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Anthony Park
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There is no legal time limit to transfer real estate after death. It could happen quickly, or it could take years. We’ve seen cases where the real estate doesn’t get transferred until generations later. A fast sale is ideal, because problems can emerge in the meantime. There is a lag between the date of death and when the executor gets legal authority to handle the property. So, even “fast” isn’t very fast.
How long does it take to get preliminary letters? The executor does not have full authority over the estate until he gets letters testamentary (or letters of administration) from the court. Preliminary letters give the authority to collect and manage property of the estate. They will not grant authority to distribute property. Preliminary letters are handy for entering the real estate for repairs, etc.
Theoretically, the executor can get preliminary letters within a week. They can be issued same-day in emergency situations. Realistically, getting the letters is a slow process. We’ve had properties with leaks and rodents, and it still took us weeks to get preliminary letters. We called the court daily and filed papers often, and it didn’t move as fast as we needed it to move.
If you have an estate without emergencies, you probably won’t get preliminary letters. If the court takes weeks to respond to emergency petitions, they aren’t going to move any faster for “normal” estates.
How to prevent foreclosure on inherited property Undoing a foreclosure proceeding has legal costs and other implications. No one wants to deal with that. To prevent foreclosure, first notify the lender. Even though the mortgage company can’t give you much information without court letters, you should still inform them that you are working on the estate. If the lender doesn’t hear from anyone, they will go right to their foreclosure counsel.
When folks hear the word “foreclosure,” they think of mortgages. Your homeowners’ association or co-op board can also take action, because they aren’t getting paid either. Again, they won’t have the legal authority to work with you. But you can let them know that you are getting preliminary letters.
You should also look up and notify any other potential lien holders. There could be a mechanic’s lien, or a family member with a non-bank mortgage on the property. You might be surprised what a simple letter can do. Let them know that you are working on the estate so that no one else starts a process that is costly to undo.
What to do when property owner dies There are certain things you can and can’t do without court letters.
First, you cannot forward the mail. The post office needs legal authority to do that.
You most likely cannot change the locks. Although, this is a gray area. If you are in a managed co-op or homeowners’ association, they will bar you from securing the property. You have a better chance of securing a property that is not managed. If you think it will be a contested probate, don’t change the locks. You can get in big trouble, especially in New York.
You may be able to winterize the property and secure it in other ways. Piled up mail and overgrown grass signal vacancy and can attract thieves or vandals. Even if you don’t have legal authority to clean up the newspapers, the court won’t give you a hard time deterring criminals.
Remember, the property manager may not even live in the same state. Make a relationship with the doorman or superintendent and notify them of the owner’s death. They can keep an eye on the property and let you know if something looks off. Without court letters, you won’t get access to the interior of the property. But, the doorman can let you know of a leak or pests or a problem that affects the nearby units.
Communicate with everyone until you get legal authority from the court to handle the property. Preliminary communication can stop a whole lot of problems from starting.
My book, “How Probate Works,” can help you know what to expect with probate real estate.
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We’ve talked before about not making a loved one your executor. I recently read an article titled, “2 Big Reasons Not to Make a Loved One the Executor of Your Estate.” Here, we’ll add our own perspective for why it’s not a great idea.
Being executor can be emotionally difficult It is a duty that begins almost immediately after the death of your loved one. You are grieving the loss while facing a list of daunting tasks. Even normal probate is a lot of work and can be tough while grieving.
In a somewhat difficult probate, you navigate the decedent’s family and friend relationships. If you are also family and friends with these people, it can be awkward. They will continually ask you when they will receive their inheritance. Some will complain that they get less money than others. You may not get far into the probate process before this happens.
It goes without saying that a difficult and dramatic probate is even more burdensome and draining.
Being executor is long and time consuming If you think probate lasts a few weeks or months, think again! Probate lasts many months and sometimes many years. Over the past few years, we’ve seen probate take longer than ever.
Many of the executor’s tasks must be done in person. This means walking into a bank and taking care of the assets face-to-face. It is very inconvenient, especially if the executor works and has a busy home life. The executor cannot delegate responsibilities by power of attorney. An attorney can help with many tasks, but not all.
Things an executor needs to know The executor should have an understanding of legal issues and risks of being executor! An executor is personally liable for mistakes they make during the probate process. This includes asset valuations, purchases, sales, tax complications, failure to pay debts, and more. The executor is liable out of their own pocket. Creditors can come after the executor’s bank and brokerage accounts and their home.
There are a lot of tax issues when administering an estate. The taxing authorities know that this is their last chance to wring every last cent out of that social security number. The IRS will go through the assets with a fine tooth comb. What if your executor doesn’t have the skills to manage assets? The executor should be able to manage real estate, financial assets, and unique assets such as small businesses, collectibles, and bitcoin. If your executor doesn’t have an existing skill set for managing assets, don’t count on them learning when you pass. It’s too much to ask someone to learn how to manage assets while they are mourning.
Many people think things will be fine as long as their executor hires the right people (lawyer, CPA, etc.). It is important to have a good team during probate, but it is not enough. Each of these professionals have their own incentives and opinions. And remember, none of them are personally liable. Just because you hire a lawyer to help with probate doesn’t mean you will get the best advice. Even if your CPA is great at doing your income tax returns doesn’t mean they know how to do tax returns for an estate. You need professionals who have a solid understanding of probate.
The article we reviewed also recommends working with experienced professionals. People are starting to hear more about professional executors. Whereas, even 5 years ago, it wasn’t quite as popular. If you want to learn more, check out my book, “How to Hire an Executor.” When people understand what professional executors do, they like the option. They are thrilled to have that burden lifted off of their loved ones.
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In this episode, we will talk about self-custodied bitcoiners (not those who have their coin on an exchange or with a third party). Some bitcoiners share their seed phrase with their spouse or adult children. Or perhaps they share their cloned wallet with those trusted individuals. It’s temptingly easy, essentially frictionless to share your seed phrase. But, as we’ll discuss, it can be insecure for reasons you may not think of. Sharing your seed phrase can be dangerously inflexible and not future-proof. Relationships change One reason that this plan is not flexible is because relationships change. Married couples can become divorced or widowed. You may have a falling-out with a loved one. Your relationship with your child may be good now, but the relationship could become strained or even estranged. If this happens, you may not want them knowing your seed phrase. That’s like giving the keys to the kingdom to someone you don’t trust anymore. They’ll won’t keep it secure Say you give your seed phrase to your spouse or adult son. No matter how wonderful they are, your loved one may not realize how important it is to keep your seed phrase safe. It’s not that they have bad intentions, they may just have bad operational security. Imagine if they tape your seed phrase to the refrigerator so they don’t forget! Besides exposing it, they may lose your seed phrase altogether. Don’t think that you’ll be successful in training or teaching your trusted loved one. Remember, self-custody is like a completely foreign language to them. When you first started with bitcoin, how many months or years did it take for you to understand how it all works? Your spouse or son might not want to learn about bitcoin, so they might take a photograph of the seed phrase or put it on a password manager app. What about giving them a clone hardware wallet instead? All they need to do is remember the PIN to open it. This still isn’t a great idea for the same reasons we just discussed. Keeping the hardware wallet up to date is a job. There may be updates every couple of months, and your spouse or son needs to remember to manage those updates. Besides, there is the risk of hardware failure. If your loved one doesn’t have the seed phrase and the hardware wallet is the only way to access your bitcoin, you’re looking at catastrophic loss. Even more robust external hard drives fail. Such technology could be outdated and difficult to open after many years. You can't take back a secret Once you’ve shared the seed, you can’t take it back. Think back to grade school: you tell someone your deepest secret and then realize that kid is a blabbermouth! You can’t undo what’s been done. Same with sharing your seed phrase. What if your relationship with that trusted person changes? You’ll need to create a new wallet and transfer your funds, otherwise your “secret” is with an untrustworthy person. We see this with our non-bitcoin clients. They make a treasure map or write a letter of instruction telling their trusted person where everything is located. Once you create that treasure map or letter, you have to keep it up to date constantly. Life changes could occur making it inapplicable. Similarly, if you don’t trust that person anymore, you need to move everything and make new maps and letters. Now you know why it is not secure to share your seed phrase. Hopefully this helps you to make the best bitcoin inheritance plan for your situation. I am working on my bitcoin book, and I hope to get it out there soon! In the meantime, check out my book, “How to Hire an Executor”, available on Amazon. If you are a bitcoiner, you may want to consider hiring a professional executor to navigate this complex component of your estate. Request your free consultation
This is a very common question that we get from Solo Agers. We’ll review the pros and cons of making that decision. Reasons to sell your home before you die The biggest reason Solo Agers want to sell their home before they die is because they don’t want to leave a mess for their loved ones. Otherwise, there may be a lot of cleaning, maintenance, and packing for the heirs to do. Additionally, the house may need renovations before it is in sellable condition. Another reason is that Solo Agers may want to downsize anyway. Downsizing is a different topic, so we won’t focus on that here. Reasons to leave selling your home to your executor after you die I often suggest that our Solo Agers live where they want and leave the task of selling the home to the executor after they pass. Don’t spend your final years cleaning, packing, staging, and moving if that’s not what you want to do. It’s probably not on your bucket list to clean out your garage before you die. Do those things you always wanted to do. Enjoy life! If you still feel that obligation to put things in order for your heirs, please know that probate is a mess no matter what. Don’t bother trying to leave it perfect. What if you clean out your home and you live longer than you expected? Now a new mess will accumulate. Even if you could know the exact date of your death, it still won’t work out perfectly. Another example of “helping” heirs is making treasure maps to your keys or passwords. Don’t do it. You may move your keys or change your password and forget to update your treasure map. You don’t need to spend your final days and years making your death convenient for everyone else. If you are still worried about burdening your heirs or executor, you could hire a professional executor. This could be us, or a bank, or a fiduciary company. It is the job of the professional executor to handle the cleanout, renovations, etc. Because we do these things so often, it’s not a big deal for us. And if something complex were to happen, then that’s our job, too. That’s what we get paid for. You can rest knowing that your professional executor is experienced and capable. You won’t have to burden your heirs with the tasks, and you won’t have to spend your final years worrying about what will happen after you die. Most Solo Agers are relieved when they learn that a professional executor can handle all of this. My book, “The Solo Ager Estate Plan,” can help you decide which tasks (if any) you should worry about before you die. I enjoy meeting more and more Solo Agers; it’s a growing population. As I work with them, I also learn a lot of things that I can pass along to all of you. Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
When someone dies, many folks are confused about who owns the house during probate, right after the death. Technically, the heirs own it immediately upon death, subject to debts and taxes of the estate. But, sometimes is not clear who the heirs are. The probate process decides who exactly are the heirs and places an executor in charge to sort out all those debts and taxes.
So, the heirs own the house, but if it is not clear who the heirs are, then you kind of need to wait to see who really owns it. Understandably, this is a bit confusing. We’ll cover common questions on who owns the property during probate.
Can multiple heirs inherit a house? Yes, multiple heirs can own the house either by will or deed. As you can imagine, having more than one heir inherit the house leads to a lot of problems.
The most common problem is when one heir lives in the house and won’t leave. Or maybe heirs can’t agree on how to manage the property. And, sometimes one heir wants to keep the property and the rest want to sell it. They might even disagree on how to buy each other out.
These conflicts often lead to a probate sale so everyone can take their share and walk away.
Can the executor sell a house that is in probate? Does the executor have the power and authority to sell a house that is in probate? Yes, absolutely. Besides, selling the house is often necessary. Maybe the will instructs the executor to sell the house and divide the proceeds among the heirs. Sometimes the house has to be sold to cover the estate bills/taxes that the bank accounts can’t cover. Or, as mentioned above, the house has to be sold because multiple heirs can’t agree on what to do with the property.
Do all heirs have to agree to sell property? Preferably, all the heirs should agree; that would make life easier! But they don’t necessarily have to agree.
If there is a court-appointed executor, then executor can make the impartial decision (if it’s a professional executor and not a family member). If the executor is a family member or one of the heirs, then the decision isn’t really impartial and there is potential for drama.
If multiple heirs are on the deed, then the house is technically not part of probate. If heirs are in conflict about the deed, then there will be expensive court proceedings to either bring the property back into the estate so the executor can decide, or a judicial partition where a judge decides. By the time these expensive court proceedings are over, there might not be much profit.
Naming multiple heirs on a deed is a variant of what we call the “beneficiary problem.”
Probate We get these questions a lot, so hopefully this helps clear things up for our callers and listeners! To learn more about the ins and outs of probate, check out my book, “How Probate Works,” available on Amazon.
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What are the risks of being an executor? An executor has a lot of power and responsibility during probate, but is correspondingly accountable for everything that happens within the estate.
We’ll cover how an executor has risk of even personal liability, how long that risk lasts, and how an executor can protect himself from these risks.
Executor personally liable for debts and taxes The executor has personal liability for debts, taxes, and anything wrong with the estate. If an executor makes an error, the court’s first reaction is to deny payment of the executor's commission. If the commission is not enough to cover the court-determined error, the executor’s PERSONAL assets (home, bank accounts, etc.) are legally at risk if court rules that the executor screwed up.
When someone chooses an executor and that person accepts the role, it's very possible that neither party is aware of the risks. The risks can be more than the executor forgetting to pay a tax bill and becoming personally liable for it. Some scenarios are a bit more nuanced. For example, the executor sells the real estate, but at the closing a few months later, the heirs dispute the sale price. The heirs might seek the difference in the price from the executor's commission or from him personally. Another example is when the executor fails to pay a “knowable” debt or tax or fails to take the steps to find out if debts exist.
How long is an executor liable for debts? Theoretically, the executor can be liable forever. There are some limits, but practically an aggressive lawsuit can get around those limits
Many states have laws that give creditors 7 months (or similar time limit) to submit verified claims. There is a specific legal procedure to become an official creditor or else the executor is not personally liable for that debt. However, even in absence of a formal claim, the executor can be held to have constructively known about the debt, or even should have known!
The best practice when closing an estate is to ask heirs to sign a receipt and release, which says the heirs accept their check as full and final settlement, and agree not to try to sue the executor later. Theoretically, the release is iron-clad protection for the executor. But practically, the heirs can get around it. An heir could claim that she signed the receipt and release because the executor failed to disclose information, otherwise she wouldn’t have signed it, etc.
How executors can protect themselves The good news is that there are ways to protect yourself if you are an executor.
First, get the tax clearance. Don’t distribute estate funds until the IRS and state have confirmed you’re good to go. Although painfully slow, they have procedures to formally release an executor from personal liability. If you fail to get the tax clearance (or even fail to search for tax that is owed), the taxing authorities have and will slap you with large and completely unexpected tax bills.
Second, when closing an estate, do a full accounting with receipt and releases. The accounting is composed of the books and records of the estate in court-approved format. It provides full disclosure to the heirs and gives heirs/creditors less wiggle room to argue that the executor failed to inform them.
Next, keep a reserve. Hang on to a small percentage of the estate funds to pay those surprise debts or taxes, just in case.
Of course, the reserve will be paid out to the heirs eventually. But, give yourself some time to make extra sure that the estate doesn’t owe any debts or taxes. No matter how good an executor is and even though the estate is closed, things tend to come up down the road. If you have a decent reserve, then you won’t have to hunt down the heirs asking them to pay back the debt. And believe me, the heirs will not return your calls and you’ll be out of luck.
Lastly, you can protect yourself by not being an executor: hire a professional! Even with a good probate lawyer, amateur executors are prone to making poor decisions that leave them open to risk. Why not have an experienced professional making those risk cost-benefit decisions, instead? Even a small mistake could leave an executor open to risks.
For those of you who are considering being executors or for those who are thinking about who to name as your executor, it is useful to know what an executor has to go through. To learn more, check out my book, “How to Hire an Executor.”
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A letter of instruction will likely fail for your bitcoin inheritance plan and should have only a marginal role in your plan, if any.
Search for “bitcoin inheritance” and you will probably find lots of people advising you to write a letter of instruction for your heirs. We talked about this and even provided a sample letter of instruction. Now, having spent a bit more time delving into different approaches to bitcoin inheritance, we’re de-emphasizing a letter of instruction.
Note: this applies to self-custodied bitcoin, not held through a third-party.
Educate your heirs A letter of instruction is a subcategory the general approach: I'll just educate my heirs! Some folks set up a fairly complicated bitcoin inheritance plan, but assure themselves, “I’ll make sure to educate my (spouse, son, etc.) on self-custody.”
Like any other educational endeavor, you must have an eager and willing student, or it just won’t stick. You can educate them on self-custody as hard as you want, but unless your heir is self-motivated to learn, it probably won’t work well. They may appear to understand in the short term to appease you, but that “knowledge” will leak out of their heads almost immediately. Think back to when you started your Bitcoin journey: if you weren’t that interested and someone started discussing self-custody and hardware wallets, your eyes probably glazed over.
You could blame the lack of self-motivation to learn on the ever-evolving status of bitcoin, but this is not the case. We see it all the time with other legacy assets like art, collectibles, and especially small businesses. Take, for example, a father who spent his life building his profitable small family business to pass on to his children. Sometimes the heirs aren’t interested in running the family store after dad passes. No matter how much that father tries to teach them how to run the business, they just don’t care enough to learn.
You don’t want to rely on your heirs’ knowledge of Bitcoin to make sure it passes properly, because self-custodied bitcoin that doesn’t have a transfer of custody upon your death is basically lost bitcoin.
Letters don’t work with even legacy assets Even if you are the Shakespeare of letters of instruction, you still won't be able to write a perfect letter to make your heirs understand how to successfully gain custody of your bitcoin. We’ve seen it with even legacy assets: letters of instructions don’t really help.
Why not? Your situation and your assets change over time, and people overestimate their ability to keep these letters up to date. It’s a lot to remember and to actually update your letter every few months.
On the flip side, most heirs (and most humans) are terrible at reading, comprehending, and following instructions. Some people struggle with IKEA furniture instructions... Just imagine how hard it will be to understand a letter of instruction especially after the death of a family member or friend. On top of that, your letter probably won’t be one page long; it will be several pages of difficult things for an amateur to comprehend.
It’s not because your heirs are dumb; it’s the emotional circumstances. We see heirs struggle with even basic assets that they are super familiar with (bank, brokerage accounts, etc.). Self-custody bitcoin would be a HUGE hurdle for a non-bitcoiner to deal with, especially relying only on your letter of instruction.
Bitcoin inheritance treasure hunt A letter of instruction is too often a “treasure map” to various seed phrase shards or wallet locations. Turning it into a treasure hunt is a terrible idea. It’s an even more complicated and worse version of a letter of instruction. We’ve seen treasure maps and letters of instruction fail for simple things like the keys to a storage locker or the location of important original documents. What happens if things get moved around or your letter isn’t up to date? It’s a dead end more times than not.
For these reasons, we highly discourage relying on a treasure map for any part of your bitcoin inheritance plan. Of course, you can still have a letter of instruction, but it should not be a featured piece of your estate plan. At a later date, we’ll discuss what should be the features of your bitcoin inheritance plan.
In the meantime, check out my book, “How Probate Works,” available on Amazon. It will help you understand the steps of probate before you further complicate it with Bitcoin.
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I do serve as a professional trustee, not just executor, or our Solo Ager clients. We’ll cover why our Solo Ager clients are looking for a professional trustee, why they don’t use banks, and how much it costs to hire a professional trustee.
Disputes between trustee and beneficiary Why are our Solo Ager clients looking for a professional trustee? The main reason is because of potential disputes between the trustee and the beneficiaries. Unfortunately, this kind of conflict is very common, even more so than between heirs and executors.
A trust creates a much longer relationship: an estate lasts a year, worst case 2-3 years. Even with tax issues and selling the estate assets, there is at least a finite relationship where the heirs can see the finish line. The heirs and executor can probably learn to put up with each other, because they know that there is an end in sight. Whereas, a trust can last decades. It usually deals with the duration of someone’s life.
A trustee usually has to make more discretionary decisions than an executor. Often, trusts are written so that the trustee can decide how and when to distribute money to a beneficiary. For example, a trustee can make a “distribution for the health and education or comfort” of the beneficiary. This can get very awkward if heirs and trustee all know each other (siblings, friends, cousins, etc.), and the heirs have to prove to the trustee why they need the money. The heirs may not want to disclose certain health or financial issues to a trustee who is close with them. Even discussing the heirs’ standard of living means that the trustee will know what the heirs spend their money on. There could be a lot of details that you wouldn’t share with your family or friends otherwise. This is why having a professional trustee could make the situation easier.
With an estate, the heirs are the people named in the will or the intestate heirs named by law if there is no will. A trust has multiple layers of beneficiaries. There are beneficiaries of the income of the trust and also beneficiaries who receive whatever is left when the trust maker dies. Those are very different incentives: the income beneficiaries want as much income generated and paid out to them as possible, whereas the beneficiaries at the end do not want the trust money to be spent or distributed so that they can still receive some. This can be a difficult balance even for professional trustees, so imagine how dicey it would be for a trustee who has a relationship with the heirs.
Naming a bank as trustee Why not name a bank, trust company or other fiduciary company as trustee? Some of our Solo Agers have shared their experiences with us, and they tell us it often doesn’t work well because of minimums or bureaucracy.
Many of these institutions have minimum trust size requirements to qualify, or else they will just reject you. Surprisingly, these minimums can be quite high, because they only want to deal with people who have a lot of money. Even if your trust meets the minimum right now, make sure you have a sufficient amount to qualify by the time you actually need the bank to act as your trustee. For example, the bank’s minimum requirements might increase at a rate that outpaces the growth of your trust assets. If that happens, your trust may no longer be eligible and your trust won’t have a trustee anymore. Another example is when you need to use the trust money during your lifetime to pay the income beneficiaries or medical bills. Taking too much money out of the trust could also disqualify you from using the bank as your trustee.
What about the bureaucracy? We’ve heard from many folks that it is a frustrating and lengthy process just to get approved by the bank. This doesn’t necessarily relate to the minimum requirement; it just takes so long to get your application approved. You’d think it would be the other way around: a person entrusting an institution with their life savings should be vetting the banks! It feels more like asking the bank for a loan rather than asking them to be your fiduciary. On top of that, there is no guarantee you will talk to the same person each time. Whereas with a professional trustee, you know exactly who you hired.
For these two reasons, many clients have reported that they just gave up trying to deal with the financial institutions.
How much does it cost to hire a trustee? In most cases, there is no cost now, because most trusts are usually revocable or a testamentary trust. So, you won’t need a professional trustee until you pass away. Since no one is doing the job now, there is no cost now.
Once a trustee is needed, the cost for a professional trustee is the same as an amateur. Just as with an executor, the trustee fees are set by state law. If it costs the same to use a professional trustee as it does an amateur, it’s a no-brainer to choose the experienced professional! It’s a fair assumption to assume it costs more to hire a professional trustee, but fortunately, that is not the case.
Thank you to our listeners who’ve submitted questions like this. It helps our Solo Agers to know that they’re in good company. If you have not done so already, click the link below to receive a free E-copy of my book, “The Solo Ager Estate Plan.”
Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
This happens when the buyer agrees to a higher contract price, but the seller also agrees to credit back a set amount to the buyer, so the net purchase price is lower.
For example, if the buyer wants the house for $250,000, they would set the contract price at $300,000 with a side agreement that the seller would credit $50,000 on the closing statement, effectively making the price $250,000.
Why not just a price reduction? Co-ops (and sometimes condos and homeowners’ associations) want the closing price to be (artificially) higher to maintain their average price per square foot. They don’t want records to show that a unit sold for significantly less than other units, because, in theory, it will eventually drag down the value of the building. Even though a lower price is reasonable for a probate property that needs major renovations, it doesn’t benefit the co-op.
Sometimes cash buyers and investors want the recorded price to be higher, so they can show flip buyers a slimmer profit margin. For example, an investor pays $250,000, hoping to flip it for $350,000. When the investor goes to sell the property, the buyer can check the public records to see what the investor paid. It will show that the investor is trying to make a $100,000 gain. If the records show that the investor paid closer to $350,000, it won’t look like he’s making a large profit.
What can a seller credit be used for? Non-professional executors and heirs are sometimes worried that the situation seems sketchy. They wonder if they are really allowed to give a seller’s credit. No worries; it is legitimate and fairly common.
In non-probate situations, it is most often used as an incentive to the buyer to cover some repairs or pay for closing costs. Sometimes repairs need to be done for the property to be sellable. It’s a way of putting the repairs on the buyer instead, when the estate is cash-poor or the executor just doesn’t have time.
Usually cash buyers only A seller’s credit is mostly used for cash buyers for a few reasons.
There are often small credits for something like a broken stove. But sometimes there are legal issues with the property or major renovations are needed. If the credit is a large amount, greater than 10% of sale price, it makes the closing figures look non-traditional. Banks don’t handle that situation well, so a seller’s credit is usually not a good option for a buyer who needs to take out a loan.
Selling a probate property has many nuances; it’s not the same as a regular house sale. You may have sold your home once or twice and figure that selling probate real estate is easy. The reality is that probate real estate can be very different.
To learn more about what to expect during probate, check out my book, “How Probate Works, “ available on Amazon.
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We’ve talked before about why Solo Ager estate plans must be frictionless. Same goes for a bitcoin inheritance plan, even more so.
The best inheritance plan is the one that actually exists In general, 60 to 70% of people have no will or estate plan at all. Why don’t they have an estate plan?
44% is due to procrastination - “I have time; I’ll get to it later.”
25% of people are not sure where to start.
13% say that it is too expensive to create an estate plan.
In the New York City area, the cost to set up an estate plan with an attorney ranges from $1,500 to $4,000. Especially if you don’t have the liquid funds available, it’s an understandable hesitation.
Making an inheritance plan is a series of tough decisions We only have a limited amount of brain power for decision-making per day! Creating an inheritance plan uses a lot of that decision-making fuel. For example, do you start with a lawyer or do it yourself? If you choose a lawyer, do you know a good lawyer? Now you’re spending time and energy asking for referrals and setting up consultations. If you choose to make the plan yourself, what software will you use?
Once you decide on hiring an attorney vs. a DIY plan, do you want a will or do you want a will and a trust? There are many legal decisions to make as you develop your plan.
Next, who will inherit your estate? With a nuclear family, this will probably be straightforward. But, perhaps you want to add charities, friends, etc. You will need to decide what amount to give to each beneficiary.
Who will be your executor or trustee? If you have minor children, who will be their guardians?
These are just the major things you have to think about when planning your estate. Once you make it through one decision, you have to move on to the next. It’s easy to see why so many people put off making an estate plan.
Bitcoin custody adds more decisions to your inheritance plan How will you hold your Bitcoin while you are alive to make it easier to transfer upon your death? How (technically) will that custody transfer to your executor when you die? There are technical logistics that you don’t have to worry about with legacy assets.
Will transfer actually work? From my conversations with various bitcoiners, many seem a bit overconfident that their bitcoin inheritance plan will work seamlessly. In our experience, even common assets, like stocks and bank accounts, have problems transferring easily, let alone something like bitcoin, where your heirs are probably very unfamiliar.
Have you compromised your existing security too much to make your plan happen when you die (meaning, is it a bit too easy to make a transaction while you’re alive)? On the flip side, have you compromised your existing convenience too much to make your plan as secure as possible (meaning, is it a pain to make a simple transaction now)?
Who in your life understands bitcoin custody, probate, and taxes well enough to be your executor? Chances are that you don’t know someone knowledgeable in all of those areas. This is where we can help as professional executors.
Most importantly, remember, the best inheritance plan is one that actually exists. You have to have something, or else you have nothing!
To learn more about probate, check out my book, “How Probate Works,” available on Amazon. It doesn’t address bitcoin specifically, but it can help you understand what’s involved in administering an estate. Hopefully soon, I will complete my bitcoin inheritance book!
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Folks who are interested in naming me as their professional executor ask how much it costs to get started. There is no cost! We’ll explain why, what you get, and what to expect.
It’s just a nomination At this point, you are healthy and just being responsible by making your estate plan. When you name me as trustee in your trust or as executor in your will, it’s just a nomination; I haven't done any work yet. Besides, you can always change your will and I may never become your executor or trustee, depending how you make your plan.
Not your estate planning lawyer To be clear, I’m not your estate planning lawyer. I’ve done estate plans before, and I am very familiar with what needs to be done. Nowadays, I’ve narrowed down my expertise and I am focused on being the best possible executor or trustee after folks have passed. Some people ask if I can draft their wills or trusts anyway, and the answer is unfortunately no. I no longer have the software, fancy paper, etc. to do wills.
Consider it a good thing that I don’t split my time between preparing wills and acting as a professional executor. It means that I am dedicated to providing the best service as your executor.
Also, as an experienced executor, I know how things will happen at the end. When reading a will, I can foresee what issues will arise because of the way it is written. When you nominate me as your executor, I am happy to take a look at your will as a second set of eyes. Again, this review would be non-legal advice, because I am not your estate planning attorney. But, I will be the one to carry out your wishes. When reviewing your estate plan, I look for any red flags that may make my job harder as your executor. As a side note, we don’t usually find many red flags, because many people work with competent estate planning attorneys.
Complimentary check-ins As we’ve discussed before, we offer complimentary annual check-ins. We do this to make sure I’m alive and you’re alive! It’s also useful to get to know each other over the years. You want an executor who is familiar with you and your wishes, based on more than just one meeting or phone call. As we talk, I might discover that you’ve grown distant from certain relatives or perhaps you made a new best friend later in life. These things could be useful when carrying out your will or even defending your estate plan.
Since I am not doing any work for your estate yet, we keep the calls brief. Sometimes it’s just an email. But it’s a good reminder for you to think about your plan at least once a year.
This is a common question that we get, but if you have any other questions, please feel free to leave them in the comments. To learn more about what I do as a professional executor, check out my book, “How to Hire a Professional Executor,” available on Amazon.
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Barring a terminal illness or physician-assisted death, it’s very hard to know when you will die. The world changes very quickly, and you do not know what the world will be like at the time of your death. For example, there were no iPhones two decades ago, and now look how technology has evolved.
So, to future-proof your plan, you must keep it as flexible as possible.
Inheritance plan vs actual circumstances In general, your estate plan will be different from the actual circumstances upon your passing. For example:
- Your beneficiaries and your executor may be very old or may not be alive. Or, your relationships with them may have changed.
- Your beneficiary is wealthier than you anticipated and you may not want to leave as much money to them anymore.
- Your assets have changed. Say you plan to give your nephew 10% of your bitcoin. But, when you pass, your bitcoin is worth way more than you ever imagined. Now that 10% is a pretty hefty chunk of change, and you didn’t intend to leave your nephew quite that much.
- Most people do not have an estate plan at all, and even the ones who have a will or a trust don’t update them. Supposedly, 70% of plans are not up to date and 20% of them haven't been updated in 5 years or more. That’s a lot of people with ex-girlfriends still named as beneficiaries in their estate plan... But, let’s be realistic: if we didn’t do estates for a living, we’d probably forget, too!
- No matter how much you plan for your death, there is a general chaos surrounding the probate process. You don’t know who will be alive, who will cause drama, or who will sue the estate because they are upset about how you wrote your will. People think that their heirs and beneficiaries will be cordial, but when money is involved, you never know.
Bitcoin evolves quickly Bitcoin is a young asset, and it is still in a very fast evolutionary stage. Bitcoin has gone from your wallet being only available on your own node (if you run core software), to paper wallets where you write or print out your code/seed phrase/key, to HDD, to multisig wallets.
And that’s just wallets! Now you have second and third layers from Lightning and Arc coming on. There are more people with their own nodes now. Who knows what’s next? Will you update with each evolution? Unlikely. So, your plan needs to be able to adapt to the circumstances surrounding your death.
Even our Bitcoin podcasts have evolved over the past few years!
When to automate? One of the main points in using Bitcoin is to eliminate trusted third-parties and middlemen. In general, automation is best suited for predictable and repeating tasks such as regular billing, social media posts, or other high volume tasks.
But there are certain circumstances where it’s not wise to use automation. Using automation is a poor choice when the task requires decision-making; it’s the opposite of predictable and repeating. You do not want to automate your estate plan. As we discussed above, you do not know what the world or your family tree will be like upon your passing.
In traditional, legacy estate plans, beneficiary designations don’t work very well. It is a form of automation to say, “Upon my death, everything will go to this person.” Avoiding legal fees and probate sounds great, but you are assuming that your plan will be up to date. You’re assuming that the amount in the bank account at the time of your death is the amount you want that beneficiary to get. More often than not, this scenario doesn’t shake out the way you hoped.
A custodial Bitcoin solution means naming a beneficiary on your Kraken or Binance account. But when automating a non-custodial Bitcoin inheritance plans (like a time-lock, letter of instruction, sharding, etc.), you have frozen in time an inflexible solution for a situation that requires great flexibility.
For probate in general, as well as Bitcoin, it is more important to rely on a human executor who can assess the situation and make the appropriate decisions. In probate, the executor may have to deal with a bureaucrat or a government employee who is asking them to do something ridiculous to get the information needed for the estate. You need a human being who can perceive that the instructions are strange and find a way to get the job done. That’s the difference from being stuck in a non-flexible system that doesn't have decision making capabilities.
In conclusion, your Bitcoin inheritance plan needs to be as flexible as possible to adapt to the evolution of Bitcoin and our ever-changing world.
To learn more about probate, check out my book, “How Probate Works,” available on Amazon. It doesn’t address Bitcoin specifically, but it can help you understand what’s involved in administering an estate. Hopefully soon, I will complete my Bitcoin inheritance book!
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Physician-Assisted Dying has other names that might be familiar: death with dignity, aid in dying, assisted death, euthanasia, and assisted suicide
Since we’ve received many inquiries from our Solo Agers, here some of your FAQs:
Making arrangements from Switzerland Can my professional executor help make arrangements from Switzerland after I pass?
Switzerland is often the go-to jurisdiction, but there may be others in the U.S. The medical facilities need to know who to notify upon death, and we have filled the role as the entity to be notified. You also need to make arrangements to send final personal effects (phone, wallet) after your passing. Again, we have been in that role before, and we have coordinated the receipt of the personal belongings.
Live your last days to the fullest If you are scheduling a physician-assisted death, you have to weigh the balance between preparing and living your life to the fullest.
We get calls from Solo Agers who are very focused on preparing and tying up any loose ends (cleaning out and selling their home). Our advice is to go ahead and take care of the low-stress items but leave the rest to us. It is our job to figure things out upon your passing, and it’s very unlikely that you will think of everything that needs to be done anyway. There is a limit to how much you will be able to help us, no matter how hard you try. Most folks have not gone through probate enough to know what needs to be done, so it’s better to let us handle it. Most people pass away unexpectedly and most things are generally unorganized anyway.
Instead, do your best to enjoy your remaining time and complete that bucket list!
To disclose or not to disclose Do I need to tell my executor that I plan to have a physician-assisted death? It’s totally up to you; we’ve dealt with both.
Telling us helps us be ready on the scheduled date. But if you prefer your privacy, it’s no problem; we’ve done that too. Most deaths are unexpected, so we are used to it.
Perhaps your loved ones don’t know that your death was planned. As professional executors, we know how to handle the situation tactfully.
Click the link below to check out my book, “The Solo Ager Estate Plan.” This topic is not covered specifically in my book, but it will help you learn more about probate in general.
Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Should you look for a broker or lawyer first when selling a probate property? With non-probate home sales, brokers are the first to list, set an open house, and find a great buyer. Lawyers only get involved once a buyer is in place and a deal is struck. The lawyer then drafts the contract and conducts the closing.
But with probate, talking to a lawyer first makes more sense. Here’s why:
Talk to a probate lawyer first when selling a home It’s important to talk with a probate lawyer, because you need to know who has the authority to sell the home. The lawyer can also tell you whether the estate needs to be probated. Not every estate needs probate: maybe the house is titled a certain way or it is held in a trust. Or, maybe you live in an area where the title company accepts “heirs at law” affidavits. These situations are best analyzed by a probate attorney.
How long will it take to get started? How much will it cost? The answers to these questions will determine what type of broker you will work with.
A probate attorney will walk you through the estate debts, taxes, etc. You may not want to go through the hassle of selling the probate property if there is only a small fraction of the estate left over after debts and taxes.
There are some pre-steps that a probate lawyer (or a good broker) can help with:
- Hiring a title company to confirm who owns the property and check for major judgements or liens.
- Talking to co-op management and HOAs to see if there are any red flags.
When to speak with a broker first to sell probate property Brokers are good at figuring out how much you can reasonably expect to sell the house for. Is there enough value to deal with the mess?
A downside of talking to a broker first is that too often, they are eager to get a new deal but they don’t understand the estate situation. The broker may not realize that the person they are speaking with does not have the legal authority to hire them. At that point, you’ve wasted your time and the broker’s time if you do not have the legal authority to sign a listing agreement, etc.
Sometimes selling probate property does not require a broker. You can avoid the broker’s commission if you sell the home to an heir, a neighbor, or a cash investor. A probate lawyer can advise on this, so it will probably save money to meet with a lawyer first.
We see this happen a lot, so we want to share our tips with anyone who is looking to sell probate property. Meet with a probate lawyer first so that you can get proper guidance. To learn more about probate, check out my book, “How Probate Works,” available on Amazon.
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How much does a professional executor cost? Most people are surprised to learn that executor fees are the same whether you choose an experienced professional or your unemployed nephew who has lots of spare time. When people realize that they are paying the same cost, they will probably choose a professional executor.
In fact, your estate will probably even save on expenses with a professional vs.an amateur.
Executor fees set by state law Executor fees are almost always set by state law, whether it is a percentage of the estate or a reasonable fee. The percentage often works out to 2-3% of the estate’s value, which is less than half of a broker’s commission in most states. Some states use the “reasonable fee” standard, and the court accepts a customary percentage as “reasonable.”
Sometimes the reasonable fee is an hourly rate that the court deems acceptable. If you have an amateur executor, the hourly rate can get pretty expensive. If the executor doesn’t know much about probate, it will take him longer to accomplish tasks than a professional executor. Sometimes amateur family/friend executors attract more drama. The heirs are more likely to contest the fees, and the executor may not get paid at all.
Professional executor save time and expenses As with anything else, a person who has done something hundreds of times is probably better at it than someone who has never tried. A professional executor is experienced, efficient, and has the right contacts. A professional executor knows the person to speak with at the bank rather than talking to 17 different banks. He knows which court clerk is the surly one and which one will push your paperwork through. He also knows which vendors have the best value for the cost (cleaning crews, painters, contractors, accountants, etc.).
A professional executor also knows which services are not necessary. For example, staging an apartment for sale is expensive, but usually not necessary. We’ve seen staging bills as high as $20,000! As an heir, I’d be upset that my inheritance went to pay for something like that. Some contractors pitch pretty extensive renovations, like a marble countertop. Because it’s not their money or their house, some executors go into HGTV-mode. There is no need to knock out the walls; we just need to clean the home and make it look like it hasn’t been lived in for 40 years.
There are circumstances where it’s beneficial to stage and renovate a home, but not for estates. The longer a probate property sits around, the more it will cost the estate.
How much do banks charge to be executors? Banks are the exception; they will sometimes ask for special language in the will or trust opting out of state law and getting higher fees with higher minimums. A large entity, like a bank, doesn't want to be bothered with small estates and small fees.
On top of that, most banks won’t agree to be your executor unless you have a decent amount of liquid money invested in their bank. We made a recent call to a bank who refused to act as executor for a $2.5 million estate. Even if you have enough money to qualify, you still need to wait for their risk analysts and committees to accept. It is a long process…IF they even accept. you.
As you can see, it’s more cost-efficient to hire a professional executor than to choose your unemployed nephew. So if you don’t want to burden a relative or friend with the task, please check out my book, “How to Hire a Professional Executor,” available on Amazon.
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A deadman’s switch is a seemingly elegant and trustless solution for bitcoin inheritance. But if you think it through, it currently has too many problems to work securely.
A deadman’s switch is a protocol or mechanism where, if the creator misses a periodic check-in (ex. push a button every 3 months, reply to a monthly email, etc.), it's assumed the creator has died and will trigger an event.
Types of bitcoin dead man switches With the first type of deadman's, upon failure to press the button, a pre-loaded transaction executes. Imagine that you set up your E*Trade account to sell a certain number of shares for a certain amount. Similarly, everything is “loaded up” in your bitcoin deadman’s switch, and the pre-loaded transaction automatically executes if the check-in is missed. What happens if you miss the check-in not because you are dead, but because you forgot? It all depends how you set up your plan. So it would be wise to have multiple check-ins required before the event is triggered.
With another type of bitcoin deadman’s switch, upon failure to press the button, a secret gets delivered. The secret may be your seed phrase or pass phrase, and gets delivered by email, telegram, or phone call or sms text. to your heir or executor.
Problems with a deadman’s switch that executes a bitcoin transaction First, this creates a beneficiary problem. Even in non-bitcoin scenarios, people name beneficiaries on their accounts in order to bypass probate and distribute the account directly to the beneficiary without any supervision.
The problem with naming beneficiaries on your life insurance, IRA, etc. is that people often forget who their beneficiaries are and they forget to update their beneficiary designations. Maybe they named an ex-girlfriend or a since-disowned relative.
Bitcoin is also ever-changing and could be worth way more or less at the time of your death. You won’t know for sure how much your beneficiary will receive from this pre-loaded transaction. That’s a hard thing to try to keep up to date.
If you forget about this pre-loaded transaction and it’s not up to date, it probably conflicts with the rest of your estate plan. Say your plan was for Alice, Bob, and Charlie to each get a third of your wealth. You figure that your stocks are worth about 1/3, your bitcoin is about 1/3, and your house is about 1/3. It seems clever enough to leave one of those to each of the beneficiaries, right? What happens if the assets fluctuate wildly in value in the remaining years until your death? Now your heirs won’t receive equal shares of your wealth like you intended.
Another problem is that your bitcoin is stuck in the UTXO, which is a problem for creating pre-loaded transactions. You can’t move the UTXO without setting up a new deadman’s switch. It’s like having a bank account that can only have a beneficiary designation as long as you never withdraw or deposit into that account. You can never move the account to another bank. This only makes sense for the portion of your bitcoin that you plan to keep in deep cold storage. It's like a treasure chest that you bury.
The last problem with this plan is that the transaction must execute to an heir’s wallet. What if your heir doesn't have a bitcoin wallet? Even if you set up a wallet for them, will they know how to use it? Do they know how to secure their seed phrase? You can set up a custody wallet on an exchange like Coinbase, Kraken, or Gemini. But most bitcoiners with self-custody don’t want their bitcoin going into a third-party wallet for their heirs.
Problems with a deadman switch that delivers a bitcoin secret This plan has horrible operational security. You must write the secret (seed phrase, pass phrase, PIN) on a hot (online) computer. You must be able to trust the service’s servers, encryption, etc. And remember that the secret will be delivered via email, telegram, phone call, or sms text. This plan does everything you’re told not to do with self-custody operational security.
You could instead use a multisig or shard your seed and give pieces to different people. But if you use those solutions, then you don’t even need a deadman’s switch. Why add another layer of complexity to a complex situation?
A deadman’s switch seems attractive, because you don't have to trust anyone. But if you walk mentally through the scenario, you can see that using a deadman’s switch isn’t a great solution. Probate is a complicated process and adding bitcoin to the mix brings a whole new level of complexity. To learn more, check out my book, “How Probate Works,” available on Amazon.
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Our Solo Agers friends often ask this when they’re ready to name me executor in their will. We support well-done DIY wills and anything that helps make your plan as frictionless as possible. Some kind of plan is almost always better than no plan!
So, do you need a lawyer to make a will? No, we’re not aware of any state that requires a lawyer to make your will. We do nonetheless recommend that our Solo Agers at least hire a lawyer to supervise the signing. Here’s why:
Signing ceremony technicalities A signing ceremony sounds like a long, drawn-out event, but it could last as little as 15 minutes. Still, there are many technicalities to follow, or else the will may be invalid.
Just a few examples, the person making the will (the testator) has to make a proper declaration in the will. The pages of the will must also be stapled together, or else there is a potential for page-swapping. Lastly, to demonstrate that the testator is competent to sign a will, lawyers often chit-chat about current events with the testator. If testimony is ever needed to prove that the testator is competent, then the witnesses can refer back to that conversation.
If any of the technicalities go wrong, then the will may be invalid. Yes, DIY services provide detailed instructions for drafting your will, but most people don’t follow instructions to a T (or even read the instructions). It’s easy to miss a step and invalidate the whole will.
It’s much easier to get an experienced attorney to supervise the signing. It’s also cheaper than hiring an attorney to draft your entire estate plan.
Lawyer-supervised presumptions In many states, the probate court will give the benefit of the doubt if the signing was supervised by a lawyer.
For example, the court is more likely to accept a self-proving affidavit signed by your witnesses, instead of requiring the witnesses to appear in court to testify. Suppose you die 15 years later...tracking down the witnesses, getting them to agree to come to court, and having them accurately recollect your signing ceremony would be very hard. There is no guarantee that they will remember that day or even still be alive.
Without the lawyer supervision and the self-proving affidavit, it may be harder for your executor to probate your estate.
Best will witnesses DIY wills often use subpar witnesses. It’s natural to want to ask family and friends to witness, because they are close to you. Using a witness who is named in the will or who could potentially inherit your estate creates a conflict of interest. Their testimony as a witness won’t hold up well in court because they have beneficial interest.
But, it’s also not the best idea to grab a passer-by as a witness (UPS delivery person, doorman, bank teller). If you don’t even know the witness, chances are it will be hard for your heirs to find them if ever needed. Sometimes the address they provide is the physical address where they signed!
For these reasons, lawyers will provide their own experienced witnesses (paralegals, other staff, the lawyer’s spouse, etc.). These people have witnessed wills many times before and can give good testimony if needed.
If you decide to do your own will, at least have the signing supervised by an experienced attorney. For more answers to your estate planning questions, click the link below to receive your free electronic copy of my book, “The Solo Ager Estate Plan.”
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Why do heirs suddenly need to sell probate real estate? We see cases where years, even generations, have elapsed since the real estate owner has died, and nothing has been done. So why, all of a sudden, do the heirs seek a lawyer or professional executor? Here are the top 5 reasons we’ve seen.
