STEP-CHILDREN, ADOPTED CHILDREN, NATURAL CHILDREN – WHO INHERITS?

STEP-CHILDREN, ADOPTED CHILDREN, NATURAL CHILDREN – WHO INHERITS?

With the different variations of families in the modern world, complication can arise as to whom has the legal right to inherit monies. So often an adult child will come to a lawyer’s office after a parent has died to discuss distribution of an estate just to find out that they are not entitled to anything.

Besides being excluded in someone’s Will, two of the reasons why a child possibly could have no right to an inheritance is that the child is not the natural born child of the parent or the child is not an adopted child. Generally a child who is a step-child, or the child raised by an extended family member or close friend without a legal adoption, even with a legal guardianship, cannot inherit from the step-parents.

So what are some of the inheritance rules regarding adopted children and step-children? The law varies from state to state. Generally though, natural born children and adopted children are provided the same rights to inherit property. However, a step-child typically does not have a right to inherit property from a step-parent if the step-parent dies without a will or the will specifically does not designate the step-child as a beneficiary.

On the other hand, the law is most states provides that an adopted child has the same rights as a natural child if legally adopted. It should be noted that when a child is adopted, adopted child loses the right to inherit from the child’s natural parents, although gaining the right to inherit from the adopting parents. An exception is when a spouse adopts a child of the other spouse. In that situation, the adopted child does not give up inheritance rights from the natural parent.
A parent of a step-child who wants the step-child to inherit must specifically state so in a Will. Phrases in a will that leaves assets to my children, or to my brothers and sisters, will not include step-children and step-siblings.

The same is true if you are a step-child and want your parents or siblings to share in your estate. You must specifically name the individuals. Otherwise, by law, if you generally list parents or siblings without the specifics, the bequest may not go to the people who you want.

There is one way where a step-child could challenge the lack of inheritance. That would be when the child is financial dependent on the step-parent. If a step-child was treated as a child of the family by a married step-parent or was financially dependent on a step-parent who has died, and there is either no or inadequate provision on the death of the stepparent, he or she may be able to make an application to the court for part of the inheritance.

Because these issues are rather complicated, it is important for you to speak with an attorney who is able to help you meet your estate planning needs.

WHO IS IN CHARGE IMMEDIATELY AFTER SOMEONE DIES

In this article, we will address some questions regarding the legal documents that a decedent may have executed before death; and who is in charge after death.

After someone dies, the Power of Attorney is no longer valid

When someone dies, the “attorney-in-fact” who was named in a Power of Attorney to handle the affairs of the decedent prior to the death of the decedent, no longer has the authority to conduct the affairs of the decedent. The reason is that the Power of Attorney is a legal document only effective during the life of someone. It immediately becomes invalid upon death.

This can lead to confusion if the attorney in fact is not the same person named in a Will as the Executor or is not a nominated administrator if the decedent died without a Will. The attorney is fact must cease taking action with regard to the estate. Also, the Attorney-in-Fact should have maintain proper records of the transfer of assets immediately preceding the death of the decedent in case there is a need for the Executor to look at such document.s

After someone dies, a court appointed Guardian is no longer in charge

If the decedent was considered incapacitated, the court may have appointed a Guardian in charge of the person and property of the decedent. Guardian of the property is also sometimes called a Conservator.

After the decedent dies, the Guardian is no longer necessary and any powers are no longer in effect. The Court will require the Guardian to provide a final accounting of the Guardianship. The Guardian most likely has been required to keep an accounting on an annual basis; a final accounting is necessary to release the guardian of any liability. Sometimes, there are issues with the Guardian’s accounting that will need to be addressed during the Estate administration. It is advisable for the Guardian to keep good records of the finances of the decedent.

The Proposed Executor or Nominated Administrator should be proactive

If the decedent had a Will, the proposed Executor should begin taking steps to probate the Will. It is important to take the steps in a timely manner, i.e., within two months of the decedent’s death.
Even before the probate of the Will, the proposed Executor should take action to protect the assets of the Estate and to notify of the decedent’s death all creditors of the decedent and banks where the decedent had accounts.

