When someone dies owning real estate, problems can occur. This article addresses some of the issues that arise.

A person can leave real property specifically to someone in a will or trust, or leave it as part of their residuary estate. The residuary estate is the portion of an individual’s estate that remains after all specific gifts and bequests have been made and all claims of the estate are satisfied.

If someone dies without a Will, the real property passes by “operation of law,” to the next of kin pursuant to the intestate statute of the state (the law governing how property is distributed when someone dies without a will). Operation of law means that nothing has to be put in writing to cause the heirs to inherit the property.

When filing a petition for probate or estate administration, the court will want to know the value of the property and whether or not it is an income producing property (e.g., a rental property). Depending on the value of the property and who is handling the estate, and who will inherit the property, the court will determine whether to restrict the sale of the property without court approval; and also will want the personal representative to account for the rental income of the property if a rental property.

Difficulty usually arises immediately after death if there are bills to pay or rent to collect. It may take a few weeks before someone is appointed as the personal representative. Or, no one decides to petition the court. Some heirs take it upon themselves to pay bills or collect rent. These heirs must keep a strict accounting of the finances as later they may be accused of malfeasance. Unfortunately, some people fail to petition the court for years to come. This only results in potential wrongdoing.

Further, it is always in the best interest of the Estate to distribute or sell the property in a timely manner. The longer the property stays in the Estate, the more likely the handling of the sale or distribution to heirs or the collection of rent or the payment of expenses will be challenged.

Unfortunately, a common occurrence is for one sibling believing for one reason or another that they are entitled to more than what is permitted by law. This occurs especially if one sibling was living with the decedent and others live out of the state; and especially if it is rental property.

If the personal representative refuses to distribute the property to the heirs, the heirs would have to petition the court for an accounting and removal of the representative for breach of fiduciary duty. The representative would have to have a justifiable reason why the property has not been distributed.

If upon distribution there is disagreement on what to do with the property, one of the heirs can petition for a partition and sale of the property, i.e., force the sale of the property to a third party, or have an heir “buy out” the other heir(s).

Overall, keeping real property in the estate for an extend period of time is not looked favorably upon by the Court. Speak to your attorney about how to handle these issues so the issues do not get out of hand.


Life estates are used in estate planning for various purposes. This article will discuss some of the ways. First, we will explain what a Life Estate is.

What is a Life Estate

A life estate is when a person has a right to live in a home or occupy real property during their lifetime. The person does not have a right to bequeath the real property upon death, but the right to live on the property. It lasts only for the life of the person. The life estate holder cannot leave the property or land to anyone in their will, because their interest in the land ceases to exist when they die.

The person with the life estate has a full right to possess the land or transfer their interest during their lifetime, but must refrain from engaging in waste or activity that would prevent the next person in line (usually called the remainderman) from putting the property to full use.

How a Life Estate is created

A person owning land can create a life estate in a deed that gives the land to a person “for life” and identifies what should happen to the property after that person dies.  For example, the deed could state that the property is transferred to Sam Doe do for life, and upon Sam’s death, is transferred to Jane Doe.  The owner of a life estate is called a “life tenant”.

Right of Life Tenant

The Life Tenant has certain right including income derived from rent or other uses of the property, during his or her possession. However, as mentioned, the life tenant cannot damage or devalue the land or cause the destruction of it. Sam could use the property during his lifetime, and possibly even sell or rent out his interest to a third party, but that third party would have to surrender the property to Jane upon Sam’s death.

Duties of the Life Tenant

Generally, the Life Tenant is responsible for the upkeep of the property, including the payment of property taxes, utilities and ongoing household expenses. The issue of expenses usually take a toll when there are necessary major renovations such as a roof repair, electrical or plumbing issues to be done. Case law shows that if the renovation is minor in nature then it is the responsibility of the Life Tenant, but if major in nature, may be responsible by the remainderman. For example, if there is a leak in the roof and it just needs patching, that would be the responsibility of the Life Tenant. If the whole roof needs replacing, this cost may be share or mostly funded by the remainderman. This is when disputes usually occur.