- Bad economies mean heirs need money When there’s a recession, our office gets busier. It seems that when times are tough, people want large, lump sums of cash (rather than a theoretical portion of an estate).
It’s a bit counter-intuitive, since real estate prices are often down at these times and heirs would have to sell low. The heirs figure that even though the sale price is lower than in a strong economy, at least they’ll get some cash.
- More deaths means more complications As more and more family members pass, heirs see how increasingly complicated probate will be.
For example, mom died and left the house and 4 kids who all get along. The 4 kids don’t probate, but agree amongst themselves who will perform upkeep, who will collect rent, and how the rent will be divided. But then the kid in charge of upkeep dies and now no one is officially in charge of upkeep. Then the one in charge of making sure there is a tenant also dies, so his kids move in. Now there is tension among the family members who don’t all agree with the arrangement. You may not think your family will have these problems, but when money is involved, it can get messy.
Once the original heirs start passing and those who were not part of the initial arrangement get involved, problems can snowball quickly. At this point, it is just easier to sell the real estate before it gets more complicated.
- Tenant problems For example, grandma owned a rental property and for years after grandma’s death, tenants paid like clockwork. But for whatever reason the tenants stop paying. It happens all the time. It’s easy to stop paying rent and stay in the house when no one is enforcing payments. The heirs will find that they can’t take legal action until they start probate and get a court-appointed executor.
Sometimes the tenants learn that no one is legally in charge yet, and that’s why they stop paying. It could be at least a year before an executor is appointed by the court. So, there’s at least a year rent-free. As a side note, often these non-paying tenants are also heirs. Oh, the humanity!
- Creditor, co-op demands, no longer self-sustaining Sometimes heirs miss or ignore bills, then the creditors eventually get active. Just imagine an heir being diligent about paying all of the bills, but totally forgot about the water bill. Rather than the company shutting off the water, there is a giant outstanding bill after a decade. Sometimes an estate debt is so large that there is no choice but to sell the real estate.
Or sometimes a co-op board looks the other way for a while, but now wants things done correctly and the estate needs to be probated.
Maybe the rent used to be enough to cover all bills, but as time elapsed it’s not quite enough anymore. Maybe you didn’t raise the rent enough, or inflation caused your expenses to skyrocket. Now you have real estate that is generating a loss.
- Property damage or disrepair A major storm may cause costly damage. Other problems that tend to emerge when the property is not owner-occupied could be mold, old/leaky roof, or floor/foundation problems.
Maybe none of the heirs have the funds to fix these major problems to bring the home up to rentable status. If there are no other funds and the heirs don’t want to deal with it, then maybe it’s time to sell.
Probate Book These are the most common reasons we’ve seen for heirs to sell real estate quickly. Two good books on the subject are, “How Probate Works” and “How to Hire an Executor,” both available on Amazon.
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When we chat with new clients, we ask them why they chose to look for and hire a professional executor. Here are the 5 most common answers. Perhaps you will see yourself in one of these situations.
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There’s no one else There may not be any close family or friends due to old age or because the client is a Solo Ager. Or maybe a client does have close family and friends, but they do not live nearby, they have no time, or they are not financially savvy.
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Went through being an executor and hated it We have clients who served as executors and hated it. Because they hated being an executor, there is no way they want to burden a loved one with the task.
It could be the other way around: the friend or family member who they want to nominate was already an executor once and hated it, too.
- Fees are the same, so you may as well get a professional Once clients realize that the executor fee is exactly the same for a professional executor versus a family member or friend, they can’t believe it! In most states, the law is the same. Whether it’s your unemployed nephew who needs money to start a rock band versus a seasoned professional with an experienced staff versus a bank: If you have that choice and the fees are going to be the same, why wouldn’t you name a professional executor?
In fact, hiring a professional executor may even cost less. An experienced and professional staff can reduce costs due to economies of scale, better deals with vendors, etc. We minimize a lot of losses because we can often do things quicker.
- Banks won’t take the client or charge fees or require certain investments Many come to us after being rejected by their bank/brokerage, even if they have plenty of money and have been loyal customers for years.
Or sometimes, they are in the process of getting the bank to agree to serve as executor. But there are so many layers of committees and approvals from the bank. Those people come to us because we provide a more personal experience. With a bank, you’ll never talk to the person who will be the executor; it’s just “the bank.”
Lastly, people don’t like the bank’s requirement that a certain amount of money must be invested with them to qualify. You probably need between $3 million and $5 million just to talk to the bank. The bank also requires very specific investments: your money has to be invested in Brokerage Account “A” and the underlying investments must be in the Brokerage's created funds. To put it bluntly, this is how banks can charge more fees.
- Age gap siblings This is similar to our #1 reason above, but more often we are seeing age gap siblings. Since we’ve been seeing this specific situation more often, we thought it was worth mentioning as its own reason. For whatever family reason, we’re seeing clients whose next closest sibling is 25 years older or younger! They don’t have a tight relationship due to the large age gap.
On the other hand, we have clients whose siblings are almost the same age, which doesn’t give an elderly client much hope that a fellow elderly sibling will be able to fulfill the duties of an executor. You want someone who will survive you or be young enough to handle stressful situations.
These are all great reasons to check out my book, “How to Hire an Executor,” available on Amazon. If you are part of our monthly email list, we give away one free paperback copy a month!
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Multisig or a passphrase ("poor man’s multisig") are two ways to transfer custody to your bitcoin executor upon your death. Let’s compare, so you can decide which best fits your bitcoin inheritance plan.
Why multisig for bitcoin inheritance? The main feature is splitting access to your bitcoin, so that it’s not catastrophic if just one of your keys is revealed, leaked, or hacked. While you should always be careful of how you manage your security materials, using a multisig allows you to be a little less uptight with your security practices. By contrast, if all of your stash is in a singlesig wallet, then access to that one key could cost you all of your bitcoin. If one key is lost, you lose it all. If one key is hacked, it’s all stolen.
Also, this is not necessarily what’s best for estate administration (which can last years), but rather the immediate transfer of custody to your executor. So this is not about how your executor will hold your keys during his tenure as your executor. This analysis is specifically regarding the pros and cons of how smooth the transfer will be from you to your executor upon death.
Lastly, the general pros and cons of multisig vs. singlesig with a passphrase (multi vs. single vendor risk, costs of multiple hardware wallets, ease of setup, etc.) are beyond the scope of this analysis. For the purpose of this discussion, we are just looking at the pros and cons of transfer to your executor upon your passing.
Leaving a passphrase for your bitcoin executor First, we’ll look at using a passphrase as a poor man’s multisig for your non-bitcoin executor. Your seed phrase and your additional passphrase combine as an imperfect 2-of-2 multisig of sorts.
A passphrase would be easier for a non-bitcoin executor, in theory, because it feels more like just a second password. By contrast, multisig can be more intimidating: and feel like those movies with a nuclear submarine where the captain and the first mate must each put a key in and turn on the count of three...
If you or your executor lose your passphrase, there’s at least theoretical hope to recover it with enough computing power (depending on length and complexity of the passphrase). People are not too great about choosing phrases randomly, and often use short passphrases that are easier to remember. A lost 12- 24-word seed phrase could not be recovered for the foreseeable future.
You could also hide your passphrase in plain sight, so that it’s easier to transfer to your executor. For example, writing a letter to your executor, where every fifth word comprises your passphrase. My understanding is this is poor opsec with a 12- or 24-word seed phrase, because seed phrase words are a finite set, and hackers have algorithms to scan text for seed phrase words.
But be aware: passphrases are not really designed for this, and there’s not much support for its use as a poor man's multisig. A non-professional executor may have trouble finding information online about passphrases as a 2-of-2 multisig. Whereas there are companies that, for a consultation fee, will take the time to walk the executor through the multisig process.
How your bitcoin executor will handle your multisig With a 2-of-3 multsig, there are three independent keys (seed phrases and/or hardware devices), and you need two of them to access the bitcoin and make a transaction.
Multisg has more leeway for error: even if you lose one key, you still have two and can recover. This provides a margin for error in terms of catastrophic loss. With a passphrase (or any 2-of-2) set up, there are only two "keys", so if you lose either one, you can’t access your bitcoin.
A second benefit of multisig is that each key is strong and offers full protection because each key is a 12- or 24-word seed phrase, created with the fully researched cryptography security. Whereas you create your own passphrase, and we're all pretty bad at being sufficiently random (admit it, we use our kid’s name, anniversary, favorite movie quote, etc. as passwords).
Lastly, multisig has lower “smudge risk” than a passphrase. Since 12- or 24-seed phrase words comes from a finite set of possible vocabulary words, if just of the handwritten seed words and smudgy, there is still good a chance of figuring out the word. But since your passphrase can be any word, in any language, or even gibberish, guessing a smudged word would be complete guessing.
The focus here is how your executor will solve the puzzle after your death so your bitcoin isn’t lost. For further reading on what executors deal with in general, check out my book on Amazon, “How Probate Works.”
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Multisig or a passphrase ("poor man’s multisig") are two ways to transfer custody to your bitcoin executor upon your death. Let’s compare, so you can decide which best fits your bitcoin inheritance plan.
Why multisig for bitcoin inheritance? The main feature is splitting access to your bitcoin, so that it’s not catastrophic if just one of your keys is revealed, leaked, or hacked. While you should always be careful of how you manage your security materials, using a multisig allows you to be a little less uptight with your security practices. By contrast, if all of your stash is in a singlesig wallet, then access to that one key could cost you all of your bitcoin. If one key is lost, you lose it all. If one key is hacked, it’s all stolen.
Also, this is not necessarily what’s best for estate administration (which can last years), but rather the immediate transfer of custody to your executor. So this is not about how your executor will hold your keys during his tenure as your executor. This analysis is specifically regarding the pros and cons of how smooth the transfer will be from you to your executor upon death.
Lastly, the general pros and cons of multisig vs. singlesig with a passphrase (multi vs. single vendor risk, costs of multiple hardware wallets, ease of setup, etc.) are beyond the scope of this analysis. For the purpose of this discussion, we are just looking at the pros and cons of transfer to your executor upon your passing.
Leaving a passphrase for your bitcoin executor First, we’ll look at using a passphrase as a poor man’s multisig for your non-bitcoin executor. Your seed phrase and your additional passphrase combine as an imperfect 2-of-2 multisig of sorts.
A passphrase would be easier for a non-bitcoin executor, in theory, because it feels more like just a second password. By contrast, multisig can be more intimidating: and feel like those movies with a nuclear submarine where the captain and the first mate must each put a key in and turn on the count of three...
If you or your executor lose your passphrase, there’s at least theoretical hope to recover it with enough computing power (depending on length and complexity of the passphrase). People are not too great about choosing phrases randomly, and often use short passphrases that are easier to remember. A lost 12- 24-word seed phrase could not be recovered for the foreseeable future.
You could also hide your passphrase in plain sight, so that it’s easier to transfer to your executor. For example, writing a letter to your executor, where every fifth word comprises your passphrase. My understanding is this is poor opsec with a 12- or 24-word seed phrase, because seed phrase words are a finite set, and hackers have algorithms to scan text for seed phrase words.
But be aware: passphrases are not really designed for this, and there’s not much support for its use as a poor man's multisig. A non-professional executor may have trouble finding information online about passphrases as a 2-of-2 multisig. Whereas there are companies that, for a consultation fee, will take the time to walk the executor through the multisig process.
How your bitcoin executor will handle your multisig With a 2-of-3 multsig, there are three independent keys (seed phrases and/or hardware devices), and you need two of them to access the bitcoin and make a transaction.
Multisg has more leeway for error: even if you lose one key, you still have two and can recover. This provides a margin for error in terms of catastrophic loss. With a passphrase (or any 2-of-2) set up, there are only two "keys", so if you lose either one, you can’t access your bitcoin.
A second benefit of multisig is that each key is strong and offers full protection because each key is a 12- or 24-word seed phrase, created with the fully researched cryptography security. Whereas you create your own passphrase, and we're all pretty bad at being sufficiently random (admit it, we use our kid’s name, anniversary, favorite movie quote, etc. as passwords).
Lastly, multisig has lower “smudge risk” than a passphrase. Since 12- or 24-seed phrase words comes from a finite set of possible vocabulary words, if just of the handwritten seed words and smudgy, there is still good a chance of figuring out the word. But since your passphrase can be any word, in any language, or even gibberish, guessing a smudged word would be complete guessing.
The focus here is how your executor will solve the puzzle after your death so your bitcoin isn’t lost. For further reading on what executors deal with in general, check out my book on Amazon, “How Probate Works.”
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A frictionless first estate plan is a great first step for Solo Agers with no plan at all. It helps Solo Agers clarify their thinking and decisions, all while having a basic plan in place in the meantime.
Why Solo Agers need a frictionless first plan We’ve heard from many folks who are stressed because they have no plan whatsoever. In general, Solo Agers don’t have the traditional heirs and family members available to fill the executor role, so it is important to have something in place.
The reason why many Solo Agers don’t have a plan is often because of analysis paralysis. While estate planning is a series of decisions, some people get stuck analyzing every detail. Of course, there is also the fear of making the wrong decisions and the consequences that come from that. The biggest fear is choosing the wrong fiduciaries.
Why a frictionless plan? A frictionless plan is a version of your estate plan that is as low-cost and as low-headache as possible.
When your estate plan is low-cost, psychologically it is easier to make decisions, because you realize that it’s not a big deal to make changes if needed. People feel more at ease when spending a few hundred dollars versus a few thousand dollars to create a plan and make changes when needed. Low-cost solutions allow you to easily reverse or change your plan and not feel like it is set in stone.
With a low-cost solution, the fear of making changes won’t prevent you from having any plan at all.
Example of a frictionless solo ager estate plan Our plan for a frictionless Solo Ager estates includes three steps:
First, make a do-it-yourself will using one of the software programs that we’ve reviewed. One that we are currently recommending is Free Will. For basic wills, it gets the job done. https://anthonyspark.com/e187-3-best-free-diy-will-software/
Second, name a professional executor. If you feel comfortable with us, name us for now. It doesn’t have to be your final decision; you can change the executor any time. https://anthonyspark.com/professional-executor/
Third, have an attorney-supervised signing. This is the biggest (low) cost involved. The reason we recommend an attorney-supervised signing is because there are a lot of technicalities to having a legally binding will signing. If you mess up even one or two parts, all of your hard work becomes moot. In the New York area, you can hire an attorney and their staff to witness the signing of your self-prepared will for $200 or $300 (compared to the thousands of dollars to hire an attorney to draft your estate plan). The cost of an attorney-supervised signing could be even lower outside of the New York area. https://anthonyspark.com/e273-diy-will-vs-lawyers-for-solo-agers/
We hope that by outlining these low-cost options, you will be confident in creating a bare-bones plan as a safety-net to get you started.
Free copy of "The Solo Ager Estate Plan" To learn more about estate planning for Solo Agers, click the link below to get your free copy of my book, “The Solo Ager Estate Plan.”
Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Let’s discuss how, why, and how long it takes to get “fresh” Letters Testamentary in New York. Fresh letters simply means that they are newly dated. Most of the time, probate takes months or even years, and during that time, you may need to get fresh copies of the letters to use.
Do letters of testamentary expire? One question we get is “do the letters of testamentary expire?” Technically, no, they don’t expire. It’s not as if your executorship has ended and you need to renew it. Rather, letters are a certificate proving you are still the executor. For example, if you walk into a bank with your letters that are over a year old and you want to close the account, the bank will very likely accept them. In the last year a lot could have happened – the court could have removed you as the executor, the letters could have been suspended, or there could have been other issues. They want letters that have been issued within the past 30 days (or in some cases 60 days) to prove that yes, you are still the executor, and all is good.
How to renew letters testamentary In the past, getting newly updated letters was relatively easy. You could walk into the court with $6 and they would simply print the letters and you would walk out with them. You could even mail in a request and get them back within a reasonable timeframe. The exception would be if the court is missing items in the probate file, such as affidavits, inventories, etc. It is the court’s leverage to make you fix any issues before they give you fresh letters. This doesn’t mean the letters have been revoked; it’s just the court’s opportunity to get something they need in return for something you need.
Fresh letters delays in New York in 2023 Now, getting quick letters are not happening. The court no longer allows you to visit the counter or walk in with your money and request. You have to upload a request for fresh letters online. Sounds easy, right? Here’s the issue – the courts are at least three months behind processing online filings. So, for example, requests uploaded in December are finally being processed in March. This doesn’t account for anything you may need to fix, which will add even more back and forth time.
If you have something important you need letters for (a real estate closing, for example), then you will need to plan well in advance for this. One option is to order letters right as the property is listed, possibly even before. You do run the risk of actually getting the letters quickly and them being outdated before the closing. In which case, you would need to order them again. You could get around this by ordering them every month or every other month until the closing to be sure that you have them. It may seem wasteful, but unfortunately, not having the letters could delay the closing (which is much more expensive than a few extra copies of letters).
Probate isn’t a quick process as it is, which is why it’s best to set expectations early in the process. Check out my book, “How Probate Works,” and when you get to the chapter on delays, just add on more time. Unfortunately, that’s the way things are right now.
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As we’ve spoken about before, Anthony can be your professional executor, even if you don’t live in New York. We have been seeing many inquires from out of state lately, and these are the top 5 looking for Anthony to be their professional executor. We are located in New York, so we are not including New York inquiries on this list. While this isn’t a scientific study, this is what we are seeing based on our daily calls.
Georgia First on the list, much to our surprise, is Georgia. Maybe because it is retirement friendly, which we have learned that it is. There is low sales tax, no inheritance tax, low income tax, real estate is “more bang for your buck” compared to other states, and it’s warm and super friendly. Although it is retirement friendly, we aren’t seeing that there is a large network of professional executors there. It works out for Anthony, since he spends most summers in Atlanta and is very familiar with Georgia.
New Jersey This is less of a surprise, as it’s right across the river. We’ve found that a lot of New Jersey folks seek out New York professionals, thinking they will get a “city caliber” professional. It doesn’t matter where your executor lives, the fee is set by New Jersey state law. So, whether it’s a professional executor or a non-professional such as your nephew, they will get paid exactly the same. So, you may as well get the most for your money. And for Anthony, he’s in New Jersey often, so this is fairly easy for him.
Texas Third on our list is Texas, and we don’t really have an explanation for this one. Perhaps, like Georgia, maybe it’s a good place for retirement. Again, while searching online, we are not many professional executors. But why Anthony? The only thing Anthony can think of is that in real life, he tends to get along well with Texans. Maybe the viewers and listeners sense that and want to work with him? After all, a professional executor is someone you will work together with, at least annually, so you should definitely have a good rapport. This state also works for Anthony, because he does travel to Texas often.
California Fourth, and possibly the most surprising is California. It’s far from New York and on paper, it doesn’t seem like a good fit. California even as a fairly robust local professional fiduciary industry. They even have a certification and a trade association for professional executors. But for whatever reason (maybe the requirement of upfront fees by CA executors), clients want Anthony all the way in New York. Believe us, he is happy to serve in California – he loves it there!
Florida Last, but not least is Florida, and this makes the most sense. It’s a huge retirement state. However, for legal reasons, serving as a professional executor is problematic. Anthony can’t actually not serve as a professional executor in Florida, because he doesn’t live there. Only blood relatives may be out of state executors. But there are ways to deal with this. Anthony can be a nonresident Trustee for a Revocable Living Trust. Trusts are becoming very common in Florida to avoid probate. Clients who want to work with Anthony find this trustee workaround a great option. And again, he has no problem traveling to sunny, warm Florida, which he does often.
If you want to find out what is required of an executor, I suggest reading Anthony’s book, “How to Hire an Executor.”
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As you may know, Bitcoin does not have layers like legacy and traditional accounts do, so an inheritance plan needs to be created. We will discuss the drawbacks of constantly seeking and getting stuck on a “perfect” Bitcoin inheritance plan, and a few solutions for approaching the creation of these layers.
Legacy assets have inheritance layers, bitcoin does not Legacy assets (banks and financial institutions) already have several layers or contingencies that you may not even realize. On the testamentary side (deciding who gets what), there may be a will, a trust, beneficiaries on the account, or payable on death designations. If you don’t have any of those, there are still default inheritance state laws called intestacy laws. Basically, even if you do nothing, there is a safety net of who gets what, and there are backup layers. You could name backup heirs, successor executors, etc., but even if you don’t, the intestate laws will dictate inheritance. This is not the case for Bitcoin.
The other side of inheritance is custody, since so many Bitcoiners self-custody. When you have Bitcoin assets on an exchange, you have a few failsafe layers. This includes password recovery. While you are living, you could contact the institution to gain access. When you pass, your heirs have a third-party custodian that they can turn to for assistance with accessing and liquidating. With self-custody, you don’t have this naturally built in to turn to.
Worst case, with traditional and legacy accounts, there is the process of unclaimed funds. This is where the assets go to the state after a certain amount of time if they are not accessed. This is in place, so the money doesn’t simply disappear or get lost. Bitcoin does not have anything like this yet.
Again, Bitcoin self-custody has few to none of these fail safes as of right now.
“Perfect” bitcoin inheritance solutions Anthony has spoken with many Bitcoiners, and he keeps coming across the same problem – people are getting stuck waiting for the “perfect” inheritance solution. The plans, ideas, and visions for are different for each Bitcoiner, based on their level of security and knowledge. But for everyone it is important that you do not wait. While you’re working on your perfect plan, put in a satisfactory solution for the time being. You need a safety net.
If you worked really hard on your perfect inheritance solution and you believe it will work, great. But what if it doesn’t? There are no layers or fail safes in plan with Bitcoin self-custody. So, it’s up to you to create all of these layers, backups, safety nets, etc., so the funds aren’t lost.
How to make bitcoin inheritance layers Start with a layer that you’re HIGHLY confident will work, even if you don’t love it (for example, it relies on a third party, exposes your KYC, etc.). Once you have that in place then add layers that increase your comfort and increase complexity. But keep in mind, increased complexity may increase the risk of not working.
Here is one example:
First is the base layer and one way to do this is to create a poor man’s multisig. If you have a single sig hardware wallet, you can give the seed phrase to your heirs and successor heirs (your wife and children perhaps), store a handwritten copy of your seed phrase in safe deposit box, and give your passphrase to bitcoin-savvy friend or professional bitcoin executor (executor and successor) named in your will. Again, you may not love this for privacy reasons, but you are fairly confident this would work.
Now, with the base in place as your safety net, you can do whatever you want. You can teach your heirs in hopes they will understand self-custody enough to take custody on their own with a letter of instruction and treat it as a family bitcoin wallet.
Again, remember you are not creating your perfect plan, you are creating your own safety net until you have your perfect plan.
Check out my book, “How Probate Works,” to get an understanding of the probate process. Then add all the extra steps your executor and heirs will need to do to administer your bitcoin. As always, please reach out with your questions and feedback!
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We get this question quite often – can you sell your inherited property? The answer to this depends on many factors. First, you need to figure out if you can sell an inherited property. Here are a few steps for you to take to answer this, before you can decide if you need a probate lawyer or professional executor.
Check the deed to confirm you inherit First, check the deed to see if the decedent actually owned the property. Some people stay in a home long after another relative has passed or they are long-term renters. It’s actually easy these days to get a copy of deed online. One example is ACRIS here in New York. Most other states and counties are similar.
One note – it is a bit harder to obtain documents for co-ops (co-ops always worse during the probate process). You would need to call the management company for the information, which is sometimes like pulling teeth. They will need to check their internal records for the owner, and they may not provide you with the information.
Once you have the deed, you want to clarify the owner. Is it the decedent? Was it in a trust? Is it in some other relative’s name? Let’s say it’s your uncle who passed, but he actually moved into the house after your grandfather passed years before. It could likely still be in your grandfather’s name. That would add a few layers of complexity to ownership. Deeds can also have joint owners, and co-ops can have beneficiaries. If there is a joint owner or beneficiary, and it’s not you, then you don’t own it.
What happens to a mortgage when house is inherited? The next step is to see if there is a mortgage. When someone passes, the mortgage has to be paid off. So, it’s important to find out if there is a mortgage and how much it is. It doesn’t mean the heir is immediately on the hook for the mortgage payments, but it does need to be settled before the house is sold. If the mortgage amount balance is really large or underwater, it will definitely affect how you approach the estate. If the estate is close to or completely insolvent it makes the estate very cash poor, which changes how the estate is administered.
Checking for a mortgage is similar to checking for a deed. Except for co-ops, mortgage information may be found online, on the statements that come in the mail, tax assessment offices, or on tax returns.
In addition to searching for mortgages, you also want to look for potential larger debts. If there are tax debts, public assistance or Medicaid debts, second mortgages, etc., these debts must be paid first before anyone can get paid out from the proceeds from the real estate sale.
Did you inherit tenants, too? Lastly, to determine if you can or want to sell the property, you need to figure out if the property is occupied. Did you inherit tenants? Is it vacent? If it’s occupied, it will affect how you approach the estate. For example, if there is another heir living there and won’t leave, that is a whole set of additional problems. If it’s an actual tenant, it’s not as clear cut as one would expect either. More often than not, tenants after the owner pass create problems and lose their moral compass. Evicting or removing tenants is usually a nightmare. It may change your approach to selling the property.
Check out Anthony’s book, “How Probate Works,” which will break down what is involved with administering a decedent’s estate with property.
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Since we do so many probates, we see what parts of your planning actually helped with probate (dos), and which ones didn’t really matter (don't bothers).
We are reviewing this info so that you don’t spend too much of your valuable time on planning that won’t help all that much. This is based on our annual executor check in calls, in which we hear from our clients who have well intended plans to gather information for us, should we need it. Which in most cases, we don’t. We are trying to save you stress and make the estate planning process a little bit easier.
Solo ager estate planning “dos” Good and proper storage of original documents is important. It’s best to keep the original with your professional executor or other third party. Do not keep it yourself. This is for many reasons, such as access your home or apartment. Additionally, if a third party loses your will, probate could still move forward with a copy. However, if you lose it, it’s presumed that you intentionally destroyed it. Same goes for a safe deposit box – it’s hard to get access to this. It’s not impossible, but it’s very challenging.
Update your emergency contacts and be sure your executor is among those listed. An emergency contact list should be given to someone who will know of your death. This could be a building manager, doorman, neighbor, primary care physician, etc. You want to make sure they know who to notify in the event of your passing, including of importance, your executor and next of kin.
You should also review your beneficiary designations. We have talked before about why we don’t like beneficiary designations, but if you have them, make sure up to date. Or better yet, get rid of them. You certainly want to make sure they represent your wishes, and not your wishes 10 or 20 years ago.
“Don’t bothers” for your solo ager estate plan Don’t use treasure maps. We have received detailed letters and emails with where the will is, where their important documents are, and even where their spare keys are. More often than not, the location of these items will change by the time of your passing. It may take us longer to use the treasure map to find them than it would to simply look on our own. Plus, it would be a waste of time searching if they have been moved. It’s not worth the amount of time you’d spend writing this type of “map.”
We don’t need contact lists. Typically, the lists we’ve seen include building managers, financial advisors, etc. These change often. We find when we make these calls, the people on the list no longer even work there.
Speaking of lists, detailed lists of assets which include balances and very specific info is also not needed. High level information is good enough (such as the name of financial institution). Balances change daily, so by the time you write it down, it’s likely changed.
Sort of helpful There are a few things we would categorize as sort of helpful, but you don’t need to spend time on these, if you don’t want.
Password lists are one example of a sort of helpful thing to do. A list is nice to have, but post-death access to online accounts is not permitted, even if we have your password and log in. We simply can’t use those passwords. Email and social accounts may have some use to be able to access names and addresses, although again, we have rarely used these. Same with phone passwords. We seldom log into a decedent’s phone, and if we do, it’s only to find a contact name that we couldn’t find elsewhere.
A high level asset list is sort of helpful. It will give us a general sense of what you own to point us in the right direction. We would use this list along with the other items we collect (mail, past tax returns, bank statements, etc.) to be sure we aren’t missing something.
A list of contacts that are likely to not change is also sort of helpful. This includes next of kin, your primary care doctor, and possibly your CPA. It’s good info to know, but likely, we would get the newest information from the documents we have gathered.
Solo Ager Book If you don’t already have my book, “The Solo Ager Estate Plan,” click the link below for a copy.
Free copy of "The Solo Ager Estate Plan" Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
As you can imagine, probating a hoarder’s estate adds a few more complications. In this episode, we will talk about how to deal with some of the main challenges.
A hoarder can be defined as someone that likes to keep a lot of things; those that hold on to items with little value. As an executor, we define it as a situation where it’s abnormally difficult to navigate the living quarters. For example, a hallway that isn’t a hallway. Or trouble opening a door, because there are items blocking it.
How much does it cost to clean a hoarder’s estate? On average, to clean out a hoarder’s house, it will cost about two to three times as much as it would cost to clean out a similar living space of the same size. We’ve chatted about the costs for cleaning a “normal” home, which can add up in a typical situation. For example, if you’re cleaning out a hoarder’s one-bedroom apartment, the cost will be the equivalent of a two-to-three-bedroom home. The reality is that you will need more movers, trucks, and dumpsters.
Another level of additional cost is dependent upon the cleanliness, which you may not know until the stuff is removed. You may be facing possible additional safety/hazmat costs, depending on the severity.
How to find important items in a hoarder probate Another twist when you are dealing with a hording situation in probate, is how to find important items in the home. Even in normal (or conventional, typical) estates, it can be hard to track down important items. For example, executors need to look and find estate planning documents, tax returns, or tangible gifts such as art, jewelry, collectibles. There’s a much higher risk of not finding these items when the home is in this condition.
In addition, it makes the cleanout process much slower. Typically, we can find the items before it’s cleaned out. But, in a hoarding situation, we have to wait for the movers to clean out walkways to access areas to search. They are helping us gain more elbow room and to be able to navigate the living area. It’s a move items, search for items, move more items, search for more items game. You have to search as they are cleaning, which prolongs the process and adds time and money.
How to protect a hoarder’s reputation during probate Another layer is how to protect the reputation of a hoarder during probate. Most hoarders aren’t proud of their situation, how much stuff they had, how they lived, etc. In this case, more than a few hoarders have explicitly asked us (as their professional executor) to hide the situation from family, friends, and neighbors. We’ve talked previously on how to handle privacy for our clients. We are happy to do this for them.
We will select our cleanout crew carefully, making sure they have a high level of professionalism and discretion. We’ve seen crews that have someone at the door nudging along nosey neighbors and some that even set up barriers to block the view in the home. In a building setting, even requesting the assistance of the building managers is important, as they are the first line of gossip defense.
If you want to find out what is required of an executor, I suggest reading my book, “How to Hire an Executor.” A non-professional executor may get overwhelmed by this particular situation. In addition, hiring a professional who will adhere to your request for reputation protection in a hording situation is important.
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Could you imagine doing a ton of work and not getting paid? It’s frustrating, but it happens. One of the drawbacks of nonprofessional executors is they are more likely to lose their executor fee, despite doing months, even years, of work for the estate.
In this podcast, we are going to discuss a few real-world instances where this happened. We want to help you see that this can happen and that you don’t want to take on the executor role expecting a nice piece of change for your hard work. It sounds like a decent payday, but as we’ve discussed before, the ratio of hours worked to amount paid is not equal, and you may not even get a penny.
Family changed their minds, denied his executor fee In this case, “Joey’s” aunt passed away and the aunt was survived by siblings. Joey was not even an heir and didn’t even live in New York, but he was younger and financially savvy. He was in a position to defer his job offer to focus on being an executor. Of course, his family “graciously” agreed to have him serve as executor.
So, Joey moved from California to New York and deferred a legitimate job offer. He put in three years of hard work administering the complex estate. In the end, his uncles objected to Joey getting paid. Literally at the very end, right as disbursement checks were being written out. Yes, he did have the right to fight for this executor commission, but it would put the family at odds with each other. So, for the sake of preserving family harmony, Joey didn’t fight. He walked away.
For those that think this would never happen to them or to their families, we hate to be the bearer of bad news, but it happens often, unfortunately. Family drama can happen when you’re dealing with emotions and money.
Contested will, contested executor commission In this second situation, “Linda” was named as executor in her aunt’s will. Some family members contested the will, and after a lengthy and expensive litigation, the family settled on a revised breakdown of their inheritance. Side note – this was a good case where the decedent should have made a better plan to omit them.
During all this time, Linda, as the executor, was doing all the grunt work for over a year to vacate, repair, and sell her aunt’s dilapidated house. She also had to deal with the very stressful process of evicting bad tenants.
She did a great job.
Again, at the very end, right as checks were about to be sent out in accordance with the negotiated settlement agreement, the contesting family objected to Linda getting an executor commission. So, the family litigated that too, and Linda unhappily eventually settled on a reduced commission because the legal fees would’ve kept adding up to keep fighting. We watched her work so hard to eventually get less than deserved. Could you imagine working your normal full-time job to then get notice of a large reduction at the end of the year?
Court denied her executor compensation “Kristy’s” good friend named her executor because Kristy happened to be a lawyer (though not a probate lawyer). Her friend made a DIY will.
Only when her friend passed and Kristy began probate did she learn that since she’s a lawyer (even though she wasn’t a probate lawyer and wasn’t acting as a lawyer for her good friend), the will needed certain additional paperwork and affidavits. In the absence of this paperwork and affidavits, the Court cut Kristy’s executor compensation in half!
Kristy spent multiple stressful years dealing with her friend’s estranged yet demanding heirs, banking issues, and other complications. In Kristy’s own words, she said that being an executor was “not worth it,” and she was a little embittered to her friend for putting her in such stressful role.
These are a few reasons that we talk about professional executors. If using a professional executor, family dynamics wouldn’t be a factor and there would be less of a debate by the family regarding the executor receiving their fee.
Executor To learn more about hiring a professional executor, so this doesn’t happen to a friend or family member, check out my book, “How to Hire an Executor,” available on Amazon!
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Here’s a mental exercise to put yourself in the shoes of your bitcoin heirs. The underlying assumption is that your heirs know nothing or know way less than you do about bitcoin. Many bitcoiners have a pretty deep knowledge of bitcoin, self-custody, operational security, and so on. And you may be so deep down the rabbit hole that you forget how daunting and confusing bitcoin can be.
Maybe by the time you pass away, bitcoin knowledge will become more common. But for now, most people don’t know what they’re doing. All of the above topics may as well be a foreign language to your non-bitcoiner heirs. And that’s a useful way to imagine how your heirs will feel. Think as if your bitcoin heirs will probate your estate in a completely foreign country (or planet).
Bitcoin is a different world Imagine you had to probate an estate in a completely foreign country. Even with translation apps, you really don’t understand the basic language, especially slang and technical jargon. Even the most basic concepts are completely different. For example, opening or closing an “account” doesn’t make sense in that foreign jurisdiction.
This is the type of confusion that your non-bitcoiner heirs may face, even if they have dabbled in bitcoin before. On top of all that, your heirs are dealing with the grief of your passing and other family dynamics.
Now imagine your heirs attempting bitcoin inheritance schemes Now imagine your heirs attempting to follow a letter of instruction, a treasure map to constitute seed phrase shards, or operating a multisig wallet. If they do something wrong, everything could be lost.
Many of us still have a hard time empathizing, and think “I’ll write such a clear letter of instruction, no problem.” I’m sure your heirs wouldn’t want to be thrown into another planet with just one piece of paper telling them what to do. Remember, you have spent years researching and learning about bitcoin. An instruction letter is going to seem absurd and overwhelming to someone who knows next to nothing about bitcoin, let alone the probate process.
Pretend your uncle tells you he has assets in a foreign country: you don’t speak the language, you don’t know the customs or systems, and at every turn a corrupt bureaucrat or scammer could irrevocably steal everything. But don’t worry, he’s writing a really clear letter explaining everything!
How would you help your heirs with a foreign probate? Whatever you think they’d need for a foreign probate is how you should help your heirs with their bitcoin inheritance.
You could try connecting them with a friend who is (reasonably) trustworthy and familiar with the foreign situation. You could go a step further by finding and vetting a local lawyer or other professional who your heirs can hire to help.
I know this rubs a lot of bitcoiners the wrong way because these ideas involve relying on a trusted third-party. From the point of view of someone who hates “trusted third-parties,” these suggestions may be a necessary evil to make sure your heirs actually inherit your bitcoin. A trusted third-party can be a back-up plan, but you can’t rely solely on a letter of instruction to a clueless bitcoin heir. That’s just asking for a post-death disaster.
If your heirs can’t administer your bitcoin correctly and it gets lost, everything you worked so hard for is gone.
As you know, I’ve been touring bitcoin communities to get a sense of how it all works. One thing I’ve observed from bitcoiners is their inability to remember how hard it was for them in the beginning. They know so much now, but it’s easy to forget that their heirs are starting from scratch.
Another thing is that people still mess up when dealing with “normal” bank accounts and brokerages during probate. Probate is not an easy process, and adding bitcoin to the mix just makes it that much harder for your executor and heirs.
Probate (can apply to Bitcoin) Check out my book, “How Probate Works,” to get an understanding of the probate process. Then add all the extra steps your executor and heirs will need to do to administer your bitcoin.
As always, reach out with your questions and feedback!
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It’s understandable that beneficiary designations seem like an excellent and easy estate planning tool. But from our experience, when someone actually dies, beneficiary designations are often bad news.
We’ll describe a few reasons why beneficiary designations cause problems in probate when estate plans become reality. Then you can decide for yourself if beneficiary designations are worth the risk.
Outdated beneficiary designations don’t reflect your wishes Often, by the time a person dies, their beneficiary designations are way outdated and no longer reflect the wishes of the decedent. How do we know that the designations are outdated? The beneficiary designations clearly conflict with the will, trust, letter of last instructions, and last conversations.
Why? It is too easy to forget to update your beneficiary designations. It’s easy to download a beneficiary form from the bank website, sign, and return it. But, it’s very easy to forget to submit a change of beneficiary form when you make changes to your estate plan. For privacy reasons, the bank doesn’t list your beneficiaries when you get your statements. You have to remember to check if you’re not reminded on a regular basis.
During our annual reviews, we try our best to nudge our solo agers to keep their beneficiaries up to date (or remove them). My preference is to remove the beneficiary designations and let everything flow through the will.
What happens if there is not enough money in an estate? Accounts with beneficiary designations are NOT part of the probate estate. This means that your Executor has no control over those funds. The money will go directly to your named beneficiary (who could be your girlfriend from decades ago that you forgot to remove...).
Too many accounts with named beneficiaries can result in a cash-poor estate. There are not enough funds to pay for estate expenses, court fees, appraisers, debts, or even for the heirs named in your will. Not having money to pay debts and creditors can cause more problems, because creditors may go after the heirs.
Even worse, there may not be any funds available to pay the beneficiaries named in your will, because the bank accounts went directly to the account beneficiaries. It will be sad for the heir in the will, since it wasn’t your intent to leave them with no inheritance.
Hard to know until probate has already begun It creates an annoying catch-22. Meaning, banks/brokerages only reveal if there are named beneficiaries to the beneficiaries themselves or to a court-appointed executor. How do you know if probate is necessary if you don’t know whether there are any beneficiaries?
Your executor may waste time and money to set up probate, only to find out that there was no reason to probate because the accounts have named beneficiaries. It’s frustrating to tell the family that they paid us just to tell them that the account funds are going elsewhere.
Also, the banks do not reveal this information easily, even to the court-appointed executor. Sometimes executors still have to jump through hoops to get the banks to cooperate.
Solo Ager Book Beneficiary designations seem great on paper, and I get it. But, time and again, we’ve seen how this does not end well in reality. Hopefully this prompts you to just take a look at all of your accounts sometime soon.
If you don’t have it already, click on the link to my book, “The Solo Ager Estate Plan,” for a free download.
Free copy of "The Solo Ager Estate Plan" Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Tax clearance is taking even longer lately because of a new twist: 1040 verification. Everyone agrees it’s important to keep the tax bogeyman satisfied, but all these layers of delays are frustrating our clients and us. Below we'll explain what’s happening here.
What is tax clearance and why does it take so long? The executor needs to make sure that the IRS agrees no more taxes are due. This is important because the executor is personally liable for unpaid taxes. If the executor makes distributions to the heirs and the heirs sign indemnity agreements, then the heirs will be liable for taxes.
Maybe you’re thinking that your loved one’s estate was so small that there’s no estate tax. We’re not just talking about estate tax, but final 1040s, payroll, small business, retirement payouts, and just about everything else. Still don’t think it applies? You’d be surprised how complex someone’s tax situation can be. The IRS is pretty good at combing through the past six years to make sure they get everything owed to them (it’s the IRS’s last chance to be paid).
Why does it take so long, generally? As with any bureaucracy, it takes the executor a while to gather all information and past returns. (Try getting a tax transcript quickly from the IRS!). The IRS will also take their time since this is their last bite at the apple. And lately, everything related to the IRS takes way longer due to unprecedented delays and backlog. As you recall, the lock-downs were in 2020. It’s mind boggling how the IRS is so backed up three years later.
Now the IRS wants verification If the estate is owed a refund on any of its final returns, the IRS now requires identify verification of the decedent. It’s understandable that the IRS is taking these measures, since scammers posing as IRS agents have become ubiquitous. But the result is that estates are getting stuck for more weeks or months because of $10 refund.
Why does IRS verification cause longer delays? It’s because all bureaucracies are slow, and are even slower if your situation is not on their main “script.” For example, if you go to the bank to open a personal checking account, it’s easy for the tellers who open checking accounts several times a day. But if you have a non-traditional request, such as closing a decedent’s account, the teller probably has to go ask a manager for help. When you go off-script from procedures that an employee is used to, then things can go haywire.
Whether it’s multinational banks or the largest government in the world (US), these bureaucracies struggle with edge case situations. It’s very hard to find a competent banker, branch manager, or IRS agent who understands what an executor is, let alone the correct procedure for dealing with a deceased customer or taxpayer. You’re pretty lucky if you speak to a knowledgeable agent on your first call, if you get to speak to anyone at all.
Can’t we just forego the $10 refund? Ah, nice try. The IRS will not process the return (not just the refund check) until they verify the decedent’s identity. When a return is not processed, you can’t get confirmation of the final balance and therefore the final release from liability.
For example, when you call the IRS to verify, they ask if you are the decedent. Once you tell them you are the executor, it heads downhill from there. It sounds absurd, but it happens.
The 1040 verification is a new procedure, so this is a heads up for those facing a new estate. For those who have been working on an estate for a while, this could be a reason why the estate is now dragging on. When we say that we’re waiting along with you, we mean it. It’s an uphill backwards in the snow with no shoes kind of battle.
Probate Check out my book, “How Probate Works,” and when you get to the chapter on delays, just add on more time. Unfortunately, that’s the way things are right now.
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How do you sell a probate co-op, when the estate has no other cash?
Why does the estate need cash? To pay for all the preparations, such as movers to clean out the property, cleaners, contractors for minimum renovations to make the property marketable, and more.
For some houses, cash buyers/investors may be an option. But for other houses and the many co-ops in NYC, it’s not an option.
Sell personal property When the estate has no cash or bank accounts, it’s usually because the accounts have named beneficiaries. When the estate only has accounts with named beneficiaries, there’s no operating account for the estate. Beneficiary designations are one of my pet peeves; they usually mess things up rather than solving inheritance problems.
So, the estate has a valuable piece of real estate, but no means to pay for the necessary steps to turn it into cash. Usually, the personal property in the residence is junk. I know someone may value their yard sale treasures or the dining room set that took forever to pick out, but no one else wants it. Antiques and high-end pieces can be sold easily, but generally it's not worth the cost of running an estate sale for the other personal property.
In this situation, the executor has no choice, so maybe but maybe they can sell enough pieces, jewelry, or anything to raise funds for the estate. Again, not a great situation: you’re essentially asking your executor to conduct a garage sale in hopes of raising enough money to clean out the rest of the junk!
Ask heirs to pay Another undesirable option is asking the heirs to pay. The bottom line is that the heirs almost never have available funds. Even if heirs have the funds, they probably don’t want to contribute. Besides, even if one heir funds the estate, it causes imbalance and it is recipe for drama. The one who funds the estate will expect special treatment over the other heirs.
Bridge loans A bridge loan is a short-term loan to get you from being illiquid to being able to sell the real estate. Bridge loans are not the same as usurious inheritance funding loans. This is a loan that is secured by the property itself. For that reason, some bridge loans have 0% interest!
So, what’s the catch? There’s lots of paperwork and specific conditions to get a bridge loan. Some loans require you to work with a particular broker or firm. But if that doesn’t bother you and you have no other options, it’s not too bad. Applying for a bridge loan is similar to filling out a mortgage application.
Executor Those are the not so ideal solutions to selling a cash-poor probate co-op. If you dump this situation on a family member or friend, they probably won’t have nice things to say about you after your death. Hiring a professional executor is a good idea in this situation. To learn more, check out my book, “How to Hire an Executor,” available on Amazon!
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If you’re a solo ager and you must use a power of attorney (POA), make it as limited as possible.
We received the following from a solo ager listener: “You state in your book that a financial power of attorney is not necessary if there’s a solid living trust in place. (I don’t feel the risk of abuse is a critical concern in my case). However, my lawyer says I need to name one.”- Lori
This attorney refused to complete our listener’s estate plan unless she included a financial power of attorney.
Why I avoid POAs whenever possible Powers of attorney are very overpowered. It can be executed with just a simple notary with no witness requirements. But, for that basic execution, there is unlimited control over someone else’s finances, house, etc.
Powers of attorney are pretty unstructured. There are no guide rails in the law for how an agent under the POA is compensated or whether there should be an accounting proceeding.
Besides, if you have a revocable living trust, then you have most of the benefits of a power of attorney. You would only need a POA if you are traveling abroad or incapacitated. You’d need someone to manage the funds on your behalf so you don’t fall into arrears or foreclosure.
I don’t think the risk of having a financial power of attorney is worth covering those outlaying scenarios. If you ever read a standard power of attorney, you’ll see that the agent has the power to do almost anything with your finances and property.
A supreme example from the news headlines is of Brooke Astor, a famous New York philanthropist. Her son was able to siphon about $80 million from her estate with a simple POA, contrary to the rest of her estate plan.
You might read the scenario above and say, well, I’d only give power of attorney to someone I trust. We’ve seen people who used to be the most trusted candidates go astray. Money does interesting things to people. This fear should not keep you from creating an estate plan, but keep in mind that you should minimize the use of a POA.
