Arnold Law Firm, LLC

What if someone who died owed more than they could pay?

2024-01-15T20:34:07Z

When someone dies in Mississippi, the property that they owned becomes the property of their estate. They may have selected certain family members or charitable organizations to receive their assets. Unfortunately, their financial obligations also pass to their estate. People may have had massive student loans, large credit card balances or medical debt from their end-of-life care that becomes a responsibility of their estate. What happens if there aren't enough assets in the estate to pay those debts in full?

The personal representative must proceed with caution

The party handling estate administration is at risk of financial liability for debts in some cases. Unusually, the personal representative should communicate with creditors and make a point of paying them with whatever assets remain in the estate. If someone dies while owing a debt and they have a cosigner for that debt, the cosigner may be the responsible party for any remaining balance due after their death if the estate cannot settle the account. The personal representative is typically not responsible for debts owed by the decedent if there are not sufficient assets in the estate to repay those debts. They may need to liquidate estate property to pay debts to the best of their ability. If they make mistakes in that process, they could then become personally responsible for the remaining debt. If someone improperly distributes estate assets to beneficiaries or pays creditors in the wrong order of priority, they might face that lead to personal financial responsibility. It is, therefore, crucial for those managing an estate with significant debt to learn more about Mississippi law and follow the right procedures during estate administration. Properly handling debts, including sending formal notice to creditors, can help mitigate the personal financial liability risk that comes with engaging in estate administration.

Can you change the executor of your will?

2024-01-04T13:36:48Z

Choosing the executor of your will was possibly one of the most complicated things you did when drafting your estate plan. You may have assessed several parties to find one with the needed qualities. Thus, removing them can be a difficult decision. But what can lead to this decision?

The chosen party no longer wants the role

An executor should be willing to serve. Your chosen party may have accepted the role before but can change their mind later. If this happens, you will need to appoint another executor. Regardless of why your executor no longer wants the responsibility, your relationship doesn't have to change. Respect their decisions and name another party.

Falling out

Trustworthiness is a crucial quality of an executor. You should trust that your executor will act in your best interest. Thus, if you have a personal falling out with your executor, consider choosing another party.

Divorce

If you named your spouse your will's executor but have since gotten a divorce, you may need to remove them.

Another party is better equipped to serve

Chances are your named executor didn't understand the role in depth in the beginning. That's why it's crucial to connect them with professionals and keep them updated on the estate regularly. However, if your executor's skills fail to improve as expected after providing them with the needed resources, you can choose another party you believe is better equipped to serve.

Incapacitation/death

If your executor becomes incapacitated and can't fulfill their duties, you should choose another person. Lastly, if your executor dies, you will name another one. Removing an executor can be complex. Get legal guidance to understand the steps to take to validate any changes you make to your estate plan.

Is undue influence a form of fraud?

2023-12-19T15:27:49Z

There are many types of fraud that can impact an estate plan. One of the most obvious is when someone replaces the official will with a fraudulent document. Perhaps a family member found out they were being disinherited, for example, so they substituted the document to take some of the inheritance from their siblings. But these types of things are relatively uncommon, as most people would not take such drastic steps. There’s another type of fraud, known as undo influence, which may be used to accomplish a similar goal. But it works in a much different fashion.

Influencing someone else’s decisions

With undue influence, it’s usually a form of manipulation. The person who is using it is trying to influence the decisions that the other person makes as they draft their estate plan. Rather than creating a fraudulent will, they are just trying to manipulate the actual will so that it says what they want. For example, the person who wants to change the estate plan could be a caregiver for the elderly parent who is writing it. But they could threaten to stop providing necessary care and assistance until the estate plan has been altered in their favor. They could also use other manipulative tactics, like lying about the other heirs and beneficiaries. They use their position of power, along with this manipulation or inaccurate information, to get the elderly person to file a new and altered will that is not really in line with what they wanted. Undue influence and other types of fraud can be very complicated in an estate planning context. Those involved need to be well aware of their legal options.

How do you convince a loved one they need an estate plan?

2023-12-04T18:57:20Z

Do you have a parent or other loved one who doesn’t see the need to have an estate plan – even a will? A lot of people do. If you’ve decided to use part of your time together over the holidays to convince them that they need to put something in place, here are just a few things they may not realize could happen if they die “intestate” – without a valid will.

You can’t choose who will administer your estate

When you draft your will, you designate an executor who will oversee the distribution of your assets and be responsible for things like paying outstanding debts, dealing with the probate court and more. If you don’t designate that in your will, the court will appoint someone who may or may not be the person you would have chosen.