Major Uses of Life Estates

One of the major uses of a Life Estate is for couples in a second marriage to provide a life estate to the surviving spouse with the remainder to go to the first to die’s spouse’s children. For example, let’s say Jane owns a house, is widowed with three children. She meets Sam who lives in another house. They fall in love and get married. They agree for Sam to sell his house so he can live with Jane in her house. Because Sam gave up his house, he runs the risk of not being able to have a place to live if Jane dies first. So, Jane gives Sam a life estate in the him in her Will or Trust so that if she dies first, Sam gets to stay in the house during his lifetime. Also, this allows for Jane to give the house to her children upon the death of Sam.

Life Estate are used in the same matter if the couple wants the real property to go to charity upon the last surviver’s death. After passing to the surviving spouse, upon the surviving spouse’s death, the house is given to a charitable organization.

Life Estates are also used in Medicaid planning. For example, Jane can give a remainder interest in her house to her children, while retaining a life interest for herself. The transfer of the property with a retained life estate triggers Medicaid’s five year look-back period for nursing home care, which means the earlier she would transfer the home, the sooner she would be eligible for Medicaid nursing home care coverage. By retaining a life estate,l the penalty period will be much less than if she had transferred the property outright, since the penalty is based on the value of the transfer.

Another Medicaid planning strategy involves a parent purchasing a life estate in the home of a child. This takes some cash out of the estate of the parent. Medicaid allows this technique so long as the parent actually resides in the home for at least a year after the purchase.

Speak to your attorney about the use of Life Estates in your estate plan.


Sometimes people are faced with an immediate need for estate planning. This can be due to becoming elderly with a diminished capacity, being chronically ill, unexpectedly being informed of a terminal illness or being in a life threatening accident.

If the need for estate planning is unexpected, this could lead to confusion and also conflicting opinions among the loved ones involved or among those possibly entitled to a distribution from the estate of the person requiring estate planning.

Sometimes when someone is in the hospital being treated with a terminal illness, the hospital will provide the patient with an estate planning package for them to review that has legal documentation in it. Although the health care facility understands what would make its job easier, it does not necessarily have the best interest of the patient in mind. Therefore, someone on their hospital bed may be asked to sign papers that should require some thought or understanding, and preferably discussed with a estate planning professional.

For example, someone may be provided papers to choose a health care proxy to make decision if the person losses consciousness. Someone may list two people to make the decisions. But those two people may have a conflicting opinion on what should occur. Or possibly hospital staff may make suggestions with regard to resuscitation, which a sick person on a bed may not fully understand.

Further, as we have all seen on television shows, those who are elderly without family nearby or without family members, sometimes are visited by those who will conveniently arrange for the person in their hospital bed to execute a Will, leaving all their assets to these so called friends.

The closer to death a loved one is, the more likely that issues of diminished capacity, undue influence, depression, mistakes and other issues will occur. Therefore, the best practice is to have a trusted professional to help complete the necessary forms so decisions are made properly.

The four basic estate planning documents are (and the name of such may vary with each state):

1. The Last Will and Testament;
2. Power of Attorney;
3. Living Will; and
4. Health Care Proxy.

The Last Will and Testament is the documents outlining how the assets of the decedent’s estate should be distributed. The Power of Attorney is used to appoint a person to make financial decisions when someone is still alive. The Living Will states the wishes of the person with regard to resuscitation issues. The Health Care Proxy appoints a person to make health care decisions when someone is incapacitated.

It would behoove those with a short life span to put these documents in place as soon as possible because the possibly of limited capacity to make decisions in more likely than if the person is completely healthy.

There are a variety of other issues that could be addressed with regard to financial and estate issues pertaining to life insurance, pensions, retirement accounts and investments.

Also, if the life expectancy is a bit longer wherein the person needs to be in the nursing home, Medicaid planning is necessary.

Speak with your attorney about these issues so you have the proper plan in place.


One of the most potentially difficult times in someone’s life is when one no longer has the capacity to make decisions for themselves. Family and loved ones of an incapacitated person also have to deal with this difficult situation. Further, the involvement of institutions and government agencies leads to a stressful situation.

Sometimes it is necessary for the court to appoint a guardian. The appointment could be to make decisions for the person’s health and personal care; and also for handling financial affairs; or for both reasons. This occurs when the person cannot make decisions on their own.