Why would an estate planning lawyers insist you sign a POA The short answer is that I don’t know why anyone would be that stubborn to make their client do things their way. It’s like a doctor saying, “Get this surgery and you will be better. If you don’t listen to me, then I won’t be your doctor anymore.” If they can’t explain their reasons to your satisfaction and still insist, consider changing lawyers.
Some attorneys have always done estate planning “packages”, and haven’t changed with the times. It might be hard to leave an attorney that you’ve been working with for a long time and who you are otherwise comfortable with. But, if you can’t get a decent answer to this pretty powerful question, it might be worth getting at least a second opinion.
Ways to limit a power of attorney If you feel that you need a power of attorney, then ask the attorney to make it a limited one. There are two main ways to limit a POA:
The first way is to get a springing POA instead of a general POA. A general POA is effective immediately upon signing. A springing POA is conditional; those powers only come into existence if certain conditions are met. Usually this means that you must be deemed incompetent by two physicians.
The second way to limit a POA is to only choose specific powers for the agent to have. You don’t want to check the box that says your agent under the POA has the power to gift all of your money. And you certainly don’t want to check the last box that says, “All of the above.” Carefully choose only the powers that are needed to accomplish your goals. If it’s not something you would do in your own capacity, don’t give someone else the power to do it!
Solo Ager If you don’t already have my book, “The Solo Ager Estate Plan,” click the link below for a copy.
Free copy of "The Solo Ager Estate Plan" Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
A placeholder bitcoin inheritance plan may be the solution to spur bitcoiners into action, rather than pursuing a “perfect” plan. Instead of holding off on a plan until it’s perfect, have a placeholder plan in the meantime in case anything happens to you while you are still perfecting your inheritance plan.
Perfect is the enemy of done, and using a placeholder plan may help avoid overthinking and analysis paralysis.
Why bitcoiners need SOME inheritance plan With bitcoin, there is no default safety net. Other assets, like a regular bank account, are connected to centralized institutions, meaning the funds won’t be lost. Banks and brokerages offer features such as password recovery. You heirs can submit letters testamentary to these institutions to make a death claim on your assets. Even if no one claims in a timely fashion, the funds don’t just disappear, they go to the state’s unclaimed funds.
But not with bitcoin! You need a plan for your bitcoin. The cryptographic security solutions (password, seed phrase, etc.), also make it hard for your heirs to access your bitcoin upon your death. So even though 60% of people have no estate plan, a bitcoiner MUST have some kind of plan to avoid catastrophic loss
Baselayer bitcoin inheritance plan This doesn’t have to be a plan that you love; t’s just a placeholder until you complete your treasure map or other “perfect plan.”
Once you have your “perfect” plan, don’t just scrap the placeholder. The placeholder can shift to your backup plan. Even with traditional estate planning, people name successor executors and backup beneficiaries. Think of your bitcoin plan in the same way. It’s your own unclaimed funds scenario. If your carefully crafted plan doesn’t work, at least you have a backup plan in place.
Placeholder bitcoin inheritance plan must be frictionless Your placeholder plan must be easy for you to set up or else you won’t do it. Otherwise, you’ll continue pondering that elusive perfect plan (or fail to have a backup).
First, your placeholder plan should be low cost regarding money and time. It should be easy to do yourself with minimal need for outside assistance.
Second, it should be a plan that you know will work to avoid catastrophic loss, even if it sacrifices a little bit of what you care about. For example, you may have to give up client information, or rely a little bit on a third party like a professional executor, or maybe it’s not your ideal security situation. As long as the placeholder plan falls within tolerable thresholds, you can be willing to sacrifice a little bit to not lose a lot!
I haven’t fleshed out a good placeholder plan yet, but a good place to start is a DIY will coupled with some version of a poor man’s multisig, while using a professional executor as a keyholder.
Again, I know this is not exactly the plan you want, but set it up so that it works for now. Otherwise, there is no safety net while you are developing your prefect plan.
Probate (can apply to Bitcoin) My book, “How Probate Works,” will help you understand the foundations of probate. This should give you guidance as you develop your plan, because you’ll learn about situations that your heirs may encounter after your death.
Request your free consultation
A placeholder bitcoin inheritance plan may be the solution to spur bitcoiners into action, rather than pursuing a “perfect” plan. Instead of holding off on a plan until it’s perfect, have a placeholder plan in the meantime in case anything happens to you while you are still perfecting your inheritance plan.
Perfect is the enemy of done, and using a placeholder plan may help avoid overthinking and analysis paralysis.
Why bitcoiners need SOME inheritance plan With bitcoin, there is no default safety net. Other assets, like a regular bank account, are connected to centralized institutions, meaning the funds won’t be lost. Banks and brokerages offer features such as password recovery. You heirs can submit letters testamentary to these institutions to make a death claim on your assets. Even if no one claims in a timely fashion, the funds don’t just disappear, they go to the state’s unclaimed funds.
But not with bitcoin! You need a plan for your bitcoin. The cryptographic security solutions (password, seed phrase, etc.), also make it hard for your heirs to access your bitcoin upon your death. So even though 60% of people have no estate plan, a bitcoiner MUST have some kind of plan to avoid catastrophic loss
Baselayer bitcoin inheritance plan This doesn’t have to be a plan that you love; t’s just a placeholder until you complete your treasure map or other “perfect plan.”
Once you have your “perfect” plan, don’t just scrap the placeholder. The placeholder can shift to your backup plan. Even with traditional estate planning, people name successor executors and backup beneficiaries. Think of your bitcoin plan in the same way. It’s your own unclaimed funds scenario. If your carefully crafted plan doesn’t work, at least you have a backup plan in place.
Placeholder bitcoin inheritance plan must be frictionless Your placeholder plan must be easy for you to set up or else you won’t do it. Otherwise, you’ll continue pondering that elusive perfect plan (or fail to have a backup).
First, your placeholder plan should be low cost regarding money and time. It should be easy to do yourself with minimal need for outside assistance.
Second, it should be a plan that you know will work to avoid catastrophic loss, even if it sacrifices a little bit of what you care about. For example, you may have to give up client information, or rely a little bit on a third party like a professional executor, or maybe it’s not your ideal security situation. As long as the placeholder plan falls within tolerable thresholds, you can be willing to sacrifice a little bit to not lose a lot!
I haven’t fleshed out a good placeholder plan yet, but a good place to start is a DIY will coupled with some version of a poor man’s multisig, while using a professional executor as a keyholder.
Again, I know this is not exactly the plan you want, but set it up so that it works for now. Otherwise, there is no safety net while you are developing your prefect plan.
Probate (can apply to Bitcoin) My book, “How Probate Works,” will help you understand the foundations of probate. This should give you guidance as you develop your plan, because you’ll learn about situations that your heirs may encounter after your death.
Request your free consultation
How do you find a trustworthy fiduciary to make end of life decisions for you if you’re a solo ager? We get these questions often from our solo ager clients and followers:
“What provisions may be made if someone has no healthcare proxy?“
“When there is no one to take care of you as you age and you become ill, how can you ever find a fiduciary you can trust?”
We’ll review the problem, the lack of options, and if/when we’re able to help.
Solo agers’ problem This end-of-life fiduciary problem is very similar to the executor problem, but more intimate.
Typically, solo agers do not have the traditional spouse or adult kids to fill the role. Some solo agers don’t want to burden (or are not comfortable asking) more distant relatives or friends to fill the role. An end-of-life fiduciary is not just a money or estate administration role, but rather extremely personal medical role. This means asking someone to make important end-of-life decisions for you and even be present at your death bed.
The bottom line is that you do NOT want a random court-appointed stranger to fill this role. A court-appointed fiduciary wouldn’t know you or your wishes at all.
Not many options With executors, you have the option of choosing professional executors , as well as banks, trust companies, and in some states, there are certified professional executors. There is a small, but developed industry around professional executorship. But there are far fewer options for someone to be your hired health care proxy/agent.
In the case where a health care agent is hired, it is usually an attorney. This isn’t always a great option either. One of our followers said that she talked to an attorney and didn't feel comfortable with her because all she talked about was the hourly fee. The attorney quoted over $800.00 just to "sign her up."
Another said that the attorney “refused to have an initial meeting with me because she's a ‘busy person’ and I'd have to hire her before she'd see me.”
Obviously, an attorney won’t provide these services for free, but the attorneys can be more tactful about it. For example, when we are asked to serve as a professional executor, we meet with the person to make sure we are a good fit. It’s hard to imagine someone would want name a health care agent without meeting them first.
How (and when) we‘ll be your health care proxy We do not accept this role capriciously. I won’t do it unless I am your nominated executor/trustee or otherwise known you for at least several years.
Again, I want to make sure we have a good working relationship. This includes annual calls and check-ins (which we have discussed in other episodes). I want to be sure that I have a directional sense of your personality and wishes before I commit to making medical decisions. When the end-of-life period comes, it is a stressful time both for the client and me. I need to feel confident I can faithfully carry out your wishes.
My book, “The Solo Ager Estate Plan,” can help you prepare for end-of-life decisions. Click the link below to receive a free copy.
As always, keep your questions coming!
Free copy of "The Solo Ager Estate Plan" Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
What information are heirs entitled to, and how often can they request it? There is a delicate balance for executors to keep heirs in the loop without draining their time or estate resources in constantly responding to inquiries.
Executor vs. beneficiary rights Why is it important to balance executor and beneficiary rights?
If heirs demand too much, an overwhelmed executor may make errors with actual estate decisions, or grow weary. On a more emotional level, the executor may begin to resent the decedent for putting them through this.
On the flip side, if the executor ignores or stonewalls the heirs, the heirs may resent the decedent for his choice of executor. Disgruntled heirs may pointlessly sue the executor at the end during the accounting process.
The best way to strike a balance is to address their respective legal rights.
The Accounting The main legal requirement of the executor is the accounting. Note that the accounting comes at the END of the estate. The accounting records every dollar in and out during the executor’s tenure. The executor presents the accounting to heirs, the court, and possibly creditors.
Unlike some other states, New York generally has a “give them enough rope” approach, where the executor has tons of autonomy and authority. But with great power comes great responsibility: the executor is personally liable for any “mistakes” at the end.
There is no statutory legal requirement for providing the heirs with constant updates, just the accounting at the end. But, real world expectations outside of the statutory limitations means giving periodic updates to the heirs.
Periodic updates It is best practice for executors to update heirs during the big milestones, such as selling the real estate or successfully filing the tax return. Sometimes those milestones are far apart, so at the very least, the executor should update the heirs every 6 months or even quarterly. It is important for executors to set expectations in the beginning of how often the heirs will hear from them.
If the executor doesn’t update the heirs, a judge may not be happy. When heirs get frustrated, they can file a motion to compel accounting with the court. The judge won’t normally grant such a request 6 months into the estate. But, if the judge finds out that the heirs haven’t been updated in those 6 months, maybe he will be annoyed and approve the request.
Executors should also update the heirs because they may want to buy-in from the heirs regarding major decisions along the way. It would be bad if the heirs found out months later that mom’s house was sold for a certain amount. Keeping the heirs informed eliminates unpleasant surprises and lessens the chance that they will sue the executor for decisions they disagree with. The executor doesn’t have to ask the heirs for permission to do anything, but keeping them in the loop gives the heirs a say in decision-making.
If you want to find out what is required of an executor, I suggest reading my book, “How to Hire an Executor.” A non-professional executor may get overwhelmed by all of the questions and requests from heirs and may not know where to draw the line. Something to consider is hiring a professional executor to deal with your heirs instead of placing the burden on a family member or friend.
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Heirs often want to know if there is any way to get their inheritance faster.
Probate can take a long time, for various reasons, and lately it has been taking even longer because IRS delays are making tax clearance even slower. So, here are some options for heirs in a cash crunch.
Expense reimbursements First, the executor can pay expense reimbursements as soon as possible. This includes reimbursing heirs who paid the funeral bill, court or lawyer fees, clean out or move out costs, co-op fees, mortgage payments, and property repairs. Heirs who fronted these funds are entitled to be reimbursed from the estate.
Of course, reimbursements are not actually your inheritance, but repayment of money owed back to you. But if you need liquidity NOW, this can usually come out of the estate quickly with minimal delays. For example, court fees are unequivocal, so those can be reimbursed immediately once the estate has funds available.
Requesting a reimbursement from the estate is a quick way to get cash back into your pocket. Some heirs pull thousands of dollars from their personal bank accounts to cover the estate expenses and can’t afford to wait a year or longer to replenish their accounts.
Intermediate accounting Another alternative it to do an intermediate accounting. One of the main steps to close an estate is to do an accounting of the full books and ledgers of the executor’s tenure (every dollar that came in and out of the estate). The accounting is usually done at the end of the estate process because it is time-consuming and costly. It’s difficult to track down every transaction over the span of several years, even though the executor keeps track as they go along.
An intermediate accounting takes place in the middle of the probate process, so that the executor is approved to distribute a portion of the funds to the heirs. The problem with an intermediate accounting that the executor is duplicating work that they have to do all over again at the end of the estate.
An intermediate accounting doubles the cost but may be worth it if heirs need cash and the delays are really long. This may frustrate other heirs who do not see a need for an intermediate accounting, and they may demand that the duplicate costs be paid for by the heir who wants the accounting. Most people don’t like paying for something twice if they don’t have to!
Inheritance advance loan There is another option, but I highly discourage it: the inheritance advance loan. It is BAD idea, because it is a loan that takes advantage of an heir’s need for money.
With an inheritance advance loan, you can pay 50-100% interest/fees! If your share of the estate will be $50,000 and you need $10,000 now, the loan company will give you $10,000 now. But, at the end of the estate, the executor will give you $30,000 because for the $10,000 that you borrowed, you owe the lending company $20,000. If for some reason your share of the estate becomes less than you thought it would be or if you need to spend more money on litigation, repayment may be a problem.
In the narrowest of circumstances, this option may be worth it. Please explore the other options of expense reimbursements and intermediate accounting first. Talk to your executor or attorney to make sure all other options are exhausted before perusing an inheritance advance loan. This option exists for worst case nuclear emergencies.
Probate Check out by book, “How Probate Works,” so you can understand the probate process and have reasonable expectations up front about getting your money. We try to make it clear to our clients that this process could take months or even years. Some clients may decide to go to other more optimistic attorneys, but I don’t like to over-promise and under-deliver.
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What are some less costly alternatives for a managed multi-sig bitcoin inheritance plan?
Why poor man’s multi-sig? A multi-sig setup is good for inheritance purposes, because multiple keys are needed to access your funds. This way, there’s no pressure on one single keyholder to have high-level security. In a multi-sig, if one person loses their key, an attacker or hacker can’t do much without the other keys. Of course, the keyholders should keep the keys secure. But if one leaves his 12 key words laying around, it’s not as risky as it would be if he was the sole keyholder. Also, the keyholders should be geographically distributed – don't give them to people all living in the same house.
A drawback of using multi-sig is that it can be expensive, especially if your stack isn’t that big. Having 3 to 5 hardware wallets can cost several hundreds of dollars. It might not be cost-justified by the current level of your holdings.
Many of the good plans are through popular services (such as Unchained Capital, Casa, and Nunchuk). However, those are possible single points of failure. If a hacker knows that some of your keys are with these companies, they may find a way to access them. It’s easier for a hacker to hit one of these companies instead of hitting a computer in a random house.
These companies are also an easy target for subpoenas. Maybe you going through a divorce or a child custody battle, or maybe you have IRS or creditor issues. They may figure out that you are using a big company and figure out where to serve papers in hopes of getting your account information.
Separate seed from passphrase What are some poor man options to avoid the expense of multiple hardware devices, as well as the small risk of using a centralized key-holding company?
One option is to separate your seed from your passphrase. If you have a wallet with 12 or 24 words, you can additionally add a passphrase (which is an equivalent of a 13th or 25th word). Now you need both the 12 or 24 words and the passphrase to access the wallet.
While you are alive, you can just transact normally with your wallet and passphrase.
But the plan is to give the seed phrase (the 12 or 24 words) to your executor and backup executors, while giving the passphrase to your heirs or someone else. After your death, those two parties need to team up to access your wallet. While you are alive, they cannot access your wallet unless they combine the seed and passphrase.
This is similar to multi-sig, where neither keyholder has to exercise extreme caution. But you should choose people who will keep these safe.
BUT what if your executors and heirs are the same people? In that case, you may want to hire a professional executor as a professional keyholder. Giving your adult children the seed and the passphrase makes it very easy for them to conspire together while you are alive.
Separate clone wallet from PIN Another option is to separate your clone wallet from your PIN. You can load your seed phrase into a dedicated hardware wallet that is not directly connected to the internet. In order to turn on your device, you have to enter a PIN. During your life, you transact with your wallet and PIN as usual.
Here, the bitcoin inheritance plan is to give a clone wallet to your executor and backup executors without the PIN. Then you give the PIN to your heirs or someone else, creating your own 2 of 2 multi-sig. Again, neither keyholder needs to exercise extreme caution, since there is not much anyone can do with only one piece of the puzzle.
A huge drawback is that without the PIN, your executor cannot keep the clone wallet up to date (software updates, etc.). Depending how much time lapses before you die, he could end up with a very outdated device. To address this, you may have to do some periodic updates for the executor.
Probate (can apply to Bitcoin) There’s no perfect plan; these are some options for folks who can’t cost-justify using a multi-sig, but like the idea of splitting up access for security reasons.
My book, “How Probate Works,” applies to your bitcoin inheritance planning because it explains the kinds of tasks your executor has to do when you pass.
I’ll be doing more talks to groups on this topic and we plan to post them shortly. In the meantime, keep your bitcoin questions coming!
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E303 How to Choose an Executor Who Will Accept A common question from our Solo Agers is: does my executor have to accept?
Because our Solo Agers spend a LOT of time carefully choosing who will be their executor, it would be terrible if that carefully chosen one decides to not even serve! Our Solo Agers understand the significance about who they choose, and they take it very seriously. We touched on this in Episode 221, but we’ll dig a little deeper into the topic here.
It’s just a nominated executor The first thing to know is that this is just a nomination for an executor. When Solo Agers pick who they want as their executor, they should remember that it is not a contractually bound role. That chosen executor is not required to serve; he or she is just nominated for that position.
It is up to them if they decide to serve at the time of your passing. There are many reasons why the nominated executor may not accept. They may have new health problems, or maybe they moved. In fact, many nominated executors don’t even know they were appointed until the time comes.
Is being executor too much work? There are some things to consider to be sure your executor will actually accept. Being an executor is difficult, and probate is a lengthy process. We discussed this in Episode 184, touching on the hours, months, and expertise required to fulfill the executor’s duties. It almost ends up being a full-time job! Having this job hanging over the executor’s head can easily stress them out.
It is important to choose someone who is well-suited, meaning they have the legal or tax background and especially the time to devote to the task. Or you can just hire a professional executor. We have the staff and systems set up to deal with the challenges of executorship.
Unfortunately, your nominated executor may agree to serve but won’t realize it’s too much work until they’ve already accepted. It is important that you do your research ahead of time so that you know what exactly you’re asking of them.
Is there enough compensation for your executor? An executor may decline if it’s too much work for too little pay. In New York, executor compensation is set by state law, and it is a percentage of probate estate (meaning the assets that go through the executor’s control). But it does NOT include non-probate assets such as accounts with beneficiary designations.
If your estate includes creditors or tax issues, but there are only a few probate accounts to deal with the issues, your executor may decline to serve. Otherwise, your executor will be paid very little for dealing with all the headaches. No one wants to deal with that kind of mess and barely get paid.
A solution may be to write a minimum executor compensation in your will, so that even if there are not enough probate assets, your executor could still be reasonably compensated. However, the statute is already set, so the executor may have to fight to get paid properly.
Another solution is to make sure you have enough probate accounts by removing beneficiary designations from some of your accounts. However, your executor may not be able to accurately evaluate how much work is involved vs. how much compensation they will receive. Just because an estate is large does not necessarily mean that there are enough funds available to pay the executor properly.
If it turns out to be too much work for too little pay, they may end up with unhappy memories of you. If you think your estate might present the issues discussed above, give us a call to talk through the pros and cons of hiring a professional executor or not.
Solo Ager Book Below is the link to my book, “The Solo Ager Estate Plan,” which addresses the challenges of probate and executorship. And, as always, keep sending in your questions!
Free copy of "The Solo Ager Estate Plan" Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
What is the minimum estate size that a professional executor will accept? A few prospective clients have called asking, so we’ll review bank executor minimums, our minimums, and some exceptions.
Bank executor estate minimum size requirements Typically, bank minimum sizes are high. In New York, it has been as high as 5 million or 2 million liquid assets held with the institution. In most cases, the bank wants an estate with mostly liquid assets. It’s too much of a pain for them to deal with real estate, etc. They also want those liquid assets held at their bank. The bank generates fees and they get to have those assets invested in their products.
Our estate size requirements We generally try to fill the niche between folks who have an estate large enough to need our services, but not large enough to use a bank as an executor. Generally, we’ve set the bar as low as $250,000, and we do not have a liquidity requirement. However, we do want to make sure there are enough liquid accounts to fund estate expenses. Usually $50,000 in liquid assets is plenty to cover estate expenses.
You’ll need to make sure the account with liquid funds does not have beneficiary designations. If you name a beneficiary on an account, that account will go directly to the beneficiary. This means the executor won’t have access to the account to pay for estate expenses.
These requirements may not be hard for many clients to meet, but we have run into some problems in the past. The biggest issue is beneficiary designations. Naming beneficiaries on an account means that the account will not go through probate. If there are only a handful of small accounts in your name alone (no beneficiaries), it’s not really worth it for a professional executor to do all the work and deal with all the taxes and creditors without much compensation. Compensation is based on the size of the estate.
A problem for New York clients is that many co-ops do not allow the ownership shares to be moved into a trust or have a beneficiary designations. This creates a need for a professional executor, even if your other assets are in trust or have named beneficiaries. If you must have an executor to deal with your co-op, then you must make sure you leave at least one account of sufficient size (with no beneficiary designations) to go through probate.
Again, your executor needs enough liquid assets to cover fees, clean out costs, and other costs to sell your co-op. If you don’t leave sufficient liquidity, a professional executor will not accept. You don’t want to waste your time researching and choosing an executor who won’t accept based on your low liquid assets.
What if my estate is too small? We do make exceptions for our clients and try our best to help.
One helpful tip is to add language to your will or trust setting a minimum fee. Even if your estate is below $250,000, you can state that you want your executor to receive at least a certain amount. That way, you are guaranteeing that your executor gets paid even if the size of your probate estate is small.
Even if your estate is small, you should still leave sufficient accounts without beneficiary designations so that your executor has funds to work with. And don't just leave that one perfect account, because that leaves little margin for error. If you forget and start spending from that account, then your executor may not accept due to low liquid assets.
Lastly, if you want a professional executor to administer a small estate, do your best to minimize the drama. If you think there will be conflicts with heirs or a contested will, you may want to consider a revocable trust. Also, do a decent job of record keeping. Your executor won’t want to deal with a huge forensic accounting problem for a small estate. In summary, make sure your estate is cost-justifiable for your professional executor to accept.
You can learn more about choosing a professional executor in my book, “How to Hire an Executor.”
Feel free to send questions via comments or email. We will do our best to answer them either directly or as the subject of a podcast.
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Economic recession affects probate, just as much as wages, gas, and your grocery bill. We’ll share a few ways we’ve seen how it’s been impacting probates.
Takes longer to collect probate assets First, there are major delays in collecting assets. Banks, brokerages, unclaimed funds, etc. are taking way longer than usual to process claims and release funds. They are asking for more documents and are stricter in their requirements. In the past, these financial institutions let some things slide, but now they want all the T’s crossed and I’s dotted. They may just be rigorous in their requirements now. But another interpretation is that they want to keep the money in their accounts as long as possible.
This results in delays for the executor and heirs. The key takeaway is to start the process now!
Creditors will not settle Historically, regarding an estate debt (exs. credit card or medical bills), creditors were willing to negotiate the bill down. It used to just take a phone call to get even 50% off easily.
Now creditors want full payment. Some will even wait as long as it takes or even sue the estate. The notion of debts getting discharged or reduced isn’t happening. The takeaway: don’t count on getting the debt reduced to increase the amount the heirs will receive. Just assume that debts will be paid in full.
This seems odd, considering we’ve been through recessions before. Even then, creditors were willing to settle estate debts to guarantee cash in hand. It is unclear what makes creditors so aggressive now.
Heirs need cash Heirs need and want their cash as soon as possible. If you’ve listened to any of our prior podcasts, you know that paying heirs quickly is unrealistic. Estates take a long time to settle, but there are some solutions to make payments to the heirs sooner rather than later.
One way is to pay reimbursements immediately. Sometimes heirs front money to pay for court filing fees, house clean-out, or the attorney’s retainer. Normally, when the matter isn’t urgent, the heirs get reimbursed at the end of the probate process. Why have multiple rounds of checks mailed out if it’s not urgent? But, if you are an heir who has fronted money, just ask the executor for it. The executor should have no problem repaying you.
We are also seeing heirs and executors making concessions during the accounting phase to get it done faster. In the past, parties might dispute how much money was spent on certain tasks (house clean-outs, for example). Now all sides just want to get the accounting done.
Another option is to prepare an intermediate accounting. Instead of waiting until the end for the full accounting to distribute the inheritance, the executor can do a partial accounting to pay out a portion of the shares to the heirs. The problem is that the same level of work is required to produce an intermediate accounting as it is for a full accounting. Basically, the heirs pay for the accounting to be done twice, whether by the executor or an accountant. We may start seeing a trend where the heirs don’t mind paying twice just so they can get some cash now.
I hesitate to even mention the last option, since it is a bad idea. Inheritance funding companies can give cash to the heirs in exchange for a legal right to their share of the estate. For example, if your inheritance share is $50,000, the inheritance funding company will give you less than $20,000 now and they’ll keep the rest when the accounting is done. These are horrible terms, so try to avoid this option!
Probate If you want to learn more about probate, check out my book on Amazon, “How Probate Works.” If you fill out the form below, we will give you a free chapter. As always, send us comments or questions by email. We will do our best to answer them either directly or as the subject of a podcast.
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A shared Bitcoin family wallet sounds like a simple way for your heirs to inherit upon your death. We’ll discuss the advantages of this setup, as well as some important drawbacks.
What is a Bitcoin family wallet? It is a shared Bitcoin wallet, but not a multisig wallet. It is a singlesig wallet/device/app that multiple family members have access to.
Hot wallet example: husband, wife, and kids use an app and all of them have the password and seed phrase.
Cold wallet example: husband and wife share physical custody of the hardware wallet, PIN, and seed phrase. The kids know where the parents keep the hardware wallet and perhaps even know the PIN (but not the seed phrase)..
Pros of Bitcoin inheritance with a family wallet Compared to other inheritance solutions, a family wallet is easy to set up and maintain. Unlike mulitsig or secret sharing, there are no extra steps. If you are comfortable with self-custody, then you are most likely comfortable updating your hardware device and keeping firmware up-to-date.
It is also easier to make transactions during your lifetime. If you want to send or spend during your lifetime, it is easier with singlesig. With multisig, you have to get multiple signatures, and with secret sharing you might have to reconstitute your key to sign any spending transactions. With a shared family wallet, for example, your just sign the transaction with no extra steps.
Because the shared family wallet is one wallet (and everyone knows it’s stored in mom’s dresser), there is very little treasure hunting upon death. It’s even easier if everyone knows the PIN.
Cons of a Bitcoin family wallet It is extremely poor security to have so many different people with access to a single wallet.
First, there is the risk of a family member going wayward and just taking the wallet. Sadly, there was a news story of a son who drugged his dad’s tea to get to dad’s Bitcoin. No family is perfect, and if someone decides they are entitled to something more, they have instant access to a shared wallet.
Second, when you have multiple people who have full access to a wallet, there are multiple points of careless error. For example, the son doesn’t quite appreciate how self-custody works and leaves his copy of the seed phrase laying around. Everyone who has access to the wallet needs to take steps to maintain a high level of security. They all need to understand that the seed-phrase needs to be better protected than saving it on Google Drive (bad idea!).
Similarly, there will be varying levels of interest and understanding of self-custody among the family members.
Inheritance problems with a Bitcoin family wallet Recently, we’ve seen a case with a shared family wallet and multiple family members have been contributing/purchasing into the wallet. That can cause confusion as to who really owns what. Sure, you can figure out which transactions and which UTXOs belong to which purchaser. But it creates accounting issues and increases the risk of family drama even to the point of litigation. Commingling of funds is never a good idea, and this is a good example as to why.
Upon your death, the question becomes: who’s the boss? Whenever the answer is unclear, it increases risk of family conflict. With legacy probate, it's usually legally clear who’s in charge (the named executor or trustee). That named person has the authority over the estate and that person also bears all the responsibility.
If there are multiple key holders, whoever starts signing first is in charge. It’s easy to imagine someone sweeping the wallet into a different wallet and seizing control. Now that person gets to decide who gets what. That is a recipe for family drama.
Another problem is: will your heirs figure out what to do with Bitcoin upon your passing? Even if you are a Bitcoiner, your kids may not care enough to figure it out. For example, our client called saying: “My son is very intelligent, but he has no interest in learning Bitcoin custody now. He says he’ll figure it out if anything happens to me.”
It’s a bad idea for even the smartest people to try and figure out Bitcoin on the fly. They can still make stupid mistakes compounded by the emotional stress of the loved one’s death. If you make a mistake with self-custody Bitcoin, the result can be catastrophic loss. You can’t pursue unclaimed funds, and there is no password reset.
Executor (can apply to Bitcoin) If you have a shared family wallet, you may want to consider naming a professional Bitcoin executor, hiring a professional service, or naming a friend who is very familiar with the process.
My book, “How to Hire an Executor,” is not specific to Bitcoin, but it will help you understand more about professional executor services that are available.
As you know, we love this topic. Please email your questions or leave a comment on other Bitcoin-related topics you’d like us to cover.
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Sometimes a revocable trust makes great sense for a solo ager estate plan. Generally, revocable trusts aren’t so great in New York, because they can be hard to fully fund. The main goal of a revocable trust is to avoid probate. Since revocable trusts are hard to fully fund, the goal of avoiding probate is not usually met. Here are a few reasons a revocable trust may nonetheless work for a solo ager.
Distant or disinherited heirs Solo agers tend to have distant or disinherited heirs. By definition, a solo ager is usually unmarried, without children, or those individuals are not in the picture. Naturally, this puts the solo ager in a situation where their heirs are distance (nieces, nephews, siblings, etc.).
We had a recent client whose solo natural heir was a distant cousin. In this case, a trust makes sense to avoid probate. When the remaining heir is a first cousin, there are extra hurdles during the court process such as: hiring a genealogist to submit a genealogy report, having the Public Administrator (PA) review court dates, and it generally makes probate longer and more difficult.
To be clear, this process not only applies when you leave something to that distant cousin. Rather, the probate process requires you to notify you natural “default” heirs under New York State law, which includes distant cousins. Even if you don’t want to leave anything to the distant heir, the estate is still required to go through this process if the estate is probated.
Similarly, if you have a disinherited family member, they have the opportunity to object to your will or wishes during the probate process. Having a trust still gives them the opportunity to object, but it is not as structured as probate. Under the probate process, the heirs must be served notice of the proposed will distributions, during which they have the right to object. When administering a trust, the heirs are not required to receive notice. Unless the heirs do some digging on their own, they may not actually object.
As mentioned above, you must fully fund your trust in order to avoid these problems. Say you have an apartment, a few bank accounts, and a few brokerage accounts. If, for example, the apartment does not make it into the trust, you still have to go through probate even if the bank and brokerage accounts are in the trust. Even if only one asset goes through probate, you are at risk for a longer probate process (described above) and the potential issues with distant heirs.
In lieu of guardianship A revocable trust can be useful in lieu of guardianship. Putting your assets into a trust can help avoid and maybe deter the dreaded court-appointed stranger. There are situations where court-appointed strangers/guardians might impose themselves on a solo ager with no advocates. They might get the court to agree that the solo ager is incompetent to manage assets (when in fact, the solo ager is able). Thus, the court-appointed guardian gains control over the solo ager’s assets. The Netflix movie, “I Care a Lot,” is a dramatized version of how something like this could happen.
If all of your assets are in a trust, and the trust is drafted properly, the court will not appoint a stranger or guardian to gain control of your assets. The trust states who will receive your assets, so there is little incentive for a person to try to get appointed as your guardian.
For the goal of avoiding guardianship, partial funding of the trust if ok if you are able to get the majority of your assets into the trust. As long as the assets that don’t make it into the trust are not enough of to lure a court-appointed stranger, then it should be fine. Again, it is a lot of work for someone to convince the court that you are incompetent.
End of life planning (maybe) When you are terminally ill, you know that the end is near. This makes planning easier, because you know what your assets will be upon your passing. In contrast, planning at a younger age means that bank accounts will change or you may buy and sell houses.
Knowing roughly when you might die makes it less likely that you will miss something during the trust funding process. But, even if you know that exact date and time that you will die, it’s still hard to capture every asset. Also, if you are terminally ill, you may not want to spend your last moments planning your trust.
Solo Ager Book Again, revocable trusts don’t make a lot of sense for most situations in New York, but they do make sense for solo agers for the reasons listed above. If you want to learn more, check out my book, “The Solo Ager Estate Plan,” on Amazon. Or, if you fill out the form below, we’re happy to send a free copy to you.
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Which offer for probate real estate is better: an experienced investor cash buyer, or an individual financed offer that’s supposedly $80,000 more?
In a recent case, turns out the individual offer was actually more like $30,000 (~3.5%) higher, plus tons of headaches and delays.
Nitpicked during buyer’s inspection Individual buyers heavily nitpick during inspections. Unlike an investor, the individual buyer is the one who will live in the house. He has a vision of how everything should be for his new home.
This inspection showed some problems, some legitimate and some were very cosmetic. Note that this sale was an as-is contract. It’s an estate sale; take it or leave it!
At the end of the day, the buyer demanded about $20,000 worth of repairs and buyer credits. For some items, he wanted a credit so he could pay to fix it himself. The repairs that he demanded from us added months of delay to the process.
Months equals money out of the estate. Not to mention all the problems that can arise from leaving a home vacant for months. If the roof leaks or a pipe bursts during that time, it is still our problem since the house hasn’t officially been transferred.
Cash buyers will inherit problems Cash buyers only care about big problems, except ones that affect title (such as boundary line issues or environmental problems).
But cash buyers are willing to deal with cosmetic problems. Why? Because they usually tear down and rebuild, meaning they will end up fixing those problems anyway. What about large cosmetic problems? Cash buyers have experience and teams that can easily fix cosmetic items. Since they deal with this often, cash buyers are very efficient, and their repair estimates are much lower than an individual buyer who may have to negotiate with a contractor.
Cash buyers close quickly It’s a big deal how long the probate property sits. The longer it sits, the more risk the estate bears. Even if someone trips and falls on our sidewalk while we’re waiting for a buyer, that’s our problem.
In probate real estate, we don’t have weeks of open houses, marketing, etc. In fact, we may not even use a broker, which will save another 6% in broker’s commission (in this case, about $35,000!).
As discussed above, there is no negotiation for repairs with a cash buyer. Similarly, there is less likelihood that we will need to spend months making repairs. The cash buyer just wants to get the deal done, fix the real estate, flip it, and move on to their next investment.
Compare this with choosing an individual buyer. The legal bill will be higher, because you will spend months working on a deal that could have been completed in a couple of weeks with a cash buyer. Instead of spending $1,000 or $2,000 for closing, it could be $5,000 or even $7,000.
In conclusion: the cash buyer is still net less than the individual offer (in our case, about $30,000, or 3.5% of our deal). This estate had 4 heirs, so that comes to $7,500 each.
Was it worth it the months of delays and stress to all involved in the estate? Executors in these situations have to weigh the facts and decide for themselves.
Probate Real estate can be messy. To learn more about selling probate real estate, check out my book, “How Probate Works,” available on Amazon.
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Here’s what I learned about bitcoin inheritance at the recent Adopting Bitcoin conference in El Salvador (my full bitcoin inheritance presentation here).
Background: (1) One year ago, El Salvador was the first country in world to make bitcoin legal tender, and (2) these conferences tend to be attended by the most hardcore bitcoiners, not so much the everyday users.
How does Chivo wallet work for bitcoin inheritance? When El Salvador launched bitcoin as legal tender, that came along with a government-maintained software wallet that you can keep on your phone (called Chivo). Based on my conversations with locals and with the researcher that I hired, Chivo is by far the dominant wallet in use in El Salvador.
This is unlike other parts of the world where there are at least a dozen popular wallets (hardware and software). While the rest of the world is still scattered, El Salvador has one main wallet that everyone uses. It’s not like Mac vs. PC or Apple vs. Android phones (where people usually have one or the other).
The Chivo wallet is highly centralized and KYC (“know your client”), which means you can’t get this wallet unless it is linked to your national ID number. It is managed by a centralized entity (the government). This is the antithesis of what U.S. bitcoiners are into.
One pro is that because it is centrally managed, you don’t have to worry about losing your seed phrase. The government knows that the bitcoin belongs to a certain person.
Another pro to this is that you can name a beneficiary on your wallet, like an IRA or life insurance. If you pass away, your heirs can theoretically call customer service. The heir would need to submit the equivalent of a death certificate, letters testamentary, and a claim form to have the bitcoin transferred to the heir’s Chivo wallet.
While in El Salvador, my researcher and I tested customer service for a death claim. We called a few times to get different representatives. They had no idea what to do for a dead customer. To be fair, even if you call Binance, Gemeni, or even Bank of America, they don’t know what they are doing either!
Salvadoran bitcoin estates data There’s not much data on how it’s been working, since it’s only been one year. Most of the bitcoin users are on the younger side. El Salvador has a population of six million. Not many of the deaths in the past year were of younger people. Those who died were not bitcoin holders and also not using Chivo. For this reason, we weren’t able to gather much information about self-custody issues or seed phrases lost, etc.
Recently, Chivo enabled linking your bitcoin wallet to your legacy bank account. There’s no privacy, but the point is to minimize volatility. For example, I pay my Uber driver $10, and he doesn’t want to take the risk of bitcoin going up or down. He has the option to accept the bitcoin then immediately convert it to dollars. This is how the government addressed the users’ fears of volatility, etc.
People who need this money for daily needs want something that won’t fluctuate. If users are using bitcoin like PayPal or Venmo (converting everything to dollars), there may not be many probate issues. These users aren’t investing in bitcoin, rather just using bitcoin like a Venmo system.
Bitcoiners are thinking about inheritance The conference in El Salvador was surprisingly well-attended: there was standing room only, but people were also sitting on the floor. There were so many other presentations cooler than bitcoin inheritance, that I thought I’d be lucky to see a dozen people.
During the Q&A part, it seemed like multisig was the most popular solution. Remember, these were hardcore bitcoiners, and multisig is not a technically easy solution.
Shamir's secret sharing was also a very popular solution. As you may recall, this process involves splitting up a seed phrase that’s not too risky. I will look into this further and make future posts about my findings.
But what about solutions for everyday users? They want to keep the bitcoin in their own custody without living in fear of catastrophic loss upon their passing. One possible solution is to have a multisig with someone who knows how to execute it, such as a professional bitcoin executor.
Some other observations from my time in El Salvador: the bitcoin tourists were the ones paying with bitcoin. Vendors were reluctant to let us pay for things with bitcoin. One cabbie said he accepted bitcoin, but when I arrived at the destination, he asked for dollars because his phone wasn’t working. After a little prying, I found he could open his Chivo app just fine. It seems that he didn’t know he could immediately convert the bitcoin to dollars.
Probate book My book, “How Probate Works,” can relate to bitcoin inheritance as well. At the conference, I handed out many free copies of the book, and people were interested. If you did not get a free copy at the workshop, you can also find my book on Amazon.
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We’ll discuss a recent case study of how bad neighbors can harm probate real estate sale, and how to deal with them.
Bad neighbor blames estate for water leak I am the professional executor for an estate with real estate that needs to be sold. During this process, we’ve had a neighbor with complaints.
First, the neighbor blamed our unit for a water leak. He had water damage in his unit, and he thought it was coming from us. Water damage can lead to mold issues, so we took the complaint seriously. We responded immediately and gave him access to a plumber.
The real estate is in a co-op building, which, as we discussed before, are a different animal! In this situation, the co-op manager appreciated our fast response to the problem.
As it turns out, the bad neighbor was blaming us for no reason. It had nothing to do with our unit, and the water issue was completely internal to his unit.
Bad neighbor blames estate for insects Second, the bad neighbor blamed us for a sudden infestation of bugs in his unit. His theory was that when we cleaned out our unit, something was shaken which caused bugs to move to his unit. We took the complaint seriously again and responded by giving him access to an exterminator of his choosing.
When selling probate real estate, you need to try to get along with the neighbors and building management. Getting off on the wrong foot with building management can make things very difficult for the executor. Even though we felt that the neighbor was not being truthful (as we saw no indication of bugs in our unit), we responded promptly. Again, the co-op manager appreciated our fast response to the problem.
It turns out that the bad neighbor cried wolf again. The neighbor’s hired exterminator was so dismissive of the neighbor’s theory that he didn’t even bother to spray our unit. Even though the cost of spraying would have been low, the exterminator said there was no point.
Despite all of this, the bad neighbor threatened to block our probate sale by lobbying the co-op board to not allow our unit to sell. However, the co-op saw that the neighbor lied twice and that we had been cooperative throughout the process. Thankfully, we did not need to worry about the board preventing our sale.
Bad neighbor sends us a “buyer” Those were the last of the complaints, but oddly enough, the bad neighbor sent us a buyer. He suggested selling to someone, so we looked into it. The bad neighbor “vouched” for an “investor,” which is odd because investors usually don’t do well with co-op rules.
The buyer turned out to be an inexperienced kid (late teens, early 20s) who apparently saw on Tik Tok how to flip probate properties. The kid offered a wildly high offer, which is unlikely to actually close at that price. As we’ve discussed before, if a wildly high offer does go through, it’s because the buyer nickel-and-dimes the price down to the asking price. This strategy is used to get the buyer’s foot in the door by making an attractive offer and thus eliminating the competition. (link to E291 What is a Strong Offer on Probate Real Estate?)
In this case, the heirs had been tracking the situation and understood that this buyer was recommended by the bad neighbor. Therefore, they were not bamboozled into demanding that we accept this “high” offer, like they might have been if they did not know the back-story. The bad neighbor actually helped us with this bad buyer. If we didn’t know who sent him, it would have taken more time and research to know to reject the offer.
This is a situation where a professional executor can help buffer and deal with curveballs. An inexperienced executor may get bullied with empty threats of blocking the sale, etc. Professional executors know what to look for and can help the heirs avoid the stress of threats. We continued to address the false alarms and adjusted our treatment of the bad neighbor accordingly.
To learn how a professional executor can help you avoid probate headaches, check out my book, “How to Hire an Executor,” available on Amazon.
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Executors see a lot of intimate details and secrets as part of their job. If the executor was a friend or family member of the decedent, this can be very emotional and hard to unsee. It’s often better for friends and family to have a disinterested professional executor instead. Using a professional executor without emotional connection can spare the family and friends from the intimate details.
Professional executors protect secrets Executors have a legal duty to protect and honor the reputation of the decedent. Decision-making is not all about the money in the estate. Sometimes, the executor needs to make a decision that costs some money, but it’s worth it to protect the legacy and reputation of the deceased.
So, what kind of secrets might the executor need to protect?
It’s not exactly a secret, but oftentimes executors protect the legacy of the decedent’s living conditions. The executor understands that revealing a hoarding situation would be embarrassing. Similarly, the decedent may have been pinching pennies in a sparsely furnished apartment, but did not let anyone know about their true financial situation. An example of this was the Brooke Aster case: she was a very wealthy woman who contributed millions to charities. Unfortunately, her estate was heavily contested and the ugly details about her end-of-life living conditions became public. Ms. Aster had been sleeping on a urine-stained mattress in her kitchen. Not an image she would have wanted the public to envision.
Executors also protect the knowledge of the decedent’s habits. Sometimes the decedent drank more than people knew. Maybe that’s what the decedent felt he needed to do to get through his final years, but that doesn’t mean he’d want his family and friends to know. This also extends to drugs (prescription and recreational). Another habit to protect is the decedent’s pornography addiction or sexual habits. It would be uncomfortable for the kids and grandkids to know about grandma’s active sex life.
Professional executors spare your heirs from regret We clean up those embarrassing apartments. It can be emotionally shocking for friends and family to see how you lived, ate, and slept. They might be unprepared to see a medicine cabinet full of pain killers. The image they draw from your living conditions may lead them to believe you were lonelier than you really were. It can cause them to grieve more once they see how you lived.
If you want them to have only the fondest memories, spare them from the estate cleanup.
Professional executors buffer drama among heirs As we discussed, it is hard to unsee those secrets. This often leads to the heightened emotional state of the family/friend executor, which can spark conflict and drama among heirs. For example, the executor friend might blame the decedent's boyfriend for not taking better care of her at the end of her life. Sometimes it’s better if family and friends are in the dark a bit; no need to see it all.
A professional executor can work through the issues of the estate without getting emotionally involved. To the extent that there is any drama, we act as a buffer. Let the heirs get mad at us.
Hiring a professional executor allows family and friends to have fond memories of you and allows them to continue healthy relationships with each other.
Solo Ager Book To learn more about estate planning for Solo Agers, click the link below for a free copy of my book, “The Solo Ager Estate Plan.”
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After many months (maybe years), the estate is finally nearly finished. What are the final steps to close probate? We’ll explain the accounting, receipt and releases, and the reserve.
What is the estate accounting? The estate accounting are the full books and records of everything that has transpired during the executor’s duty of administering the estate. It accounts for every dollar in and out, every asset collected and sold, and what is left over.
Sometimes preparing the accounting can take a while because:
- It takes time to get all bank statements, records, and identify missing transactions.
- The documentation has to be compiled into a court-specified format, so you need a specific type of accountant or lawyer to prepare the accounting. We’re not talking about the guy who prepares your 1040 or the lawyer who drafted your LLC.