Your assets will be distributed according to state law

By drawing up a will, you can leave your assets to just about anyone or any organization you choose. For the most part, you don’t have to leave something to relatives with whom you have no relationship. If you die intestate, assets are dispersed according to Mississippi law. Spouses and/or children inherit everything. For men, this means if you had a child outside of marriage, that child has the same right to a share of your estate as your other children if it can be proven that you’re the father – even if you never knew they existed. If you don’t have a spouse or children, your parents and siblings are next in line. As noted, no consideration is given to your actual relationship. Familial relationships (how you’re related by blood, marriage or adoption) are the only consideration. In Mississippi, there’s no distinction between “half” and “whole” relatives. That means if one or both of your parents remarried and you’ve got step-siblings out there, they could potentially inherit everything. Even if you have no remaining family (at least that you know of), wouldn’t you prefer to leave whatever you have to a worthy charity, your alma mater or perhaps to a close friend?

Families can fight over small estates

A person doesn’t have to leave millions of dollars behind for families to fight over an estate. There are family battles every day over jewelry, antiques and even tchotchkes based on what the deceased supposedly told them at some point. With some legal guidance, you can ensure you have a valid will that makes your wishes clear and lets you determine how your assets are distributed.

Why gifting your assets isn’t always advisable

2023-11-20T02:12:29Z

Transferring assets to loved ones as gifts might seem a viable alternative to achieving your estate planning objectives. After all, it allows you to pass on your estate to loved ones, just like you would with a will. However, gifting your assets can lead to negative unintended consequences that might significantly impact your legacy. Below are some of the potential drawbacks.

Loss of control and access

Relinquishing ownership of your assets means surrendering control and access. In other words, you are no longer considered the legal owner. Unforeseen circumstances, like sudden health issues or financial emergencies, could leave you vulnerable without the resources you once had.

Tax implications and complexities

Gifting assets to loved ones can have significant tax implications and complexities that need careful consideration in estate planning. For instance, there are limits on the value of gifts that can trigger the gift tax, which can take away from your estate.

Exposure to risks and liabilities

Assets transferred as gifts might face unforeseen risks, such as legal liabilities from creditors or legal disputes involving beneficiaries. Such vulnerabilities could jeopardize the intended security of the gifted assets. Additionally, the sudden wealth through gifting can overwhelm beneficiaries, leading to irresponsible financial choices or family disputes. Proper financial education and preparation are often lacking when assets are gifted abruptly, potentially causing more harm than good.

Striking a delicate balance

Estate planning demands a delicate equilibrium between securing your future and ensuring a seamless transfer of assets. Solely relying on gifting as a strategy can make it difficult to attain this balance. Seeking legal guidance can help you find a more comprehensive approach tailored to your situation and estate planning goals.

Do you need a digital estate plan?

2023-11-02T20:15:32Z

As technology continues to evolve and become an integral part of our daily lives, it’s increasingly imperative that we have a complete understanding of every place we have left a digital footprint. In today’s world, creating an estate plan for your digital assets is just as important as creating one for your physical assets.

What is a digital estate plan?

A digital estate plan informs your loved ones how to access your online accounts and your final wishes for how you wish each one to be handled. It should cover a wide range of digital information, including:

Email accounts
Social media profiles
Online banking and investments
Digital photos and documents
Websites and domain names
Cryptocurrencies
Online shopping accounts
Rewards points or airline miles

For each digital asset, you need to include login information, including passwords, security questions, and if they require multi-factor authentication. You should also have any linked email accounts used for username or password recovery. Without this information, your family may be unable to access your accounts due to privacy laws. Social media platforms each have different methods for handling accounts for the deceased. You can decide if you want your account deleted or, in the case of Facebook and Instagram, have it converted to a memorial page. Even though you have already named an executor for your physical estate plan, you will also need to name one for your digital estate. It could be the same person if you wish. However, the person who manages your digital assets should be tech-savvy. You will also need to have a secure way to store this information. It can be a physical document in a safe deposit box, a password-protected digital file or an online service. Just like your physical estate plan, your digital plan is not a one-time thing. As you add or delete accounts or change login information, it’s crucial to update your digital plan to reflect those changes.

Is it time to talk to your parents about Powers of Attorney?

2023-10-20T11:55:31Z

As an adult, you often have to juggle various responsibilities. From work commitments to family obligations, life can get busy. However, one crucial matter you should not overlook is discussing Powers of Attorney (POA) with our elderly parents. These legal documents can ensure that your loved ones are protected and cared for when they become incapacitated. What is the significance of Powers of Attorney? How do you know it’s time to discuss them with your elderly parents?

What is a Power of Attorney?

This legal document grants an individual the authority to act on behalf of another person in specific legal and financial matters. Powers of Attorney come in different forms, including a General POA, which grants the agent broad powers to handle various financial and legal matters on behalf of the principal. You can also explore a durable POA, which remains in effect even if the principal becomes incapacitated. It’s a powerful tool for helping ensure that your elderly parents’ interests are protected if they can no longer decide for themselves.

