creditors, and you have the protection of having total access to your property when you want it.

What about living trust “kits” sold to protect an estate from probate?

There are many living trust programs or “kits” are available in today’s marketplace. Many of these are perfectly fine documents, assuming that your situation and desires fit the cookie cutter langue on the forms. However, if your situation is unique, or does not fit the language of the kit trust, your estate plan may not accomplish your goals. Additionally, trusts and estate panning involves complex legal concepts that lawyers spend years to fully grasp. Other areas of the law are also impacted by trusts, including debtor/creditor, real and personal property, domestic relations, federal and state taxes, and HIPAA. In order to fully understand and evaluate how to accomplish your goals for yourself and your family, you owe it to yourself to involve a trained professional to ensure that your wishes will be carried out, and not merely the assumptions of a generic form drafter.

How much does probate cost?

Probate is the process of legally changing title of personal and real property from a decedent’s name into the name of his heirs. This process involves court action, notices and summonses to heirs and creditors, and hearings before the Court. As a result, the probate process can be very expensive, depending on the size of the estate. Generally, and estate of larger value requires more Court hearings and notices, resulting in higher attorneys fees. The minimum fee this firm charges for estate probate is $1,500. Typically, probate costs an estate 3% to 6% of the total estate value.

What is a power of attorney?

A power of attorney is a legal document in which an individual names another individual, or multiple individuals, as his agent to perform certain acts on his behalf. The agent’s right can be limited to specific acts, limited by date, or any other limitations that to the grantor desires to place on the power. Additionally, most powers of attorney or drafted to be “durable”, which means that their authority lasts beyond the incapacity of the grantor.

When does a power of attorney take effect?

Powers of attorney are generally effective upon execution, and last until they are revoked by the grantor. However, the power of attorney document itself can place limits on the effective dates of the document. Some powers of attorney contain “springing” language, meaning that they do not become effective until the occurrence of some future event, such as incapacity. Care should be taken to ensure that the future event can be easily proven however. Otherwise, the agent will have difficulty with institutions, such as banks, honoring the power of attorney.

Does a power of attorney take away the principal’s rights?

The power of attorney does not take away the rights of the principal. Rather, that it merely names another person to act in the principal’s absence.

Are powers of attorney irrevocable?

Powers of attorney are not typically irrevocable and can be revoked by the grantor at any time.

Can an attorney-in-fact make gifts of the principal’s money to the principal’s loved ones, including the attorney-in-fact?

Powers of attorney can provide authority to make gifts to a principal’s loved ones, including the agent himself. However, express language permitting such action should be contained in the power of attorney document.

Can the attorney-in-fact be held liable for his or her actions?

The attorney-in-fact, or agent, is acting on behalf of the principal as a fiduciary, meaning that the agent must act in the best interest of the principal and exercise the highest degree of care. In the event that the agent breached this fiduciary duty, he can be held personally liable for his actions.

What if there is more than one attorney-in-fact?

The power-of-attorney document itself should contain language concerning a multiple attorneys in fact. The agents can be required to act unanimously, or can be permitted to act independently, depending upon the language of the power-of-attorney document.

Can the attorney-in-fact be fired?

The principal can always reserve the right to terminate the power of attorney, thereby firing the attorney-in-fact. Additionally, provisions can be made within the power-of-attorney document for removal of an agent. Finally, in the event that the principal is incompetent, and therefore unable to remove the agent, parties can seek appointment of a guardian or conservator or over the individual, who will thereafter have the authority to terminate the power of attorney.

What kind of records should the attorney-in-fact keep?

Since the attorney-in-fact, or agent, is acting as a fiduciary to the principal, he should keep very detailed records of how any money is spent on the half of the principal.

Can the attorney-in-fact be compensated for his or her work?

An attorney-in-fact, or agent, can be compensated provided that such compensation is provided for in the power of attorney document. Typically however, such documents contain express language providing that no fees should be paid to the agent.

How does one draw up a health care proxy?

A health care proxy, or power of attorney for health care, is a specific type of power of attorney limited to health care decisions. A form for such a power of attorney is contained in the Mississippi code.

What is a living will?

A living will refers to a document that contains an individual’s wishes regarding life-support measures. In Mississippi, these documents are now called Advanced Health-Care Directives.

What is a health care proxy?

A health care proxy is a document giving rights to make health care decisions to another individual. In Mississippi, these documents are now called Powers of Attorney for Health Care.

Why have a health care proxy?

It is important to have a health care proxy, or power of attorney for Health Care, in order for your Health Care providers to have a clear understanding of who is legally entitled to make health care decisions on your behalf in the event you are unable to do so. The importance of this document has now become even more significant because of the enactment of the Health Insurance Portability and Accountability Act (HIPAA), which provides certain federal protections for privacy of medical records. By executing a health care power of attorney containing appropriate that the release language, Health Care providers will be free to provide pertinent information to those persons you so authorize.