- Unfortunately, the court requires a very niche type of format, and you must account for and balance every penny. The accounting often spans more than 1-2 years with complex transactions (stock sales, real estate closings, business sale, etc.). It is a thick stack of paper!
This is the executor’s opportunity to show everything he has done for the estate. This is also the opportunity for the heirs to either object to or accept the accounting.
Why must heirs sign a receipt, release and refunding agreement? The heirs have the chance to review the accounting, and they can hire their own attorney to help them understand it, if they wish. If there are no objections, the heirs are asked to sign a s receipt, release, and refunding agreement. Here, we’ll discuss the three elements of the agreement.
- Receipt
The heir acknowledges receipt of the money. This seems a bit odd, since the heirs sign this BEFORE actually receiving the check. It's understandable for heirs to be nervous, but the only alternative is to hold a closing to coordinate simultaneous exchange and court filing. Otherwise, we deliver the signed receipt and release to the court and await the court’s approval before distributing the money.
In some contested estates, we have done closings. However, there really shouldn’t be a lack of trust, because the executor is bound to the court. The court will know if the money isn’t distributed as agreed upon. Also, a closing would be hard to do it the heirs do not live close by.
- Release
The heirs agree to release the executor from any future and past liability. The heirs agree that the executor did a good enough job, and they won’t sue. This is what the executor really wants; he’s probably ready to put the estate behind him and move on!
- Refunding
If any unexpected tax, debt, or bill comes up after the estate is closed, the heir agrees to pay back a portion of his inheritance, pro-rata, to cover that debt. Usually, a refund is needed due to taxes, an unpaid medical bill, or a creditor.
What is a probate reserve? A probate reserve is a “rainy day fund.” Though the estate is technically closed, and the heirs agreed to refund money if needed, it’s unrealistic to believe that the heirs will actually refund the estate.
Say an unexpected expense comes up a year later, and every heir is supposed to return $10,000. Most heirs are going to ignore the executor’s calls (yes, there will be some honorable folks).
For that reason, it’s better to have cash on hand (a reserve) to pay anything that pops up. Even if it seems that all the bills have been paid, it could still take a year or more for something to pop up. The reserve amount depends on how complicated the estate is, the size of the estate, and the risks involved. Usually, it’s good to have at least $10,000. If the reserve is even $1,000 short of the unexpected bill, you’d still have to contact the heirs for the extra money. I’ve seen reserves as high as $100,000 in 7-figure estates.
The reserve should be held at least a year, but even up to three years to be safe. One reason is that the IRS takes a long time to get through their backlog, so it’s better to be prepared. Even if the heirs don’t want to pay, the IRS bills MUST be paid.
Again, the executor wouldn’t close an estate if there was a large lingering liability out there. The executor works hard to get to the point where he thinks it’s safe to close.
Once the executor is done holding the reserve, that money gets distributed proportionately like the rest of the inheritance. Distributing the reserve is much less formal, as it is a smaller amount. Plus, the heirs may be excited to receive a little more later on.
A lot of people don’t know what the finish line looks like in the estate process, so hopefully this helps to better understand it. If you want to learn more, check out my book, “How Probate Works,” available on Amazon.
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How do you find the original will after someone dies? We’ll cover where to search, how to get access, and what happens if you can’t find the original.
Did the attorney keep the original will? It is common for an attorney to hold the original will. If you have a copy of the will, the lawyer’s name is usually written on it. You can look for the name on the backer, or maybe he was a witness or the notary.
If you don’t have a copy, check the decedent’s contacts app or rolodex for any attorneys. Don’t overlook the attorneys who don’t do estate planning; you never know what leads you will get. You can also ask the decedent’s CPA or others who may have referred the decedent to an estate planning attorney. Eventually, one of these contacts should lead to the attorney who holds the original will.
New York petition to search the home If you determine that the will must be in the decedent’s home, you need a court order to enter the home. Thankfully, court is pretty quick in issuing this kind of order, unless the will is contested. Typically, it shouldn’t take longer than a couple weeks to get the order.
When you enter the building, you must be accompanied by a police officer or building management. The reason is that an order to search the home is different than acting with full executor powers. You will be limited to searching for documents such as the will, life insurance policies, funeral arrangements, etc. If you find the documents, you must immediately turn them over to the court.
The procedure for searching a safe deposit box or a storage unit is substantially the same. To enter a safe deposit box, you’ll be accompanied by the bank officer. It’s better for everyone involved that there are witnesses. You don’t want to be accused of anything.
What happens if the original of a will is lost? If can prove that the will was not in the decedent’s possession when she passed, then it is possible to ask court to probate the copy. Perhaps the attorney or the CPA says they had it at the time of her passing.
However, if the decedent must have had the will, the law assumes that the decedent intentionally destroyed/revoked the will. This is the legal assumption, even if it’s not what really happened. In this case, you must move on with administration, which is the process in which the default inheritance laws are applied.
So, do your best to find the will!
If you are young and you have a will, it may not help to tell your executor where it is; you could live for many more decades. But, if you are older or terminally ill, it is a good idea to let your executor know where to find your will when you pass.
To learn more, check out my book, “How to Hire an Executor,” available on Amazon.
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Choosing an executor can be very difficult if you feel you don’t have many choices, especially if you own non-traditional assets such as Bitcoin. We previously discussed this topic, generally (https://anthonyspark.com/help-i-dont-have-an-executor-for-my-will/), but what about Bitcoin?
Whether it’s because your friends and family lack knowledge, or because you don’t want to leave behind stress or drama, there are many reasons why so many Bitcoiners feel they don’t have anyone to name as their executor.
Your Family and Friends Don’t Understand Bitcoin You are afraid that when you pass, they will lose your Bitcoin. They don’t understand custody or any basic security protocols (OPSEC).
Another worry is that your family and friends will dump it, and immediately turn it into cash. They might fall for the hype that it is bad for the environment or actively believe it’s a “ponzi scheme.”
Or they may just be completely clueless; never heard of Bitcoin.
You Don’t Want to Burden Your Bitcoin Friends Maybe you have friends in the developer/Bitcoin community who are technically savvy enough, but you’re not close enough to ask them to take on this big job. Appointing an executor requires trust, and executorship is a burdensome job (lots of time and work).
Besides, Bitcoin may only be a small portion of your entire estate. I’d guess that most technologically advanced folks will get SUPER frustrated by the archaic parts of probate. As we know, probate includes lots of phone calls, faxes, standing in line, all without many apps or elegant solutions. Your friend who is used to cutting edge technology probably won’t want to stand in line to close your bank accounts with a physical signature. They’ll be ripping their hair out and looking for a way to do it online!
You Don’t Want to Cause Disputes Among Your Family and Friends Even if you have family members or friends who can do the job, the rest of your heirs (who don’t understand Bitcoin) may have a million questions, suspicions, and doubts. The heirs’ lack of Bitcoin knowledge, compared to the executor, will breed suspicion of the executor. Your executor will probably be frustrated with the constant questions and doubts.
When all the heirs and executors know each other and there is distrust, it can ruin relationships, cause resentment, and tear families apart. It’s easier for a completely independent executor to weather that storm.
You Can’t Find a Suitable Service Most technically knowledgeable custody service providers (Casa, Unchained) have great inheritance guidance, but, to my knowledge, they don’t offer executor services. Their advice is to talk to your attorney.
You can also find someone like myself.
Or you can look for a bank to serve as an executor. However, banks have high liquid asset requirements. Most Bitcoiners who are self-custodied probably don’t trust the banks anyway...
Do Any of These Situations Apply to You? If any of these situations apply to you, your best solution may be hiring a professional Bitcoin executor. Some of the benefits we offer:
- We have a fully staffed office available to handle all the various burdensome tasks that come with being an executor.
- We are focused on and committed to staying up to date on Bitcoin custody, OPSEC, and other need-to-know issues surrounding Bitcoin inheritance.
- Choosing an independent executor, instead of friends or family, can help prevent drama and disputes, since a professional executor is a neutral and unbiased party.
- We’re bonded and carry malpractice insurance to cover any wrongdoing as executor. This provides an additional layer of protection you wouldn’t get when working with a loved one, friend, or even a trusted financial planner or accountant.
How Do You Appoint a Professional Bitcoin Executor? Name us in your will or trust Just tell your estate planning attorney that you appoint Anthony Park as executor. In most cases, using estate planning software yourself is fine, too.
Next, schedule a call with me to make sure we’re a good fit. Then send us a pdf copy of your fully signed will/trust so I know I’ve been formally nominated.
After that, we will have annual check-in calls to stay in touch.
Nominate Us as Executor After Someone Has Died
After someone has passed away, the heirs may realize that person owned Bitcoin and they become intimated. Even if I am not named in the will or trust, there is a process for naming me post-death. It requires a little more work, but in most situations, we can work with the court and get appointed as executor even after death. The heirs can rest assured that we will now handle everything for them.
In review: just because your executor knows about Bitcoin now doesn’t mean they will still have knowledge of the ever-evolving process when you pass away. Even letters of instruction for your executor can become outdated fast! The best solution is to hire an independent professional executor who is committed to staying up to date on Bitcoin.
Probate (can apply to Bitcoin) To learn more about executorship in general, check out my book, “How to Hire an Executor,” available on Amazon. Or you can call us and we’ll be happy to speak with you.
I’ve received more and more questions on this topic, and I am actually slated to speak at a the Adopting Bitcoin conference in El Salvador. Hopefully, I will meet some of you down there and I’ll be happy to answer your individual questions.
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Is the highest offer the strongest offer? Not necessarily, especially in probate. Sometimes an heir or a co-executor believes they can get a higher offer. Then, all things being equal, we should take that offer. However, it’s unusual that two offers are identical. There are other factors to take into account besides the price.
3 Fs of probate homebuyers We use the 3 Fs to make sure the buyer is a good fit for a probate real estate sale.
- Financials
An all-cash offer is the best offer. There is always the risk of a mortgage getting denied. However, some probate properties are well-suited for a traditional mortgage situation.
We also want to see a good, healthy down payment, as well as substantial post-closing funds. In other words, the buyer should have uber financial strength.
- Fast
We need to sell fast in probate, but we won’t acquiesce to a bad offer just for speed.
A normal seller who doesn’t like a deal can reject an offer and continue to live in the home. But for an estate, the property is vacant. So, the estate is bleeding cash every month to pay maintenance, utilities, and existing mortgage.
Also, any vacant property will fall into greater disrepair, especially over the winter. One bad winter can lead to much wear and tear. If the owner is alive and living in the home, they would know about a problem and take care of it. Whereas, in a probate property, the executor will have to keep checking in and find time to deal with issues that arise. Long-sitting vacant properties will have less value due to less upkeep.
- Flexible
An executor cannot afford the time to handhold a first-time home buyer. The buyer needs to know what they are doing throughout the process. We’re busy working on the estate side of things. For example, we need to get additional court orders if the executor is bonded. We have to get special approval to sell the property, get tax waivers, get approval from the IRS to close the sale, and all sorts of other issues.
Now that the buyer has met the 3 Fs, in what circumstance might we accept the lower offer?
Is this probate homebuyer credible? We often get investors as buyers for probate properties. Usually, it’s too much of a mess for first time home buyers or first-time renovators. We want to weed out those buyers who just watched a YouTube video on how to flip a house and are looking for a probate steal.
But on the flipside, experienced investors can be a little sneaky trying to get the best deal. There are savvy investors who come in at a pretty aggressive/high offer with the goal of clearing out all the other offers. Then the savvy investor becomes the focus of the negotiation. Once they are the only ones left at the table, they start nickel and diming you down to the price of the next best offer.
Will the probate home sale actually close? Even if the buyer comes in 15% higher than the next best offer, will their mortgage actually get approved at that amount? Will the co-op or HOA approve the buyer? If we are selling an artist’s loft in Soho, and the buyer is completely unrelated to the fit and culture, they could get rejected. In New York, you can be rejected from buying a co-op for almost any reason except being a protected class under anti-discrimination laws.
Again, savvy investors may make the highest offer, but when they can’t get it negotiated down to their liking, they will bail. This does not mean that you will get to keep their down payment; they will just litigate. It’s not like a traditional buyer whose eggs are all in that basket. These investors have money to let things sit for a few months while they sue you. We avoid those buyers like the plague, because we do not need probate held up and the property still sitting vacant.
Sometimes, an offer is too good to be true. We know enough to see the red flags. Naturally, clients want to know why we may not accept the highest offer. We have to explain carefully to our clients that these types of deals will not close at that offer number.
If you want to learn more about how probate works in general, check out my book, "How Probate Works,” available on Amazon.
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A few Solo Agers have asked if they can use beneficiary designations instead of a traditional estate plan. We’ll explain some pros and cons of beneficiary designations, and why a professional executor may work better.
Why traditional estate planning doesn't work for Solo Agers Most traditional estate plans are centered around a friend or family acting as your executor to manage probate. Solo Agers often don’t have an assumed family member to serve in this role. Sometimes a Solo Ager has a friend or sibling, but for several reasons, it wouldn’t work out for those loved ones to serve. For example, friends and siblings may be the same age or older than the Solo Ager. There also may not be the same level of trust that one would have with a spouse. Or maybe the relationships are estranged.
For the reasons above, Solo Agers seek to avoid the need for an executor altogether. It’s not hard to blame them. For example, we had a Solo Ager client (no kids, no family, no close friends) who could not get it through to other attorneys that she had no one to appoint. She became so frustrated with their standard advice that she wanted to avoid appointing an executor altogether.
Why Solo Agers like the idea of beneficiary designations Beneficiary designations go directly to the heirs and “avoid probate.” This is common with life insurance and retirement plans. When someone dies, the beneficiary just fills out and submits claim forms. There is no need to go through probate for that particular asset.
Sounds easy and great, right? But in most cases, using only beneficiary designations does not work. Sure, it would work for a particular account, but realistically, you are probably not avoiding probate altogether. In order to completely avoid probate, you need a 100% perfect beneficiary designation plan. This means you cannot leave any assets out of your plan (zero assets left in probate, zero lingering debts or taxes). This becomes highly unlikely.
Any outstanding debts at the time of death need to be paid by the estate representative. Because of this, probate has to happen anyway to figure out pro-rata which accounts need to be reduced to pay your funeral bill or lingering medical bills, unsecured mortgage or credit card bills.
If all assets go to named beneficiaries, then the IRS goes directly after your beneficiaries. Your heirs will be harassed until the taxes and debts are paid. No one wants that for their loved ones. Additionally, it’s unlikely that someone will volunteer to act as your executor and deal with these issues.
Why Solo Agers like the idea of a professional executor The main attraction is that you appoint someone (experienced) to handle everything. The worry is that it will be hard to find a professional executor and it will also be expensive to hire one.
Regarding the cost, the executor’s fee is set by state law. This fee is the same whether you hire your 19-year-old unemployed nephew, or the esteemed professional executor. It is more bang for your buck to go with the professional!
How do you find a professional executor? First, you know that we can fill that role! Second, you can go to a bank and see if they have a trust officer who can serve (even if you don’t have a trust). However, most banks have liquid minimum asset requirements of 2 million or more (meaning this cannot include your home).
How do you name a person as your executor? You don’t necessarily have to pay an estate attorney to draft your will. While it’s usually a better idea to hire an attorney to draft the will (especially in complex situations), there are plenty of good estate planning software programs you can use yourself.
If you find a professional executor, interview them before you commit to appointing them. To learn more about executors and estate planning, check out my book, “The Solo Ager Estate Plan.” For a free E-copy, click the link below.
Free copy of "The Solo Ager Estate Plan" Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Most people correctly assume you need a local executor in New York, but they may not know exactly why. Let’s review a few real-world scenarios and reasons why you need an executor local to New York.
KYC requirements KYC stands for “know your customer,” and this applies to banking requirements. Banks take steps to make sure the customer is who they say they are. This helps prevent fraud, terrorism, and money laundering. Often banks require meeting the executor in person to close an account or open the estate account – they have to physically see the authorized person sign the opening and closing documents.
This may seem hard to believe, since you can open a bank account via text, app, website, etc. in minutes nowadays! However, in probate, an executor represents someone else (the estate or the heirs). Going to the bank in person is usually required and very inconvenient for an executor who lives far away.
The process also applies to brokerages or any regulated financial institution.
Selling New York real estate First, we’ll talk about the physical logistics such as the cleanout, renovations, and choosing the broker. It may be possible to do these things remotely, but it’s better to be there in person to oversee that nothing is breaking and that the renovations are up to par. Someone should be there to make sure the personal effects are sent to the heirs properly. Similarly, would you buy a home by video, or would you like to see it in person?
Choosing a broker in person is important to help get a sense of whether they understand the nuisances of the particular unit and type of neighborhood.
When it comes to New York real estate, there is a good chance you will be dealing with a co-op. We’ve talked at length before about New York co-op rules. Some of the co-ops require, above and beyond New York state law, that the executor be a New York resident. Co-ops are their own little kingdoms with their own set of rules. It is really tough for an outside executor to understand the co-op rules if they are not familiar with New York co-ops.
Also, real estate closings in New York are not conducted remotely or by FedEx. We still sit around a table for 3 or 4 hours in-person and then sign the papers furiously at the end. Antiquated, yes, but it’s how it’s done.
Dealing with local bureaucracies Until recently, ordering death certificates online didn’t exist or at least didn’t apply to New York City. You had to go down to the Health and Human Services Department and stand in line. To get it done quickly, you better know the lady behind the desk!
Similarly, while you can technically order court documents online, it is actually easier if you have someone get them in person. For example, to order a certified copy of a file, you need to know the page count, because they charge per page. How do you get the page count unless you go to the courthouse and see the file? Calling and asking how many pages are in the file isn’t going to happen.
We know that these seem like odd examples, but these are real life situations. That being said, my book, “How to Hire an Executor,” is definitely a good idea if you are thinking of appointing an out-of-town executor.
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“There’s no such thing as a perfect estate plan,” Sherlock Holmes would probably say if he did probate. What we mean is that things may not work out the way you plan, no matter how hard you try.
We’ll review an anonymous probate case study, where even in an ideal planning scenario (knowing the time of death to the minute, and plenty of time to plan ahead), there were all sorts of probate problems.
Solo Ager, Linda, was terminally ill, and had a planned end of life. This means she knew, to the minute, when she would pass, and she had months to plan in advance. Here’s how her probate unfurled. This is not a criticism of Linda; rather an acknowledgement that it is difficult to plan a perfect estate.
What part of her estate plan worked? First, Linda hired us as her professional executor. This acted as a safety net because we are experienced to look for problems (and she let us know that there would be problems).
Linda also had pre-planned funeral arrangements, which allowed her remains to be treated exactly how she wanted.
She made sure to arrange for the care of her dog. This helped to avoid the panic of a dog in the apartment with no caregiver.
Lastly, she did a good job of canceling her utility services. Usually, we have to determine what services the decedent utilized, so this saved lots of time.
What part of her estate plan didn’t work? First, Linda did a good job of preparing her will and naming a professional executor. However, she kept her original will in her apartment, instead of storing it with her attorney or somewhere else. This caused problems for several reasons.
If your original will gets lost, it is presumed that you intentionally destroyed it, thereby revoking it. If your attorney, CPA, or trusted advisor loses it, then they can petition the court to rely on a copy. The professional has no right to revoke your will, so it can be assumed that they just lost the original. While a professional losing a will is not good, at least it doesn’t negate the whole thing.
Storing the original will in your apartment requires another layer of the court process. The executor needs the will to get letters of testamentary in order to enter the apartment. This doesn’t work when the will is in the apartment to begin with. It’s quite the conundrum. It's not the end of the world if this happens; there is a special procedure in place so the executor can enter the apartment to look for the will. This procedure just adds more time and money to the process.
Second, Linda relied too much on her cell phone. She had a lot of information on her phone, and she referenced that information in her instructions to us. She even gave us the password to her phone. Unfortunately, her phone was stuck overseas. We learned the hard way that you can’t just mail a phone. The battery causes issues in shipping, and the phone may be dismantled by the custom agents. There is a lot of red tape in mailing a phone. Now, either I or another authorized person will need to transport the phone to the United States.
Lastly, Linda arranged for her keys to be mailed to us, but we have not received them. Once we get appointed by the court, we will work it out with her apartment building.
What were some unexpected probate problems? First, Linda assumed that her friends and heirs would work harmoniously with her professional executor (me). So far this has not worked out. One family member thinks I am a fraud because Linda didn’t tell her family about her plan. Another heir is not happy about how this is working out, so the heir hired her own attorney.
Linda assumed that I would be able to call her family and friends to get information that I need. But that didn’t happen. I doubt Linda expected this from her loved ones – no one usually does.
Of course, we will work around all of these issues; it’s what we do! From a planning perspective, her plan was a very good best-case scenario. There was no time variables and she had plenty of time to plan. But, even in the best situation, nothing is perfect.
To learn more about probate, check out my book, “How Probate Works,” available on Amazon. The best way to plan is to look at how it may all unfurl in the end.
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How long does probate take in New York if the estate includes bitcoin? As we talked about in a prior blog How Long Does Probate Take in New York, generally probate takes 15 months or longer; sometimes up to 3 years. Those numbers are actually on the lower side, because everything is more delayed these days.
Here we will discuss how a new-ish asset like bitcoin may add some delays.
How long does it take to become executor of a New York estate with bitcoin? Typically, it takes about 3-6 months to file and get the court paperwork naming someone as executor. The reasons for the delays are:
- Collecting documents;
- Court delays; and
- Hearings before the court will decide who should be executor.
Even with bitcoin added to the mix, this step of the probate process will remain about the same. The only area where bitcoin would make any difference is the estimated value of estate on the probate petition. The executor may have trouble pinning down how much bitcoin the decedent had. Also, because bitcoin is a newer hot topic, the knowledge that the decedent had bitcoin could attract greedy heirs. “Hmm, Uncle Joe had bitcoin; maybe I should contest his will,” etc.
How long to settle an estate with bitcoin in New York? Typically, it takes 15 months to 3 years to settle an estate. Settling an estate means the executor collects assets and pays debts and taxes to get the net amount to distribute to the heirs.
Of course, after 2020, everything has slowed down. Probate is currently taking much longer than mentioned above. Then, if you add a newer asset like bitcoin, a few more months may be added to the process.
The first reason is because of bureaucracies. Even traditional banks and brokerages are not great at handling decedent's estates. It’s a constant game of phone tag. New bureaucracies (exchanges such as Binance, Kraken, Gemini, Coinbase) will probably struggle with processing the death claims. They may not yet know what they are doing, because they don’t have a well-oiled machine for this kind of process.
The next possible cause of delay is if your decedent held his own keys and own wallet. Taking custody of self-hosted wallet and transferring it to secure multi-sig estate wallet could be time-consuming. The executor would need a lot of education to know how to handle it. It may be wise to appoint an executor who is familiar with both probate rules and bitcoin custody.
Another cause of delay for the executor is deciding whether to liquidate the bitcoin (convert it to dollars). With other assets, you want to covert the assets to dollars as quickly as possible to avoid the risk of price fluctuations. But bitcoiners tend to be hardcore and may specify that they want the bitcoin (not dollars) to go to the heirs.
Lastly, taxes add time to the process. Besides estate tax, figuring out the capital gains tax can be daunting. Even just filing a regular income tax return with bitocin may cause your tax preparer and examiner to conduct additional research on the rules. As we discussed previously, getting tax clearance tax a long time, even without bitcoin.
How long to close an estate with bitcoin in New York? Generally, the final phase (closing the estate) is anywhere from 3 months to 1 year. Again, the executor collects documents (statements, transcripts, and proof of what occurred during the probate process). Then the executor prepares the accounting, which are the books and records in a specific format required by the court. Lastly, the executor has to deal with any contests or objections to the will. Dealing with a contested will can add months to the final phase.
So, when the executor collects documentation of the assets, how does he document bitcoin acquisition? You can’t call a bank and ask for a ledger. You might be relying on screenshots. It’s not even clear if you can rely on the exchanges; you may have to reference the mempool.
How does the executor document bitcoin sale? Hopefully the sale was made on the exchange, and you can document it that way. After a sale, how does the executor protect himself and ensure the heirs that the bitocin didn’t lose value?
If you have an inexperienced person putting together an accounting and the court doesn’t accept it, much more time will be added.
We’ve tried to apply much of our probate knowledge to bitcoin situations. Let us know if you find this useful. Also check out my book, “How Probate Works,” to understand how probate works in general. Then, add to that all the complexities of probating an estate with bitcoin!
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Many of our Solo Agers wonder “how will my executor know I died?” (Especially if they’ve chosen me as their professional executor, as opposed to someone they see daily). Solo Agers tend to live alone, so this is a very understandable and common question.
Notify in case of death In New York, many Solo Agers live in buildings with a doorman, which is very convenient. Many of these buildings have “Notify in Case of Death/Emergency” forms. The Solo Ager would put my name on the form and indicate that I am the executor. Also, your doorman or super will know if something is wrong when they don’t see you coming and going anymore. Over time, they tend to recognize routines and changes to them.
Some doctors have similar forms to add my name as attorney/executor. The doctor will know what to do from there.
Perhaps you made pre-paid funeral arrangements, or you have chosen your funeral home. The funeral home should also have the same type of forms.
Leave clues Aside from having official paperwork to notify the executor, you should also leave clues of who to contact in case of death.
Make sure your executor is listed in your paper address book. Believe it or not, it’s not always easy to get contact information from a person’s cell phone.
Another way is to put the executor/attorney’s business card on the refrigerator. Hopefully it would be obvious to someone who comes into your home that they should call that attorney upon your passing.
Once you have asked us to be your executor, we send you items on occasion, such as books and holiday cards. This is a less subtle way to let someone know who to contact. Maybe your neighbor comes in and finds that you have passed. If she sees the “How to Hire a Professional Executor Book” on your coffee table and a holiday card from us on the mantel, then hopefully she would put the clues together and call our office.
Annual check-ins Once you hire us to be your professional executors, we call you for annual check-ins. These calls will naturally result in casual mentions among friends: “I was just taking to my executor…”
So now your friends know that you have a professional executor, even if they don’t know my name. That should trigger them to search for my name upon your passing. Asking friends to remember little details of your life is probably not realistic. So, a few clues are more likely to recall something you said earlier.
Another reason these check-in calls are helpful is that the conversations give me an update on ongoing health issues. If there is a downward trend, I will know to monitor your situation a little more often.
Worst case scenario, if you were to pass away a minute after we hang up from our annual call, I'll know within a year when it’s time for our next call. It’s not ideal, but it works.
There’s no perfect way of letting me know, but these are the most common scenarios. If you don’t already have one, please click the link below to get a free copy of my book, “The Solo Ager Estate Plan.”
Free copy of "The Solo Ager Estate Plan" Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Every executor faces the tax risks unless they get proper tax clearance, which can take a LONG time. Here’s how we’ve seen that plays out with professional executors, non-estate attorneys, and amateur executors.
Professional executors set patient expectations We advise heirs from the beginning that this will be a long process! This probably turned away many prospective clients who thought I was crazy for saying it could take years and decided to go with an attorney who told them it would take only months. (I’m pretty sure it ends up taking years for those attorneys, too). I’d rather be warned that it could take years, than to expect the over-promised and under-delivered “few months”.
We keep reminding our clients over the months that it is a long process. People don’t want to hear it, but at least they’re not wondering what’s going on.
An example of how long things can take: We filed an application for tax clearance for Mr. M.’s estate in September 2020. The IRS just responded via a computer-generated letter in July 2022 (almost 2 years later!). The IRS hasn’t even granted the tax clearance yet; the letter just acknowledged that they received our application.
This is why we set up the expectations in the beginning, because there’s nothing we can do about the government.
General attorneys react General attorneys can be very reactive if they have not had experience in this area. Many potential clients call us in similar situations where things are going slow, asking if their attorney is doing something wrong.
The potential client is dealing with the same set of facts that we deal with, except that his attorney has not set any expectations and is communicating with the heirs.
In order to get a case, some attorneys tell prospective clients that “probate” takes a few months. What they mean is that’s how long it may take to get letters testamentary. They don’t tell the client that getting letters is just step 1 of the 3 stages of probate.
Similarly, once the house is sold or accounts are collected, non-specialist attorneys tell the heirs that payout is imminent. But the inexperienced attorney comes to realize that to protect their client (the executor) from personal liability to the IRS, they must first get clearance.
Then the attorney has to break the news to heirs who thought they were about to get a check that it may be a LONG time. It's all about expectations and being able to see a couple steps ahead; not just react to the situations as they come.
Friends or family executors get blindsided The previous situation isn't great, but it's not as bad as when an amateur executor gets blindsided. Sadly, amateur executors (friends and family) often don’t even realize they must get tax clearance first. Then they get hit with the personal tax liability.
For example, Ms. V. was the executor for her uncle’s estate, and she didn’t know to get the tax clearance. She just paid out the funds quickly to happy heirs.
Then IRS sent her a letter informing her that the estate owes $20,000 in taxes.
She had to try and recoup the funds from the heirs. Mrs. V. reached out to the heirs and waited patiently for the checks. How many checks do you think came in? None.
Some people might say, “Oh, my family wouldn’t do that to me.” Well, some heirs may want to help out, but in some cases, they’ve already spent their inheritance.
Unfortunately, the IRS doesn’t care who pays the taxes, as long as they get paid. Executors are personally liable. So, Mrs. V. had to come up with a way to get $20,000 to pay the IRS. To this day, I do not know if she took out a loan or if she was able to recoup the money from the heirs.
Having an amateur executor is probably the worst situation. They don’t know to how set expectations, and they end up getting into messy situations. This is a good reason to check out my book, “How to Hire an Executor."
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Here are our tips for cleaning out the decedent’s home and getting it presentable for sale.
Identify the estate clean-out problems For example, did the decedent die recently, or has some time passed? Sometimes folks become ill and move into a facility, leaving their home behind. We often see these homes in disrepair (leaks, mold, gas shut-off, rotting food, etc.). Alternatively, if the decedent was living at home and died suddenly, then there may not be so many issues. Remember, in New York, you won’t be able to get into the house right away after someone passes. You will need to get permission, and that process should be built into your timeline.
Next is the amount of clutter. This depends on the square footage of the home. Was the decedent a hoarder? How much are the heirs taking with them? Whatever the heirs take will reduce the amount you have to clear out.
Lastly, are there property-specific issues? We’ve discussed in the past how New York co-ops are a very unique animal! Lofts can present specific issues, as well. Make sure you take into account elevator access, permission from the Board, etc. when you develop your clean-out plan.
Find the best clean out service for your estate There are two types of services: clean-out and cleaning.
Clean-out service means the big, burly dudes who carry out the furniture, etc. A cleaning service provides vacuuming, wiping, dusting, etc.
The best service for an estate situation does it in one shot. Work with a team who is experienced in sizing and estimating the deal and is big enough to provide crew and trucks to handle it in one day. There’s no apartment in New York that can’t be handled in one day with the right team.
We had a recent bad example: GotJunk sent 1 truck and 2 small guys for a 2,500 square foot loft! There was a lot of stuff, and we had to do the clean-out over two days. That’s two days of cost, as well as inconveniencing the other neighbors in the building.
Second, make sure the service is reputable and insured. Buildings will require a COI (Certificate of Insurance); they won’t let anyone in to do the job. Co-ops and neighbors also appreciate well-manned crew. They don’t want bubble wrap and tape littering the halls and elevators. Keeping the common areas clean goes a long way in maintaining the relationship with the neighbors and co-op board.
Lastly, a good clean-out service will get the home broom clean. They not only clear out the junk but actually bring in the broom to clean. We’ve dealt with some clean-out companies who left bits of extension cords and zip-ties and tape on the floors. While it may not be a big deal, it does shift the burden and cost on to the next step: the cleaning service.
How to choose a cleaning service The goal is not to clean the home so someone can move in and eat off the floor. You need to have the home presentable for sale. A sell-able condition may mean different things for different situations.
If you are selling to the typical retail buyer, then you should get the home as pristine as possible. However, if you know the home will only attract investors, broom-cleaning is fine.
If the house situation is borderline toxic, you may need a professional crew. For example, there could be bodily fluids from the decedent’s death. Or maybe the level of mold in the bathroom or kitchen is dangerously high. If you encounter these situations, you can search for a local crime-scene cleaner. It might sound extreme, but they can provide a next-level cleaning service.
As we’ve discussed before, there are a lot of moving parts to the probate process. To dig in deeper, check out my book, “How Probate Works.”
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Probating bitcoin is more complicated than usual probate. We’ve discussed the 3 stages of probate generally. Here, we’ll describe some specifics of the process for when the decedent owned bitcoin.
How to find out if deceased had bitcoin First, did the decedent even own bitcoin? We previously discussed three steps to take to find out if the decedent owned bitcoin.
To recap:
- Check for hardware wallets, which are little devices that look like a USB drive, calculator, or small smartphone.
- Check the decedent’s phone and computers for software or soft wallets. If you have no idea what those apps are named, just do a Google search for the most popular software wallets. New programs and apps come out all the time.
- Look for instances of 12 or 24 words. You could find these on a piece of paper, etched into metal plates, or anything else you come across that may be a seed phrase to the decedent’s wallet.
Get letters testamentary for bitcoin Once you determine that the decedent owned bitcoin, you need to get letters testamentary.
Is this practically necessary? Do you really need letters testamentary for someone who had self-custody (held in a private wallet and not on an exchange). Probably not, unless bitcoin is held in exchange. If the decedent held the bitcoin privately, there is no gatekeeper to get past. Once you have the decedent’s key or PIN, you have possession of the bitcoin.
Is this legally necessary? Absolutely. Say you walk into the decedent’s house, find cash, pick it up and walk out. Sure, practically, you can do that. But it doesn’t mean you should! Taking possession of the bitcoin without letters testamentary is no different taking personal property, cash, or jewels from the estate without proper authority.
Take custody of the deceased’s bitcoin Now that you confirmed the decedent owned bitcoin and you have letters testamentary, how do you take custody of the decedent’s bitcoin? Generally, you want to move it out of the decedent's wallet into a new wallet for the purposes of the probate process.
If the bitcoin was held on an exchange, submit paperwork (death certificate, letters testamentary, claim forms) to authorize the withdrawal. This is similar to the process involving a brokerage account.
If the bitcoin was held in self-custody (ex. a hardware or software wallet), make sure you have all necessary device(s), seed words, pins to access the wallet. I recommend moving it into a new wallet for probate. For the executor who knows how to cover their own tail, I recommend moving the bitcoin to a 2-of-3 multisig with a reputable custody service (Casa, Unchained, etc.). The reasons are that the custody service will hold a third key; in case the executor dies during probate, and to minimize risk of the executor being held personally liable for losing keys/custody. There is more of a chance of someone losing the information than there is for other disasters. As an executor, you don’t want to put yourself in that position. There’s no perfect solution, but the 2-of-3 multisig creates levels of redundancies and backups.
Sound complicated? It is! And it’s exactly why you should consider naming a professional bitcoin executor.
Should executor sell or hold bitcoin? Now that the executor has possession of the bitcoin, should the executor sell or hold during the pendency of probate? This is the toughest question.
With stocks and other volatile assets, the general rule is to sell and liquidate. Why? Because executor’s job is to preserve value, not grow the estate. Executors will only get blamed if the price goes down; there’s no reward or upside if the estate goes up.
BUT, some bitcoiners are pretty hardcore and may direct that they don’t want the bitcoin liquidated into dollars. If decedent or the heirs really want to keep the bitcoin holding, the executor should prepare paperwork to document that the consequences are not his fault. Holding the bitcoin poses pretty considerable risk for the executor, so most won’t do it. Again, if this is important to you, consider hiring a professional bitcoin executor! You need someone willing and comfortable bearing the risk under the right circumstances.
Even if the decedent tries to spell it out in the will, the executor may not be comfortable taking the risk of holding the bitcoin. If this is the case, it may be beneficial to find and name a professional bitcoin executor in your will.
Close an estate with bitcoin Many folks think once the executor collects the assets/bitcoin, they can turn around and immediately relay it to the heirs. NO, the distribution of the estate does not occur immediately after the executor gets his hands on the hardware wallet. The executor must wait for all debts, expenses, and taxes to come in and pay those first.
Only after all those final debts and expenses are cleared can executor safely distribute bitcoin. If an executor pays out the bitcoin before he settles taxes and debts, and then receives a tax bill, he’s going to have problems. The executor either has to ask heirs for money back, or he will have to pay out of his own personal funds.
It’s best to wait until you have receipt and release from the IRS and letters from creditors stating that they have been paid in full. You don’t want to be in the position where you ask the heirs for money back to pay debts. They probably won’t give the money to you anyway.
We’ve tried to apply much of our probate knowledge to bitcoin situations. Let us know if you find this useful. Also check out my book, “How Probate Works,” to understand how probate works in general. Then, add to that all the complexities of probating an estate with bitcoin!
Request your free consultation
How does receiving an inheritance change your own Solo Ager estate plan? A family inheritance will increase the size and complexity of your estate, so let’s discuss what that means for Solo Agers.
Increases the size of your estate How does this inheritance result in a more complex probate for you later on?
The more you have, the higher the risk of conflict. This is because there is more at stake. If your niece and nephew were going to each receive $20,000; that’s a nice chunk of change, but not worth hiring lawyers for. But if they are now going to receive six figures each, it gets more complicated. Also imagine if you plan to leave the niece $100,000 and the nephew $300,000; the niece could feel she’d have the funds to hire an attorney and make it worth the fight.
Then there’s taxes, and we're not just talking about estate tax. When you have more assets, you’re more likely to have capital gains issues. Or, even ordinary income tax clearance issues on your final 1040. The higher your net worth, the more complicated or diverse are your assets. If you inherited a bunch of stock and bought/sold them to organize your estate, it could cause issues getting the tax clearance on your 1040 if you die shortly after.
It also depends what you are inheriting. If your current estate is made up of bank, brokerage, and real estate, then it’s probably pretty straightforward. But what if you inherit commercial real estate, a share of a small business, art, Bitcoin, etc.? Those are new assets that can add twists to your plans. Maybe the executor you appointed isn’t equipped to deal with these types of assets.
This leads to the next question: Do you now need a professional executor?
As Solo Ager, you may have chosen a friend or distantly related family member as executor. Now that your estate is more complex than you originally planned, the more burdensome and difficult it is to administer the estate. You’re now asking more from the executor than you did initially, and maybe it’s time to consider hiring a professional executor.
Reduce amounts to your heirs Receiving an inheritance could compel you to reduce the amount you give to your heirs. It seems counterintuitive; if you inherited more, why would you give less? For example, our client recently inherited a large amount of money from his father, who passed away. His initial estate plan was to give a good chunk to his niece and nephew (25% of his estate to each and 50% to charity).
Since he received dad’s inheritance, his estate is significantly larger. In our client’s opinion, 25% of his now-large estate is a bit too generous for each of his heirs. On top of all this, the niece and nephew have already inherited from our client’s deceased father, too!
In this situation, our client felt it was appropriate to reduce the heirs’ shares and bequeath those funds to others.
Leave more to charity Along the same lines, you may decide to leave more to charity. If your estate is bigger, you have more options to give to good causes. You can give (more) to charity, since you have enough to leave good amounts to friends and family and still have funds left over.
Now that you have more to leave to charity, there are different techniques and strategies available to you. For small estates, it’s not worth the legal and accounting fees to set up certain plans. But now, the amount you’re leaving to charity is large enough to cost-justify a trust or other planning tool that better suits your legacy and goals.
We have Solo Agers who are grateful to have inherited from older family members, and they have told us how it’s impacted their own estate plans. We wanted to share with you so that you can be prepared, too.
If you have not already done so, please click the link below to get a free copy of my book, “The Solo Ager Estate Plan.”
Free copy of "The Solo Ager Estate Plan" Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Does the MTA covid death benefit have beneficiaries, and if not, who should inherit? The MTA is paying a pretty generous amount (about $500,000) to the estate of any employee who passed away with or from covid. The requirements seem to be tightening up a bit, but we’ll see what comes of it.
Have your MTA Covid death benefits been paid to the wrong person? We’ve had a few of these cases. Although well-intentioned and hardworking, the folks at MTA don’t seem to be experienced with estate issues. They are probably also overwhelmed because Covid benefits are a new thing. Because the benefit is significant, MTA is probably getting a different energy from these heirs as opposed to heirs just looking to claim the decedent’s last paycheck.
For example, Mr. S. was confused because MTA told him they would pay benefit to him. Since he was named as beneficiary on son’s pension, Mr. S. was told that the Covid benefit would go to him, too... even though Mr. S.’s son had a surviving wife and kids.
It seems that the son never updated his beneficiary designations when he got married and had kids. We see this happen often, and it is a main reason why we don’t recommend using beneficiary designations.
In another example, the MTA paid the full amount to Mrs. B., but her husband died with no will and with kids from a prior marriage. When you die with no will, your estate is supposed to go roughly half to your surviving spouse and half to your kids. Should his children from a prior marriage have received part of the benefit? It was actually the kids who called us to ask this, because dad’s second wife (Mrs. B.) got all the MTA Covid death benefit money.
Does the MTA Covid death benefit have named beneficiaries? While possible, it is highly unlikely. This emergency benefit only came into existence less than 2 years ago. It’s an automatic benefit, not something employees signed up for, like a pension or life insurance.
If naming a beneficiary is not the case, it’s highly unlikely that Mr. S. being named on the pension carries over to the Covid death benefit in the example above. I can’t think of any other scenario where beneficiary designation from one policy gets automatically transfers to another. That’s like saying, “I named my wife as beneficiary on my life insurance, so she should get my IRA, too.” We ended up confirming that there was miscommunication with the MTA in Mr. S.’s case.
Who is supposed to inherit the MTA Covid Death Benefit? In the absence of beneficiary designations, death benefits get paid according to the will, or if no will, then according to default inheritance law (intestacy). This has been consistent in our dealing with the MTA. They are requiring proof of a court-appointed executor or administrator before they pay anything to anyone. In our experience, the MTA has been handling this properly, yet sometimes heirs have a misunderstanding.
So in Mrs. B.’s case: If a spouse has received funds and no funds were paid to the kids, either:
- There was a will that the kids didn’t know about and they were disinherited under that will; or
- Maybe the spouse received funds not as the wife, but as the executor/administrator. If this is the case, the funds may pay out to the kids when estate is closed; or
- MTA paid the benefit directly to Mrs. B., even though she is not the executor/administrator; or
- B. received the check in her capacity as executor/administrator, and she is not fulfilling her duty as fiduciary.
So, with $500,000 per claim, has the money run out? The program still exists, but the MTA is tightening qualifications for the benefit. When we first worked on these claims, “Covid” just had to be on the death certificate. Now the MTA wants medical records, and Covid needs to be the primary cause of death. They now have departments and committees dedicated to determining whether this benefit will be paid out.
If you have questions about your family’s eligibility or rights, please contact us. We've worked on several MTA Covid death benefit claims and have developed relationships with the MTA. We can get this done for you!
If you want to learn more about how probate works in general, don’t forget to check out my book, “How Probate Works,” available on Amazon.
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We often get hired when someone has died, but no one wants to be the executor. Sometimes there was a will with nominated executors who don’t want to serve. Other times there was no will, but none of the next of kin want to do the job. So they hire us as the professional executor.
Being executor is too much work Most folks who’ve been an executor before avoid doing it again. They know first-hand how time-consuming it can be. Generally, we’re referring to people other than surviving spouse or children. The job is a bit easier for surviving spouse or children, because there is a lot of shared knowledge and possibly even shared assets.
Other relatives or friends who have served as an executor before know how time-consuming it can be. Or perhaps they’ve heard enough horror stories from friends. (Plus, if you’ve heard our prior podcasts, you know how difficult it can be!).
Too old to be executor Some nominated executors simply feel that they are too old to be an executor. This doesn’t necessarily mean they’re incompetent. Perhaps they were nominated many years ago when they were younger, but now they know that being an executor can be stressful. Perhaps now they are used to low-stress retirement life, and they don’t need any new stress. No need to increase that blood-pressure medication!
Also, in terms of logistics, being an executor requires a lot of legwork, doing things in person, running around town for real estate, waiting in line at banks, going to the courthouse, etc. This may not seem appealing when you expected to relax in your old age. There are also tasks that can be done electronically, and an older person may not be very tech-savvy.
Can I be estate executor if I live far away? The executor may live out of state or abroad, but it could cause some issues. The main issue is that the executor may be unfamiliar with local customs and laws.
For example, if you are an executor residing in Colorado for a New York estate, you will be bewildered by how NYC co-ops work
Perhaps an executor from Europe assumes that wiring funds to the heirs works best. You would be shocked to find out that wiring could be a huge mistake.
For the same reasons as an older executor, there’s too much legwork to get done from afar. The number of flights alone would be cost-prohibitive and a pain. Unfortunately, many probate documents need original, wet signatures. We have sent documents overseas, and even one document in one envelope can cost $150!
So, if neither you nor your family members want to be someone’s executor, remember that there are folks like us out there who can handle it. Declining to serve as an executor is very common, and there is no reason to feel guilty about it. You might be better off remembering your loved one fondly instead of remembering the frustrating estate work.
If you fit into the criteria above, please check out my book “How to Hire an Executor” available on Amazon.
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We’ll discuss how to sell a loft in probate. This is yet another type of apartment that is unique to New York. We’ve talked about co-ops in the past, which seem mind-boggling to many people (even New Yorkers).
What is an artist-in-residence? It is too much to cover in depth, so this is a link from Street Easy, a local real estate blog: https://streeteasy.com/blog/sohos-artist-in-residence-law-101/
To live in a loft that has been converted from commercial use, the buyer is supposed to be an artist who lives in their studio. In other words, a work-living space. Not that many people are professional artists, but buyers may be required to be a “certified” artist.
This impacts probate by sorting through paperwork to confirm that the decedent was an artist-in-residence. This requirement also limits your pool of buyers.
There’s a process to get certified as an actual artist by the City of New York. As with any bureaucratic process, apparently there are lots of workarounds. And there must be, because I've never seen an actual artist living in these multi-million-dollar lofts. Note that there is an income requirement; you can’t just make finger paintings and declare yourself an artist.
It’s a niche issue, so make sure to work brokers who have deep experience. Otherwise, you will end up wasting a lot of time and limiting the number of potential buyers.
