2 Things Real Estate Investors Must Know About Estate Planning


First, NOW is the time to act…Did I say NOW?!?!

You may have established an estate plan in the past, or you may not have gotten around to it, but it is critical that you ALWAYS have an up-to-date plan. 

Most people are smart enough to keep their car in good working order -- it requires oil changes, an annual physical check-up, etc. But I'm always surprised by the common misconception about how often they should have their estate plan reviewed.

You see, most people see estate planning as something you "do once" and never have to think about again. That's just flat incorrect. 

Just like your health can take a dramatic turn (for the better or worse) in a year, your estate planning decisions can change dramatically in a short period. Sometimes, something simple happens, such as an out-of-state move by the people you've identified to serve as the guardians for your minor children. That's just one of many good reasons to revisit your estate planning decisions.

Plus, though there's been a lot of talk in recent years about the higher estate tax threshold, there are many ways in which out-of-date plans can be "burned", by not complying with new laws.

Your estate plan is a "living and breathing" plan (at least when done right) and therefore has to be maintained to reflect your life as it is today. 

Second, PLEASE ensure you have chosen the proper executor. 

Whether you're dealing with significant sums, or with a more modest estate, choosing the person to handle these transactions is a critical decision for EVERY Salt Lake County family.

It's always a great idea to get professional advice in making these selections. But, if you choose to "go it alone" for some reason, here's what you need to keep in mind as you consider who will be your executor:

An executor must:  

 * Obtain certified copies of your death certificate
 * Locate Will beneficiaries
 * Examine and inventory your safe deposit boxes
 * Collect your mail
 * Cancel credit cards and subscriptions
 * Notify the SSA and other benefit plan administrators of your death
 * Learn about your property, which may involve examining bank statements, deeds, insurance policies, tax returns and other records
 * Get bank accounts covered by the Will released
 * Place notices in newspapers so creditors can make claims
 * Hire a probate attorney

Either the executor or the probate attorney must:  

 * File court papers to start the probate process and obtain legal authority to act as your executor
 * Manage your assets during the probate process, which usually takes six months to a year
 * Handle court-supervised probate matters, including transfer of property to your beneficiaries and making sure your final debts and taxes are paid
 * Have final income tax forms prepared, and, if necessary, have estate tax returns for your estate prepared and filed

Of course, the open probate process is something you will absolutely want to minimize and even avoid. A sound plan does this.

But this right here (the choice of executor), is where it starts.
In the future, I'll have more to say about an executor and why that choice is so important.

Warmly, Janet Behm, EA

Utah Real Estate Accountants

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