Safe deposit box cause a lot of headaches when the box owner dies. Certain people (such as a spouse, a parent, an adult child/grandchild, or a person named as a personal representative in a Will) are allowed to open and look in the box, but only to remove a Will or burial plot or life insurance policy. If you’re not one of the designated people, then you have to get a court order to open the box. Nobody is allowed to remove any contents unless they are a joint owner of the box. The only way to remove the contents is to open a probate administration. This can be very frustrating if you live locally, but imagine if your family members live in another state. Safe deposit boxes are good for items you cannot replace, such as jewelry, collectibles etc. If the item can be replaced (i.e., passport, deed to your house, car title etc) it does not need to be in a safe deposit box. Close your box if you don’t need it and safe your family members the headache and expense of dealing with the box.
Trust & Estate Tip of the Day: Do you have a Durable Power of Attorney for one or both of your parents? Are you also a joint owner of their bank account for convenience purposes? If so, you’d better confirm with the bank that you are actually a joint owner and not just listed as the power of attorney (which is called attorney-in-fact). I see this happen often – the (adult) child thinks he/she is a joint owner of the bank account, mom/dad dies, and all of a sudden the account has to go through probate because it really wasn’t a joint account, the child just had access via the Durable Power of Attorney.
Trust and Estate Tip of the Day: A friend asked if a life estate avoids probate. The answer is yes it does. As a little background, a life estate is a way of owning real estate. Title is split between two parties, the life tenant and the remaindeman. When the life tenant dies, title automatically passes to the remainderman. Under the right circumstances, this is a great tool to avoid probate. But there are several drawbacks of this type of ownership. For instance, sometimes the remainderman dies before the life tenant, and then a probate is needed for the remainderman. Even when using enhanced life estate deeds (aka lady bird deeds) problems can arise. In most circumstances, a revocable trust is a much better choice than a life estate deed.
Trust & Estate Tip of the Day: You have a Last Will and Testament, so your estate will avoid probate . . . . WRONG! Having a Will does not keep your estate from going through the probate process. Probate is a court proceeding which is necessary when you die owning assets that don’t pass to someone automatically. What passes automatically? Jointly owned assets, financial accounts that name a beneficiary, and assets titled in a trust do not have to go through probate. All other assets that you own typically will go through probate, even if you have a Will. A revocable trust is a simple way of avoiding probate, especially for real estate. Naming beneficiaries on all financial accounts (which was the subject of a prior post) also helps tremendously.
Trust & Estate Tip of the Day: Where is the best place to store your estate planning documents? Well, that depends on the type of document and your specific circumstances. But one thing is for sure, you want your health care advanced directives to be easily accessible by your designated surrogate(s). Give copies of these documents to your surrogate(s) – which might include hard copies or electronic copies (such as email) or if you feel comfortable then store them in the cloud. Your surrogate may need to make a quick decision and will need to show that he/she has the legal authority to do so. DO NOT store your health care advanced directives in a safe deposit box. They do you no good there. Where should you store your will? Stay tuned