Further, if there is a need to search a safe deposit box, the Executor should immediately get a order to open the safe deposit box if the Executor is not already named on the box. When opening it, the Executor should have a bank assistant there and take an inventory of the box.

If there is a need to protect personal belongings of the home of the decedent, the Executor could request the Court via a notice that no one is permitted to enter into the premises (although if the decedent shared a home with someone, it could be limited to the decedent’s private quarters).

If there is no Will, then the family members must determine who will be the Administrator of the Estate. Hopefully, the family members can agree on who this will be.

Complications can arise with all these issue. Talk to your attorney prior to taking any action after someone dies to make sure you are following proper procedure.

SEVEN ESTATE PLANNING CONSIDERATION WHEN PEOPLE MARRY LATE IN LIFE

Although Baby Boomers are aging, there hearts remain young. Marrying later in life to establish companionship is an option that many take. For many Boomers, there is nothing stopping them from continuing their own adventure and at the same time enjoying their intimate or extended family.

How though, should the Boomers handle their Estate Planning when they marry late in life? Most in their seventies or even eighties still have their mental capacity to make proper estate planning decisions. However, as we age into our 90s and beyond, there is more likelihood that we will have diminished capacity. Therefore, prior to marrying or re-marrying, Boomers should consider putting their estate plan together so they cover the basics, and also maintain family harmony.

Here are some points to consider when marrying later in life:

1. Where are you going to live?
2. How are you going to pay for your expenses?
3. Who will make your financial decisions if you need help?
4. Who will make your health care decisions if you become incapacitated?
5. If you have assets for distribution, who is going to get them?
6. Who is going to run your estate?
7. If you have children or grandchildren, what are they going to think?

WHERE ARE YOU GOING TO LIVE?

When you marry, you will have to choose a place to live. If you own, do you give it up to live with your partner? Or do you have your partner move in with you? Or do you find a new place to live? What happens if you move and then your partner passes? What happens if your partner lives with you and you pass? Who inherits the real property?

Some of these issues can be handled with a revocable trust or maintaining a life estate. So, if you move into your partner’s home, you can have a life estate set up or put the house in a trust so you can live there. A trust or a life estate protects you from uncertainties when one of you passes. Also, it allows for you to pass your inheritance to other family member while allowing you or your partner to be taken care of in their lifetime.

HOW ARE YOU GOING TO PAY FOR YOUR EXPENSES?

You may need to look into medicaid planning in case one of you has to go into a nursing home. Forming a supplemental needs trust may help you avoid paying your assets for nursing home expenses and obtain medicaid to help pay the bill.

WHO WILL MAKE FINANCIAL DECISIONS FOR YOU IF YOU NEED HELP?

Having a Power of Attorney in place in case you need someone to help with your banking and finance needs is important to have. Your partner could be your attorney-in-fact, i.e., the person who has a right to handle your finances when you cannot do so; or you may have another family member or friend be the attorney-in-fact. If you marry later in life, your partner may also have diminished capacity eventually, so it is important to pick someone who can be there for you to make financial decisions.

WHO WILL MAKE HEALTH CARE DECISIONS FOR YOU IF YOU BECOME INCAPACITATED?

This decision if very important. So many times, family members dispute who should make health care decisions – especially if you have children and are in a re-marriage situation. If the children do not agree with your new spouse or a spouse in a short term marriage, this can cause complication. Be very careful to draft a health care proxy so people know who can make decisions for you.

IF YOU HAVE ASSETS FOR DISTRIBUTION, WHO IS GOING TO GET THEM?

If you marry later in life, you may not want all of your assets to go to your partner. You may have children from a previous marriage, or nieces and nephews or friend you have known for year that you would like to designate as beneficiaries. Testamentary trusts that become active when you pass could be a way to help you distribute your assets to your family and friends while at the same to providing for your spouse during lifetime. Also, you may want to sign a prenuptial agreement that discusses who gets what upon death.