Who may commence a proceeding

The persons or entities that may file a petition for guardianship can be the following:

1. the person alleged to be incapacitated;

2. a presumptive distributees of the person alleged to be incapacitated;

3. an executor or administrator of an estate when the alleged incapacitated person is or may be the beneficiary of that estate;

4. a trustee of a trust when the alleged incapacitated person is or may be the grantor or a beneficiary of that trust;

5. the person with whom the person alleged to be incapacitated resides;

6. a person otherwise concerned with the welfare of the person alleged to be incapacitated. This may include a corporation, or a public agency, including social services; or

7. the chief executive officer, or the designee of the chief executive officer, of a facility in which the person alleged to be incapacitate is a patient or resident.

What a Court considers

The court may appoint a guardian for a person if the court determines:

1. that the appointment is necessary to provide for the personal needs of that person, including food, clothing, shelter, health care, or safety and/or to manage the property and financial affairs of that person; and

2. that the person agrees to the appointment, or that the person is incapacitated.

The determination of incapacity consist of a determination that a person is likely to suffer harm because:

1. the person is unable to provide for personal needs and/or property management; and

2. the person cannot adequately understand and appreciate the nature and consequences of such inability.

In reaching its determination, the court gives primary consideration to the functional level and functional limitations of the person. Such consideration includes an assessment of that person’s:

1. management of the activities of daily living;

2. understanding and appreciation of the nature and consequences of any inability to manage the activities of daily living;

3. preferences, wishes, and values with regard to managing the activities of daily living; and

4. the nature and extent of the person’s property and financial affairs and his or her ability to manage them.

In addition, the court shall consider all other relevant facts and circumstances regarding the person’s:

1. functional level; and

2. understanding and appreciation of the nature and consequences of his or her functional limitations.
The proceeding to appoint a guardian can be contentious. The person alleged to be incapacitated may object to the proceeding; or family members may argue over who should be a guardian.

Estate planning can help prevent the need for a guardian. If the person executes a power of attorney or health care directive prior to any alleged incapacity, this could help prevent the need for a guardianship proceeding. Speak with your attorney about how to limit the need for a guardianship proceeding; or if necessary how to petition for one.


Regardless of how large your estate is, you may have a need to put in place a plan to protect your assets due to creditor or business issues; or at death to provide adequate protections for, say, minor children and wayward heirs.
In addition, beneficiary designations for assets such as IRAs should be kept current and name the right people – if the IRA owner is now divorced and neglects to change the designation to his new spouse, the likelihood is that the (now) ex-spouse will take. Or the beneficiary may be a spendthrift heir.
There are many non-tax reasons for creating trusts, including creditor and predator protection, as well as controlling the ultimate disposition of assets while still providing for a beneficiary over the beneficiary’s lifetime.
A self settled trusts is a “spendthrift” trust wherein the creator of the trust is also the beneficiary of the trust. If your jurisdiction recognizes self settled trusts, a creditor may be prevented from enforcing a judgment against the assets in the trust. There are sixteen states that currently have a form of asset protection trusts: Alaska, Colorado, Delaware, Hawaii, Mississippi, Missouri, Nevada, New Hampshire, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Virginia and Wyoming.
The most important aspects of a self settled trusts are that they are irrevocable, contain a spendthrift clause and apply the law of the applicable state. Also, sometimes that trustee must be a resident of the state.
Tenancy by the Entirety
Several states will prevent a creditor to enforce a judgment against a spouse for the other spouse’s personal debts. As a result, property held as tenancy by the entirety protects the assets from creditors. However, if both spouses are a debtor to the creditor, the creditor can reach the property. Spouses should take into consideration that property held as tenants by the entirety require both spouses to consent to the sale of the property.
Fraudulent Transfers
Although a settlor of a trust can possibly create a spendthrift trust, trust set up for the purpose of avoiding a known or potential creditor may be null and void and the transfer may be considered fraudulent. A fraudulent transfer would occur if the transfer was made to hinder, delay or defraud creditors. Also, some types of obligations such as child support cannot be eliminated with a self settled trust.
There are both federal and state statutes that prevent the fraudulent transfer of assets. If the transfer is considered fraudulent, then it will be voidable. There is a statute of limitations for making such a claim. Under the Uniform Fraudulent Transfer Act that forty three states and the district of Columbia have enacted, the statute of limitations is four years.
Although the courts have discretion to determine what is a fraudulent transfer, the following would indicate that the transfer could be fraudulent:
– Transfer was made when the transferor was insolvent;
– Transferor has been sued or threatened with a lawsuit; and
– Transfer made but still allowing for possession of the property.
There are other indicators of a fraudulent transfer also. For potential claims after the transfer has been made, the court will generally look to see if it was reasonably anticipated that there could be a claim against the transferor when the transfer was made.
Speak with your attorney about asset protection to make sure that you do it the right way.