Should a medical directive accompany the health care proxy?

Generally, it is a good idea to have both a health care power of attorney and an advanced health-care directive. The health care power of attorney gives decision-making rights to an individual to act on your behalf, however that individual may not be prepared to withdraw life-support. The addition of a advanced health-care directive can make your wishes in that regard clear, and remove any guilt on the half of your Health Care agent. In the event of execution of both documents, your preference as to which document should control in the event of a conflict should also be made clear within the documents.

When does a health care proxy take effect?

Healthcare proxies can be made to the effect upon the occurrence of the future event, however generally they are made effective immediately upon execution.

What if the principal regains the ability to communicate his or her own decisions?

Once the principle is able to make his own decisions regarding his Health Care, the health care power of attorney would cease to be effective.

What are Alaska and Delaware trusts?

Alaska and Delaware trusts are trusts which choose to use Alaska or Delaware law. Both of these states have very favorable laws concerning certain features of trusts, including asset protection and of the elimination of the rule against perpetuities, an archaic rule which limits the life of a trust to approximately three generations.

Should I have a trust?

There are multiple types of trusts available. Each type of trust is designed to serve a different purpose. Depending upon what your specific needs are, you may or may not need one of these types of trusts. Such a decision should only be made after careful consultation with a qualified estate planning attorney.

What does it mean to be a “fiduciary”?

A fiduciary is an individual as a placed in a position of trust, such as an agent of a power of attorney, or a trustee of the trust. A fiduciary as a duty of utmost care and fair dealing when acting on the half of another.

Who should have a copy of the health care proxy?

A health care proxy should be provided to any doctors or hospitals with which you are receiving treatment, so that they have on record your authorization to convey medical records, information, and from whom they may seek direction regarding your Health Care in the event you are unable to provide such period

Who should be appointed as a health care agent?

Generally a spouse or other close family member is appointed as the Health Care agent, however there are no rules regarding such appointments. You should appoint the individual in whom you have the greatest amount of trust in their ability to provide for your Health Care. Additionally, you should obtain at that individual’s permission, to insure that they are in fact willing to serve in that capacity.

What is an estate plan and why do I need one?

An estate plan is simply in the plan of how your assets will be distributed upon your death. Often in such a plan is a simple as everything being transferred to your spouse. In very large estates, such a plan usually involves the establishment of one or more trusts in order to minimize or eliminate estate taxes. Every estate plan is truly unique, depending upon the your unique circumstances and assets. Morton law firm provides extensive counseling and customized estate plans to meet the specific and unique needs of each of its clients.

Can a person object to a proposed guardianship for him- or herself or for someone else?

Yes, an individual does have the right to oppose a proposed guardianship over his person or belongings. The individual can hire a lawyer to act on their behalf, and in the event of an unwanted guardianship, it is advisable to engage legal counsel immediately upon receiving a Notice of Hearing.

Isn’t my estate too small for an estate plan?

No estate is too small for an estate plan. Wile a small estate may not require complex tax provisions, or cascading trusts for future generations, it does require a plan that is appropriate to accomplish the desires of the decedent. Such a desire may simply be for everything to be transferred to one’s spouse. Such a simple plan, however, will not occur without appropriate planning. Under Mississippi law, children are entitled to an equal share with the spouse, in the absence of a will or trust providing to the contrary.

Won’t joint accounts take care of passing on my assets?

Joint bank accounts will avoid probate, however they also bring with them additional problems. By naming another individual as a joint account holder, you are in fact making them a co-owner of that account, and subjecting that account, and your money, to that person’s creditors. A trust, with multiple successive trustees, is generally a better approach, and will eliminate the potential for your assets to wind up in the hands of someone else’s creditors.

Why should I pay a lawyer a lot of money for some simple documents?

You shouldn’t. Documents are merely the method that lawyers accomplish the goals of their clients. The documents themselves have no inherent value, and are actually ancillary to the attorney’s services. What the attorney is paid for is his knowledge and experience, and his ability to apply that knowledge to your specific situation, to solve your specific problem. By planning your estate through a qualified attorney, you can rest assured that all available options have been considered and thoroughly discussed with you, allowing you to make the best decisions for your estate. The lawyer will accomplish your goals for drafting customized documents designed to meet your specific needs, and also designed to avoid numerous pitfalls and traps, which however unlikely, could disrupt your estate plans. Upon completion, you will have the peace of mind of knowing that you have taken care of your family under your terms, having first considered all available options.

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