Cleanout: the elevator problem Many of these were warehouses converted into lofts. That means there is not a traditional lobby with an elevator. The elevator goes directly into the living space. There is a key to each floor, so the elevator won’t randomly go to someone else’s loft.
While this living situation is cool and unique, it leads to some issues from the executor’s perspective.
For example, when you are using the one elevator that leads to all the floors, you are denying the other residents use of the elevator while you are cleaning out the decedent’s loft. This is not unique to probate; it happens when anyone moves in or out. It’s just one more twist for the executor to deal with.
We experienced an odd situation where we didn’t have the key to the door that led from the elevator to the loft. The locksmith drilled, held the elevator door open with one hand, and then had to undo everything to let someone else on. Then he had to start over again to help us.
The positive side is that these elevators are huge, since the lofts used to be warehouses. You can fill it with stuff and might only need two or three runs before giving the elevator back to the rest of the building.
Unique layouts of New York City loft apartments There are no rooms; just a huge open space! You can get an architect and a contractor to put up some walls, but in its raw form, it is just a huge open warehouse floor.
Again, this is not unique to probate, but to anyone selling a loft. You’ll have a narrow set of buyers who are interested in living like that. Executors, since you have many other things to worry about, make sure you are working with a broker who is familiar with selling these lofts.
Lofts are very unique, but plenty of buyers love the space and uniqueness. And as a double-whammy, many of these lofts are co-ops, as well! So, you may deal with extra problems and rules.
To read about various probate-related situations, check out my book, “How Probate Works,” available on Amazon.
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How do you probate a Bitcoin miner’s estate? We’ll cover: what a miner looks like, whether to keep the miner running through probate, and how miners will probably have yet another wallet to figure out. The Bitcoin mining machine The word “miner” can apply to the individual who engages in active mining or to the device itself. Confusing, right Did the decedent own a miner? A miner is a supercomputer dedicated to solving complex math problems to earn Bitcoin. The process of solving those math problems is what makes the Bitcoin network secure. This machine is not an ordinary laptop or PC. The miner itself looks like a prehistoric computer or heater, and often worth at least $10,000! Executors – make sure you Google what it looks like! You don’t want to accidentally throw away Uncle Bob’s “large old computer...” It could also be mistaken for a space heater, because it actually does throw off a lot of heat. Keep in mind that the decedent could own a hosted miner. Because the machines are huge, hot, and noisy, people may not want to keep them in the house. Instead, there are miner "farms" that handle the cooling, electricity, and noise reduction. This allows shelves upon shelves of miners to be in one place and under the right conditions. A decedent may own a machine at a hosted facility and pay rent for the facility to provide those solutions. Running a Bitcoin miner throughout probate Should the executor continue running the Bitcoin miner throughout the probate process? As we know, probate can take a long time. Running miners for a year or more could generate significant income. You need to do a cost-benefit analysis. Do you unplug the miner and sell it or keep it running? Just like any other operating business, don’t over–think it. Does the executor have the capability to keep running the miner, or is it better to sell it immediately? For example, an executor is not equipped to continue running a retail store for an estate, so it’s better to sell quickly. But an executor could maintain a rental property until ready to sell. So, if you have a hosted miner, it may be easy enough to pay the miner farm rent to keep it running. But, if the machine is in the decedent’s home, you probably don’t want it there while you are preparing to sell the home. Some factors to take into account are: 1. Electricity cost vs. revenue. It takes a lot of power to run the machine. If you are spending a lot of money on electricity and the current price of Bitcoin doesn’t justify it, the executor may want to sell. 2. Risks: If one of these machines blows out in the home, it could cause problems. If the machine itself is worth $10,000 and it blows out, then the heirs lose that money.
Another Bitcoin wallet We’ve talked about wallets that executors may miss (https://anthonyspark.com/e270-3-Bitcoin-wallets-executors-overlook/), and miners may have another one! The miner’s earnings usually have to go through a “pool” before it gets to the wallet. It’s hard to win the calculation contest at home on your own little device, so many people join pools where miners combine their computer power and divide up the earnings. Because of that multi-layered setup, you may need to find yet another seed phrase for another wallet. Hopefully this is a good overlap of probate experience with bitcoin miner knowledge. My book, “How Probate Works,” will show you how probate works in general. I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your situation. As always, if you have questions about Bitcoin and probate, let us know! Request your free consultation
Many of our Solo Ager clients ask if I’ll serve as their successor (not primary) executor. The short answer is yes. We discuss why solo agers ask for successor executors.
Planning to be a future Solo Ager They may not be Solo Agers at the moment, but they are planning for when they will could become a Solo Ager. It’s smart: planning two steps ahead.
Married, no kids Mrs. M and her husband named each other as their executors in their wills, which is common. At some point, one of them will die first.
The husband named his brother as his successor executor (in case Mrs. M predeceases him).
Mrs. M doesn’t have siblings or other close family members. She doesn’t want her brother-in-law acting as her executor if her husband predeceases. Mrs. M needed a successor executor of her choosing.
That is why she reached out to our office, and we are happy to work with her.
Girlfriend, no kids, wants to disinherit Mr. C named his girlfriend as his executor, since he wants to disinherit his family members and leave everything to his girlfriend.
He is also disinheriting his nieces and nephews (next-of-kin). If his girlfriend predeceases him, Mr. C is leaving his estate to charity.
If his girlfriend predeceases him, Mr. C needs someone like a professional executor to handle everything, since there is no one else. Also, since Mr. C is disinheriting family, a professional executor is a good choice.
Along those lines, even if his girlfriend is alive, she may not want to accept her role of executor. She probably won’t want to deal with a messy contest and engage in a court battle with the heirs. The girlfriend has the option to decline and let a professional executor to step-in to handle the mess. She will still get the inheritance check at the end, but she wouldn’t have to deal with the heirs.
Mr. C set up the will to give her options: she can serve as executor if she’s ok with the situation, or she can let the professional executor take over.
Sometimes we get calls asking us to act as successor executors, and we are happy to help.
If you want to learn more about Solo Ager situations, click the link below for a free copy of my book, “The Solo Ager Estate Plan.”
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We’ll share 3 recent problems we encountered while selling probate real estate: a bad septic tank, firing a broker, and co-op listing prices. We’ll share these stories with you and add key takeaways for executors and those facing probate.
Septic tank problems in probate Any leak or other problem involving a septic tank is a huge headache. Septic water leaking into the ground soil is an environmental violation.
In our case, a problem appeared during the septic inspection (thankfully it was not a full-blown leak). It required our whole team (me, the other attorney, and the real estate broker) to work together quickly to save the deal by replacing the tank. As we’ve mentioned several times before, selling probate real estate quickly is key. Otherwise, the estate bleeds money while the property sits on the market (not to mention impatient heirs and looming IRS deadlines).
Takeaways:
- You need a great team (broker, executor, attorney) who understand probate, the need for speed, and the risks to the executor. These are tough situations that require competent professionals. The team must be able to communicate well and do it quickly.
- It is best to have a local executor: someone who understands local laws and customs.
How to fire a real estate agent This situation is never easy, but being an executor is not for someone who avoids conflicts. Speed and risk assessment are two things that are important during probate.
So, if you have a broker that is taking too long to sell, it will anger the heirs. Taking too long to sell also puts the executor at personal risk for the loss of property value. The executor can’t just let it sit and let the bills accumulate.
A real estate agent who is not a good fit may make poor pricing decisions on your behalf. Perhaps the agent is a slow communicator or a poor evaluator of buyers. You don’t want to waste time on buyers who cannot close.
Takeaways:
- Take time to choose the broker carefully.
- Make sure they understand probate’s unique risks and priorities.
- You should try to hire an executor with a trusted network of reliable, experienced agents.
- If the executor doesn’t have a specific real estate agent to work with, a savvy executor knows to sign a limited listing agreement so he can get out of it quickly if needed.
Co-op pricing strategy This is kind of NY-centric, since there aren’t a whole lot of co-ops elsewhere.
We’ve talked about why co-ops are a pain for probate, and pricing is one of those reasons. In probate, you want to price aggressively (low) to sell with speed. You wouldn’t want the neighboring unit to sell faster than yours because you wouldn’t come down $10,000. But you don’t want to list too low, because you must get a good value for the heirs.
On top of this balancing act, the co-op adds more complexity: the co-op board must be satisfied with the price, so it can’t be too low. The co-op has the right to reject deals that don’t preserve the value of the building as a whole.
Because of this, co-ops listings can:
- Make the price too high for the market but make the co-op happy. Then it sits for months.
- Make the price lower and get buyers, only to have them frustratingly rejected by the board over and over. This ends up being a waste of time, and the co-op goes back on the market.
Takeaways:
- You need savvy executor who can set realistic expectations for heirs and explain to them that co-ops are just difficult to deal with. In this situation, an executor outside of NY with no knowledge of co-ops would be a huge disadvantage.
We hope these anecdotes were helpful to you. To learn more about how probate works, check out my book, “How Probate Works,” available on Amazon.
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Many non-US heirs need a professional executor to get federal transfer certificates.
What is a federal transfer certificate? It is an IRS document, specifically, Form 5173. It is used to confirm through the IRS that there is no estate tax due, or it’s already been paid. The certificate allows the financial institution off the hook for taxes.
In absence of this, they can be liable! For example, lets’ say ETrade has a brokerage account for a decedent who was a non-resident, non-citizen. If any tax was owed, but ETrade releases the funds prior to the tax being paid, then ETrade owes the IRS those taxes. This transfer certificate is the IRS’s way of letting ETrade know that it is safe to release the funds to the executor or heirs. Because of this liability, banks and brokerages will not release the money without this certificate.
When is a federal transfer certificate required? First, the decedent should be a non-resident alien (NRA). Second, the decedent’s assets must be US assets: stocks, real estate (but not bonds, cash, checking account, etc.).
The executor must send the certificate to the financial institution, or else the bank cannot and will not release funds.
If estate is large enough that it requires a federal estate tax return (706NA), just file the return instead using the federal transfer certificate. After filing the federal estate tax return, you will receive a closing letter from the IRS stating that they agree with your return and that the matter is closed. You can take the closing letter to the bank, and they will release the funds without the federal transfer certificate. You do not need to do both.
Recently, we’ve found that some institutions interpret to mean that if there there is a US professional executor (as opposed to a foreign executor), then no federal transfer certificate is needed. Hurray! Right? Unfortunately, this is usually not the case. Even if the law has changed, most financial institutions have not caught up. They are still requiring federal transfer certificates.
But, even if a federal transfer certificate isn’t required, the US executor is personally liable for estate tax. For that same reason, I, as a professional US executor, will not release the funds until I have filed the estate tax return. I will apply for the tax clearance anyway, so it’s really just a similar situation with the same result. Somebody has to make sure the taxes are paid so it doesn’t come back to hurt them later on.
How to get a federal transfer certificate There are detailed instructions on the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/transfer-certificate-filing-requirements-for-the-estates-of-nonresidents-not-citizens-of-the-united-states
The application information for the federal transfer certificate is substantially similar to the estate tax return (706NA).
The IRS website says it can take 6 weeks to 6 months to respond to the application for certificate. However, as we know, it has been taking much longer these days. We have discussed previously about the numerous IRS delays, and as a result, the turnaround time is unpredictable. It could take years, unfortunately.
We trying to set the expectations as realistically as possible. Even if we file immediately, it won’t move the IRS any faster. This can be very frustrating, especially for the heirs.
If you want to learn more about professional executorship, especially if you are in another country, my book “How to Hire an Executor” will help shed more light on the topic.
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How will your executor handle a Bitcoin winter (or crash) like the one we’re living through now? We’ll compare a few likely scenarios depending on who you’ve chosen as your executor.
But first, a few assumptions:
- You’re a “maxi” (a Bitcoin maximalist – someone who really values Bitcoin in and of itself, and not just its conversion to dollars);
- You want your heirs to inherit the actual Bitcoin you’ve accumulated, not just the fiat dollar value on your date of death; and
- You believe Bitcoin’s value in dollars will probably be very volatile for several more years. You understand that even if it’s “down” during your probate, you want your executor to hang on to it.
So here are a few scenarios:
Professional executor, but doesn’t “get” Bitcoin There are many attorneys and banks who are savvy in executorship and probate. In fact, banks have whole departments with trust officers that handle this. Once you find these experienced folks, do they have knowledge of Bitcoin? Maybe, but they probably have knowledge of crypto in general.
Bitcoin maximalists consider themselves separate from the rest of the crypto universe. If your professional executor has only a light understanding of crypto in general, they will associate Bitcoin with the current crypto crash. During a crash, can they withstand psychological pressure to sell? Probably not. That’s the most likely outcome with a professional executor that doesn’t understand Bitcoin like you do.
Maxi amateur executor Say you chose your buddy who is a fellow maxi but has never been an executor before. He probably has similar values as you and wants to hold on for dear life (“HODL”). But, he has very little knowledge of the probate process or experience being executor.
If Bitcoin is going through a winter cycle during probate, the heirs may demand that he sell the Bitcoin so they can get their inheritance in cash. Can this amateur executor withstand threats of lawsuits, accusations of breach of fiduciary duty, and sob stories from heirs? Between dealing with that and also trying to HODL, it’s going to be a lot of pressure. If the executor doesn’t understand how to defend himself, he might be convicted enough to protect his own stack of Bitcoin. But he might give in to pressure from the heirs and sell their UTXOs so they leave him alone.
Understandably, you want your executor to be experienced with Bitcoin, but you also have to weigh whether the executor can withstand the pressure.
Professional Bitcoin Executor Your best bet is to find a professional Bitcoin executor. Investor Michael Burry, from the movie and book Big Short, ran a fund holding money for other people. He shorted the real estate market right before the crash of 2008.
While the real estate market was doing well right before the crash, his positions were losing a ton of money. His investors wanted their money back and threatened to sue him. Burry kept saying no and told them to trust him. He even took technical steps to keep the investors’ money in place to prevent investors from withdrawing.
In the end, the recession happened, and all of those shorts exploded, allowing his investors to make 400 times their money. At the end of the movie, Burry sends out a one-liner email: “You’re welcome.”
In our estate scenarios of a Bitcoin winter, you need someone like Burry who is both convicted AND knowledgeable. You need someone who can carry out your wishes and do a probate-version of a side pocket to make sure he withstands the pressure and delivers the Bitcoin to your heirs.
I hope to fill a similar role, and hope others will, too. I have the experience as a professional executor, and I am beginning to see the light of Bitcoin values. While this topic is very specific, you can still learn about hiring a professional executor in my book, “How to Hire an Executor.”
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Our solo ager clients often ask “who should draft my will? Should I do it myself or hire a lawyer?”
Default: hire a reputable estate planning lawyer The benefit is that you will have peace of mind that your will is done correctly, as opposed to using a computer program. Software is pretty good, but a human (in this case, an experienced attorney) will spot problems that a DIY will can miss.
A drawback is that hiring an experienced attorney can be costly, especially compared to using computer software.
Make sure to find any attorney who specializes in estate planning, not the guy who does DUIs and wills only on the side. (No offense to either subset of the profession, but these are just completely different skillsets).
DIY will tips Will preparation software is a fine option these days, because it is much more developed than it was even five or ten years ago. Watch our previous episode where we reviewed some DIY options.
You may want to use a software program if you think you’ll make revisions quite often. Each revision with an attorney can be expensive. Simply changing a name can cost more than you’d think. Even if you just want to swap out “Joe” for “Bob” in your will, the attorney still has a duty to look over your entire estate plan and each document to make sure they are accurate and confirm that your situation hasn’t changed.
If you decide to draft the will yourself, please consider hiring a lawyer to at least supervise signing ceremony. This will ensure that the will is signed correctly, including the affidavits and the witnesses. You’d be surprised at the problems that can arise if the will isn’t signed properly.
You can usually find a local experienced estate planning attorney who can supervise the signing for a fraction of the estate planning cost. In this case, the attorney will not review your will for errors, but will simply supervise the signing process. Keep in mind that even if you’ve drafted a perfect will yourself, it is all for nothing if you fail the technicalities of the signing ceremony. It sounds like signing should be something simple, but we’ve even seen inexperienced attorneys mess it up.
Can my professional executor draft my will? Sure, a professional executor can draft your will. I used to do a lot of estate plans, but now I’m 100% focused on being best executor possible for you. Being a professional executor is time consuming, and it doesn’t leave a lot of room to be good at extra jobs on the side.
Personally, I don’t have the software, fancy paper, or setup any more to draft wills. I would be doing it from scratch, and that’s not an ideal situation. However, I am happy to do a non-legal advice review of your draft plan to check for any glaring red flags. It’s a good idea to have a review to point out obvious mistakes that could blow up your whole estate plan.
If you want learn how probate works for Solo Agers, check out the link to my free book, “The Solo Ager Estate Plan.”
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Sometimes the small personal effects can have a big impact. It may be the irreplaceable keys to the loft, the invaluable smartphone, or treasured photos in the wallet.
What are personal effects? They are usually personal property; items of particular significance that are carried or worn. These can be wallets, jewelry, phone, keys, etc. Items above a certain value, like a diamond engagement ring, fall into a different category.
If she died in a care facility? Sadly, more often than not, some personal property will go missing at a care facility. It’s a sad indictment of humans everywhere. When a lot of people pass through a patient's hospital room (EMTs, nurses, doctors, visitors, janitors, etc.), there is bound to be a set of sticky fingers with no way to figure out who did it.
Personal property sitting on a patient’s nightstand is an easy grab. The thief may not be a habitual thief but could simply be a person who sees a crime of opportunity. We’ve had this happen in many of our estates, sadly. The family knows that their loved one had a piece of jewelry at the care facility, and now it’s gone. Heirs understandably get mad, and there is not much anyone can do. Unfortunately, this is something below the district attorney’s radar and is typically hard to prove.
If she died at home? In New York, when someone dies in their home, the police come and put up yellow police tape. You then need Letters Testamentary to enter. The police search the home for personal effects and put them into the evidence room at the police precinct. So, if you do get into the home and can’t find something, check the police precinct.
Also, the police purge non-cash valuables within 1 year. They can’t hold things forever, or they will run out of room. If you are looking for the decedent’s keys or special photos, etc., you need to get to the precinct as soon as you can. A year may sound long, but time seems to go fast when you’re probating an estate. Sometimes it can take a year to get Letters Testamentary, so you need to move fast!
Be aware that you will need to find the correct police precinct. We had an estate where we thought the personal effects were at the local precinct, but they were stored at the main one.
This sounds like a pain, but at least the police secure the property and there is a paper trail of what they found.
If you want to learn more about how probate works in general, don’t forget to check out my book, “How Probate Works,” available on Amazon.
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Today we describe some real-world examples of mistakes made by non-professional executors dealing with probate real estate.
Making it personal with tenants Often times, a non-professional executor is a family member or friend who has too much history with the tenants.
For example, one of our executors helped the decedent in her final years and felt that the tenants were taking advantage of the decedent (late paying rent, not cleaning up after themselves, poor property upkeep, etc.). So, when the decedent passed, the executor has lots of bones to pick with the tenants: where the tenants parked, the condition of property, etc.
If tenants want to be difficult, they can make probate very difficult. As we’ve talked about before, it can be very hard to get rid of bad tenants in probate, so picking a fight isn’t helpful. For the sake of probate, it’s often best to let it go and move on.
In our example, the executor got into huge fight with tenants and the tenants called the police. A huge production was made, and we had to spend months in litigation to get them to vacate.
When a professional executor is involved, he or she doesn’t have that blood-boiling history with tenants. A benefit of hiring a professional executor is that we don’t get emotionally invested.
Knowing what renovations are worth doing In the past, we’ve discussed certain renovations that almost always make sense (Episode 254: Best Renovations to do Before Selling Probate Real Estate) These include a fresh coat of paint, cleaning out the home, etc.
We recently had an executor who believed the decedent’s home was fine to sell as-is. Let me tell you that the place was not fine. But the executor had the position that if “it was good enough for my aunt to live there, it’s good enough for buyers.” Perhaps it was something sentimental to her that the house looked a certain way, but that’s not what buyers are looking for.
Because of this, the executor declined even a basic paint job. It is almost certainly going to be a struggle to sell.
Choosing the right broker Choosing the right broker is tricky, even with a normal sale. You need to pick the right fit for the property and the right demeanor as a seller. Of course, it’s even harder in probate.
Even if you find an excellent broker for the neighborhood, you also need someone who understands probate issues. For example, I am dealing with a situation where neither the buyer’s broker nor the seller’s broker understood that the seller was in probate. So, the day before closing, they said they “need something called Letters Testamentary before we can proceed.” Only then did they learn that the heirs were not in agreement, so there was no property to be sold! It was a huge waste of everyone’s time.
That was an extreme situation, but there are many other nuance situations where if you don’t have a broker experienced with probate, time and money are wasted.
For example, we have an executor who hired the dreaded “friend” broker. Friend brokers can be great, but this is not the time to repay favors to a friend via estate work. Estates are complicated already. The second problem was that the broker was from out of state and didn’t understand local customs. Third, the broker listed the home at a high price. In probate, you want to sell fast, but listing at a high price psychologically pegged the executor’s mind to that unrealistic number. A probate-experienced broker would avoid that situation. High prices turn away buyers who know the area and know that the seller has unrealistic expectations.
When an offer finally came in, the out-of-state broker prepared a binding contract and had the executor sign it. (In New York, a lawyer usually prepares or reviews the contract, because there are a lot of nuances that can cause disadvantages and risk). As a result, this executor unknowingly made some big concessions and promises she didn’t need to make.
These are things we’ve seen a lot lately. We share these scenarios to help you avoid future problems and consider the importance of hiring a professional executor. If you are interested in learning more, please check out my book called, “How to Hire an Executor,” available on Amazon.
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When someone passes away, it is the executor’s job to gather the decedent's assets. What are the Bitcoin wallets executors may overlook? We’ve discussed how to look for common bitcoin key storage (Episode 253 3 Steps When a Bitcoin Owner Dies), such as hardware wallets, software wallets, and seed phrases. But a professional bitcoin executor will also find these others.
Wallets on nodes Think of a node as your own server on the bitcoin network. Bitcoin is a digital currency, and the way it travels through the world is through nodes. Nodes are intentionally inexpensive and meant for individuals to be able to afford and maintain. Nodes are meant for the individuals to be the backbone of the system, not big companies.
If a professional bitcoin executor sees the decedent was serious about bitcoin, privacy, and decentralization, the executor knows to look for a node. These nodes can even be on a Raspberry Pi or an old laptop, as long as there is sufficient memory space. Why look there? Because these nodes will often have a wallet inside them.
Lightning channels On a high level, the lightning network is a second layer on top of the main bitcoin network. The lightning layer relies on “channels” between lightning nodes.
Say you use Vemno, and you are hanging out with your friend for dinner. Maybe you owe her $5 for the drink and she owes you $10 for dinner. Venmo is not actually transmitting money back and forth each time you do. Venmo keeps a tally of what is moving back and forth between you, and at the end of the day/week/month, it totals a net amount of dollars to be transmitted from your bank to your friend’s bank (or vice versa). Think of it like an abacus where you move the beads back and forth. Here, the main network is the banks and Venmo is the connector/second layer. Venmo has to hold some money to make sure those transactions happen.
Similarly, if you and I transact with bitcoin, we’re not going to send bitcoin to each other every time. We could set up a lightning channel between us. Let’s say we regularly send $100 between ourselves, so we probably have a channel with about $500. That $500 is locked into the lightning channel between us.
Upon my passing, my executor should close the channel and find out what is owed you and to my estate. A professional bitcoin executor will recognize a lightning wallet, and search for node to close channels to release channel funds.
The example of $500 may not seem like a lot of money. But, if the channel was established a while ago, and bitcoin has gone up in value, it might have a significant value.
Hopefully I got this right. If you are more technically savvy in cryptocurrency, please feel free to correct me!
Alternative exchanges We’ve talked about the main exchanges before. Nowadays, even non-Bitcoin enthusiasts have heard of Binance, Coinbase, Kraken, and other large exchanges.
There are even more alternative exchanges that focus on privacy, international exchange, etc. They may not even be companies, but decentralized software. A professional bitcoin executor will also recognize alternative exchanges and know how to recover funds on alt exchanges such as Bisq or HodlHodl.
This topic is constantly evolving, and we will try our best to keep you up to date. Please send us your questions and we will do our best to respond!
If you want to learn more about professional executors, please check out my book, “How to Hire an Executor.”
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Business valuation is tricky even under the best circumstances. And the probate process adds a few more twists.
Not turnkey The first twist is that you are probably not selling a turn-key business. Some people come to us with valuation approaches such as 1) Comparables (what similar businesses have sold for in the area) and 2) Discretionary income (meaning, what sort of income does this business throws off, multiplied by the number of years you expect to earn that).
Both approaches assume the business is fully operational, which isn’t always the case when the owner has passed away. You can’t use the grocery store where the owner is alive and running it as a comparable to the store in the midst of chaos since the owner passed.
In probate, the business often stops upon owner’s death. Even if the business doesn’t stop, the quality of the business tends to head downhill. People usually notice when the business isn’t run by the owner anymore. It's kind of like an “inmates running the asylum” type of situation... Not great for business, and therefore not great for the valuation of the business.
Buyers typically want to step into a seamless, ongoing operation. With a probate business, the buyer is not purchasing an ongoing business, but rather has to re-jumpstart a business that may have been temporarily closed for months. The buyer can’t walk into the restaurant and be open for business the next day with the menu ready to go.
No keyman Without a keyman, the business doesn’t work. The keyman is so crucial to a business that you can buy “keyman insurance” in case he passes away. When a small business loses its keyman, it loses a lot.
First, there is no transfer of knowledge. If you buy a business from a living owner/operator, he can tell you the tips and tricks of the business. These tips are unlikely documented anywhere, just things that the owner knows.
Second, there are no relationships with customers. Without the owner, maybe some of the best customers don’t come anymore. There are no relationships with vendors who give the business a good deal. They may want to reset their prices and not give the new owner a grandfathered-in deal. Additionally, if the owner/operator doesn’t own the property, the quality of the relationship with the landlord is huge for determining the value of the business. Without a lease, there is no business. Also, since the landlord doesn’t know the new owner, he may want to renegotiate the lease.
Lastly, the keyman is important because valuation is sometimes based on discretionary income (the amount of income the business throws off). Small businesses don’t necessarily report on paper all that they earn. How can the seller convey to the buyer what the business is actually worth – the real income? That conversation between seller and buyer often happens when no brokers or lawyers are present. If the owner passed away, there is no side discussion of actual discretionary income. Without that conversation, is almost impossible to value the business based on discretionary income.
Rapidly declining value In probate, a non-operational business rapidly declines in value.
First, inventory may be expiring and rotting with every passing day. This is assuming that in the absence of the owner, the business ceases to function or functions poorly.
If the business closes for a couple weeks or months, that may not feel like a long time to an heir who has never run a business. But that is enough time for its most loyal customers to find a new favorite store. Not only that, but closed businesses attract theft and vandalism. A closed business is an easy target for a crime of opportunity.
Lastly, even while the business is non-operational, it is still bleeding expenses (rent, security, taxes, utilities) while no revenue is coming in.
For those reasons, the faster you sell in probate, the better in order to keep the value from falling farther. The longer the business sits, the more money it loses. We have experience in this area and have seen these scenarios first-hand.
If you want to learn more about how probate works, please check out my book, “How Probate Works,” available on Amazon. If you are dealing with a situation like this, please feel free to reach out to me.
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To my surprise, we keep getting calls from Solo Agers in California asking me to serve as their executor and trustee. Let's explain why this is surprising.
California is a leader of professional executors and trustees I thought that California has a robust and developed industry of professional executors. For instance, California has a state licensing agency: Professional Fiduciaries Bureau. You have to apply to receive a license to be an in-state professional fiduciary. There are also trade groups like the Professional Fiduciary Association of California.
There is a whole infrastructure for personal executors in California that you don’t see in other states. This led me to believe that there is an abundance of professional fiduciaries in California.
Yet, solo agers can't find professional executors in California While Californians are able to find professional executors, it is hard to find a professional executor that is focused on Solo Ager issues. So, these Solo Agers feel like they’re put into a cookie-cutter plan. For example, some Solo Agers are being told to just leave everything to their kids – even when they are estranged, or they don’t have kids!
Yes, I can be executor outside of NY, including California For the above reason alone, I want you to know that even though I am based in New York, I can be a professional executor for someone outside of New York, including California.
Just keep in mind that there are some drawbacks when you choose an out-of-state executor. There may be travel costs and slightly less familiarity with local customs. The trade-off is that you’ll have a professional that you are comfortable with. A professional executor is well-versed in administering an estate generally, even if not specific to a certain location’s customs.
Whether you live here or across the country: If you are looking for a professional fiduciary to focus on your Solo Ager issues, it would be my honor to help you.
If you want learn how probate works for Solo Agers, check out the link to my free book, “The Solo Ager Estate Plan.”
Free copy of "The Solo Ager Estate Plan" Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Our clients want a professional executor for many reasons. Most commonly they have no heirs, or their family lives abroad. But those aren’t the only reasons. We’ll share a few recent examples of why clients want a professional executor.
19 Heirs! Mr. and Mrs. K. are in their 70s, and they want a professional executor for when they pass. They have 19 nieces and nephews as heirs, scattered across the US. Mr. And Mrs. K. do not want to choose from the 19 heirs for a couple of reasons.
First, they don’t want to sow discord by singling out one heir to be executor. When just 1 out of 19 has more authority or power, the others may become jealous or suspicious.
Secondly, Mr. And Mrs. K. know what probate can be like from past experiences. They understand that having 19 heirs across a dozen states is going to be a headache for the executor. Even having two heirs in different states is a hassle, especially when original wet signatures are required on certain documents. Having a professional executor is beneficial Mr. and Mrs. K.’s of situation.
Son cannot manage own finances People from all walks of life can benefit from hiring a professional executor, not just Solo Agers. For example, Mr. and Mrs. J. have an adult son who, for various reasons, has not taken flight from the nest. Although the son doesn’t live at home, Mr. and Mrs. J. financially support him, including paying his rent.
Understandably, Mr. And Mrs. J. don’t feel comfortable having their son handle their estate. Since he is financially dependent on his parents, Mr. and Mrs. J. need a professional trustee to continue to manage funds and financially support their son when they’re gone.
Executorship would be too much Some clients don’t want to burden a loved one with the responsibilities of executorship. Ms. H. is single mom with 2 adult daughters. One daughter lives in Europe, so it is unrealistic for her to be the executor. The other daughter lives nearby, but she is busy raising her 3 young kids.
It is simply not realistic to ask either daughter to execute an estate, given distance and everyday business of their own lives. Being an executor is a whole job on top of whatever job(s) you already have in life. As we’ve discussed many times, the probate process can be long and difficult. Not understanding the documents and requirements of probate adds to the difficulty of administering an estate. Let alone, dragging 3 small children with you to the banks!
These are all great reasons for considering a professional executor. If you want to learn more about how a professional executor can help, check out my book, “How to Hire an Executor,” available on Amazon.
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After someone dies with Bitcoin, among all the other chaos, are questions about taxes. How do you pay capital gains from during the decedent’s life? Or if he was a long-term holder, how much capital gains tax will the heirs owe? What about estate tax?
Final year capital gains tax from trading If decedent was not a true holder, and was buying/selling, there are probably realized gains. You have to sell something to owe capital gains tax.
But how does an executor sort through to find the basis, the sales prices? It's still complicated, because at least for now, cryptocurrency is not a well-established industry and is constantly evolving.
First, check the decedent’s devices for apps that track basis. There isn’t a main app out there right now, so Google “cryptocurrency tax tracking” to see which apps are popular at the time. If you find an app, it’s somewhat good news. The downside is that some of these apps don’t work very well.
Next, check the exchange that the decedent was using (Coinbase, Kraken, Gemini, etc.) Some of the exchange platforms do basis tracking, but again it’s not that good yet. Even traditional stock exchanges don’t always track the basis. So, it’s a bit unrealistic to expect the crypto exchanges to do as good a job of tracking basis. When someone is alive, it’s easier for them to track their own basis. But, like any other estate, things become a bit messier when you're doing it for someone who has passed away. It takes work to reconstruct the portfolio to find the values.
What happens if you don’t find the basis? You can’t wait around forever; at some point the executor must take a position on the basis. Then the executor files the 5495 with the final 1040, holds his breath and waits to see what the IRS says. Obviously, this is what the executor does after LOTS of legwork to come up with the best guess for the basis. Filing with the IRS should not be the first step, and you should have a very strong argument supporting your guess.
Long-term Bitcoin gets stepped-up basis Like all other capital-appreciated assets (homes, stock, etc.), Bitcoin will get stepped-up basis.
As a quick review, the basis is your adjusted purchase price. If you bought a house twenty years ago, your purchase price is your basis. Same with stock. If you bought stock for $50 a share ten years ago and now it’s worth $500 a share, you made a ten-fold increase.
Capital gains are calculated by what the asset is worth now (when you sell) vs. what you paid for it (when you bought it). When a person passes away, there is a very rare freebie from the IRS called the “stepped-up basis.” If you bought Bitcoin for $1 and it’s currently trading at $100,001, your gain is $100,000. You’d owe a lot of tax on that. But, if you pass away and your heirs get it, their stepped-up basis becomes $100,001. If the heirs sell it the next day for $100,002, their capital gain is $1.
Long-term Bitcoin holders may have SIGNIFICANT gains, so passing it on to the heirs could be a huge tax benefit.
Estate tax on Bitcoin Is there estate tax on Bitcoin? Yes, it is an asset, just like anything else. Estate tax is a tax of your net worth upon your passing. Your executor or heirs need to put together a balance sheet or list of all your assets, minus liabilities, and present it to the IRS.
The good news! Most people do not need to worry about estate tax because, currently in 2022, the tax only applies to estates over $12mm (and $24mm married).
However, there are probably some Bitcoin holders that are very close to being over the exclusion amount. Earlier, we discussed the stepped-up basis to avoid the capital gains tax. But, if your gains have gone up so much that you’ve shot past the estate tax threshold, you’re trading capital gains tax for estate tax. If your estate is worth that much, you should consult with an attorney or an accountant.
This topic was based on a question from one of our listeners. Thank you and please keep the questions coming!
If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your situation.
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What happens during a late probate, meaning you don’t begin the probate process until many years after death? In a recent case, we probated an estate 40 years after death. This case study shows just a few problems with late probate.
Creditors get impatient Creditors are usually patient, and they understand that when someone first passes, they won’t get the decedent’s money immediately. Once the creditors know that the estate is opened and the attorney is involved, they sit tight for a bit.
BUT, if it’s been a decade – or four in this case - they understandably get impatient. Creditors need someone to sue to get their money; they can’t sue a dead person. If no one is appointed as executor, then there is no one to drag into court. Eventually, if the heirs don’t probate, then creditors will ask the court to appoint someone (usually the Public Administrator, a court-appointed stranger) to be executor/administrator. The creditors aren’t going to request that an heir be appointed; it will be a court-appointed person who has no relationship to the estate.
Multi-generational probates If you wait decades to probate, then you will likely end up with multi-generational probate. As time lapses, more people will pass away.
For example, granddad passed away 40 years ago, and no one probated his estate. Eventually, his kids and grandkids will pass away too. Granddad died in 1970 and was survived by five sons at the time. Since then, two of the sons and even some grandsons have passed away.
In this situation, courts will usually require you probate in reverse: starting with the grandsons’ estates, then the sons’, then you will be allowed to probate granddad’s estate. Why? Granddad’s estate requires someone to represent the interest of his five sons. But, if two sons died, there is no one to represent those sons. Someone needs to be appointed for the deceased sons’ estates. But, if those sons had sons (grandsons of the granddad) who passed away, then you can’t set up the two sons’ estates until you set up the grandsons’ estates.
That’s why you have to work backwards: you set up the grandsons’ estates, which allows you to set up the sons’ estates, which allows you to set up granddad’s estate. If this all sounds like a mess – it is.
We get calls from grandkids who haven’t probated; they just keep living in the grandparent’s home after his passing. But now the grandkids want to sell the home and they don’t realize the amount of work ahead of them. A lot can happen in 40 years. In this case, it took a week’s worth of emails and phone calls just to figure out who is who in the family tree.
Tenants get too comfy and won’t leave If tenants stay in the decedent’s property even for a year, they get very comfortable living there. They are used to staying in the house without rent increases and act as if it is their own place. The tenants generally do not want to leave. This is true of both family members of the decedent and also unrelated tenants.
If the tenants act like this after a year or two, imagine if the tenants have stayed in the house for decades. Because they have been maintaining the home for decades, they get upset when an executor comes in and tells them that they have to pay more rent or leave.
We’ve highlighted three of the problems that can happen if an estate is probated late, especially after 40 years. These are problems that can be fixed but be ready to have a lot of patience through the process.
If you want to learn more about how probate works, check out my book on Amazon, “How Probate Works.”
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What happens if you become a Solo Ager later in life? How does this happen? How does this affect you toward the end of your life? And what are some consequences to your probate estate?
Let’s review “Ms. B.’s” situation and discuss.
How Ms. B. became a Solo Ager late in life Ms. B. was married with a daughter, so she was not your typical Solo Ager. Her adult daughter moved far away out of state. The daughter was not quite estranged, but not much involved either. They stayed in touch and were friendly, but the daughter was effectively estranged, as she was not there to see to her mother’s care.
Then, Ms. B.’s husband got sick and passed faster than anyone expected. So, Ms. B. was alone, rather unexpectedly. Ms. B. did not have a solo-ager plan, or a support network established, because she did not expect to be in this situation.
How Ms. B. got a court-appointed guardian As is common, sadly, soon after her husband passed, Ms. B. degraded physically and mentally. As mentioned earlier, because she didn’t expect to be a Solo Ager, Ms. B. had no support network. Once she was hospitalized, there was no one to whom the hospital could release her. So, she was shuffled from rehab to a nursing home.
Wanting to go home and understandably frustrated, she was deemed “uncooperative.” This led the nursing home to petition the court for a guardian appointed for Ms. B. (a court-appointed stranger). The court-appointed guardian was a nice attorney, but he had never met Ms. B. before. Now, this court-appointed guardian is responsible for carrying out her wishes, and he understandably has no idea what those wishes are. His job is to help her get out of the nursing home and to keep the nursing home from compelling her to take medication that she didn’t want. Unfortunately, the guardian was unable to remove Ms. B. from the nursing home before she passed away.
Why a court-appointed guardian makes probate harder Though Ms. B.’s court-appointed stranger was a nice, professional attorney, he had no prior relationship with Ms. B. As with most guardianships, there is a disjoin between the guardian (who has control of the funds) and the estate.
The guardian, upon Ms. B,’s death, has to make sure the court approves of how he conducted himself during Ms. B.’s life. The guardian has to keep records of how the money was controlled and spent under the guardianship. If the court approves of how the guardian conducted himself, then the guardian gets released. This may sound simple, but we’re talking about a check register that could span a few years. (When we saw Ms. B.’s register, it was pretty thick).
Also keep in mind that Ms. B. was not his only client; he probably has dozens of others.
The accounting procedure could take months or years after the client passes away. During this time, the executor (me, in this case) and the heirs are stuck waiting. There are things we need to take care of, and that is hard to do without knowing about or having access to the estate’s funds.
For example, Ms. B.’s apartment needed repairs to leaks and mold, as well as some renovations just to get it ready for sale. The accounts are stuck with the guardian until the accounting is complete. Until then, the executor has to bootstrap and even take out loans to take care of the necessary expenses.
How can one avoid this situation? If you even suspect that a guardian may soon be required or forced upon you, then you should make a revocable trust. When creating a revocable trust, YOU choose the trustee who will manage your funds. Secondly, it's a seamless transition from the person managing your money while you were alive to the same person managing your money after your death. Lastly, this could help avoid court delays during probate.
I hope this helps you understand what could happen if you become a Solo Ager late in life. Below is a link to my book that sheds some additional light on the topic.
Free copy of "The Solo Ager Estate Plan" Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Every bitcoin estate plan must include a simple, easy-to-understand letter of instruction to your heirs or executor. If you don’t, all of your hard-hoarded bitcoin may disappear.
Explain Bitcoin to a Child Keep it super simple! Write the letter like you are explaining bitcoin to a child. Do not give the whole history of bitcoin, block chain, sound money, etc. Just write enough to get them past this treacherous stage: handling new and complex assets while grieving.
In your letter, write about:
- High-level concepts;
- Major pitfalls to avoid when working with cryptocurrency; and
- Immediate to-dos or checklist.
Bitcoin vs Banks Most of your heirs understand banks and brokerage accounts. So, explain how bitcoin is different. Explain that cryptocurrency can be lost forever if handled wrong, unlike dealing with a bank. There is no password recovery.
If your heir is a little more financially savvy, explain that bitcoin is like a bearer instrument. Bearer instruments are certificates where whoever holds them owns the money. (Cash is essentially a bearer instrument). When you give someone your bitcoin keys, that person has complete no-consequence access to your funds. No one will check their ID or verify their signature.
Where You Store Your Bitcoin In your instruction letter, explain where you store your bitcoin keys. You should have a rough inventory of what you’re holding so your heirs know what to look for. Most bitcoiners have a little bit on an exchange (Coinbase, Binance, Gemini, etc.). You may also have some hot wallets online (apps, browser extensions, etc.). Lastly you may have cold wallets, which are not connected to the internet at all (hardware or paper certificate).
It is important that your instructions are in a letter, not in your will. Your holdings could change, and you won’t want to update your will for every change.
Next, explain how the heirs can access the items on your inventory.
Exchanges are simple to explain, because they are more similar to banks than anything else. You heirs will send the death certificate and letters from the court and the exchange will turn over possession to the heirs.
Wallets are a little different. A good solution for a hardware wallet is to give a clone wallet to an executor or heir and give the PIN to someone else. Or you can split up a seed phrase and pass phrase among different heirs and they must collaborate to access your bitcoin.
Bitcoin letter of instruction example
If you're reading this, I'm either dead or incapacitated. If I'm not dead or incapacitated, PLEASE STOP READING NOW.
This letter is about my Bitcoin and other cryptocurrency, and how to access them. I won't even try to explain everything about Bitcoin here, but I want you to know enough to not get robbed or lose everything.
Some important high-level concepts:
(1) Cryptocurrencies can be lost, forever! There's no FDIC, or bank customer support to stop payment or reverse a bad transaction. Once it's gone, it's gone.
(2) There's no password reset or "recover lost password." If you lose the passwords (known as seed phrases, I'll explain below), Bitcoin and other cryptocurrencies are gone forever.
(3) Bitcoin and other cryptocurrencies are "bearer" assets, like cash. Whoever holds it, owns it. So if you hand someone the seed phrases, it's like handing them an untraceable bag of cash.
Nervous enough? No worries, Just follow these instructions, and you should be fine.
On Exchanges
I hold some Bitcoin and other cryptocurrencies on the following exchanges:
- Binance.com/Coinbase.com/Gemini.com
This is the easy part: just ask my executor or probate lawyer to contact the exchange with an original death certificate and letters testamentary, and they'll give further instructions on how to transfer my Bitcoin and other cryptocurrencies.
Now it gets harder.
On Hardware Wallets
I also hold some Bitcoin and other cryptocurrencies on hardware wallets. What's a hardware wallet? It looks like a large USB thumb drive, and my passwords/seed phrases are securely stored inside the device. You need my PIN code to access my hardware wallet.
My hardware wallet (and duplicate copies) are located:
- Describe locations
You should automatically receive an email with the PIN within six months of my death (I set up a "Dead Man's Switch"). Just remember: anyone who has both my hardware wallet and PIN has full, irreversible access to the Bitcoin and other cryptocurrencies inside.
Seed Phrase
If you cannot find or access any of the hardware wallets, you can still recover my Bitcoin and other cryptocurrencies using my "seed phrase." This string of 24 ordered words is the secret password to control the funds, even without the hardware wallet device.
I've given the first 12 words to these trusted people: Bart, Lisa, and Maggie
And the second 12 words to: Moe, Larry, and Curly
Contact whoever you need to complete the 24 word seed phrase. And remember: whoever has the full 24 word phrase has full, irreversible access to the Bitcoin and other cryptocurrencies inside.That's it.You probably won't be able to navigate all this without some help.But at least you now know how to find and protect the hardware device and seed phrases while you figure out the rest.
Also, consider choosing an executor who understands bitcoin custody. If you want to learn more about how a professional executor can help , check out my book, “How to Hire an Executor,” available on Amazon. I don’t have a Bitcoin chapter yet, but you'll get a sense of how choosing a professional can make things easier, especially for something complicated like an estate that includes Bitcoin.
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One of our podcast listeners asked: “Is it possible to open a Binance account that is funded by a trust account? If so, does that by default make that particular Binance account a trust account with the beneficiaries named on the bank account that is used for funding it?”
Great question! To answer it, we need to break it down a bit:
What is a trust account? There are a lot of different names for a trust account at a bank: ITF (in trust for), Totten trust, TOD (transfer on death), POD (paid on death), and other similar names. Basically, it is beneficiary designation that is added to your bank accounts.
It’s the same concept as life insurance policy: when you completed the forms, you most likely named who gets the account when you die. They become the beneficiaries on this particular policy.
A trust account at a bank is not the same as creating a Trust for estate planning purposes. I believe the question here is: “Does the Binance account take on the beneficiary designations that are on the original bank account?”
Do beneficiary designations transfer with funds? The answer is NO. If you send money from your Citibank bank account to a Vanguard account to buy some stock, the Vanguard account does not automatically inherit your Citibank beneficiary designations. You’d have to fill out forms at Vanguard to name beneficiaries.
Beneficiary designations do not follow the dollars. That’s the case for moving from bank account to crypto exchange, as well.
How to name beneficiaries on cryptocurrency exchange What is a cryptocurrency exchange? The big ones like Binance, Coinbase, Kraken, Gemini, are like E-Trade or Robinhood for cryptocurrency. And as of now, you can’t name beneficiaries on the account.
A main reason is most likely due to the fact that the laws are not set up for that yet. Therefore, cryptocurrency exchanges don’t offer that feature. So, you will need to make a Last Will and Testament or move your crypto off the exchange to a wallet that can be governed by your revocable trust or your will.