One of the most important decisions you will make when planning your estate is selecting a fiduciary. Most people will select an individual to be the executor of their Estate. Some will select an individual as a trustee of their trust. Others will select a corporate fiduciary in certain situations. This article reviews the plusses and minuses of selecting an individual or corporate fiduciary or trustee.

Duties of Fiduciaries

When selecting a fiduciary, it is important that you select a person or entity that is willing to carry out the responsibilities and duties necessary to administer the estate or trust. Some of the duties include:

– take possession and control of the assets and safe guard them;
– prosecute claims and defend against claim;
– make appropriate investment decisions;
– manage non-monetary assets such as real estate;
– provide appropriate accountings to beneficiaries;
– keep trust assets separate from personal or other assets;
– pay taxes and file returns;
– keep costs of administration reasonable;
– terminate the trust pursuant to trust terms;
– administrator the trust for benefit of beneficiaries and not for the trustee; and
– follow the terms of the trust.

Trusts are created for various purposes. It is important to determine why the trust was created and for what purpose. Trust could be formed for asset protection, tax minimization, to limit access of moneys to certain beneficiaries, and to avoid probate. Knowing the particulars of the beneficiary is also necessary to determine what issues the fiduciary may have such as having a special needs beneficiary. Also, knowing what type of investment decisions the fiduciary is required to make will help in choosing a fiduciary.

When choosing a trustee, it is important to look at the persons experience in handling business and financial matters as well as handling family type situations. Sometimes just knowing the person’s demeanor could provide insight on how the fiduciary will handle the role. Also, considering any conflict of interest can help in choosing a fiduciary. You would also want a fiduciary who you think will complete the job.

Advantages of Individual Trustees

The advantages of an individual trustee are:

– May be familiar with the family dynamics;
May be familiar with the family business;
– Cost of administering the trust is usually less; and
– The assets remain in control of a family member usually.

Disadvantages of an Individual Trustee

Some disadvantages of an Individual Trustee are:

– May lack the sophistication to handle complicated trusts;
– May not have the time to administrator the trust;
– May be unduly influence or have a conflict of interest;
– May not be able to complete the duties due to illness or death; and
– May not be able to administrator the trust if assets are in various jurisdictions.

Advantages of Corporate Trustees

– Has the ability to handle sophisticated trusts with large amount of assets;
– Is usually familiar with the laws and regulation with regard to trusts;
– May have multiple offices in different states where trust assets are held;
– May provide more proficient formal accountings;
– Has continuity as an administrator; not need to depend on one person;
– Eliminates any tax complication arising from a beneficiary acting as a trustee; and
– Is a neutral party.

Disadvantages of Corporate Trustees

– Viewed as and may be insensitive to family needs and concerns;
– Fees are usually higher;
– Lack of family control;
– May more likely reject the administration of the trust if too cumbersome and not adequately funded, tor o high a cost to administer and not generating enough fees.

Speak with your attorney about who is best to serve as your fiduciary.


Will drafting can be complicated. People can run into problems if they attempt to do it on their own, or rely on websites that do not offer legal counsel, or even if they hire an inexperienced or lesser qualified attorney to do it on the cheap. Unfortunately, many of these people never realize the potential ambiguity that can occur in will drafting because they die before the ambiguity is discovered, causing havoc for their beneficiaries or heirs.