The importance of discussing Powers of Attorney

As a loving and responsible adult child, initiating a conversation about Powers of Attorney with your elderly parents is essential because it can ensure that your parents’ financial and healthcare interests are safeguarded, should they become incapacitated. Without these legal documents in place, decision-making may fall into the hands of strangers, and the outcome may not align with your parent’s wishes. By discussing Powers of Attorney in advance, you can also alleviate the stress and confusion that can arise when important decisions must be made quickly. Your parents can have peace of mind, knowing their wishes are understood and respected. You can help your parents make informed decisions that align with their wishes by engaging in open and empathetic conversations. Don’t wait for a crisis to strike; start the dialogue on POA today, and you may provide them with the peace of mind they deserve.

Why should you consider a trust for your estate plan?

2023-10-03T12:11:20Z

Estate planning ensures your assets are distributed according to your wishes after you're gone. While many people are familiar with wills, trusts offer another avenue for estate planning. They can provide more control over your assets, offer greater privacy and may offer tax benefits.

A trust is a legal entity that holds and distributes assets according to the terms set by you, the trust creator. However, not all trusts are the same. They can be categorized into two main types: revocable and irrevocable. Understanding the benefits of each can help you make an informed decision about your estate plan.

Revocable trusts offer flexibility

A revocable trust, also known as a living trust, can be altered, changed or revoked entirely by you during your lifetime. This lets you modify the trust terms as your circumstances or wishes change. One of the main advantages is that assets in a revocable trust avoid probate, which is the legal process to authenticate a will.

Irrevocable trusts provide asset protection

Once you've placed assets into an irrevocable trust, you generally can't modify or withdraw them without the beneficiary's permission. Though this might seem like a drawback, it's a powerful tool for asset protection. Assets in an irrevocable trust aren't considered part of your estate for tax purposes, potentially reducing estate taxes. Additionally, because you no longer technically own the assets, they're usually shielded from creditors and legal judgments.

It's critical that your estate plan clearly outlines your wishes. Within each type of trust, certain trusts serve specific purposes. Working with someone familiar with trusts as part of a comprehensive estate plan can help you make a knowledgeable decision.

Estate planning considerations for people with dangerous jobs

2023-09-21T01:36:13Z

Many people believe that estate planning only involves issues relevant to elderly individuals, so they put this vital task off until they are older. However, those with high-risk occupations usually benefit from a plan regardless of age. An untimely work-related accident could leave your family and assets vulnerable if you suffer disabling injuries or death. An estate plan that accounts for the possible consequences of a dangerous career can protect your autonomy and the people you love.

What are considered high-risk occupations?

Careers within the high-risk category are those with a higher-than-average risk of injury, illness or death. Such jobs can be dangerous for multiple reasons, such as exposure to hazardous materials or working at great heights. Examples of risky Mississippi occupations include:

Roofing and construction
Professional health care
Logging and agriculture
Iron and steel working

Executive-level careers that involve frequent travel, especially to overseas locations, may also have a higher-than-average injury or death risk.

What estate planning documents should you consider?

Of course, you will want to create a will and keep it updated regularly. You may also want to consider adding advance medical directives, such as a living will and health care power of attorney, to your plan. They can help you state your wishes about your medical care and designate who can speak with your medical team if a workplace accident or illness incapacitates you. You have many options for ensuring that your assets remain protected for future generations. One or more trusts could provide you with a way to transfer your wealth to your loved ones. Well-prepared trusts can also ease the probate process for your family if a work accident leads to your death. Experienced legal guidance can help to ensure that your estate plan covers most or all possible outcomes after a work accident.

4 things to include in an estate plan

2023-09-05T02:46:35Z

An estate plan allows a testator to instruct how their estate is handled once they pass away. There’s a lot to understand when making an estate plan. Here’s what you may need to include:

Your list of heirs

A will typically includes an itemization of assets. It also includes a list of people who should benefit from the will. Your heirs can include anyone that might be friends and close relatives, such as spouse, children and siblings. These people will likely be contacted shortly after the testator's passing and notified about what they should expect to inherit.

The executor of the estate

A will also typically includes an executor of the estate. The executor is responsible for validating and filing the will to start probate. Probate allows the executor time to contact beneficiaries, file taxes, collect death certificates, contact banks, pay debts and disperse assets. Depending on how complex the estate is, probate can last over a year.

Power of attorney

The testator can also name a power of attorney. A power of attorney is a representative who acts on behalf of the testator if they were to be incapacitated after an accident or medical condition. The power of attorney can decide how a testator's medical and financial decisions are made until the testator recovers or passes away.

A guardian recommendation

Many parents name a guardian for their minor children in their estate plans. A child’s guardian is meant to take over the responsibilities of raising a child if their parents suddenly and unexpectedly pass away. Designating this person tells the court who you want to take care of your child if anything happens to you. If you’re looking to plan out the future, then you may need to reach out for legal help. Estate plans can be more complicated than a lot of people realize, and you want to make sure that you get everything right.