If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your Bitcoin situation.
Request your free consultation
There are many excellent probate lawyers who would be terrible executors. Why? Let’s break down what you need to have to be a professional executor.
The right support team Probating an estate takes a LOT of hours. It is not reasonable for those hours to be charged on an attorney’s billable time; your estate will go broke in no time. Some lawyers who are just starting out might do everything on their own, but that’s a recipe for burning out quickly.
The attorney must have well-trained, experienced paralegals and support staff. This is a huge asset for an executor while carrying out their duties over a period of months or even years. We’ve had some clients ask if they can just hire the paralegals! Unfortunately, it doesn’t quite work that way.
Think technically, not strategically Some probate lawyers tend to think more technically, not strategically. That’s not a bad thing; competent probate lawyers will know the steps to get from point A to point B.
But sometimes the question is, SHOULD we be trying to get to point B? You may need to step back and see the bigger picture. A good executor thinks strategically and sees around corners.
For example, a good lawyer knows which forms to send out to complete the court probate package. A good executor also knows which forms to use but also knows that some forms alarm heirs and cause them to clam up. A good executor won’t just send out the forms to the heirs but will take the time to explain the forms and walk the heirs through the process.
Pessimists make good lawyers Lawyers are supposed to expect the worst, it helps them to draft all those contract clauses to prepare for worst case scenarios. But such pessimism may paralyze an executor, who has a duty to reasonably keep the probate estate moving forward. The executor’s job isn’t to make sure that nothing bad ever happens, but to keep the process going to get the checks into the hands of the heirs. The mindset is a bit of a balancing act.
A good executor will be aware of the downsides, because they could be personally liable for things that go wrong. But the executor should be able to weigh the situation and embrace whatever solutions are available to keep things moving. There is a difference between being aware that something bad could happen and being crippled by the possibility.
A good example of this is closing an estate with an accounting reserve. Meaning, you’re 95% sure the estate is ready to close, and you are ready to get the checks to the heirs. But there is a 5% chance that could be a tax issue or creditor. Since the executor is personally liable, it’s tempting for him not to make any distributions until he is sure that there are no issues. One solution is to close the estate but hang on to a reserve amount to handle any possible problems. This will move things forward to settle the estate.
Hopefully this will help you identify what kind of executor you want for your will. If you decide to hire a professional executor, call them and interview them before making the decision. To learn more, check out my book, “How to Hire an Executor,” available on Amazon.
Let’s talk about 3 common suggestions that are bad bitcoin inheritance plans. Why so negative? Why talk about bad bitcoin inheritance plans, rather than the good? Well, sometimes the process of elimination can help focus our thoughts, so we better understand what makes the good plans “good.”
Sharing you private keys This is just terrible security while you’re living. Why? Because sharing your private keys with someone gives them immediate, irreversible, and unfettered access to your bitcoin hoard.
“But I trust my spouse (or kids, or best friend,” you say. I’m sure you do at this moment. But we’ve all seen thing change faster than you realize.
Maybe a great marriage suddenly veers to divorce. Or who would suspect their own child so controlled by drug addiction would poison them to get their Bitcoin?
And it doesn’t need to be so dramatic, just basic carelessness. Will your loving spouse, child, or best friend know how to keep your private keys as safe as you would? Will they get fished, or simply lose their keys?
And if they do have sole and unhacked possession of your private keys when you die, will they know what do you? Or upon your death, will they be relying guidance from a “trusted third party” to understand how to probate your bitcoin?
“Just” educate your heirs For many, their plan is to “just educate” their heirs so that heir will know what do when you die.
Um, do you remember how long it took for you to accumulate your current bitcoin knowledge? How many mistakes did you make? How many BIG mistakes did you make?
Now imagine your heirs are grieving, stressed, and have a lot to do during probate. And on top of that they’re supposed to navigate transferring self-custody? It’s just unrealistic
Even if, by some miracle, you cram their heads full of update to self-custody knowledge today, will they stay up to date? Do they want the knowledge enough to stay apprised of protocol updates, multsig best practices, current use of QR codes or air-gapping? Or will their knowledge be obsolete by the time you pass?
Treasure maps You think you’re writing a simple letter of instruction, but to your heirs it’ll feel more like a treasure map.
Why? Remember, your herirs will be grieving, stressed, and have a lot to do during probate. And no matter how much you “educate” them, it’s unlikely they will know know what to do upon death, and will have to rely on “trusted” third party.
And these letters/maps go out of date faster than you think, Do you really want to spend your life constantly updating your letter of instruction? By the way, this problem is the same for any will or trust, not just Bitcoin Inheritance letters of instruction.
If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your situation.
Request your free consultation
Hurray, you’re finally in contract and ready to close on the sale of the estate’s business. You already did all the hard work preparing to sell the business, now make sure you cross the finish line and close the sale properly.
Maintain status quo until sold Make sure you maintain your insurance payments. In the rare chance that there is a slip and fall accident between the time your insurance lapses and the closing occurs, it will be your problem.
Maintain your security plan, whether it’s an alarm system or driving by to check on the place. We have had an attempted burglary in one of our situations. It’s like the burglars have a sixth sense that the owner passed away and that the building is not well-attended. They notice that there are no cars or customers coming and going from the business.
Keep up to date with all of the business vendors. If the business is not operational, let the vendors know not to come by anymore. You don’t want boxes of inventory stacked up, just like you don’t want piles of mail stacked up outside of a decedent’s home. It’s pretty obvious that the place is vacant if no one takes the items inside.
Allow buyer’s final inspections Make sure that the lease is transferable. The buyer may need to have an introduction with the landlord to make sure they get along and agree on new terms.
Even if you provide a fully audited inventory of the estate assets, sometimes buyers want to do their own inventory. Cash registers, coolers, machinery, the condition of the parking lot - the buyer will want to see these for himself. Sometimes you can’t capture the condition of these types of things in a report or photographs.
Transfer all paperwork While most of the paperwork happens at closing, some paperwork needs to be put in motion ahead of time. For example, making sure that the buyer can take over the lease from the landlord.
There may be a whole bureaucratic process to make sure the buyer gets the necessary licenses and permits to operate the business. Maybe it’s a permit to have a cafe on the sidewalk in front of the restaurant or obtaining a liquor license.
Think you’re done? Not quite. Even if you’ve sold and liquidated the business assets, you probably still need to wind down or dissolve the corporation and business bank accounts. You probably did the sale in the form of an asset sale (meaning, the buyer bought the stuff), and not a sale of the corporate stock. The estate is now left with an empty corporate entity. Dissolving the corporation involves getting certain tax clearances, notifying the Department of State, emptying business accounts, and notifying the IRS with a corporate tax return.
It’s a long process, but it has to be done. We’ll cover this in a future episode, but please comment below if you have questions or comments in the meantime.
If you want to learn more about how probate works, check out my book on Amazon, “How Probate Works.”
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The following are three recent questions from our Solo Ager readers. Thanks for your questions!
As a side note before we begin: I’ve noticed that a more popular phrase is “Elder Orphans” rather than “Solo Agers.” I feel like “orphans” sounds like a bit of a downer. Please let us know what you think in the comments.
Can I disinherit with a poor man’s will? A “poor man’s will” is a slang term for not having an official will, but rather, using your beneficiary designations to patch together an estate plan. You can disinherit people this way, but it probably won’t work out the way you hope.
Too often, beneficiary designations do not reflect your final wishes. People often forget who they named as beneficiaries on their accounts. That kind of information doesn’t show up on your monthly statement; you have to call the bank. Another reason is that your account balance is continually changing. Maybe you want to leave your bank account to your nephew, but you like your niece more, so you leave her your larger brokerage account. Then, you leave the other brokerage account to your brother. What if one brokerage account over-performs and the other account tanks? Now your wishes are out of whack.
When doing a poor man’s will, you don’t have the structure to run your estate. People like to avoid probate because the process is long, but probate actually gives structure to the process after someone passes away. Structure is important to make sure debts, taxes, and expenses get paid. You could run into the situation where no one knows who is supposed to pay for the funeral. Or maybe the IRS is hunting down all possible heirs to pay the taxes.
Without a probate estate, there are no funds to pay an executor. If all the assets have a named beneficiary, there is no operating account for the estate. Most people don’t want to do the executor work without compensation.
The way to disinherit without using a poor man’s will is using an “in terrorem” clause with a disincentive payment. An in terrorem clause is when you disinherit someone by cutting them out of the will if they object to the will. But that only works if that person is going to get something. (It doesn’t work to say they get nothing, and if they object, they get more of nothing!).
Who will scatter my ashes if I move out of state? One reader asked who will scatter her ashes if she moves out of state, away from her executor (in this case, I’m her professional executor).
The executor can still honor those wishes out of state. FedEx delivers ashes, and we work with the local funeral director to make sure the ashes get shipped correctly - The estate will pay for the shipping costs. Alternatively, the estate can pay for the executor to fly out of state if there are sufficient funds.
Who should I hire to make my funeral arrangements? One reader asked if they should hire me, as a professional executor, to make funeral arrangements. Is hiring a person better than buying a prepaid funeral arrangement?
I am not a fan of prepaid funeral plans. With all due respect to my funeral director colleagues, I’m not a fan of prepaying for anything. If you want to set aside money in an account for your heirs to pay for the funeral, that is fine. Locking yourself into a prepaid plan is not the best idea. Funeral homes are not great managers of other people’s money. For example, we had an estate of a deceased funeral director and had to open the funeral home books to see who was owed what. We were tasked with refunding money to people who had prepaid funeral plans, since the funeral director passed. The records were not well-kept, and it was quite a mess.
You can use legal documents for choosing who will be in charge of your funeral plans, and you can have a separate account with funeral funds available. This allows you to change your plans. Suppose you buy burial plots in one state and then you move to another state. Don’t lock your plans in too much because you don’t know how your wishes will change in the future.
A similar question: is the professional executor a “one-stop shop?” Yes, if you ask me to serve as your professional executor, I will have annual check-in calls with you. I can’t just meet you once and put my name on your documents. We don’t have to be best friends, but we need to have a relationship that gives me a general sense of how to carry out your wishes.
Another question: should I name my funeral director as my executor? No. Unless your funeral director is a unique individual who has significant experience serving as executor, then it’s a definite no. They might be excellent at managing final affairs and ceremonies but acting as an executor is a completely different skill set. Just because death relates the two roles doesn’t mean the skill sets are related.
Again, we appreciate your questions. Please keep sending them in! If you don’t have a copy of my book, the Solo Ager Estate Plan, click the link below.
Free copy of "The Solo Ager Estate Plan" Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Hiring a professional executor is particularly useful for non-US heirs. Most state rules make it tough for you to be a US executor if you are not from or currently living the US.
US Executor Qualifications Many states outright prohibit non-US citizens or residents from being a US executor. Some states are a bit more nuanced. New York allows a non-citizen to be executor, but only if they’re also a New York resident. You must prove that you are a New York resident not only when applying for executorship, but also whenever you are acting as the executor.
For example, we have a non-US citizen heir who moved to New York for the purpose of being an executor. Then in the past two years, he moved out of state. When he tried to use his letters at the co-op, the co-op would not accept his letters because he was no longer a New York resident. In order for your letters to be valid, you must stay a New York resident.
Can you be a US executor if you live abroad? Sometimes it can be done, but it’s challenging. New York may allow it, but only if you have a US co-executor. This is a pain because it means more paperwork during probate. For anything that requires a signature, you’re basically doing the work twice. If you are overseas, you’d have to go to an apostille or a consulate. Just the postage alone to sign each document can be quite expensive.
Further, even if the court allows it, you now have an overseas co-executor who has to get US notarizations, which is often a frustrating process. And more, the co-executor may even have to fly into New York for mundane tasks. You’d think that in 2022, you’d be able to accomplish these tasks online or over the phone. Nope. There are a surprising number of tasks that require in-person visits. Banks and co-ops are two of the biggest culprits.
We have a situation where a retail store in Colorado is part of the estate. The store security system won’t speak to the executor, unless it is in-person. Also, the bank in Colorado requires an in-person visit to close the decedent's account.
What if the non-US court has appointed an Executor? Many ask: what if I’m a non-US citizen, non-resident, but I’m the court appointed executor in Spain, England, etc. of an estate with US assets? Then, can I be a US executor?
No, because the probate procedure will be slightly different. It’s called “ancillary probate.” All of the rules of about citizenship and residency discussed above still apply. Even if you are a citizen/resident of Spain and are appointed there, you still need a US co-executor. Better yet, hire a professional US executor to collect the US assets.
Because of the complexity of being a non-US citizen executor, people seek our help to make the process much easier. We work with international heirs often, and we are familiar with administering these types of estates.
If you want to learn more about professional executors, check out my book, “How to Hire an Executor,” available on Amazon.
As the default recommended multisig quorum, there must be lots of 2 of 3 multisig holders out there. So let’s make sure your 2 of 3 multisig also works as well upon your death as it does while you’re alive.
Three things to think about: who has your third key; access to keys 1 and 2 upon death; and consider a 2 of 4 multisig.
Who has your third key? Your best candidates are a custody service, a professional executor or lawyer (who also understands bitcoin custody and opsec), or family and friends.
Ideally, this keyholder will have an ongoing understanding of both bitcoin custody and security, as well as probate and estates. This means someone will keep up to date as technology and best practices evolve, and not just a fleeting understanding.
We discussed in depth “who should hold keys as part of your bitcoin inheritance plan?” in E256.
Access to keys 1 or 2 upon death Presumably, while you’re alive you have sole access to keys 1 and 2. So how will your 3rd keyholder get access to one of your keys upon your death?
One of the benefits of multisig is that you don’t need such extreme security measures. Why? Because even someone gets one of your keys, they’d still need to get another key to be able to access your bitcoin.
So how to make sure a second keys is available upon your death? A few ideas:
- Share a full seed phrase with a family or friend, who would share with your 3rd keyholder upon your death
- Give a hardware wallet clone to family/friend, who would share with your 3rd keyholder upon your death
- Store a copy of your seed phrase or a hardware wallet clone in a safe deposit box
- Write a full seed phrase in your will/trust
All of these brainstorm ideas trade some security to increase the chances your estate will actually be able to access your bitcoin upon your death.
Consider 2 of 4 (or more) multisig 2 of 3 multisig means your 3rd keyholder must somehow get access to keys 1 or 2 (your keys) upon your death.
In our experience, too many things go wrong and go missing upon death. And not just bitcoin. Far less esoteric things like bank accounts, atm cards, birth certificates get lost in the shuffle and chaos of probate
For that reason, I’d prefer to have a quorum of keys ready immediately upon death. For example, a custody service such as Unchained Capital or Casa has key 3, and a professional bitcoin executor (me) has key 4.
I prefer this setup because keys 3 and 4 are immediately ready, and we can still fall back onto keys 1 or 2 as backups for redundancy.
What are the drawbacks of 2 of 4 versus 2 of 3?
- Setting up is a bit more complicated
- While alive, validating receive addresses may be more complicated
- And non-2 of 3 multsigs currently standout on the blockchain, and are therefore less private. But Taproot should solve this.
If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your Bitcoin situation.
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Probate is already a slow process, and recent IRS processing delays are making probate even slower.
Most probate cases must receive IRS tax clearance in order to close the estate. Otherwise, the executor and heirs are at risk for lingering tax problems and getting hit with unexpected tax bills later. Once the heirs understand this, they are fine with taking the time to close the estate properly!
The Taxpayer Advocate is a government entity whose job is to oversee and review the performance of the IRS. The Taxpayer Advocate’s recent annual report https://www.taxpayeradvocate.irs.gov/reports/2021-annual-report-to-congress/ breaks down the extent of the IRS delays, why we can’t get any answers, and what to expect this year.
We are in the frustrating position where we have to tell clients repeatedly that we are “waiting on the IRS.” Hopefully this blog helps to clarify the situation.
Is the IRS having processing delays? “Delays” an understatement. The following are quotes from Taxpayer Advocate’s sub-report: ”PROCESSING AND REFUND DELAYS: Excessive Processing and Refund Delays Harm Taxpayers https://www.taxpayeradvocate.irs.gov/wp-content/uploads/2022/01/ARC21_MSP_01_Processing-Delays.pdf”
- “At the close of the 2021 filing season, the IRS had 3 million returns awaiting manual processing”
- “As the IRS is preparing to begin the 2022 filing season, it is poised to carry over millions of unprocessed returns and millions of pieces of taxpayer correspondence, resulting in even longer delays for taxpayers who have been patiently waiting for far too long”
- “Taxpayers who have filed their tax returns continue to wait, and wait, and wait for any update from the IRS”
These direct quotes match our experience without a doubt. It can take months to get any response from the IRS. We even include a copy of our letter with a pre-paid envelope and simply ask them to stamp the copy and mail it back to us. In years past, it only took a few weeks to receive our stamped copy. Now, it’s taking them months to just open the letter.
When we do finally get a response, it’s often a punt: just a letter saying they need six more months to a year to respond. Even worse, when we finally get a real response, sometimes it’s incorrect. So, if there’s an issue (even a non-problem, IRS mistake), it resets the clock, and we have to wait another 6 months or more for the IRS to look at it again.
Can I contact the IRS for a status update? Clients naturally ask if we or they can call the IRS for an update or timeline. It is very unlikely.
From Taxpayer Advocate’s sub-report: “TELEPHONE AND IN-PERSON SERVICE: Taxpayers Face Significant Challenges Reaching IRS Representatives Due to Longstanding Deficiencies and Pandemic Complications https://www.taxpayeradvocate.irs.gov/wp-content/uploads/2022/01/ARC21_MSP_03_Telephone.pdf”
- “In 2021 the IRS received 282M phone calls. Customer service representatives only answered 32M (11%.)
- “A taxpayer contacted by the IRS regarding her deceased mother’s return was told to call in but has been trying unsuccessfully for over a year to get through to the IRS”
- IRS aims to respond to taxpayer correspondence in 45 days. As of Jan 1 their turnaround time is nearly 1 year”
In our experience, we don’t even have the 11% chance of talking to someone. We deal mostly with estates, which are a higher level of complexity than a standard tax filing. We are not going to get a call back from a customer service agent; we have to wait for our file to get to a higher-level agent or even an IRS attorney. So, yes, over one year for ANY sort of letter or reply sounds accurate!
Will IRS processing and communication improve? This is unlikely; the IRS has a big hole to dig out of. The IRS didn't complete processing all 2019 returns until June 2021, “Thus, the unprecedented processing and refund delays taxpayers experienced in 2021 could be as bad, and potentially worse, in 2022.”
We can only hope that our client’s files are at the top of the 35.3 million pile. Please know, we are waiting along with you, and we're frustrated, too. Unfortunately, we’re all in the same boat. In our experience, no one wants to try to close the estate without the tax clearance and bear the risk of the IRS coming after them.
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If you have a multisig, who should hold keys as part of your bitcoin inheritance plan?
Multisig is a great way to reduce risk of theft or catastrophic loss by reducing single points of failure. Michael Flaxman does a nice job explaining why to use multisig.
But what happens upon your death? You’ll want one (or more) of your keys held by someone other than you. Let’s review some good options for who.
Bitcoin custody service Nowadays there are several businesses to fill this void, led by Unchained Capital and Casa.
Some advantages of hiring a pro keyholder:
- Expertise. These guys appear to know what they’re doing. So you won’t have to worry much about them losing their keys, maintaining good opsec, or generally keeping up to date.
- Immortality (sort of). Even if the founder or your main point of contact dies, the business itself will carry on and be there after your death (unless they go out of business, of course)
- Handholding for your heirs. Both Casa and Unchained offer services to guide an executor or heir who is completely clueless about seed phrases, multisig, etc. So not only are they one of your
And a few disadvantages:
- New. Custody services, collaborative custody, whatever they’re called, it’s all very new. So it’s hard to predict if they’ll stick around, change their focus, or what business standards they’ll adhere to. Only time can tell
- No probate expertise. While these guys are clearly experts in custody and security, they don’t have experience with probate and executor issues. No shame there, even most “estate planners” and financials advisors don’t really understand probate, either.
- Cost. Yup, they’re in business, so they charge fees (varies depending on the package and services you need). Unchained has a 2 of 3 service where there’s no fee now, only a $25 fee if/when you need them to sign a transaction.
Bitcoin executor Just like with estate planning in general, it’s good to have a great executor to run your estate upon your death.
Some pros of having a professional executor hold one of your multisig keys:
- Probate expertise. A professional executor will know all the ins and outs of probate, the courts, and tax issues.
- Highly regulated. For better or worse, a professional executor (usually an attorney or bank) is bound to all sorts of ethics rules, fiduciary duties, or banking regulations. So at least you know he has plenty of guide rails. And if anything goes sideways, your heirs will have well-established procedures for remedies against him.
What are the cons or having a professional executor hold one of your multisig keys?
- Try finding one. According to our clients, it’s very hard to find a good professional executor. Bank have high net worth minimums, and even then have interviews and committees to decide if they want your estate. And apparently they’re aren’t many reputable individual/attorney professional executors out there.
- AND knows custody. So it’s hard enough to find a good executor. Now compound that by finding one who’s at least a little experienced with bitcoin. Else you’ve just added a new risk vector, some dude who’ll lose his keys, get phished, and let his hardware wallet firmware stagnate un-updated.
Family or friends A trusted family or friend sounds ideal, right? Someone you already know and trust. If you have shared interests, they may already be down the bitcoin rabbit hole with you. Heck, they may even be an heir.
The possible downside is that they simply don’t want the burden of being an executor (of sorts). Probating and settling an estate can be a long, time-consuming, and headache-inducing slog, So even if your family or friend has the expertise to handle the custody of your multisig key, they may not want that burden of responsibility.
If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your Bitcoin situation.
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Lots of people like to keep cash and valuables hidden at home. But what if you do too good a job of hiding them that even your executor can’t find them? They could end up lost or thrown away. Let’s discuss how to avoid that.
Why people hide cash and valuables at home Some folks don’t trust banks or the government, in general. Perhaps they came from a country or grew up in another era where banking was much less reliable.
Others want to hide valuables from home aides, cleaning staff, EMTs, etc. Unfortunately, it’s not unusual for items to go missing when someone gets transferred to a nursing home or when they pass away.
Lastly, some folks want to be prepared for a recession or bank runs/panics. Panic bank/ATM runs could have easily been the scenario two years ago when we witnessed the toilet paper shortage.
Where NOT to hide cash and valuables at home If you hide valuables too well, the executor/heirs probably won’t find it either. From personal experience, treasure hunting for hidden money and jewelry is just one thing on a long list of the executor’s tasks to do when cleaning out a home. The executor needs to document items for family members, and the home needs to be cleared out and in broom-clean condition to get it on the market in a reasonable time frame. There’s really not much time to tear up the floorboards to look for hidden cash...
Here are some examples of where people hide things and why the executor/heirs might miss it:
- In the freezer, wrapped in foil or Ziploc bag. It’s not really reasonable for someone to go through every item in the fridge/freezer to see if there’s money in it. By the time we’re cleaning out the fridge, everything is probably rotting. We do our best to check, but often, there just isn’t much time before we need to move on to the next task.
- In the pantry, inside flour jars, sugar jars, cereal boxes. Again, there isn’t time to look through all of these things for hidden valuables. Sometimes we hire a cleaning company, and they certainly are not going to take the time to examine each item.
- Inside books or hollowed out books. It’s not realistic for an executor to take every book off of the shelf and leaf through the pages. We do tend to check the dictionaries and Bibles, which are more common “hiding places.”
- Taped on the underside of the drawer. Some public administrators will take out every drawer, examine it, then toss it on the floor. After doing so, it tends to look like someone robbed the place. We do our best to look around, but we also respect the emotional reaction of the heirs. We do not trash the place.
- Inside a cigar box. We do check these, but if the box is tucked away, we might miss it.
- Sewn into the lining of clothes. We might do a pat-down of some items, but generally, clothing is overlooked. Although one time, we found cash in a sofa cushion because we noticed a lump.
- Under floorboards. If there is an obvious discolored board, we’ll take a look. However, we’re not wrecking a house to find possible valuables. It’s time consuming and costly to pull up floorboards and get them neatly back into place. By the way, if the floorboard hiding place is so obvious that we can find it, chances are the home aid or EMT can find it, too.
Good places to hide cash and valuables at home A fireproof safe costs money and it can draw attention, but it also means that your executor knows to look in there. Try not to worry about the home aid seeing your safe. Most crimes are crimes of opportunity. You are more likely to have cash or jewelry swiped off of your dresser than for a visitor to spend time trying to get into the safe.
There is no need to buy a huge safe that is incredibly obvious. You also don’t want to get a tiny safe that is easy to carry away. A standard safe might weigh 50 to 100 pounds and can be bolted into the floor or the wall.
Solo Ager Book This topic came up because we have been talking about hunting for Bitcoin keys after death. We thought this would be helpful to cover other types of treasure hunts.
You can tell your professional executor that you have hidden things in certain places, but this may not help if you die years later and change the hiding place.
If you want to learn more, click the link below to get a free copy of my book, “The Solo Ager Estate Plan.”
Free copy of "The Solo Ager Estate Plan" Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Selling probate real estate can be tough because properties are usually out of date, very “lived-in,” and attract discount buyers.
Here are a few minimum renovations and repairs that executors should consider in order to receive a flow of serious buyers, without spending too much in estate funds.
- Clean out the clutter Cleaning out clutter is more expensive than people realize. For example, cleaning out a one-bedroom apartment in the Manhattan area will cost between $1,500 and $2,500 for several cleaners/movers, a truck, and a dumpster.
Though cleaning out is expensive, it is a MUST. It’s very difficult to sell a home with the deceased person’s belongings everywhere. Do your best to get the home at least broom-clean or better. Even buyers looking for a sweet deal aren’t really excited to clean up someone else’s mess so that they can move in.
You’ll probably need to pack and ship some items to heirs anyway, so cleaning out the place completely just makes sense.
- That fresh paint smell We’ve seen so many homes with outdated colors or tones. We have one right now with blood-red colored walls. Though certain colors may have been popular at one time, you need a neutral color like beige, light gray, or white to sell a home. Don’t try to get fancy with different shades of the same color. We had a house with at least eight different shades peach freshly painted throughout, and it was not appealing! Give the buyers a blank canvas to work with and let them pick their own colors.
Don’t use wallpaper - stick with paint.
Besides being aesthetically pleasing, a fresh coat of paint can help reduce odors. To put it bluntly, most probate properties smell like the person who lived there. Again, give the buyer a blank canvas that smells fresh.
- Let there be light! For some reason, really “lived-in” places seem to feel dark. Maybe there are too many curtains, or the windows haven’t been cleaned.
Most realtors will say that maximizing the light very important. You can do this by updating all of the lightbulbs to LED lights (which is a cheap fix, by the way!). It is also good to wash and fix the windows, if feasible (this may not be so easy in a high-rise building). You may want to consider getting rid of curtains to brighten the place. Additionally, getting rid of curtains can reduce odors trapped in the fabric.
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Refresh the floors You don’t need to do a full reflooring, as this can be quite expensive. Just replace or remove the carpet. If you find hardwood floors under the carpet, leave it exposed. People tend to like hardwood floors. Sanding and refinishing old wood floors is way cheaper than putting new flooring in. If you have to put carpet in, choose a light, neutral color.
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Minimum bathroom updates Bathroom updates can get expensive, but there are some minimum updates you can do to maximize its appearance. Don't replace the tub, just re-caulk it. You should consider replacing the vanity, as it is fairly inexpensive and easy to install. Many old vanities have stained outlines of where pill bottles and other items sat.
It is also beneficial to update the showerhead and the fixtures. You can go to any hardware store and pick up inexpensive, shiny, updated fixtures. The $50 spent to replace a leaky shower head with a fancier one, will be worth it to help the home sell.
If there are enough funds and the heirs agree to use the estate funds, then you can make costlier updates. However, I assume that most heirs want to maximize their inheritance and just get the home sold. Besides, you don’t know what taste the buyers will have. You might spend a lot of money on updates that look good to you, and the buyer ends up ripping it out to suit their own style.
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What do you do if someone dies owning Bitcoin, but you have NO IDEA how Bitcoin works? How do you recover the Bitcoin, so it doesn’t get lost forever? Right now, Bitcoin is delicately owned, meaning the tools of ownership are still being ironed out. It’s still very easy to have an accidental catastrophic loss.
Here are the basic steps to find the keys to the decedent’s Bitcoin.
Note that the steps below assume that the decedent’s Bitcoin is not on exchange, since the claim process for an exchange is very similar to traditional bank or brokerage. As exchange is a platform like CoinBase or Gemeni, where you have an account with that entity. Most hard-core bitcoiners have a personal custodied hardware wallet instead. Here, we are talking about those bitcoiners.
- Look for hardware wallets Looking for a wallet is the first and easiest step, because it’s something physical to look for. A hardware wallet may look like a USB drive, a type of smartphone, or a pocket calculator. Not sure what you’re looking at? Open Google images and search for “hardware wallet.”
If you find a hardware wallet, you probably need a PIN code to unlock the device. If you can’t figure out the PIN, at least you know the decedent owned a hardware wallet. If you can't figure out the PIN, make sure to try step 3 below (word lists).
If you have the PIN, congrats. You’re able to unlock the device to access the decedent’s Bitcoin keys stored inside. (Note – the Bitcoin is not actually on the device. The device is a key to the Bitcoin). You can now use the hardware wallet to access, sell, or transfer the decedent’s Bitcoin. So, be sure to treat the PIN and device very securely.
- Check phone and computer for software wallets You might want to scroll through the decedent’s phone to see what apps the decedent had. Google “top software wallet iPhone” or “best software wallet android” or “mac software wallet” to get an idea which apps to look for.
Again, the software wallet may be password protected. If you can’t guess or find the password, at least you know the decedent has a software wallet. You can use step 3 for word lists (below).
If you have the PIN, congrats. You’re able to unlock the device to access the decedent’s bitcoin keys stored inside. You can now use the hardware wallet to access, sell, or transfer the decedent’s Bitcoin.
Keep this device in a safe place! Anyone who has control over the decedent’s phone has the power to access, sell, or transfer the decedent’s Bitcoin. So, be sure to treat the PIN and device very securely. Also, be sure that you remember the PIN, because the device can lock you out for a period of time after too many failed attempts.
- Look for 12- or 24-word lists If you found a hardware or software wallet, but you can’t figure out the PIN or password, it’s still possible to access the decedent’s Bitcoin.
The hardware wallet or apps are really just wrappers, ways to conveniently hold the Bitcoin keys, but are not the keys in and of themselves.
Another format for decedent’s Bitcoin keys is a list of 12 or 24 secret words in a specific order (aka “seed phrase”). If you (or anyone else) has these words, you can use them to create a new hardware or software wallet, and therefore have full control to access, sell, or transfer the decedent’s Bitcoin.
You’ll be looking for a card, note, or letter with the seed phrase on it. So, if you find the 12 or 24 words, do NOT:
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- Share them with anyone;
- Copy/paste them onto your phone or computer; or even
- Take a picture of them.
Just keep the paper secure until you can safely transfer the Bitcoin to a new account.
It’s also important to mention that even though you trust your lawyer, you shouldn’t share the passwords with him or her. Just let the lawyer know that you are in possession of what you believe is the hardware/software wallet and password.
Hopefully this gives you some insight for what to do and look for when dealing with a decedent’s Bitcoin. These questions and issues will become more common as more people start owning Bitcoin, but for now, most people are not sure how it works.
If you want to learn more about how a professional executor can help , check out my book, “How to Hire an Executor,” available on Amazon. I don’t have a Bitcoin chapter yet, but you'll get a sense of how choosing a professional can make things easier, especially for something complicated like an estate that includes Bitcoin.
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Listener, Raymond, asks: “What happens to your clients if you die? By you, I mean Anthony S. Park. Who is your backup?” He posted this question on a professional executor video, so we’ll answer in the context of me being a professional executor as opposed to being an attorney.
Thanks for your question, Raymond.
Can an executor transfer his duties? If you name me as your professional executor, can I delegate my duties to someone else? No, the roles of a fiduciary (trustee, executor, etc.) are non-delegable. So, if I die, I can’t just say that my spouse, or paralegal, or law partner can take over.
Why not? Because it's not my choice as to who should be your executor - you chose me for a reason. It’s not up to me to grab one of my colleagues to step in; there’s more to it than that. It should be your choice.
By the way, this is not a limitation to just professional executors; this applies to any executor. The same principals apply if you name a spouse, nephew, or friend - they can’t just pass it along to someone else.
Can you have a backup executor? Yes, you can and should name a successor in your will or trust. In your will, the appointment of a successor executor will be in the same or following paragraph where you nominate me as executor. For example, “I appoint Anthony S. Park as my executor, but if he cannot fulfill his duties, then I name __________ as my successor executor.”
I recommend naming at least one successor executor, but no more than three. You need at least one back-up, but any more than three just feels like overplanning. I’ve had clients come in with a depth chart of up to seven successors. It's very unlikely that you’d get to the point where you need the seventh executor. That would be like a plane-crash involving all of the other executors! Naming that many people will probably cause more stress than you realize. Plus, if you’ve chosen your executors wisely, you won’t need such a long list. It is important to review your will every four years to make sure you’ve chosen your executors are still fit to act, if needed.
What happens when a lawyer dies? I am both a licensed attorney and a professional executor. Like most good lawyers, I have backup counsel, as recommended by ethics rules and as required by my insurance carrier.
I have a “notify in case of death” colleague who will take over my files in case I die. This doesn’t necessarily mean that he or she will be your attorney, but at least they can notify you that I passed. You could then keep the file with my colleague or retain new counsel.
This is the same process for me as a professional executor. If something happens to me, you will be notified. As you may know, I have annual check-in phone calls with clients who’ve named me as their executor. We call to get updates from you, but also partly so you know that I’m still here! It’s a two-way street. If you haven’t heard from me in a year or two, you may need to make sure I’m still around!
Again, we appreciate Raymond’s question, and we encourage others to submit their questions, as well.
If you want to learn more about professional executors, check out my book, “How to Hire an Executor,” available on Amazon.
Our Solo Ager clients often ask, “Do I have to tell an heir that I’ve named them in my will?” For one reason or another, you may not be sure what to do. We will discus the pros and cons of telling your heirs they have been named in your will.
Do heirs have to be notified? You are not legally required to notify your heirs when you make your will. However, once you die and your executor begins the probate process, your executor is required to notify your heirs that they are named in the will. In fact, the executor must send a copy of the will to the heirs. This means the heirs will also see who the other heirs are and what they will inherit.
Why not tell your heirs? First of all, nothing is final. There is a good chance you might change your will again before you die. It would be pretty awkward to tell someone that they are inheriting something, and then you change your mind. You don’t want to cause drama between you and your heirs, or among the heirs themselves. Suppose you have two nieces between whom you were going to split your estate 50/50. Then they find out that you’ve changed it to 75/25. This will create an awkward situation among all of you, especially if the nieces are sisters.
You may find that once you tell your heirs what they will inherit, the heirs’ behavior changes. It could feel as if you are dangling their inheritance in front of them. Or maybe the ones inheriting the most won’t try as hard to win your favor or hang around as much, since they feel secure in what they plan to receive.
When to tell heirs Generally, I don’t recommend telling your heirs what they will specifically inherit for the reasons described above. However, there are times when it makes sense to tell them. One reason is to help them plan for the future. Say you have a niece with school-aged children, and she is struggling to figure out how much to save up for college. You know that by the time her children are in college, you won’t be around. You can let your niece know that they will receive an inheritance to take care of those costs. This news could alter how aggressively she saves, which will make their lives easier now (not just when the inheritance comes). Just remember - once she relies on this information to set her financial plan, it will not look good if you change your mind!
If you are not planning on giving much to your heirs or you plan to give mostly to charity, then set expectations for your heirs. Let them know that you plan to give your wealth to charities and for them not to expect a large inheritance. Doing this can help avoid hard feelings after your death. If you have a relative who’s expecting to receive a lot and they find out after you pass that it’s going to charity, it may tarnish your legacy in their eyes. But if you set expectations before you pass, then the heirs will be prepared.
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Jimmy Song recently published a great article about what the Taproot upgrade could be for Bitcoin estate planning (video here). Taproot is the recent upgrade to the Bitcoin protocol, and we’ll do our best to outline Jimmy's article in layman’s and through the lens of an experienced executor.
What are scriptspends? Taproot has added programmable spend instructions called scriptspends. As Jimmy writes, “Taproot essentially allows you to have as many alternative conditions for unlocking your Bitcoins as you want, making the addition of recovery options to be easy.”
In past blogs, we’ve discussed other solutions like an emailed dead man’s switch and sharding your phrase into several pieces. This upgrade potentially does away with all of that while using more elegant solutions.
Cryptocurrency tools keep evolving for the better, and we can't wait to see ideas get developed.
Potential recovery options with Taproot 1. Mutlisig With Taproot, you can “recover your UTXOs with a 2-of-5 multisig of 5 friends that don’t know each other.”
I am not sure how this is different from existing multisig solutions. Perhaps Taproot just makes it easier to implement a multisig? If you can enlighten me, please send me an email or comment.
- 1-year time lock You can “recover your UTXOs after a time lock of 1 year and locked to a key belonging to a known service like Unchained or Casa.”
This seems to be a type of “unclaimed funds” mechanism, where after a year of inactivity, access switches to a key held by a third party. As long as you access this Bitcoin once a year to show that it is an active account, nothing happens. But inactivity after 1 year authorizes the scriptspend to automatically give a third-party a key to access. Perhaps this should be a default setting for new wallets.
Just like searching for unclaimed bank accounts after someone has died, this recovery option gives someone a way to recover, rather than being lost forever.
- Degrading multisig Jimmy writes that you can ”recover using a gracefully degrading multisig of 3 of your family members where 3-of-3 is for immediate recovery, 2-of-3 after 6 months and 1-of-3 after a year.”
For example, after 6 months of inactivity you would need 3 keys to spend. But after an another 6 months, sort of assuming you don't have access to 3 keys, your multisig requirement would reduce to just 2 keys. And eventually to just 1 key. Again, in the name of avoiding catestrophic loss.
This is all to make up for the fact that Bitcoin is not like a regular bank. If you lose your password, there is no password recovery. You need multiple contingency plans, otherwise, it’s gone. You’re probably more likely to lose your password than to be hacked!
With scriptsprend, these options seem to be only limited by imagination of programmer. That’s very encouraging.
Private recovery options Jimmy notes that “you only have to reveal the recovery method when you spend using it, so your friends don’t even have to know that they’re part of your backup plan! You just have to present them with what needs to be signed.”
So, if you name 3 people as your multisig members, they don’t have to know that they are back-up signors to a transaction. Similarly, you don’t have to tell someone that they are your executor; they can discover that upon reading your will.
The problem with this approach is that it assumes everyone knows how to (or is familiar with) use private keys. I’m not so sure this is realistic; we’re just not at that point in time yet. Maybe you have enough tech-saavy signors in your group to meet a quorum. Perhaps you can use Unchained or Casa as a back-up. Or maybe even a Bitcoin-savvy professional executor?
In this stage of development, it’s probably not smart to rely on 3 family members with digital signatures. You'll need one or more people/companies who are familiar with the technical requirements.
If you want to learn more about how a professional executor can help , check out my book, “How to Hire an Executor,” available on Amazon. I don’t have a Bitcoin chapter yet, but you'll get a sense of how choosing a professional can make things easier, especially for something complicated like an estate that includes Bitcoin.
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When you name me as your professional executor or trustee, we have an annual “check-in” call or email to make sure I’m up to date on your plan and wishes.
We’ll review below what we chat about during our annual check-in.
But first, why annually? As your executor and potential witness if your will is contested, it’s useful for me to be familiar not just with a snapshot of your wishes upon your death, but the trajectory of your wishes.
For example, it helps me to track that year after year your niece was gaining your favor. Maybe she only made phone calls in the beginning, then she sent Christmas cards to you, and ultimately, she finally started visiting you. At each annual check-in, you talk about her more and more. On the flip side, if every year you report the same thing about your niece and she contests your will, then I’ll know what that relationship was like if I have to testify in court.
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Are you alive? If you answer our check in call each year, then we’ll know you're alive! Of course, we care more than whether you are dead or alive. We’ll ask about your health and check to see if there are any signs of capacity issues. For example, are you becoming frailer each year? Perhaps you might need a trust or other sort of estate planning advice.
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Does your plan still reflect your wishes? Does your plan still reflect who you want as your beneficiaries? Are any of your beneficiaries dead or incapacitated since we chatted last? Perhaps there is now someone you would like to cut out of your will or maybe a beneficiary is no longer worthy of an outright inheritance. Maybe your nephew is now a drug addict or gambling addict, and you need to put his share into a trust because you still want to give him something, just not all at once. Maybe one of your beneficiaries is now in a nursing home, and you want to make sure her share is protected (not counted as an available asset).
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Have your assets changed? Have you bought or sold anything major? As your professional executor, I need to collect and distribute your property after your death. It would definitely help me to know that your summer home in the Poconos has been sold or maybe you bought a big piece of land in Montana.
Also, are you significantly richer or poorer than when we last checked in? Did your crypto crash or your Bitcoin pop? There is a cost-benefit analysis involved, and the size of your estate plays a big role in that.
- Do your assets still have correct titles and beneficiaries? If you have a trust, you probably want a good number of assets to be no longer owned by you personally, but rather owned by the trust. Is that trust paperwork in place with the bank?
Even if you don’t have a trust, do you have beneficiaries on your accounts? Have you named who automatically gets your 401(k), life insurance, IRA, brokerage account, etc.? It’s important to make sure the correct person is named. Is your old girlfriend from ten years ago still listed as the beneficiary?
As a caveat, we generally don’t recommend structuring your estate plan with beneficiary designations. There are many problems with that approach, and you can check out this link to learn more. If you do have beneficiary designations, we’ll make sure the designations are at least reasonably accurate.
- Are we still a good match? The last thing we’ll check is if you and I are still a good match. Do we still like each other, and do we still trust each other? Am I still young and fresh and up to date on estate administration? Or maybe when I am older, you’ll want a younger professional executor. I mean, you should have an executor who is likely to survive you! Does my style of doing things match the way you want things done?
There is no right or wrong answer.
The check-in is usually a 15- or 20-minute phone call, or even a few emails back and forth. The check-in helps us keep in touch over the years and gives me a better picture of your wishes each time.
If you want to learn more about professional executors, check out my book, “How to Hire an Executor,” available on Amazon.
If you hold bitcoin, 2022 may be the time to make your New Year resolutions to get your Bitcoin estate planning in order.
Everyone approaches crypto differently: Entry level people will probably be on exchanges; more intermediary users may have their own software or hardware wallets. Hardcore bitcoiners probably have hardware wallets, cold storage and maybe even paper wallets – most likely in a multisig structure.
Have you named beneficiary designations? Newer bitcoiners most likely hold their crypto on exchanges (Kraken, Binance, Coinbase, etc.). The most important question is: does your exchange allow beneficiary designations? This means filling out a form which says that, upon your death, your account should go to a certain person. (This is similar to naming a beneficiary on your IRA or life insurance). Some exchanges appear to be slowly adopting beneficiary designations. Having a beneficiary is a great way to make sure that someone knows that you own crypto!
If beneficiary designations are allowed, are yours up to date? Does it reflect your current wishes, or is it still in the name of your girlfriend from ten years ago? This would not make your current spouse very happy; believe me – we've seen it before! No need to leave those emotional messes for your grieving family.
It’s very important to make sure your beneficiary designations are up to date on all accounts, not just your crypto.
Check your letter of instruction and devices Intermediate bitcoiners usually have multiple accounts and hardware wallets/devices. These bitcoiners have self-custody, which means they have more control over their bitcoin than if they were using an exchange.
If you have self-custody, check whether you have a basic letter of instruction. This letter tells your heirs/family that you have cryptocurrency, where the accounts are held, and where any wallets are located. If you have software wallet, let your heirs know the name of the software wallet or app. They might think Kraken is just a video game on your phone! Be sure to continually update your letter of instruction because the wallets you have this year may be different from a year ago.
If you haven’t touched your wallets or nodes in a while (which is totally normal for “cold storage”), there is a chance that those versions and firmware are not up to date. The latest security standards may not be in place. Less savvy heirs/family may be stressed about locating and accessing your bitcoin. It will be much harder for them if they find out they have to run updates before they can proceed.
A lot of hardware wallets rely on batteries. Check in every once in a while, to make sure the batteries are able to power up.
Does your multisig still work? I am not a hardcore user, so bear with me on this one. Advanced bitcoiners may have a multisig recovery and inheritance plan. That means that there is no single key to access their hoard of bitcoin; there are layers of protection. For example, you will need 2 out of 3 keys, etc. in order to access the account.
As discussed above, make sure you have updated versions of everything and that everything still works. Imagine how hard it is for someone new to crypto to wrap their head around “multisig,” “hardware wallet signature,” etc.
Another important thing to do is make sure all of your signers are alive. For example, you have a 2 of 5 multisig. You have at least 3 of the keys, your spouse has one, and your cousin has another. That way, if anything happens to you, your spouse and cousin can put their keys together with yours and be able to access the account. But, is your cousin still alive and able to perform his duties? Is he still a valid keyholder? Does he still have his key, and does it still work? You can’t just check your own keys; you have to check everyone’s, because otherwise it’s pointless.
Multisig is new to me, so I am not sure how to confirm that a multisig actually works. Do you really need to do an annual test with all the keyholders, or do you assume that their keys work if yours do?
It would be a shame to go through the trouble of setting up a multisig and then for some reason it fails upon your death. I would love to hear from someone more technologically advanced to help answer these questions.
If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your Bitcoin situation.
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As we know, Solo Ager estate plans are a bit trickier than other estate plans. We recommend that our clients take a look at their estate plan every 4 to 5 years. However, for Solos Agers, we suggest a light annual review.
- Your Executor The first thing you should review is whether your executor is still alive. This is important for Solo Agers because they often have non-traditional executors. Solo Agers often hire a professional executor like me because they don’t have family members who they feel comfortable appointing. This professional executor is probably not someone they keep in touch with on a daily basis.
Is your executor still living nearby? Perhaps if the executor has moved far away, it’s not practical to have them named in your will any longer.