This article addresses the types of ambiguities that can result from poor drafting of the will. By recognizing them, you will understand more fully the reason why you should hire an experienced attorney to draft your will.

Types of Ambiguities

Generally, there are two types of ambiguities in law:

Patent Ambiguities, and;

Latent Ambiguities.

A patent ambiguity is apparent on the face of the will, meaning that the wording itself is ambiguous or could be interpreted various ways. An example would be that the will states that a gift is given to one beneficiary in one part of the will, yet later in the will, gives the same gift to another beneficiary. Or stating that the remaining of the estate should be distributed in the following percentages, but the percentages do not add up to 100%.

A Latent ambiguity is where the wording itself is not ambiguous but it would have various meanings. An example of Latent ambiguity would be making a bequest “to my nephew, Michael,” when the testator has two nephews named Michael.

Latent ambiguities can be classified two ways: equivocation; or misdescription. An example of an equivocation is when a testator states that I leave my estate to my nephew, but the testator has more than one nephew. An example of a misdescription would be if the beneficiary is mentioned with a nickname or when a piece of property is listed with the wrong address.

Will Construction

When there are ambiguities in a will, this leaves open potential litigation if the beneficiaries or heir cannot agree on the interpretation of the Will; or the court itself decides the will cannot be interpreted. If that is so, the court will usually entertain what is generally called a will construction proceeding.

A will construction proceeding is when a fiduciary or a person interested in obtaining a determination as to the validity of a will present to the court the particular portion of the will necessitating an interpretation.

Many courts will first look at the plain language of the will to see if a meaning can be given to the ambiguity by interpreting what the testator’s intent was. In some cases, if the plan meaning cannot be resolved, some courts may treat a gift as a failed gift in keeping with the general rule that court will only admit extrinsic evidence to resolve ambiguous wording, not to rewrite wills.

If looking at the plain language of the will does not resolve the ambiguity, the court may look at the surrounding circumstances known to the testator at the time the will was drafted. Again, a court may admit extrinsic evidence to resolve ambiguous wording but will not add words to the will, since it considers that re-writing the will.

Many of the ambiguities in a will occur because the testator attempts to avoid proper estate planning. Speak with an attorney about your estate planning needs. There is no reason why a will need be ambiguous with proper estate planning.


When a loved one dies, the nearest family members or sometimes close friends when no family is known or near by, wonder what to do about the assets of the decedent immediately upon death. Any person’s assets can fall into certain categories including :

Household items;
Jewelry and other valuables;
Belongings in a Safe Deposit Box;
Bank Accounts;
Brokerage Accounts;
Real Estate; and

Household Items

If the decedent was married and living with a spouse, the household items would affectively be the property of the spouse. In many states, the spouse would receive at least the first $50,000 of property even if there was no will. So, unless the decedent specifically designated certain items to beneficiaries in a Will, the surviving spouse would have the household items.

If there was no surviving spouse, then most of the time, the children, if any, would determine how to split the household items in an amiable way and inform the personal representative of the estate; or the personal representative will choose; or there would be an estate sale.

Jewelry and Other Valuables

If there are some personal items such as jewelry or art work of high value and have not been designated to a beneficiary in a Will, or the value is exceedingly high, a closer look at the estate plan of the decedent is necessary to determine who and how to distribute the valuables. In these cases, the personal representative may have authority to determine the best way to distribute the items if not specifically designated in a Will. Similar the same would be for cash found in the household.

Safe Deposit Box

Sometimes valuable and important documents are kept in a safe deposit box. Sometimes the safe deposit box is only in the decedent’s name or there is another person who also has access to it. When someone dies, someone may need to get a court order to open it; or if the joint owner can open it, then an inventory should be taken, preferably with a witness.

Bank Accounts

If a bank account is in the name of the decedent only, then it is effectively frozen until the personal representative opens an estate account and there is a transfer of monies into the estate account.

If the account is a joint bank account, then in most cases the assets in the account are non probate assets and would belong to the surviving owner of the bank account, unless the decedent opened the account and added the name of the second owner “for convenience only,” wherein the account would be subject to probate and the second owner would not have ownership of the assets in the account.

Sometimes there are accounts that have a designated beneficiary. In that case, the beneficiary would inherit the moneys in the account without probate of the account.