WHO IS GOING TO RUN YOUR ESTATE?

You will have to pick a person to be the personal representative of your estate. You may also need to pick a trustee. If you pick your spouse, you should also select a successor representative so if your spouse is incapacitated or unable to handle the estate, you have someone else you trust to handle it.

IF YOU HAVE CHILDREN WHAT ARE THEY GOING TO THINK?

If you have children and you re-marry late in life, the children may feel threatened by your new spouse. Especially with regard to inheritance, and finances and health care decisions for you. Talk to your children before you get married so they know that you will protect their interests while at the same time allowing yourself the happiness you deserve.

There are many decisions to make and many documents to sign. Talk to an attorney about these matters prior to tying the knot later in life.

WHAT IMMEDIATE ACTIONS ARE NECESSARY WHEN SOMEONE DIES

When a loved one dies, family members are usually in a state of uncertainty with what to do. While everyone is respectful to the loss of the loved one, tension can arise as to who takes responsibility for arrangements and costs. Confusion often arises. This article addresses some of the questions you may have in this situation.

Who pays the funeral director?

If the funeral director wants payment the day of the burial or prior to the funeral, the person who usually would pay is the family member who is the named Executor in the Will. Afterward, the Executor would be reimbursed from the assets of the Estate when the Will is probated.

If the Executor does not have the funds to pay the director, then most likely other family members will pitch in to pay the funeral director and be reimbursed by the Estate.

If the Estate has no asset to reimburse the Executor or family members, then all family members should pitch in for the expense.

If the Executor is a non family member, then the family would usually pay for the funeral and be reimbursed from the Estate.

If there is no Will, then the family members will have to choose someone who would be the Administrator of the Estate and the proposed Administrator would pay or family members would pitch in to pay the funeral director. Reimbursement would be from the Estate.

What are typical Funeral Expenses?

Generally, all expenses that reasonably relate to the burial of a loved one can be considered an expense of the estate. The expense must be relevant to the ceremony or burial or service.

This would include:

Casket
Funeral director’s basic service fee
Embalming and body preparation
Funeral ceremony and viewing
Hearse, Death Certificates, Obituary
Grave space
Cost to dig the grave
Headstone
Grave Marker
Family reception and catered food
Clergy Fees
Florist Fees

Again, all cost must be reasonable. Otherwise, the Court may reject the costs as an expense of the Estate.

When are papers filed in Court?

In some state there is a waiting period before filing papers in court out of respect for family members and allowing time for grief. However, it there is a immediate need to file papers to handle a financial matter, the court may entertain an expedited motion or grant temporary letters to resolve the immediate need (e.g., paying health care for a surviving spouse or child; collecting rent; running a company). In any event, most likely it would still take a few days before the court would ever issue an order.

What happens to Bank Accounts and Credit Cards and other Assets?

Generally, the proposed Executor or Administrator would notify financial institutions and credit card companies of the death of the decedent even before the estate administration. This would put a hold on the account or to stop interest accruing on credit cards. Sometimes, these institutions will require a death certificate, which can take a few days to obtain. But it puts the banks and credit card agencies on notice in case someone tries to take money of the account or use a credit card.

Once the person has died, no one can write a check from the bank account or attempt to use the decedent’s credit card. Basically, everything is frozen at the date of death until there is a personal representative appointed by the Court and an estate account is opened. Further, all other personal assets should remain as is. There is some leeway as to necessities such as moving a car for street cleaning, etc. But generally, nothing should be touched unless necessary to move. All assets should be inventoried as soon as possible.

Reasonableness and respect are key

Because of the emotional state that most family members experiences upon the death of a loved one, family members should proceed cautiously when handling the immediate financial needs of the decedent’s Estate prior to the opening of an Estate. Family members who pay for funeral expenses should keep track of their expenses. Family members should refrain from attempts to transfer monies of the decedent until authorized by the court. Speak with your attorney about these issues.