Are you still confident your executor will fulfill his or her duties to your liking? Perhaps the executor is someone who is developing close relationships with relatives that you are planning to disinherit. Maybe your executor is getting older and declining. Maybe your assets have become more technologically advanced, and your executor isn’t familiar with the types of accounts you have (bitcoin, for example).
- Who inherits Again, you want to make sure that the beneficiaries of your will and/or trust are still alive. It sounds depressing to have to think about such things, but a 5-to-10-minute review of your documents could prevent a headache for your executor when you pass.
Are your beneficiaries still worthy of inheriting your money? Sometimes family members slowly stop keeping in touch with their aging relatives. As a Solo Ager, you may want to evaluate whether those people are still worthy of receiving your estate. Does it still make you feel good that you’re leaving your money to them?
You may have set up a trust for a beneficiary, or you may have chosen to give them their share outright. It’s best to re-evaluate to see if that choice is still appropriate for that beneficiary. For example, you may have chosen an outright distribution to someone who has since started having drinking problems or gambling issues. Perhaps you’ve left money to someone who needs asset protection. Now, a trust or some other planning tool may be better. On the other side, you may have put a minor beneficiary’s share in a trust, and now he or she is an adult who can handle money.
Many Solo Agers prefer to leave some money to charities. Take time to review if your charity of choice still exists and if it is still worthy of inheriting your money. Perhaps the charity was very efficient in serving the original cause, but now a change of management style has resulted in less money going toward the charitable cause itself.
Does the charity still align with your values? Have your passions or interest changed? Maybe when you created your will, you were really into pets, and you left a large share to the ASPCA. Maybe now your passion is something else that you’d rather leave your money to.
- Your Guardian You may not have a guardian in your estate plan. But, are you satisfied with what happens if you lose capacity? If you don’t have a trust or other mechanism in place, are you happy with the idea of a court-appointed guardian? You may have listened to our prior podcast in which we reviewed the Netflix move, “I Care a Lot.” The movie is obviously a dramatization, but it shows how bad it can be when the system takes over someone who doesn’t really need a guardian.
It’s best to have a plan in place now before the court decides it’s a good idea to appoint a stranger as your guardian. If you are unfamiliar with court-appointed strangers, we suggest you check our podcast on the topic.
In conclusion, an annual light review of your documents can go a long way in making sure your plan is strong. To learn about estate planning tips for Solo Agers, please check out my book, “The Solo Ager Estate Plan,” available on Amazon.
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Did you know that heirs of Metropolitan Transit Authority (MTA) workers who died of COVID19 may receive a $500,000 death benefit?
When I first heard of this, I thought it was a scam. But, yes, this is real! We’ve helped families collect this benefit. Here’s how:
Who qualifies for the MTA COVID19 death benefit? Any MTA employee who died of COVID19 qualifies. The MTA has already paid out over $62,000,000, which means at least 140 employees have passed away from COVID 19.
How to apply for the MTA COVID19 death benefit? An heir can’t just apply as family member of the decedent (we’ve been hired by families that have tried). You must set up an estate and get a court-appointed executor or administrator. That court-appointed person is who must apply. An administrator is appointed for an estate without a will, and an executor is appointed for an estate with a will.
Be sure to choose wisely who you want to fill that role, because once that person is appointed, they need to know how to work with the MTA to get the claim pushed through.
It’s not easy like submitting a life insurance claim. This kind of death benefit claim is new. Anytime you are dealing with something new involving a bureaucracy, you need some force of will to get it done. From personal experience, getting the MTA death benefit can be a long, drawn-out process involving numerous emails and long hold times on the phone. But, with the right team pushing through, we have had successful outcomes for our clients.
When will the MTA COVID19 death benefit end? As of this writing, it is currently extended through December 21, 2021. It could last longer, but we don’t know yet.
If you lost a loved one who was an MTA employee, you should apply for this benefit as soon as you have opened the estate. Sooner is better than later. Why? Because the MTA seems to be tightening the qualifications, making it harder to qualify. For example, an unvaccinated employee is no longer eligible. The MTA is also taking a closer look at the cause of death (did the employee die directly from COVID 19, or something else?).
Be aware: getting a court-appointed executor or administrator currently takes a few months or longer. So, start now. If you call us today to open an estate, it could be early spring before the court appoints a representative for the estate. The courts are very backed up and short-staffed.
This was a very specific blog about a specific benefit, but it is important to know about it if you think you may qualify.
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One of our listeners recently asked what happens to your crypto on exchanges when you die. How will his spouse or kids get his crypto when he dies? Our listener has roughly $500,000 in Solana, Ethereum, Bitcoin, Shiba inu, and Doge, held on exchanges: Coinbase, Crypto.com, and EToro.
Inheriting from crypto exchanges is similar to banks Just like a bank or brokerage, you submit death certificate, letters form the court appointing the estate’s representative, claim forms, etc. Then the exchange will process the claim – sometimes slowly. Sometimes they won’t know what they are doing, and you’ll have to lead them by the nose. (This happens even with traditional banks and brokerages). Sometimes the customer service representative tells you that you need certain forms, and you spend a couple of weeks preparing the forms. Then after submitting the forms, another representative tells you to submit something different. This is all too common.
The result of this process is that your administrator or executor will have access to your crypto through the exchange account. However, it is still unclear whether an executor will collect the crypto in-kind (having the actual coins transferred to your executor) or if the crypto will be liquidated (cutting a check to the executor). My instinct is that it will be distributed in-kind. This matters, because receiving coins in-kind means the executor needs to know what to do with them.
Make sure your heirs know the crypto exists! This process only works if your heirs or executor knows where to look for your crypto and submit the claim. Most exchanges/apps are not sending out 1099s or statements. Your heirs and executor won’t have many clues to work off of. There won’t be a piece of mail from Coinbase that tells your heirs to look for your account there. They may be able to hunt through your email to find information, if they can get to it.
The solution is to either mention your crypto to your executor and heirs or leave a memo that your crypto exists (and where to look for it).
Don’t bother listing crypto in your will. Just like personal property, it changes too frequently. Your holdings in 2021 will be totally different in 2023. You don’t want the costly and time-consuming task of changing your will every time your accounts change. Your best bet is leaving a memo or letter.
Though we usually discuss more broad crypto topics like wallets, hardware and software, this question was specific to exchanges. Even though I’d still like to write a book on cryptocurrency for estate planning, I am a leery of writing something that could be obsolete by the time I finish it. But we shall see…
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So, you finally did it: you made and signed your will. Now, where do you store the original? We get this question a lot from Solo Agers, particularly those who have named me as executor in their wills.
Can you keep your will at home? It’s not a good idea, even if you have a fireproof box or filing cabinet. The big drawback (at least in New York) is the legal presumption of intentional revocation. Meaning, if you lose the original (in absence of evidence), the court will assume that you intentionally destroyed it.
If you store it with the court, lawyer, or executor, they do not have the right to revoke your will. If your executor loses your will, they can still potentially probate a copy of your will.
Storing your will in a safe deposit box is a bad idea. Getting into someone’s safe deposit box after death can be a pain. That pain is compounded if the will that authorizes your executor to access the safe deposit box is in the safe deposit box!
Does probate court keep original will? Yes, there is a mechanism called “filing a will for safekeeping” in the New York courts. You go to your local county surrogate’s court and pay a fee of $45.00. They will keep it in the court’s vault.
The benefit of filing a will with the court is that it’s a centralized process. One of the first things we do when we probate an estate is to check with the court to see if they have the will.
However, there are two major cons: 1) A publicly filed will is a semi-public record. This doesn’t mean that anyone can walk in and look at it. Rather, suppose you make a new will years after you filed your first will with the court. Maybe you forgot you ever filed the first will, and now your executor is probating your subsequent will, which names different beneficiaries. Your executor may need to notify the beneficiaries of the first will. This is probably not the case if you didn’t file your will with the court. 2) Another drawback is: which court do you file it with? What if you file it in Manhattan, but then you move to Long Island? Probate occurs where you die. If the will isn’t stored in that court, then the benefit of checking the court for the will doesn’t exist anymore.
Do lawyers keep original wills? Yes, some lawyers offer fireproof storage for wills, trusts, and other client documents. Most do not charge a fee for this. Not all lawyers offer to hold wills due to the risk involved. As mentioned above, if the lawyer loses your will, the executor should still be able to probate a copy.
Should I give my will to the executor? Generally, the answer is no. However, a professional executor lawyer is set up to safely store your will. Most amateur executors (family, friends) are not set up and have the same issues as you for where to store it.
To find out more on this topic, check out my book, “How to Hire an Executor,” available on Amazon.
When one of the heirs won’t leave the family home, what can you do? It’s a pretty common situation. For example, mom passes away leaving three adult children. One adult son was living with her when she passed away, and he doesn’t want to leave.
Why heir won’t leave The top reason is pretty straightforward: it’s like having free or reduced rent. Sometimes there’s the feeling of entitlement. As in, “I was the one taking care of mom during her last years, so what’s the big deal if I stay in the house?”
Then, there’s that litany of “dog ate my homework” type of excuses: I have an injury and can’t move right now; I don’t want to move my kids in the middle of the school year; I’m too busy to deal with a move, etc. We’re not saying these excuses are justifiable, we’re just saying that we’ve heard it all!
Can you evict an heir? The short answer is yes, but it is an uphill battle. Evictions generally tough. You deal with notice requirements, assumptions that tenants have rights, extensions, etc. It could take many months to years to evict a tenant in a normal situation. Add to that, the complication that the heir is partial owner. In our example where mom passed away with three surviving children, that adult son is still an heir to one-third of the estate, even if he leaves the home. So, now it’s psychologically more than just evicting a tenant, it’s evicting a one-third owner.
In addition to a frustrating situation, evicting your sibling is probably pretty awkward! (“Happy Thanksgiving, sister; pass the turkey. And oh, yeah - here’s your eviction notice”). A situation like this can devastate families. A professional tip to avoid the awkwardness is to use someone else as the “bad guy,” such as a realtor or professional executor. If the home is a condo or part of a homeowner’s association, maybe make a call to the manager to discuss the eviction. If this works, it can save a lot of money in legal fees. The quicker the eviction is taken care of, the less money wasted. It’s expensive to let someone reside in a home for “free.”
How to buy out heirs More often than you’d think, the resolution is to pay the heir to leave. It doesn’t feel great to pay someone who is supposed to leave anyway but take a look at the cost-benefit analysis. It might be cheaper than the headaches, legal fees, mortgage payments, etc. As much as you might not want to pay him, it’s probably the best solution. It could also make those Thanksgiving dinners less tense!
Paying an heir to leave doesn’t mean you have to start with the highest number. Maybe start by offering to pay for the moving costs. Then offer more, as needed, until he actually leaves.
This is where having a professional executor comes in handy – he or she can do the awkward work for you. If you are interested in learning more, check out my book on Amazon, “How to Hire an Executor.”
The Netflix movie, “I Care a Lot,” shows a nightmare scenario for Solo Agers. It is a dramatization of what could potentially happen to our Solo Ager friends.
Below we’ll separate 7 myths from reality in this movie. Spoiler alert! If you want to watch the movie first, then save this blog to read after you’ve seen the movie. We’ll be discussing mostly just the first 30 minutes of the movie (the set-up) but we will touch on parts later in the movie.
The sole job of the main character, Marla, is to act as a guardian for people who are incapacitated. Elderly Ms. Peterson is deemed to be incompetent, and Marla is appointed to take over her affairs. Marla represents what a bad guardian can look like. Ms. Peterson’s situation shows how brutal it can feel if you are a vulnerable Solo Ager.
- “Pain in the rear” patients get nudged into system In one scene, Marla talks to the doctor about how Ms. Peterson is a pain in the rear. Marla prefers for Ms. Peterson to get nudged into the system and out of her hands.
I would say that yes, this is real. It may not happen as maliciously or overtly as the movie, but doctors, nursing homes, social workers, and courts/guardians are human. We don’t like dealing with people who are a pain.
What happens when the doctor, social worker, etc., thinks a patient is a pain? They are more prone to medicate the problem or pass the patient onto the next facility or next guardian.
- Solo Agers targeted In the same scene, Marla is speaking with the doctor and assistant. They describe Ms. Peterson as a "cherry.” It’s clear from the context that a “cherry” is a wealthy Solo Ager who is vulnerable and has no family.
I’d say that this is real. Solo Agers aren’t necessarily targeted by bad guy movie characters, but by advertising, financial advisors, and prepaid funeral plans. There are a lot of eyes on wealthy Solo Agers. This kind of person is more likely targeted than someone with a family to help or less money to grab.
- “The System” = judge, doctors, homes Is there a gamut through which the Solo Ager gets pushed?
There’s a scene where Marla is in court, and the judge knows her. Even though Marla is doing bad things, they are a bit chummy, and the judge seems to trust her. Marla also has ongoing relationships with the nursing home directors, who want to fill their rooms while Marla is looking for places to put her Solo Agers. There are also scenes showing kickbacks where money is exchanged, and Marla gets paid in stocks.
Yes, this is real too. Again, it's not a dramatized as the movie, but it’s easy to imagine subtler versions. There is a system, and these professionals know each other. Once you’re a victim in the system, it’s hard to get out. You can get pushed from the court to the guardian to the nursing home to the social worker. Even Ms. Peterson’s dangerous and powerful son couldn’t get her out of the system.
- Court-appointed stranger In an early scene, Ms. Peterson’s morning tea is interrupted by a knock on the door. Marla is at the door telling her that she is Ms. Peterson’s court-appointed guardian. She tells Ms. Peterson to come with her or she will have to deal with the sheriffs.
It is possible to get stuck with a stranger as a court-appointed guardian. We had a case where our client expressed that she wanted her attorney or family member to be her guardian and the court ignored it.
- Hearing without the solo ager? Can all of this happen without a Solo Ager being able to stop it?
There were courtroom scenes where Ms. Peterson was not present to speak up for herself. It seems that Ms. Peterson had no idea what was going on until Marla knocked on her door.
This is a myth, at least in New York. I’m sure it could happen in some states or in an emergent circumstance. However, in New York, judges have gone to GREAT lengths to have the Solo Ager at the hearing, especially now that platforms such as Zoom can be used. They have the right to be heard, to testify, to make their wishes known. I’ve even been in situations asking the judge to end the testimony sooner because our person is in pain, etc. But the judges are adamant that the hearing is important.
- Taking her phone There is a scene where Marla takes away Ms. Peterson’s phone as she is ushered into the nursing facility. It was like Ms. Peterson was in a prison, because she was not allowed to have contact with the outside world.
This is a partial myth. In New York, nursing home patients are allowed to have their own phones. But if the phone breaks, runs out of battery, runs out of plan time, etc., is it SUPER hard to connect with a patient in a nursing home to replace or repair the phone. It’s not because the nursing home is trying to cut off communication; it’s just difficult to accomplish even small things when dealing with nursing homes.
- Raiding the safe deposit box As Marla takes control of Ms. Peterson’s life, she goes to the bank to raid the safe deposit box.
This is a myth. In New York, when an executor/guardian opens a safe deposit box, there is a procedure set up. The box opening has to be performed in front of two bank witnesses and all people present must sign the inventory of contents to submit to the court. In real life, there’s no way anyone can walk into a bank and get into a safe deposit box without abiding by the procedures.
Overall, it was a good movie. For professionals in our line of work, the first 30 minutes of the movie are probably the most frustrating. If you’ve seen the movie, please let us know your thoughts. If you are a Solo Ager watching it, don’t get stressed out that this is how life will be.
To learn about estate planning tips for Solo Agers, please check out my book, “The Solo Ager Estate Plan,” available on Amazon.
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Think it’s over? Even when most of probate is complete, the executor must hold a reserve.
Why keep a reserve? Think of it as a rainy-day fund: An amount of money that the executor holds on to in order to pay unexpected expenses. Even after more than a year, unexpected things pop up - even with experienced attorneys involved. It’s impossible to have full certainty of what the final bills are for the estate without waiting a bit. Creditors, taxes, and accompanying legal/accounting fees can be a big deal. If the executor has no money left in the account, it’s not a good scenario.
In Episode 239, we discussed this exact situation. Our client was an executor. He didn’t take our advice to wait for the full tax clearance. Since he didn’t wait and distributed the money to the heirs, they were shocked and horrified to later receive an unexpected tax bill for over $20,000. This put the executor in a tough situation where he either had to ask for money back from the heirs or pay it out of pocket.
We had another case where the hospital creditors sued the executor for an unpaid medical bill. In this case, the lawsuit was frivolous. The hospital didn’t formalize their claim, and they were barred by the statute of limitations from being paid. They sued anyway, and the executor had to hire an attorney to defend the estate in court.
There was also a case where, long after the estate had been closed, an alleged “son” emerged and sued the estate for his share. The executor had to go through litigation to find out whether this really was the decedent’s son. Obviously, he needed money to pay for legal defense.
If you ever run into these situations, and you have a reserve, you’ll be very thankful!
How much is kept in reserve? There is no set number, but it is a balancing act. The amount must be big enough for the executor to feel comfortable that he won’t run out of money in a bad situation.
But the amount should not be too big, as you want to get as much money as possible out of your hands and to the heirs. The executor is a conduit, not an investment advisor. As professional executors, we take a lot of things into account when determining the reserve amount. It’s an art and a science!
When to release the reserve? Usually, it takes about a year to close an estate, and we hold a couple thousand in reserve. About one to two years after the estate is closed, we usually feel comfortable releasing the reserve. That should be enough time for any unknowns to shake out. However, even with the best planning, something could come up ten years from now. That is why I have attorney’s insurance for these kinds of situations.
In general, the statute of limitations is between three and six years. If the estate took one and a half years to close and you hold the money another one and a half years, then you’ll have more certainty that it’s time to release the reserve to the heirs. Sometimes heirs don’t mind getting the reserve later, because that second payment feels like a bonus.
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Should executors send funds by check or wire? This could apply to expenses or payments to the heirs at the end. As a professional executor, I’ll explain why we almost never send wires, only checks.
Successful checks vs wires If everything goes well, wire transfers are faster (even faster than overnight checks). Wires are more convenient for the recipients since they don't have to go to a bank to deposit a check. Wires are more prevalent in Europe and most other countries; some don’t even know what checks are anymore. I haven't had anyone ask me to pay their inheritance by Venmo or PayPal yet, but I feel like that day is coming.
Again, wires are faster and more convenient IF everything goes right. So, let’s look at what happens when something goes wrong.
Lost checks vs wires If you have a lost or misplaced check, you stop payment. Then you wait and re-send the check. It’s not easy to do, especially for large sums like inheritance checks. But it can still be done.
Have you ever tried to reverse a wire? During a real estate closing, we had to wire funds from one closing to another. There was one wrong number in the wire, and it was gone! It took about four days for us to come back to the table to finish the settlement.
In other situations, it has taken months to reverse a wire. We’ve even had situations where the money has simply disappeared (neither the sending nor the receiving bank knows where it went).
We had a case involving heirs in Africa who demanded a wire transfer of the funds, since they did not have the infrastructure in place to receive a check. It was a six-figure amount, so we did a small test of a few thousand dollars to see if it went through. The funds ended up missing, even though it was through a very reputable source. To this day, that money is still gone. The heirs changed their tune about checks once the “test” transfer got lost.
Checks are also better for a paper trail. For estates, we need to account for every penny. That is usually easier with a paper check that can be signed and photocopied. There’s still a piece of paper involved in a wire transfer, but there’s not always proof that it hit the account. Sometimes the only confirmation you get is when the heirs say they received the money.
Even though the use of checks sounds archaic, there is too much downside to justify the convenience of a wire. When it comes to an estate, there are no gold stars awarded for speedy payments. The executor could be held personally liable for a missing wire.
As professional executors, we have the experience to know how to avoid these mistakes. To learn more on what a professional executor can do, check out my book, “How to Hire a Professional Executor”
Waiting for tax clearance is often the biggest delay in closing an estate. We’ll explain why tax clearance is so important and why it takes so long.
Why tax clearance is so important No one wants IRS problems under any circumstances. In estates, the IRS is a top priority creditor. They need to get paid before anyone else gets paid. It’s important to know the final figures for the IRS before distributing to the other creditors and heirs.
If the IRS is not paid properly, the IRS will come after the executor and heirs later. In order to be paid, they will come after whoever has the money, which can include the heirs who received an incorrect distribution. The executor can also be held personally liable.
Let’s say you are the executor, and you neglect to pay the taxes properly. You cut the checks to the heirs and six months later the IRS says you owe another $50,000. Imagine asking heirs to give back some money to pay taxes. Those heirs are not going to return your phone calls no matter the amount of money owed.
Must file final returns to get started Sometimes it is hard to get the decedent's final paperwork in order to make that final filing. It’s happened to us many times. We know there’s another W-2 or 1099 out there to finalize the return, but we don’t have them. If we’re missing documents, we have to request them from banks and other financial institutions. This process can take weeks, or even months, because these bureaucracies are not used to dealing with non-everyday situations like death. We often get shuffled around among different departments to get what we need.
Even worse, sometimes we have to request missing information from the IRS. This process can be brutally long. It takes a whole year just to get the tax clearance from the IRS. Imagine trying to request just one piece of paper. The IRS is overworked, and they don’t answer the phone. You end up filling out and submitting forms, then play the waiting game.
Sometimes filing the final tax return isn’t final. Even after filing the decedent’s 1040, from time to time you need ANOTHER filing (1041) to confirm that there are no capital gains on the sale of the decedent’s home.
Last bite at the apple This is the IRS’s last chance to get money out of the decedent. Once the tax return is filed, the IRS takes a LONG time to review it and give a final answer. They know that this is their last opportunity to collect from this taxpayer. They examine a decedent’s return way more thoroughly than a living person’s return.
The IRS reviews more than a W-2, a 1099, and a bank interest statement. Within the Statute of Limitations, the IRS looks at social security withholding, payroll tax, income tax, capital gains, and everything in between. This just adds to the already existing delay in processing.
It is frustrating for the heirs to wait so long for a distribution; however, they seem to prefer to wait rather than to sign a statement saying that they will bear the responsibility if the IRS comes after them. When dealing with the IRS, you rush to wait. There’s not much of a choice.
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About six months ago, the court chose a court-appointed stranger for “Ms. H.,” a lovely solo ager who has named me executor in her will. In this episode, we are going to check in and see what’s happened since then.
To refresh, Ms. H. is unmarried with no kids and is somewhat estranged from her nieces and nephews. Ms. H. named me as executor in her will many years ago. She recently rekindled a relationship with a niece, who has been attentive to her.
Ms. H. is in declining health and was placed involuntarily into a nursing home. She asked me and the niece to petition the court to be her guardians to get her out of the nursing home and into the comfort of her own home.
Six months ago, when we petitioned the court, the court ignored Ms. H.’s wishes and appointed a random attorney (court-appointed stranger), instead.
So, what’s happened since then?
Has the court-appointed stranger contacted anyone? Nope. Neither Ms. H., nor the niece, nor I have heard a peep since the court hearing. Up until the court hearing, the court-appointed stranger was very attentive in calling Ms. H. to make sure she understood the situation. Now, we’ve heard absolutely nothing.
In fact, Ms. H. and her niece didn’t even know the court had ruled against them and appointed a stranger. They were patiently waiting for the court to contact them. They had no idea the court-appointed stranger has been Ms. H.’s guardian for months. The only way they found out was because the niece randomly called me to ask a few questions about estate planning.
Has our Solo Ager moved home? No. She hasn’t even heard from her guardian, let alone begun the process of exiting the nursing home. There is no indication of any movement on this.
Sadly, ever since the court hearing, Ms. H. has been hopefully waiting for signs that she will be released. She had been asking daily if today is the day that she will go home.
Unfortunately, the niece had to break the news that not only is Ms. H. not going home, but that neither she nor I are her guardians. (And that the actual guardian has been silent for the past six months).
What can our Solo Ager do now? In her situation, sadly, there is not much Ms. H. can do. Perhaps in another six months, if there is no activity or contact from the guardian, it’s egregious enough to go back to court and ask for Mr. H.’s originally requested guardians. There’s no guarantee that the judge will agree, but after a year of no activity, it can’t hurt to try.
For now, Ms. H. is stuck with the court-appointed stranger. Unfortunately, a year in a nursing home probably feels like a very long time, and she just wants to go home.
So, how can others avoid this type of situation? For most folks, I don’t recommend a revocable trust, but, for Solo Agers, having a revocable trust makes sense. With a revocable trust, your chosen trustee can step in immediately, without having to rely on a judge to respect your wishes.
If Ms. H. had made a revocable trust, we’d have the power and authority to execute her wishes. We did recommend drafting a trust for her, but it never happened. We’re wishing Ms. H. the best of luck, and we hope we can give you a positive update on her case in the future.
We’ve talked about revocable trusts in a few prior episodes: Guardian vs Revocable Trust for Solo Agers and Getting Final Affairs in Order Before Death.
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If you have a non-US decedent, here are some documents that you’ll most likely need to get translated. Sometimes clients and also foreign attorneys approach us to explain to them what needs to be done.
Funeral bill The court wants to see the funeral bill and whether it was paid in full. They need to know who gets reimbursed for the cost. This is important because the funeral home is a top-priority creditor of the estate. From a public policy standpoint, we want to make sure the disposition of the body is handled properly. The funeral bill is so important that it gets paid before the IRS gets paid.
For these reasons, the court wants to make sure that the amount is correct, and the correct person is reimbursed. Therefore, proper translation of this document is critical.
Death certificate Translation of the death certificate is imperative, as well. Obviously, the death certificate is needed for proof of death and date of death. The date of death is also a trigger for important legal deadlines.
Also, the death certificate may include important information, such as residence address, marital status, and informant. The decedent’s address determines which court handles the probate proceedings and the marital status helps tell the story of the decedent.
Additionally, the informant information will give us a link to a family member. The death certificate is really the first document that we start to build the probate case on. It needs to be translated properly so that we can read and understand all of the information, including the dates.
Foreign probate court file The foreign probate court file is important to get translated. We need the entire court file, not just the foreign grant of probate letters. This file can be a lot of pages, sometimes hundreds.
Also note that the file is not just a bunch of photocopies from the court; they have to be exemplified. That is a special type of copy that is signed by the judge, then by the chief clerk, and then by someone else (triple stamped). It is expensive to have a file exemplified, and if it is voluminous, it will take a while for the court to prepare it.
Then, it will take a while for it to be translated. The court may also want the credentialed translator to sign an affidavit (you can’t just do it yourself on Google). This is a multi-step and costly process. Always check with the attorney first to be sure that an exemplified copy of the file is needed before you request one.
I recommend reading my book, “How Probate Works, “available on Amazon, so you can learn what may need to be translated if it comes from a foreign court.
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Sometimes, as professional executor, I must be a (reluctant) house flipper.
Why reluctant? It looks so fun and glamorous on TV shows! Renovating means time, money, and risk for the estate. That is not great for an executor. An executor’s job is to preserve value, pay creditors, and get whatever is left over into the hand of the heirs as soon as possible. I prefer to sell as quickly as possible, but sometimes we have no choice.
Low budget home renovation When an executor is the house-flipper, it is almost always low-budget. Any misspent/overspent dollar is money out of heirs’ pockets. I have to make decisions that don’t cost the heirs their inheritance. Knowing that, I do the bare MINIMUM amount of renovation necessary to sell the house. Am I going to get a presentable countertop or the granite one? Am I going to knock down walls to make an open floor plan? No!
Am I going to scrub the mold out of the bathroom? Of course; almost no one will buy a house like that. Will I exterminate for pests? Yes, we have to! I do what I need to do to get it sold. I don’t spend more to get top dollar; I spend the minimum amount to get a reasonable buyer.
Oversee home renovation As a professional executor, I must oversee the contractors, plumbers, movers, etc. I oversee who comes in and out of the home and make sure the workers are bonded and insured. That kind of project management can be challenging. Just imagine getting contractors inside to work on a co-op in the city. They have to come at scheduled times, and someone has to be there to let them in. And the heirs don’t have to deal with any of it when they hire a professional executor.
How to pay for home renovations As a professional executor/house-flipper, I have to figure out how to pay for these home renovations. Who pays for this? If the estate is liquid, I can take the funds from the estate account. What if the estate doesn’t have the funds? I might have to call the heirs to ask them to contribute some money toward the renovations. That is not a fun job to do; it makes you feel like a solicitor. This a job that the heirs get to avoid if they hire a professional executor.
If the estate doesn’t have money and we can’t raise funds from the family, I arrange financing. This is not the ideal option, but there are different kinds of loans out there to help. If there is something in the house that absolutely needs to be fixed, as a professional executor, I do what needs to be done to fix it.
To learn more on what a professional executor can do, check out my book, “How to Hire a Professional Executor”
Clients often call asking us why their probate case is taking so long. Probate usually takes a while, but lately, it has become an even longer process. We will discuss three current, real-world situations to help you understand what your case might be taking longer than you thought.
Is there a backlog for probate? As is the case for any bureaucracy (especially government), due to COVID/lockdowns, the courts have had limited staff and operations for over a year. This means the courts (which are generally not lightning fast anyway) are now playing one year’s worth of catch up. Probate court piles have been stacking up; it’s not as if people stopped dying.
On top of the daunting backlog, the courts are understaffed. Additionally, new clerks are hired who are not very experienced. Also keep in mind that many offices are working on a staggered in-person schedule. This leads to more delays and mistakes because there may not be enough experienced workers to provide solid training. The new clerks may have to wait much longer to get a simple answer from a supervisor who is working remotely. Meanwhile, the piles of files are stacking higher.
Can probate court change its mind? Imagine the court (clerk, staff member, etc.) reviews your file, and requires a laundry list of changes from you. This is normal and happens often. But many changes are very time consuming, such as getting papers signed, translated, ordered from other courts, etc.
Even if we think the changes are unnecessary, usually it’s just better to grin and bear and do as court instructs. Arguing about the changes won’t make it go faster, so you comply. Now imagine by the time we file the requested changes the court clerks have cycled out or changed. Now we have a new clerk who says, “who told you to do it that way? I need you to do these other five things.” This often happens with bigger corporations where you usually do not deal with the same person twice. Typically, you get to know the court clerks over the years. But lately, the turnover has been unusually high for whatever reason.
Do courts make mistakes? Yes, the court personnel are human and make mistakes, too. For example, probate court have SLOWLY adopted e-file system. Does e-file work smoothly? Not yet. We can file some things, but not everything.
We had a client who called us for a case status. He got really frustrated and called the court directly after we told him we are waiting on the court. He called to ask court status of case; court replied that nothing had ever filed. However, we were literally looking at the computer screen showing the date that the case was e-filed and accepted. The poor client didn’t know what was going on: was his lawyer or the court lying to him? Thankfully, we put out the fire since we had receipts to prove the e-file.
These are some reasons we’re seeing as to why probate is taking much longer than usual. Hang in there; it’s a waiting game. And we’re waiting along with you
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As a Solo Ager, choosing who inherits from you is something you should think about. Should it be the person who was there the most at the end? Or someone who had more of a life-long relationship with the decedent?
Which relative should inherit? You can be a Solo Ager and still have siblings, nieces, and nephews, etc. Should the person who inherits your estate be that lifelong “favorite” niece or nephew that you went to ball games with or sewed with?
Alternatively, there may have been a distant relative who was there for you at the end when things got tough. Perhaps it was someone who helped you with personal medical and hygiene needs. That kind of care creates an instant close relationship.
We deal with estates after someone has passed on, and we hear both sides of the story. There may be the niece who says she was close with her aunt for 40 years and then all of a sudden everything goes to Cousin Johnny. The other point of view is that Cousin Johnny, who never had a close relationship with the aunt, was the one who stepped up to care for her in the end. There is no right answer, but this is an example of both points of view.
Can a caregiver inherit? In a similar scenario, rather than talking about Cousin Johnny, a hired home-aide or nurse was caring for the decedent in the end. Often, the “hired help” do get something from the decedent’s estate. We’ve seen butlers, live-in maids, and live-in cooks either inherit or not inherit. The family often underestimates how close the decedent was with their cook or maid. On the other hand, sometimes the home-aide overestimates his or her place and expects a large inheritance that will never come.
A word of caution for home-aides and cousins helping at the end: The courts may look into whether a beneficiary exerted undue influence on the Solo Ager when making the will. For example, when someone is so reliant on another person for daily care, they have reason to fear that the care may be withheld if they don’t sign a will naming the home-aide as a beneficiary. If the court finds that this is the case, the will might be deemed invalid.
Leaving money to a church in your will In this context, we’ll use the word “church” to describe any religious or community organization. For many Solo Agers, the church provides a lot of comfort and community toward the end of life. When the Solo Ager lives far away from (or has outlived) their family, the church sort of becomes their family. The church may also be the one that you rely on to give you a proper burial and memorial service.
For these reasons, the church is often a main beneficiary. This may be confusing for relatives far away because they think they should get the money. But in reality, the church was the one meeting the needs of the Solo Ager at the end.
These scenarios should get you thinking about having a solid estate plan. For Solo Agers, it’s wise to get at least one version done now while you are unquestionably of sound mind. That way, there is a paper trail showing your minor changes along the way.
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We all know siblings who are constantly competing or comparing with each other. Let’s talk about how those rivalries cause problems during probate.
Which sibling inherits more? If there is any slight imbalance of inheritance amounts, there’s an issue of who was the favorite. Or maybe it’s an issue of who took care of mom or dad at the end of life. Maybe there is compensation or gratitude for whoever dedicated the time when things got difficult at the end. It might also be a reflection of who already received lifetime gifts or support. Maybe the parent helped with a down payment for one sibling's house or tuition for another sibling’s children.
There could be many reasons for each sibling inheriting different amounts, but the siblings will see it the way they want to see it, and this imbalance can create conflict.
Which sibling gets more control, communications during probate? It’s not just about competing for dollars or inheritance amounts. Even if everything is divided equally, there could still be disputes or harsh feelings about who gets to be the executor. In this case, it may be better to hire an independent executor. It could relieve some stress.
But, even if you have an independent executor, there could be disputes about who talks to the lawyer/executor more! We get this a lot: “I heard that my sister emailed you several times, and I want to know everything you told her.” Making the attorney the middleman slows things down and creates more billable time.
When siblings don’t talk When siblings don’t talk to each other, the attorney ends up having double communications - which increases costs. For example, I may have a phone call with the older sister to explain the file status. Then, I have the same phone call with the other two siblings separately. That’s three billed items that could have been just one.
In severe situations, siblings want to make sure the other siblings never get their contact information. We have to ensure that phone, email, and home addresses never get shared with the other! It’s a lot to keep track of.
For example, we’ve had to file probate petitions in such a way that the addresses of the heirs are hidden. In another recent example, we had to mail out 18 separate letters instead of one mass letter, so that no one has each other’s contact information. If that’s what the siblings want, we’ll do it. They just have to understand that there’s a cost involved.
To learn more about what probate entails, check out my book, “How Probate Works,” available on Amazon.
Let’s answer a crypto question from Haille: How does crypto transfer on death?
We’ve covered this topic in episodes 214, Transferring Bitcoin Upon Death, and E222, Beneficiary Designations for Cryptocurrency Exchanges, but we’re happy to answer Hallie’s specific questions here.
Is the will required to be probated if the beneficiary of the will has access to the Coinbase holder's account? Yes, to legally access that account, you must probate the Last Will and Testament of the decedent.
Individual Coinbase accounts do not have beneficiary designations. (Most major exchanges don’t; this is not specific to Coinbase). A formal beneficiary designation means that it is technically your account, but that is not the case here. You need to submit letters testamentary and death certificate to Coinbase, and they will grant access to you.
Could the beneficiary simply transfer those funds to themselves? Technically, yes, but it could lead to legal problems.
This is substantially similar to dealing with a traditional bank/brokerage account. Like a Chase or a Fidelity account, for example: just because you have the decedent’s username and password does not mean that you can legally access the account. You have to go through the process before you make transactions. It's tempting to think of these as different situations, because cryptocurrency might not feel like “real” money. But, once you compare it to a bank account, then it makes sense to go through the proper process to access the funds.
Why can’t I access deceased online accounts? As a general explanation, the probate process is meant to protect all possible heirs/creditors.
“I’m the heir named in the will, why can’t I just take the money?” Well, what if the will is invalid for some reason? Maybe it wasn’t signed correctly or signed by an incompetent person.
Even if the will is valid, there are situations where other people are entitled to the funds before you. There could be a “spousal election” where a disinherited spouse has a right to submit court paperwork and take a share before you.
Additionally, IRS or other creditors are entitled to receive funds before you. Suppose the decedent died with major debts. The beneficiary named in the will gets what is left after the debts are paid.
These are just a few examples. Even if these don’t apply to your situation, it doesn’t mean that you can skip probate! The probate process, albeit long and involved, is an important layer of protection.
Hopefully this answers Haillie’s questions. We love trying to wrap our heads around these cryptocurrency situations, so please feel free to keep sending questions!
If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your Bitcoin situation.
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Death, family, and money are always an emotional mix. And those emotions can lead to headaches and expensive problems during probate.
How to clean out house after death In general, the clean-out can be an emotional and cathartic process as people journey down memory lane. But in our case, the daughters are from out of state. They had limited time to just tag items for the executor to keep or trash, then leave.
Then, we hired a realtor who was willing to box and move the items to storage on behalf of the daughters. Unfortunately, making decisions in an emotional state caused very confusing, very long lists. As a result, the realtor accidentally took golf clubs to be appraised, rather than leaving them in the “keep” pile. The realtor thought these nice golf clubs were in the “trash” pile, so he decided to see what they were worth instead of throwing them away. He did this so the heirs wouldn’t lose money by throwing away something potentially valuable. He had good intentions with his actions.
Little did the realtor know, the golf clubs had strong sentimental value. The daughters went ballistic when they found out that the realtor handled the golf clubs. The daughters threatened to sue the realtor and call the police on him.
How this created probate issues The incident resulted in weeks of emails and phone calls between lawyers, daughters, and realtor to sort out and calm down the situation. Of course, this was all billable work.
The next consequence was that the realtor quit. This was unfortunate because the realtor was doing an excellent job in going above and beyond. Not only did we lose a great realtor, but it will be nearly IMPOSSIBLE to hire someone else to handle the packing and storage. Now there is a precedent that if someone makes the slightest error, the daughters might sue them or call the police.
Of course, this was not a small mistake to the daughters, but their reaction was not proportionate to the circumstances. Their response far outweighed the mistake. By the way, the golf clubs were immediately returned to the daughters with the appraised value.
Why an Independent Executor may help? An independent executor is emotionally unattached. As most of you may know, I am a professional executor. If there was a mistake made, I can dispassionately evaluate if someone made an honest mistake or acted out of line.
I take pride in being a professional executor, but I don’t take it personally. Mistakes won’t flare my emotions as if it were my father’s estate. Even if I think the realtor messed up, my response would be proportional. I wouldn’t have a ballistic reaction that scares other realtors away. There are consequences as to how you go about your business as an executor.
You may say, “Oh, I would never call the police on a realtor who made a mistake.” But most people are prone to some level of emotional response when grieving. Professional executors definitely care about your case and your family, but they do not have the emotional attachment. This emotional detachment allows a professional executor to make professional, independent, unbiased decisions.
You can read more about professional executors by checking out my book, “How to Hire a Professional Executor,” available on Amazon.
Sometimes the biggest problem in probate is the people, specifically when there are too many people involved.
When there are too many lawyers You may be wondering: “Why would anyone want too many lawyers involved?” Sometimes there are situations where everyone lawyers-up: the executor has his, the heirs each have their own, and so on.
We recently had a situation where two of the heirs had multiple lawyers. There was a language barrier because the heirs were not English speakers. They had lawyers from their own country and those lawyers had translators in the United States. That translator didn’t have any probate experience, so the family friend contacted us to explain what the probate lawyer is saying. Now, there are three layers of lawyers between the heirs and the actual work that is being done.
Sometimes heirs have multiple lawyers for other reasons. Sometimes a relative or family friend is a lawyer, but do not specialize in probate. They may act as a back-seat driver to the hired probate attorney.
None of these situations are great, because in most cases, everyone is billing. Just imagine: three lawyers multiplied by one email is now 3 billable increments. Or if you have four lawyers and the average billing is $400 an hour, that is now $1,600 an hour. Not to mention paralegals and legal assistant who are billing in addition to the attorneys. It adds up fast!
When there’s too many layers As mentioned above, there was an issue with three layers of lawyers between the heirs and the actual work that is being done. Why is that a problem? Remember the game “telephone” where you whisper something to the person next to you, and they whisper it to the person next to them and so on? By the end of the line, the final recipient has nothing close to the original message! It’s no different with professional lawyers in between.
It’s not just garbled messages or lack of communication skills, but their biases get inserted along the way. There are also delays while passing information along. If the message from the executor needs to pass through three lawyers before reaching the heir, it will take a while. What if each step takes up to twelve hours to review the information? It could be days before the message gets to the recipient, when it was a simple question that could have taken just a few minutes and one quick email.
When there’s to many emails Whether it’s because everyone has their own lawyer or there are multiple layers, important information gets lost in the barrage of emails.
If there are ten people included in an email chain, there may be times where everyone wants to chime in and respond to something that isn’t necessary. It’s not easy to scroll through ten emails and immediately pull out the important information. It takes time to go back and look through the previous emails.
Another issue with a large email chain is that no one knows who is doing what. It’s like taking your kids out with other families who have kids. Who’s watching the kids? It’s one of those situations where people might assume that everyone else is handling the situation.
Having “too many cooks in the kitchen” can lead to problems based on just communication issues alone. If you want to be armed with knowledge before tackling probate, check out my book, “How Probate Works,” available on Amazon.
In this episode, we bring you a real-world story of “Ms. H.,” who got a court-appointed stranger guardian instead of her family or her own attorney. This a cautionary tale for anyone who is dragging their feet on getting their planning done.
Why Ms. H. needs a guardian Ms. H. is a Solo Ager. (For those of you who are new here, a Solo Ager is someone who is getting on in years and is unmarried or has no available immediate family to fulfill traditional roles). Ms. H. prepared her Last Will and Testament ten years ago when she in great health and named me as her executor. Her only family are nieces and nephews, whom she disinherited because they were estranged.
A will is great for after you pass away, but you still should have a plan in place for when you decline and are unable to make your own decisions. As her health slowly deteriorated, I advised Ms. H. to make a trust or power of attorney, but unfortunately, she did not.
Sadly, Ms. H. got to the point where she was no longer able to care for herself and was hospitalized (during COVID lockdowns) for dehydration and malnourishment. She was not eating or drinking enough.
Now that she was in “the system,” she was bounced around among social workers, rehabs, and nursing homes. No one knew where she was until she finally got in touch with me and her estranged niece. I suppose in the end, family does matter no matter what transpired in the past. We then petitioned court to be her guardians (niece as guardian of person and me as guardian of property).
Who became Guardian her person? The guardian of person has legal authority to make healthcare decisions such as whether to stay in nursing home or try to arrange home care. In this case, moving back home was very important to Ms. H.
Ms. H. asked for her estranged (now reconciled) niece to serve. Unfortunately, the niece very politely declined this large task. She promised to stay in touch, but she did not want the responsibility of making major decisions and doing all the work. A nomination does not mean that someone must accept, so the judge appointed a stranger.
In this case, the stranger was an attorney chosen from a pool of attorneys who do this sort of thing for a living. The attorney had only spoken to Ms. H. once before. Would this attorney fight tooth and nail to get Ms. H. home with an aide, or would she take the easier route of leaving her in the nursing home? I know would want someone who is personally invested in my care.
Who became Guardian her property? The guardian of property has legal authority over her funds and makes investing and spending decisions.
Ten years ago, Ms. H. asked for me to handle her financial affairs upon her death. So, it makes sense that she asked the court to be the guardian of her property during the final phase of her life.
Again, the judge ignored Ms. H.’s request and handed financial reins to the court appointed stranger. I am not sure why this was the Court’s decision. Sadly, a court-appointed stranger now has full legal control over Ms. H.’s personal care (instead of family) and all her money (instead of her self-selected attorney). This stranger guardian will have to do her best, based on the information she has about Ms. H., even though she did not know Ms. H. or her wishes prior to being appointed.
This is a cautionary tale that if you fail to plan properly, you will be at the mercy of the court should you ever need a guardian for health and finances. I wish we could have gotten Ms. H. the team she wanted during her final phase of life.
I hope Ms. H.’s situation helps motivate someone else to get their estate plan in order. If you want to know how to avoid a scenario like Ms. H.’s, click the link below for a free copy of my book, “The Solo Ager Estate Plan.”
Free copy of "The Solo Ager Estate Plan" Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Unlike real estate, most people (including heirs and executors) have never owned a business, let alone sold one. So, when it comes up in an estate probate, understandably, folks are lost. We have a recent estate example, which included a retail business.
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How to secure the business location Vacant storefronts can attract crime, vandals, and the homeless. Just like when you go out of town, make sure the lights are on a timer and use motion sensors. Make sure that the alarm/security system is working and paid-up. Also, keep mail and newspapers from piling up.
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How to get the business financials We need these to figure out what the business is worth. Plus, any buyer will want to see the financials before they become serious about purchasing. So, you ask the CPA or piece together from prior tax returns. Many folks take a do-it-yourself (DIY) approach to business these days, so check the decedent’s computer to see if they used QuickBooks or a similar accounting program.
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How to get a business appraisal Why do we need this in addition to financials? Well, not everyone will interpret the financials the same way, so getting a qualified appraiser will allow everyone to be on the same page. Also, comparables are not so easy to find for businesses like they are for houses. Businesses are different from each other and are typically hard to compare. Lastly, a business appraiser is a 3rd party, with an independent opinion. This is beneficial for buyers and the heirs. You want to make sure the heirs don’t question you for selling too low. Therefore, having an appraiser gives them an answer for the sale price ballpark.
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Take stock of the business assets Figure out what you have and what you need to keep. I’m not necessarily referring to inventory, although that’s important, too. If it is a liquor store, you don't want to see the inventory consumed away by someone! I’m referring more to key assets, like employees. If you want to sell the business with a manager in place, you’d better keep the manager happy. He’s actually part of the value of the business.