Brokerage Accounts

Brokerage accounts in most cases would be similarly treated as bank accounts. However, there could be stocks or bonds held in the name of the decedent with a designated beneficiary, or jointly owned, or there is a transfer upon death provision naming a beneficiaries. Depending on how the stocks, bonds, or funds are held, they can either be part of the probate process, or go directly to named beneficiary or joint holder.

Pension, IRAs, 401ks

If there is a named beneficiary of the accounts, then the named beneficiary obtains the funds without probate. If there is a named beneficiary other than the spouse, the surviving spouse may be able to challenge the name beneficiary of certain accounts.

If there is no named beneficiary, then the asset would flow to the estate for probate or administration.

Real Estate

Real Estate could be a non probate assets if it is jointly held or if the persons inheriting it would receive it by “operation of law.” It is a good idea to check with a title insurance company to make sure that a transfer of the property without probate would be considered proper from the title company’s point of view in case the person receiving it wants to sell at a later date.


Similar to designated accounts, if the insurance names the beneficiary, then the beneficiary would receive the funds without the need for probate. If there is no named beneficiary, then the proceeds would flow to the estate.

Speak to an attorney about these issues, so you become aware of what would happen when a family member passes; or for you to develop a proper estate plan.


An issue that sometimes occurs in the administration of an estate is that the decedent’s nearest family members are cousins or other extended family members, and they cannot be found. This usually occurs when a very elderly person dies without children or spouse, and most other family members have predeceased the decedent.

Generally the distribution of assets when a decedent dies without a Will (called “intestacy”) is distributed as follows:

1. To the spouse and possibly part of the assets to the children;

2. If no spouse or the spouse is predeceased, then to the children;

3. If no spouse and no children, then to the parents;

4. If no spouse, no children and the parents have died, then to the siblings;

5. If no spouse, no children, the parents have died and the siblings have passed, then to nieces and nephews;

6. If no spouse, no children, the parents have died, no siblings or the siblings have died without children; then to the grand parents (if living) and if not, then to aunts and uncles. If the aunts and uncles are deceased, then to the cousins.

So, in a intestate situation, a decedent could possibly die and leave only cousins as heirs.

This can also occur even if the decedent has a will and many of the beneficiaries have predeceased the decedent; and there is a lapse in a bequest. Lapsing means that if a beneficiary dies before the testator, their share goes to other named residuary beneficiaries of the estate (those people who inherit assets after paying specific bequests) unless specified that the beneficiary’s share goes to their issue (decedents). The laws of each state vary.

There are anti-lapse statutes wherein the state law allows certain decedent (usually children of siblings) to inherit when the sibling predeceases the testator even if the testator failed to mention them in the Will.

Conversely, if a beneficiary who was intended to inherit part of the residuary estate predeceases the testator, and that beneficiary is not covered by the anti-lapse statute, then that beneficiary’s inheritance will return to the residuary estate, to be inherited by the other residuary beneficiaries. If there are no surviving residuary beneficiaries and the anti-lapse statute does not apply, then possibly extending family members may inherit.

Therefore, depending on the various scenarios, there can be situations where the estate assets would go to extended family members even if there is a Will.

If there is a possibility that the extended family members will inherit from the decedent, a good idea is to draft a family tree during the estate planning process. This way, the personal representative of the estate will have a family tree diagram and possibly an affidavit to review when determining what extended family members will inherit the assets of the estate.

Otherwise, it can be extremely time consuming and costly for the personal representative to find the name of the extended family members and there location in order to serve a citation or notice for them to appear in court or become aware of the estate proceeding. Further, when there is ambiguity in a family tree when it come times to account and distribute assets, a kinship proceeding may be necessary to resolve who is entitled to inherit from the decedent.

In a kinship matter, the heir who seeks to establish kinship must proof kinship, or the court will dismiss their petition to establish kinship and the court will order the assets be deposited for the benefit of “unknown distributees” with the state. No one want the moneys to go to the state because proof of kinship cannot be established.

Therefore, it is important for you to have a proper estate plan that sets forth all your relationships so that your attorney can keep records of it. Speak with your attorney about these issues.