If the decedent didn’t own the real estate, you need to understand the lease agreement (terms, time left, relationship with the landlord, etc.). These are what you parcel together to sell the business. If it’s in a great location, but there is only one year left on the lease, that might not be very appealing to the buyer. If it’s in a great location with eight years left on the lease, that’s helpful to know.
- How to choose a business broker Why do you need a business broker? As mentioned above, it’s hard to figure out comparables. If you don't have the savvy or the experience, it’s hard to know how to compare this stand-alone liquor store to a wine store in a strip mall. People may try to sell a house on their own, but there are fewer DIY and “for sale by owner” options for businesses. It would be hard to sell without a broker. It’s not just about finding a buyer; brokers help with the grind and paperwork of closing.
How do you find a business broker? Many realtors do both. I’m not a big fan of realtor-brokers, but sometimes this may be your best bet in small cities. In larger cities, there may be more brokers available who are solely business brokers. With most professionals, it’s usually better to use someone who specializes, instead of a jack of all trades.
If the business has a CPA, check with them. CPAs are often good resources for attorneys and brokers.
If you have no luck with the methods above, look for similar businesses that have sold, and find out who they used. This may take more legwork, but the information is usually out there online.
Setting up your estate plan is the key to successful estate administration involving a business. For more information on unexpected twists and turns and why probate can take so long, check out my book, “How Probate Works,” available on Amazon.
Casa is really becoming a leader in Bitcoin estate planning and custody solutions. They recently launched their version of beneficiary designations for cryptocurrency, and I’m really hopeful about this. I think this is something that needs to be in place, because there is always the risk of catastrophic loss. So, let’s take a look.
How Casa Beneficiary works You start by naming a beneficiary on your cryptocurrency, and he or she gets 2 keys in 3 of 5 multisig.
Casa uses 3 of 5 multisig as their custody solution for preventing the risk of catastrophic loss and preventing theft.
What is multisig? 3 of 5 means there are 5 keys to your cryptocurrency, and at any time, you need 3 of those 5 keys to take action (such as buying/selling).
In this scenario: you have 3 keys, your attorney or Casa has 1, and your beneficiary has 2.
No one has access while you’re alive. When you die, your beneficiary shows proof of death to Casa (or your attorney) and your beneficiary combines her 2 keys with that key. With 3 keys, the cryptocurrency can move to the beneficiary.
Think about it like you’re dealing with a bank or brokerage company. The beneficiary goes to the bank with a claim form and a death certificate. Similarly, the beneficiary goes to Casa with a claim form and death certificate to prove the person died.
Pros (1) It avoids probate (for better or worse). “Better” meaning that the surrogate’s court won't have to deal with cryptocurrency. “Worse” meaning that you’d be avoiding checks and balances (such as the ability for a child to contest if disinherited wrongly, or someone taking advantage of you by making himself your beneficiary). While probate is a pain, it is there for a reason: to make sure people get what they’re supposed to get.
(2) Casa’s multisig solution, in general, is an excellent reduction of risk of theft and catastrophic loss. I still think there needs to be a better version of it, but it does do what it’s supposed to do. They will probably work out all the kinks, and this is just one step in the evolutionary process.
(3) Casa will consult with and “handhold” the beneficiary (such as key custody, how to get access). Will your beneficiary even know what to do with the 2 keys from Casa?
Cons (1) The beneficiary still must maintain 2 keys, and the beneficiary may not even know what they are. It’s unusual for a family to have two people who know how to deal with cryptocurrency. Casa tries to mitigate this by consulting with the beneficiary to make sure she knows what to do. I’m not sure how this will work, as my experience shows that handholding usually just isn’t enough in a sticky situation.
(2) It’s a bit expensive. To be eligible for this service, you must have a Casa Diamond account, which is $5,000 a year. The cost of an estate planning attorney is about $2,000 to $10,000 every four or five years. If you have a lot of cryptocurrency, it may be worth it since other benefits are included in the account.
(3) Beneficiary designations are not always ideal, as you may recall from a recent blog on illiquid estates.
It will be interesting to see how Casa’s multisig solution evolves. Owning cryptocurrency means you will need an estate plan. Every time I sit down to think about writing a bitcoin estate planning book, something new happens! However, if we get a lot of positive feedback, I will consider writing a short guide that includes high-level principals that don’t seem to change. Would you be interested? Let us know in the comments.
If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your Bitcoin situation.
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Sometimes the estate doesn’t have cash on hand and only has illiquid assets like the home, a business, or artwork. But settling the estate has many ongoing bills and expenses, from court fees to movers to accountants. We’ll discuss 3 ways to deal with cash-poor, illiquid estates.
Can the heirs pay? Sure - If the heirs have the funds, they can “lend” money to the estate to keep things moving. For example, the estate will be worth $200,000 once we liquidate everything, but we have no cash until we sell everything, such as a house. We usually need a couple thousand dollars to hire an appraiser and clean it out prior to the sale. It’s not a good situation.
First of all, not all heirs have the funds or ability to pay. Oftentimes, we’re not looking at hundreds of dollars, but thousands. Even if there is an heir who is well-off, it may create an imbalance. The heir who loaned to the estate feels entitled to run the show and receive information before the other heirs. When the family is upset and grieving, having a wealthy heir loan money to the estate could cause more family problems.
Especially in this situation, the executor must keep excellent records to make sure the repayment in terms of final inheritance adds up properly.
Can you get a loan against your inheritance? This means borrowing from an “inheritance funding” company. These are basically like payday loans for heirs, but for estates. This is VERY expensive.
How does it work? I’m not endorsing this, but I want you to understand it. Here is the example:
You have an inheritance of $10,000 that you should be receiving, but you don’t want to wait. You then pledge up to $10,000 of your inheritance to the lender. In exchange for signing loan documents, the lender gives you $5,000 cash now (half). Depending on how long it takes for the estate to close and repay, the lender will keep up to $10,000 of your inheritance. If the estate takes too long to settle, the lender may keep all $10,000. Or maybe the estate settles quickly, and the lender gives you $2,000. So, essentially you paid $3,000 to borrow $7,000. Estates can take a long time, so most likely you’d walk away with just your 50%. It might be better just to wait to get your money from the closing of the estate instead.
Heirs need to sign a bunch of paperwork, and the lender will have lots of questions for the beneficiary and executor to make sure it’s likely the lender will be repaid.
I wouldn’t call this a good option, but it is an option. I think it’s not used as much as we think it would be, because people simply don’t know about.
Can I delay paying estate bills? Yes, you can try to juggle and pay only the immediate bills, and delay or defer the rest until there’s cash available.
An example of this would be negotiating to pay upon the sale of the home or business. For instance, an appraiser may want $500 up front to do the appraisal, but maybe you can offer to pay them $1,000 (but not until the closing of the sale).
This option requires savvy and experience to determine who will bend vs. what bills are important and must be paid now. Negotiating doesn’t necessarily mean that letters will stop coming from the debt collectors and such. You will likely continue to receive monthly notices until they are paid.
In conclusion, none of these options are great, but it’s what you do if you’re stuck in that situation. To dig into this topic a little more, please check out my book, “How Probate Works,” available on Amazon.
The following are three recent questions from our Solo Ager listeners. Thanks for your questions!
Is a bank as an executor better? This question comes from a Solo Ager who listened to our previous podcast episode 221, where we discussed whether executors are contractually bound to serve.
Our listener asks, “since professional executors are not contractually bound, aren’t banks better?” The short answer is: No. Banks aren’t contractually bound, either. Individuals and banks are on the same level regarding that issue.
This leads us to the next question: why wouldn’t a bank take an estate? To answer this question, you have to think far ahead 10, 15, or even 20 years.
What we have seen happen is that the bank shuts down their estate’s division. Or perhaps between the time they agreed to be your executor and the time that you pass away, the bank increases their estate minimums, so now your estate doesn’t qualify. For example, your estate may have been two million dollars when you appointed the bank, and that amount met the bank’s minimum requirements. But, since then, they bumped up their minimum to five million, which makes your estate ineligible.
Even if you meet the qualifications and the bank still has an estate department, the bank’s review committee may reject your estate. Maybe they see the estate as too risky, due to family feuds and potential litigation. Or maybe the estate has too many illiquid assets (house, art, collectibles, etc.). Banks want to be in this business to control your portfolio, and it is a lot of work to liquidate those kinds of assets.
Should a professional executor review my will before I sign? I am often asked to be the professional executor for my clients, but I am rarely the attorney who drafts the will. This may be due to the client living in another state, they have an attorney they’re comfortable with, or that we’re not currently drafting wills.
The short answer is: No, it’s not required any more than it’s required for a spouse or best friend to review it.
However, if you name a professional executor (such as a bank or attorney), we can be a good second set of eyes to review your Last Will to make sure it’s what you want. It’s like getting a free second opinion.
But if you’re working with a good attorney, it’s not necessary to have a professional executor review the will. You also don't want your drafting attorney to feel like he is being second-guessed.
It could also be confusing having a lot of different people with different opinions looking at the will. You don't want too many cooks in that kitchen.
Does naming beneficiaries on my accounts help my professional executor? No, it probably makes things harder! Why? Naming beneficiaries to your account creates liquidity problems. It’s as if you are treating your bank or brokerage account like a life insurance policy: “In case of my death, this account will automatically go to my niece.” You might think this is great because it minimizes probate, but there are complications. Here’s the problem: if you name beneficiaries on too many (or all) of your accounts, you put your executor in a liquidity crunch. Because those beneficiary accounts go directly to the beneficiary, the executor won’t have operating cash to move the estate forward. The executor may not have enough funds to pay bills, taxes, etc.
An example of this is one of our estates with two houses, a business, a car, and a bunch of accounts. The accounts and car had beneficiaries on them. So, now I am the executor of two houses and a business, and I have no cash. My job is to settle the estate, but I have no money to clean out the houses, secure the business property, or pay to evict the tenant that won’t leave. There are solutions, but they are not ideal. I’ll probably have to sell the business or house at a severe discount, because who is going to want to buy a house full of junk because I can’t pay to have it cleaned? Who is going to buy a business where I haven’t been able to secure it or get the financials done? No cash means selling the property “as-is,” which means fewer buyers.
When I am named as executor, I make sure there are more than sufficient accounts in probate to cover the estate bills, or else I usually will decline to serve, as it puts me in a tough position.
These are great, relevant questions, so please keep them coming!
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You probably don’t want to burden your kids or family with your debt when you die. Here, we’ll cover the ins and outs of debt and death, including an overview of what happens to your debt when you die and how to handle an estate with debt.
We’ll also cover when heirs do not inherit debt (with some exceptions), and why debt collectors keep calling heirs. Lastly, I’ll explain how your heirs can turn the table and actually increase their inheritance.
When Heirs do NOT Inherit Debt Generally, debt dies with borrower, and the estate will pay, if it can. When someone dies, their assets and debts all get thrown into an entity called the “Estate.”
If the Estate is positive, then the heirs will inherit the assets. For example: Your aunt died with a $100,000 house having a $30,000 mortgage, no cash, and another $30,000 in credit card debt. The executor will need to sell the house and pay off the bills, but now the heirs will inherit the $40,000 remainder.
If the Estate is negative, then the heirs get nothing. However, the heirs DO NOT owe the difference. The creditors have to eat the loss, and usually cannot come after the heirs. For example, your Grandpa rented his home and pretty much spent what he had. He then died with $5,000 in his checking account, but also with $25,000 in credit card debt and medical bills. Now, Grandpa’s estate is $20,000 negative. Do his heirs have to reach into their pockets and settle the $20,000 difference? No. Credit card companies and hospital must eat that $20,000 loss.
There are some exceptions, however:
- Co-signers and co-borrowers on mortgage will be held responsible because they were equally responsible when they took out the loan.
- Another example is when parents guaranteeing private student loans (you can avoid this with federal loans which don’t require co-signers).
- Some hospitals will nudge a spouse or family to co-sign medical bills (check with your attorney before signing). This happens when your loved one is in the hospital and you want to make sure he gets the best possible care. You’re not thinking about the dollar amounts in that emotional state when the hospital administrator puts a pile of papers in front of you to sign in order to continue his care. Your first thought probably isn’t to call your lawyer, but you may be co-signing something that you don’t really have to sign.
- Joint credit cards (between husband and wife or business partners) are another exception. Some people make themselves joint signers for convenience (allowance cards for adult kids, or retired parents). Both parties might be liable for that line of credit, which might not be your intention. FYI: This doesn’t apply to authorized users, such as employees. So, you may want to make your child an authorized user rather than a co-signer.
- Some states (California and Texas) have community property, meaning that spouses share everything even if the asset not co-signed or joint.
Given these pretty clear rules, you may be wondering why debt collectors keep calling heirs? Debt collectors can be pretty aggressive and cold in calling the surviving family. They do it because often, it works! They can guilt or trick heirs into paying debts that the heirs never had a legal obligation to pay. It’s horrible that debt collectors take advantage of grieving, disoriented families. It’s gotten so bad that the Federal Trade Commission has made rules that debt collectors can’t mislead family members into thinking they have to pay. As with all rules, there will always be loopholes.
So, how do you turn the tables on these debt collector bad guys? Don’t just avoid getting scammed. If you negotiate HARD enough with estate creditors, you can significantly reduce the amount you pay on the bills. As a professional executor, I’ve settled debts for as low as 33 cents on the dollar. By negotiating hard, there were tens of thousands more left for the heirs. I increased their inheritance by knowing the law and flipping the script and getting aggressive with the creditors.
Knowledge is key! Most people don’t have the information they need for successful estate administration. If you want to learn more about probate, check out my book "How Probate Works" on Amazon
When someone passes away and you are in charge, one of the top priorities is securing the house. In order to do this, you need to start with the following five steps.
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Take care of the lights, mail, etc. to keep criminals from thinking the house is vacant. Use automatic lights and don’t let mail or newspapers pile up on the porch. Just think about things you might do when going on a long vacation.
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Change the locks...maybe. In most cases, you want to change the locks in case someone else out there has an extra key. However, if there are tenants, you cannot change the lock without a court order in New York. If you do, you could be charged with a crime. If there is a possible tenant (even your sister or cousin), don’t change the locks.
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Winterize the home. This can mean different things in different parts of the country. Take into consideration things like pipes freezing or bursting or snow piling up on a roof. Make sure you don’t incur any additional damage based on the weather. Probate can take a long time, so start thinking about winterizing in the beginning.
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Set a routine to check in on the home or ask a neighbor to check in. If you live close, you could drive by often. If not, you can ask someone to routinely check on it for you. You want to make sure that the home is in good shape and there is no criminal activity.
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If you live in New York – tell the doorman. There could have been a dog sitter or cleaning person who has ongoing access to the apartment. The best person to stop that (a gatekeeper) is the doorman. Let him know that your loved one has passed away and there is to be no more plant watering, dog walking, or house cleaning until someone is appointed to do that.
To learn more, read my book "How Probate Works."
America’s favorite billionaire Warren Buffet has said “All things considered, the third best investment I ever made was the purchase of my home…” We’ll compare homeownership to investing, and we need baseline assumptions to understand the comparisons.
Over a lifetime, your mortgage payments, taxes/maintenance (including amortized capital costs) will equal roughly similar housing for free-market rent. If I buy a house right now, the mortgage, taxes, and fees added up might be about the same or less than I’d pay for rent in the same area. Homes in the same area may be rented out for more than the average mortgage payment, but sometimes it’s cheaper to rent.
Housing cost nets out. Some believe that when you buy a home, you’re not only investing, but you are also getting “free housing.” This is not the case. What we’re really comparing is the down payment plus any large mortgage reduction payments vs. same amounts invested in the stock market.
Here are the four reasons that homeownership is better than investing:
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Homeownership is More Familiar You can touch and feel your investment. You live, eat, sleep, play, and possibly even work on this tangible investment! Compare this to stock investments, where you see a squiggly line on the screen with a green or red arrow. Even if the market crashes and the value of your house plummets, you still feel safe knowing you have somewhere to live.
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Leverage There is nothing else in the world like the benefits and infrastructure of mortgages. Average folks can get huge loans with standardized application processes and brokers/bankers to help you. In Korea there are no mortgages! There, you have to buy your home in cash. Oftentimes, Korean parents have to help their adult children buy homes. If you have other examples of how easy or hard it is to buy a home in other countries, please let us know.
Warren Buffet said that the 30-year fixed mortgage is “the best instrument in the world.” Not only is it easy to borrow a home loan, but there are also huge tax benefits such as deducting the interest that you paid. Not many loans let you do that. There also used to be more deductions available for SALT (state and local property tax), which we discuss in other episodes. To put this in perspective: if you have $50,000, you have possibly $600,000 to $1,000,000 in purchasing power. You can’t get this kind of multiplier in buying power with stocks.
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Tax benefits Owning a home means a deduction for mortgage interest and no capital gains on the first $250,000 (or $500,000 if you are married). For many people, the mortgage interest deduction makes the difference between paying a large amount of taxes vs. a reasonable amount. As mentioned above, the downside is that SALT deduction benefits have been limited.
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Forced savings Mortgage payments are a form of forced savings. If you are not disciplined to save, a mortgage is the way to go. Every month that you make a payment, you are also paying down debt on a huge amount of equity. With investing, you have to have discipline to save (not spend) and not to tinker, buy/sell (let the index compound and do its work!). The more a task requires willpower, the less likely you are to succeed. Having a forced system like mortgage payments can be beneficial. The temptation is not there to do something else with your mortgage payment money; you are required to pay your mortgage! The looming threat of homelessness is quite a motivator!
Learn more in my book "How to Buy Your Perfect First Home."
It is helpful to know what happens to your probate vs. non-probate assets when thinking about your estate plan or your future inheritance. Do you really know how assets transfer upon your death? You may think there is a shortcut to use in your estate planning but read below to see what really happens.
First, there are in-court and out-of-court assets. In-court means that there is a type of asset that has to go through the probate court. Probate court is an extremely specific court that every county in the country has. Their job is to make sure that assets transfer properly. They make sure that the Will is correct and real, and that the proper heirs are notified. If someone dies with a Will, it’s called the probate process. If there is no Will, it is called the intestate process. By default, anything in your name or your name alone will go through probate.
What are the advantages of probate assets? In general, the pros are related to a legal finality.
- By going through the probate process there are safeguards in place. The court has procedures in place to protect people who may not be able to protect themselves. For example, if you are survived by minors (children) who don’t have the maturity to look out for their own interests, the court can appoint a temporary guardian. If you are survived by an heir with special needs, there is a procedure in place to make sure their best interests are protected.
- Probate has processes to make sure final creditors and taxes are paid. If you close the estate properly, there won’t be lingering taxes. If you follow the probate procedure, you won’t be sued later by someone who comes after the estate. There is a 7-month statute of limitations against creditors once probate has taken place. If an executor is appointed on January 1st, any creditor (including the IRS) has 7 months from January 1st to submit their bill or claim. If they don’t do it during that time, they are out of luck.
- Probate is all in a centralized place. If someone lived and died in Manhattan, and the next living heir lives far away, he might not know where the decedent stored his/her Will. However, if he knows that the person died in Manhattan, he can contact that courthouse to see if someone set up an estate.
What are the drawbacks of probate? The cons are generally related to dealing with a government entity.
- Probate process is slow. It can take from 9 months to a few years, and in some cases, even longer. It is long because there is a 7-month waiting period for creditors. There is a lot of paperwork to circulate among the heirs, executor, and court. Oftentimes these forms still need to be mailed, and sometimes these documents even have to be notarized. If multiple heirs have to get papers notarized, it can cause a lot of delay and friction. The process of using paper and wet signatures is unfortunately antiquated.
- Another drawback are costs. You’ll need to pay court fees, attorney fees, accounting fees, Executor commissions, etc. All these things added up can be tens of thousands of dollars.
- Probate is public. If you are a celebrity or a very private person, maybe having your private affairs accessible by the public is not desirable. For example, if you are in New Jersey, you can pull up James Gandolfini’s Will because his estate went through probate. This is also true for Prince and Frank Sinatra. If public access bothers you, then you may want to consider a non-probate method when planning your estate.
Examples of Non-Probate Assets Probate means you have to go through court. The other option is having non-probate assets. These assets are anything with a named beneficiary or a named/joint owner. One example is life insurance. A life insurance company, for example, might require the beneficiary to turn in a claim form and death certificate in order to receive the money. This is a good thing to set up so there is some cash available while doing the rest of the probate.
Other examples of non-probate accounts are IRAs, retirement accounts, 401(k)s. There are tax benefits for naming your spouse or children as beneficiaries on IRAs and 401(k)s (talk to your tax advisor!).
If you are joint owners of real estate, the survivor automatically owns the whole thing. For example, a husband and wife own a condo in Manhattan. Husband dies, and the wife immediately owns 100% of the condo.
Even bank accounts can be set up as non-probatable assets. You can add a joint owner or use another method such as ITF (in trust for, TOD (transfer on death), POD (paid on death), Totten trust, and many other options.
Trusts are also non-probate assets. These can be revocable, living trusts, or grantor trusts. They act as a wrapper that you put around your assets so that they are no longer owned by you. Rather, they are owned by a trust with its own instructions with what happens when you pass away. These are used to avoid probate court.
You Can Change Your Assets from Probate to Non-Probate Anytime Let's’ say that I bought a house before I got married, and it is my name alone. Then I can update the deed to add my wife after we married. I can add my wife easily to a bank account, etc.
Beware: Non-Probate Assets Override Wills This is extremely important to understand. Let’s say my wife and I have our first child and I go through all of our accounts and name the baby as the secondary beneficiary. Then we have more kids and I forget about the beneficiary designations. Now that I have a big family, I decide to have a Will drafted to leave everything to my wife. If she dies, then I leave everything to my kids. However, the Will only controls anything that comes through probate. So, those beneficiary designations naming my first child will not go through my estate. Then my other kids get nothing from those accounts, even though I named them in the Will. This happens all the time – people forget!
Making Everything Non-Probate is NOT Estate Planning You might think that making everything non-probate will save time and money. Don’t do that. Here’s why: people forget! Your monthly bank statements do not list your beneficiaries; there are no reminders for updating! Unless you are one of the few conscientious people who remember to update all account beneficiaries, there will be something that doesn’t match your intentions when you die.
For example, Kurt was in love with Jasmine. They weren’t married, but Kurt added Jasmine as beneficiary to his savings account. Unfortunately, Kurt and Jasmine separated. Decades later, Kurt got married and had a daughter. He had a very long, fulfilling life and all the while he maintained that bank account. When he passed, his daughter was going through the estate assets and had to find out why someone named Jasmine was getting all that money!
Hopefully, my examples have been helpful to you in your estate planning or in administering a loved one’s estate. Please check out my book, “How Probate Works,” which covers this and a lot of other topics.
We’ve previously talked about the “F.I.R.E.” movement (Financial Independence and Retire Early). Most people assume that early retirement is a universally good thing. But what are some of the unexpected drawbacks of leaving the workforce early?
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Not as Happy as You Expected Generally, retirement makes you happy, but the increase in happiness was already priced in. It’s not like an instant happiness from winning the lottery. Retiring early is a process that you’ve been building up. Perhaps it’s better to say that the process toward early retirement may cause a gradual increase in happiness. People have said that the initial happiness of retiring early tends to fade in three to six months. As humans, we adapt to our circumstances quickly. Your way of living eventually becomes your normal.
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Identity Crisis Many people don’t realize how much of their identity is connected to their job and only after you leave your job do you truly realize how wound up you were in your profession. This identity crisis may last as little as three months or even up to a few years.
When people ask what you do for a living and you tell them you don't do anything, it could pull at your sense of self-worth. It’s hard to tell people that you are not working when you used to do something. You may feel like you now have a void that needs to be filled.
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Loss of Power/Influence This affects more of corporate America. When you work for a company, regardless of your actual salary, you may have a fancy executive title. You make decisions that have potentially million-dollar impacts. You have people reporting to you, depending on you, and seeking your permission. It is extremely hard to shift from having all of that power and influence to having none of it. Going from a job like that to fishing every day may sound heavenly, but people report that it is hard to deal with the loss of that sense of importance. When people prepare for retirement, they often think of the financial aspect, but It is important to plan for how it will impact you mentally and emotionally, too.
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Need for New Motivation Most of us have been working for money since we started working. Once you achieve financial independence, what now? You don’t want to be idle, but you’re not striving for the highest paying position. Losing your main source of motivation can be disorienting, but it is something you have to learn to deal with.
When someone retires, their motivation isn’t for money anymore. They need to find happiness and fulfillment in other ways. The most public example of this is Bill Gates. He made his money in Microsoft, but he’s not working on Windows anymore. He’s trying to cure malaria and solve nuclear power. Not everyone will retire and become a philanthropist, but retirement opens the opportunity to do something you love. Maybe you had a demanding work schedule that kept you from volunteering. In retirement, you now have the time to pursue those desires.
- Living within a budget This does not apply to everyone, but many retirees have to watch what they spend. Maybe you start declining dinner invites, forgoing expensive travel, downsizing belongings, or sell your home. For many, living on a budget is an easy decision when deciding if they would rather be back in the rat race, or forgo some things and truly be retired.
I’ve read essays from folks who have been through this. I think the F.I.R.E movement is not just about retiring early but making sure you’re set up to have resources. Retirement means changing your budget for the stage you’re in. For some, it will be a tougher adjustment than for others.
You can learn more in my book, “How to Invest for Retirement”
What happens if the executor dies during probate? It depends on how far along you are in the probate process.
Probate Court Process Just Started If no one has been officially appointed yet, you either restart the court process or amend your original papers. For example, Matt’s dad died and his mom hired a lawyer to start probate to appoint her as executor. But before it was finalized, she passed away. The court allowed Matt to amend his mom’s papers to name him as executor instead. This saved Matt a couple of weeks in the process, rather than starting over from scratch. What Does Administrator DBN Mean? If the executor has already been appointed, then you must ask the court to appoint a new executor. Unfortunately, getting the administrator de bonis non (dbn) swapped in is about as time consuming and complex as getting original letters. The Latin term de bonis non administratis means, “goods not yet administered.” Once appointed, the administrator dbn is substantially the same as any other executor. When Estate Is Almost Complete If the executor has already gathered the assets, completed tax returns, and only accounting is left, the court may allow the executor’s executor to close the estate. Let’s say that Matt’s mom did almost all of the work and right before her husband’s estate was done, she passed away. Matt is his mom’s executor. As his mom’s executor, he can come in and finish up the accounting as the executor of the executor. This is a niche situation that the court allows when there is almost nothing left to do for the estate. But most of the time, the court will demand that an administrator be appointed. Request your free consultation
Bitcoin is getting more mainstream every day. But new bitcoiners need to be aware of the unclaimed funds problem. Hopefully we can contribute to a solution.
How do Unclaimed Funds Work, Generally? The first level of prevention of loss is password recovery. This is not part of unclaimed funds, but for banks and other custodians. If your bank account is dormant (meaning no activity for a long time), then the bank must make attempts to contact you. If there’s no contact after several attempts, then the bank sends your money to the State to hold in the unclaimed funds department. You and your heirs can recover from the State any time. This is how banks protect their members from catastrophic loss of assets. Why Bitcoin Is Different When you own your bitcoin, you own your own keys (self-custody). If you keep your bitcoin on an exchange, there are some similarities to a regular bank account. Meaning, you have a way to recover your password and there is a similar unclaimed funds procedure as discussed above. If you are a real bitcoin enthusiast, you probably own your bitcoin. In this case, there is no one you can call to recover your password. You are responsible for it, and there are some measures you need to take to make it work. If your bitcoin wallet is dormant for years, no one will attempt to contact you. It just stays in zombie mode. Bitcoin is a public ledger, meaning we can all see how much is in a given wallet, we just don't know whose wallet it is. There are wallets sitting with huge amounts and there is no one to check on them. If you lose your keys (or fail to deliver them to your heirs), they are gone “forever”. In other words, your wallet becomes stuck with no way to get into it. How to Prevent Lost Bitcoins Since bitcoin is not governed by the unclaimed loss protocols, there is not a safety net. If you think someone knows how to manage your crypto after your death, it won't happen without leaving instructions. How do you recover your password? Don’t share your keys. You can split up your seed phrase or add a passphrase. You can give a copy of the hardware wallet to one person and the PIN to another person.
Another option is a decentralized dead man’s switch. A dead man’s switch is a button that needs to be pressed in order to prevent something from happening. The act of pressing the button is proof that you are alive. If you fail to press the button as scheduled, then the process starts for your funds to transfer to your beneficiary. For example, the PINs, phrases, or locations of those keys will be sent to people who will combine the information to access your account. It's important to remember that it is not safe to store seed phrases anywhere online (even split up). A centralized dead man's switch with a company could go away at any given time. A decentralized dead man's switch would be some sort of open-source project that does not rely on one server or one company. A solution that preserves the ability to control your assets is decentralized and secure. For now, split hardware/pin or seed/passphrase are the best solutions we have. What are some better solutions? I would love to hear from you. What will bitcoin look like in the future? Will we have bitcoin “banks” to protect your money and provide quick easy access? How will they remain decentralized and let you keep your sovereignty over your money? If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your Bitcoin situation.
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A recent example of headaches and costs if you delay probate: Lou’s mom died owning a co-op apartment in New York. Since there was no mortgage, Lou and his sisters didn’t think there was any rush to deal with it. More than a year passed, and the co-op wanted clarity on who the legal owner is. Lou and his sisters each took turns saying they’d handle it, then dropped the ball. Finally, the co-op got tired of waiting and took action.
Co-op Foreclosures in NYC The co-op began a foreclosure proceeding. Condo and co-op foreclosures aren’t just for missed mortgage payments. Foreclosures are also for missed maintenance payments and to clear the title. In this case, the co-op board doesn’t necessarily want the money. They want control so that they can put the apartment on the market and sell as they see fit.
The proceeds from the sale would ultimately go to Lou and his siblings, but they would have no control over the process. And, the co-op’s legal fees will get paid from the sale proceeds.
Someone Else Will Probate The co-op doesn’t want to be the administrator of someone’s estate. So, the co-op asked the court to name the Public Administrator (PA) to be the executor for Lou’s mom’s estate.
As we’ve discussed before, you don’t want the PA in charge of your estate. The PA may be competent, but they are probably not the best fit for your needs in estate administration.
Now that the co-op asked the court to appoint the PA, Lou can’t simply ask the court to become the executor instead. Now Lou and his sisters must fight off the PA (and the PA’s legal fees) if they want to keep control of their mom’s estate.
How Long Do You Have To File Probate After Death There is no official rule or deadline for how long you have to file after death. Maybe after three months you are still paralyzed by your loved one’s death that you weren’t ready to move forward. Maybe by six months you are overwhelmed in trying to find a lawyer. But the court will start losing sympathy for you after about a year. The court understands that you need time to grieve, but getting started sooner is better.
Of course, Lou’s example is not the only way delaying probate can cause problems. Start talking to an attorney as soon as possible to understand the process. If you reach out to an attorney, they will not sit on your case for a year. They and their team will start working on the process while you are grieving.
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Let’s review a real-world case study of a client’s plan to transfer his bitcoin upon his death. This looks like an elegant solution, so let us know if you see any major red flags!
Cloned wallets and sharded seeds The client’s plan focused on clone wallets and sharded seeds.
The plan starts with two clone hardware wallets. A hardware wallet is like a minicomputer that plugs into your USB drive, but it is not fully connected to the internet or the computer. It keeps your private keys/secret codes offline while allowing you to interact in online transactions. When you clone your hardware wallet, you make duplicates of it. Each clone wallet is password protected.
The client gives one clone wallet to his executor. He gives the other clone wallet to his sister (who is an heir). Neither the executor nor the sister has the PIN to the wallet. They just have the device. They will receive the PIN upon the client’s death either by dead man’s switch or from another heir.
Then the client shards his seed phrase. Remember the seed phrase is 12 or 24 secret words that you can use to recover your cryptocurrency if something happens to your hardware wallet.
The client has divided his 12 words into two chunks of 6. The client gives half of those seed words to his executor. The executor won’t receive the second half of the words until the client dies.
Upon death, the executor will receive the PIN code to his clone wallet and then he has access to the cryptocurrency. The back-up plan is that the sister receives her PIN code from another heir or dead man’s switch. Then she has access to the cryptocurrency. In the event of hardware failure, the executor will receive the second half of the seed words to recover the hardware wallet.
Risk of theft vs catastrophic loss Plans need to balance risk of theft vs. risk of catastrophic loss. You are twice as likely to lose your cryptocurrency than to have a hacker steal it from you. It is more complicated than memorizing a PIN code. You don’t have the safeguard of calling a bank to reset your PIN. It is also easy to over-complicate things and make it too difficult for your heirs. There might be security holes in your plan, but are they big enough to merit increasing risk of catastrophic loss?
Redundancy, and balancing risks Using multiple hardware wallets is tangible and understandable. A hardware wallet is a device, and it needs a code to access the cryptocurrency. If hardware wallets fail, then you can always shard the seed phrase.
By using cloned wallets, there is a slight increase for the risk of theft. In this case, the client accepted the increased risk of theft to decrease the chance of his cryptocurrency disappearing upon his death.
While this plan isn’t perfect, I like it. Please pick it apart - I want to hear your feedback. We might not be hard-core “bitcoin-ers,” but we do know what happens when people die! Being an executor is not easy. If you add cryptocurrency to the executor’s job, it’s definitely harder. It will be interesting to learn more as people die holding cryptocurrency.
If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your Bitcoin situation.
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We’ve talked about mistakes when choosing the witnesses to your will (5 Mistakes With DIY Wills and Witnesses), but what actually happens if you can’t track down a witness during the probate process?
Witnesses to a will cannot be found What does it mean when the witness cannot be found? First, it could be that the witness has passed away. Second, it could mean that they left the state or the country. In todays’ age of technology, it is not that big of a deal if someone moves, but it can still lead to complications in the probate process.
Lastly, sometimes the witness simply won’t cooperate. Sometimes the witness is someone doing a good deed at the time of witnessing but doesn’t want further contact after the person is deceased. For example, maybe the attorney asked a random hospital worker to witness a patient’s will.
What to do when witnesses to will cannot be found What does a probate attorney do when a witness to a will cannot be found? It starts with internet searches, but if no results turn up then the attorney can hire a private investigator. Private investigators have access to tools and databases that a regular person does not. They can find the witness or proof of the witness’s death. Then the attorney can prove that he or she was diligent in finding contact information or proof of death.
If an attorney was present to supervise the will signing, then ask that attorney to act as a second witness. It’s like having a backup witness in place.
Once you have the witness information, the attorney needs to check if the court will accept only one witness. Unfortunately, even after all the diligent and time-consuming work, the court may still decide that one witness is not enough.
How to avoid missing witnesses You should always make a self-proving will. This means that the will has a separate affidavit that the witnesses sign saying that they witnessed the will. It’s an extra layer of confirmation, but it is not iron-clad. If the will is contested, then the witnesses can still be called into court.
It is a good idea to have professional witnesses to your will. This does not mean “professionals” such as nurses, doormen, bank tellers, etc. Professional witnesses could be paralegals or other attorneys who do this regularly. First of all, they know what to look for and know how to testify later as a witness to a will. Also, they are generally more available and easier to track down.
Even if your state requires two witnesses for a will, you can have more. That way, if one died away or is hard to find, then you can at least still have the required two. It’s like having a back-up to the back-up.
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After we published When Does the Executor Tell the Beneficiaries, many listeners and clients have asked: how does the court know who to notify?
Great question; the answer depends on who the heirs are.
If survived by many heirs If the person who passed is survived by many heirs, the court relies on a system of checks and balances. The court sort of assumes that one of the other heirs will step up and say something is something is out of whack.
For example, let’s say that there are actually seven nieces and nephews, but only six people have signed off on the court papers. The assumption is that one of them would mention the missing seventh person. The court will likely rely on the fact that the family members will keep each other in check.
If survived by one close heir Perhaps the person who passed is survived by only one heir, such as a sole spouse or an only adult child. The court needs an “affidavit of heirship” or “family tree affidavit.” This is a document that someone else must sign, swearing under oath that this is how the family tree looks. The person who signs the family tree affidavit can’t be the sole surviving spouse or child, or the sole heir’s spouse or child. So, who’s left? Usually you can use another relative (who doesn’t inherit), a longtime friend, or clergy.
If survived by distant heirs “Distant heirs'' can mean a couple different things. Your situation falls into this category if the family tree heirs involve first cousins or similar. It’s easy enough to prove that the person who passed had five children. But, once there are a certain number of distant heirs, the court needs proof of relationships. The court may require a genealogy report to prove complicated relationships. It is easier for the court to understand the family tree when it’s laid out on paper. In addition to the professionally verified genealogy report, the court may require a court-appointed third-party (usually the public administrator) to review and confirm the family tree. It is another method of checks and balances to make sure one side of cousins isn’t doing something to the exclusion of others.
In conclusion, you can’t go to the court to simply tell them who you are and get the estate moving. There are steps in place to keep people from doing so.
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Many people make this mistake with personal property when creating their estate plan: They include a long laundry list of the tiniest items in their official, legal will.
We’ll discuss why this can be a problem, and what you should do instead.
Leaving personal property in a will It is very common to leave personal property in a will. However, it can cause problems during the probate process.
Personal property lists change frequently. The items on the list may change, or you may change who you want to receive the items. You won’t want to pay money to update your will every time there is a change on the list.
Unlike a bank account, it’s hard to put a value on your personal property. Some personal property items that might make sense to put in the will are large or expensive items. Examples of these are a classic car, expensive jewelry and art, and collectibles. To determine whether the item has significant value, ask yourself: would this item be worth sending to an appraiser?
Personal property you should never put in your will To re-cap, items that are fine to put in your will are ones with big value, worth paying for an appraisal, and things that you will likely still own when you die.
People love to put furniture in their wills, but this isn’t usually a good idea. Furniture is often in poor condition, heavy, and costly to move. It also puts pressure on the beneficiaries who may not have wanted the furniture, as most people already have complete furnished houses.
What about jewelry that is more expensive than costume jewelry, but less expensive than “estate” jewelry? It’s worth something, but not worth appraising. In this case, it’s best not to mention it in the will.
Lastly, do not put clothing in your will! Unless it is a costly mink coat, it’s not worth the headache to have your will revised every time you get rid of or buy clothing. Again, like furniture, your clothes may not be desired by your heirs.
It’s not that these items are not important, but there is a better way to leave much of your personal property to your loved ones.
Use a personal property memorandum, instead A personal property memorandum is a separate document that is not part of your will. Revising your will is expensive but updating a personal property memorandum is not. The personal property memorandum is very easy to update. It could be as simple as a Word document that you update as you wish, then send the most recent copy to your attorney to keep on file. Unlike a will, the personal property memorandum is not legally binding, and that’s ok! You should choose an executor who you trust to carry out your wishes.
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In Episode 206 we talked about how to set up a trust. This time, we’ll talk about how to manage a bitcoin trust as the trustee.
How to Transfer Bitcoin to Trustee As we discussed in Episode 206, there are a couple of ways to transfer control of the trust to the trustee. These are the dead man’s switch, sharding, and even old-school envelopes.
The dead man’s switch requires the trust maker to hit a button at regular scheduled intervals. Failure to hit the button presumes your death, and an email containing your seed phrase gets sent to your trusted people. (This is not a good plan, since it stores your seed on a ‘hot” device, the email server).
You can also “shard” your code and break up your seed phrase into chunks. You would give these chunks to different trusted people who will come together after your death to put the pieces together.
How to Invest the Trust Assets Now that trustee has control, how should the trustee hold and manage the Bitcoin? This depends on the decedent's wishes.
Sometimes, the decedent’s wish is to liquidate to fiat, convert to cash, then invest it as a normal trust.
But most bitcoin holders probably want their trust to continue to hold bitcoin on behalf of the heirs. The problem is that there is no such thing as a fiduciary account on the centralized exchanges. That is, there's no way for a trustee to open an account at Coinbase, Gemini, etc. Those exchanges only allow individuals to open accounts, not trusts. So make sure you choose a trustee who knows how to handle a digital or hardware wallets and safeguard the trust keys/seeds.
If your trustee holds the Bitcoin in trust, he must manage his own wallet. He must also maintain security and anti-loss protocols as if it were his own. If the trustee dies with the keys or seed phrases, that’s not good. The trustee needs to have something in place to avoid catastrophic loss in a secure way. It makes sense for the trustee to have a sharding with the successor trustee or a backup attorney.
Bitcoin Trust Fund Distribution to Beneficiaries Since cryptocurrency is so volatile, it is best to distribute the bitcoin in-kind. Meaning, instead of the trustee selling the Bitcoin and giving the cash to the heir, just distribute the actual bitcoin to the heir. This way, the beneficiary bears risk of if/when to exchange to fiat.
The problem with this approach is that not all beneficiaries know how to receive or manage cryptocurrency. Beneficiaries should have some skill with cryptocurrency and have their own wallets/digital addresses.
If you want to learn more about how a professional executor or trustee can help , check out my book, “How to Hire an Executor,” available on Amazon. I don’t have a Bitcoin chapter yet, but you'll get a sense of how choosing a professional can make things easier, especially for something complicated like an estate that includes Bitcoin.
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In a recent case, Liz’s dad had bought a co-op with his girlfriend. Liz’s dad broke up with his girlfriend but continued to co-own the apartment as “tenants-in-common.” Liz’s dad passed away, so what happens to the co-op now?
What Happens When a Tenant in Common Dies? Unless there is a specific percentage for the tenants in common, the property divides equally.
If they had owned as “joint tenants” instead of “tenants-in-common,” then the girlfriend would become sole owner. But, the co-op shares certificate states “tenants in common." So the girlfriend is a half owner, and Liz’s dad’s estate is now a half owner.
Is Probate Required for Tenants in Common? The short answer is yes. Liz and her siblings must probate their dad’s estate to inherit their half share of the co-op. Right now, Liz and her siblings must appoint an executor who has legal authority to conduct business for the estate. A court-appointed executor has the right to enter the premises, to gain information from the co-op, and eventually to sell the property.
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Recently, our solo ager client, Julie, moved into a long-term rehabilitation facility. Thankfully, her health is stable, but her bills are starting to fall behind.
No plan: What is Article 81 Guardianship? An Article 81 guardian is someone that takes over your financial affairs when you have no prior plan. By walking you through this situation, we will show you what can happen if you fail to plan.
Unfortunately, Julie only had half a plan. She has a Last Will and in it, I’m named as her executor because she has no relatives nearby. But this is only half of a plan because a will only takes effect when Julie dies. Until then, I have no legal authority.
To help Julie manage her finances and pay her bills, I have to ask the court to name me as her Article 81 guardian. Any time you have to go to court, there are usually delays, costs, and uncertainty. While we are waiting at the mercy of the court process, Julie's co-op payments are falling behind.
Better Plan: Guardianship vs Revocable Trust What would have been a better, complete plan for Julie? In this case, with a revocable trust, I could step in and help Julie without the long court process. Besides avoiding probate, another benefit of a revocable trust is the end-of-life help with finances. For the same reasons you’d avoid probate, you’d want your end-of-life team to be able to help you without going to court.
If you worry that it’s too expensive to hire a lawyer for a trust, note that the cost of an Article 81 guardianship is between $5,000 to $10,000. A revocable trust costs about $2,000. I don't recommend revocable trusts for everyone, but it is often a wise option for solo agers.
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Going through probate is a grueling 1-to-2-year process. Would you want to go through all that if you don’t even get anything out of it?
If you think the estate may be insolvent, consider hiring a professional executor.
What’s an Insolvent Estate? An insolvent estate is when the decedent’s debts are greater than the assets. For example, the mortgage, credit card debt, and medical bills are greater than the value of the house and bank accounts.
There are also situations where the estate is close to being insolvent and you don't realize it. Examples of this are Medicare clawback and unseen taxes. If you received medical care paid for by the government, the government will want the money back when you die. This could leave your estate with a large bill. Additionally, the IRS will look over your taxes carefully to be sure they didn't miss anything.
Who Must Probate the Estate? Many family members and heirs ask: am I required to be executor? The answer is no! You can decline or not act at all. Although, some may feel like they are dishonoring their deceased loved one by leaving the estate as a mess.
If you think the decedent is close to having an insolvent estate, you have options.
One not-so-great option is to let the state take over. There’s a state office (sort of like the public defender, but called a public administrator) that can step in. But, the interest in the estate and the incentives might not be the same as a person who you hire to help.
Instead, Hire a Professional Executor for the Estate A better option is hiring a professional executor. You won't have to do the stressful work yourself and you don’t have to feel bad about abandoning your loved one’s estate to the public administrator.
Even if the estate is NOT insolvent, you now have a relationship with the hired executor. This helps to make sure you get your inheritance. If the estate IS insolvent, then you can relax knowing that a professional is there to wrap up the estate.
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Cryptocurrency (such as Bitcoin) is a new and unique asset. It’s sort of like cash, personal property, and intellectual property all in one. You need to plan for this type of asset in a different way than you would for your bank or brokerage account.
If you want a revocable trust for your bitcoin, you’ll need both a legal plan and a technical plan.
What to Include in Your Bitcoin Estate Plan? If you want your trustee to hold bitcoin, you can’t rely on the same old boilerplate trust language. You’ll need to tweak a few things for your legal plan to work.
Opt-out of the prudent investor rule Most trustees must follow the Prudent Investor rule, which (roughly) says the trustee may be liable for losses if he doesn’t invest the trust portfolio according to legacy investment principals. For example, 60% equities, 30% bonds, 10% cash. This doesn’t work for Bitcoin, since most people still consider it highly speculative. So a bitcoin revocable trust must include language opting-out of the prudent investor rule.
Access to devices and logins Make sure to include language that gives your trustee access to your computers, devices, and logins. Without this, your trustee may technically be violating privacy laws.
Keep it flexible It is important to keep your Bitcoin estate plan flexible since cryptocurrency continues to evolve.
Bitcoin in a Living Trust With a traditional bank, you'd rename your account so that the trust owns it and not the individual. For example, you’d rename your personal checking account from “John Doe,” to “The John Doe Trust.”
But this won’t work if you hold your bitcoin on a centralized exchange. Currently, exchanges don’t open accounts for trustees. Nor do they offer beneficiary designations. So, to make a bitcoin trust, you’ll need to hold via a digital, hardware, or paper wallet where you control your keys.
Think of your wallet as personal property, like artwork and other collectables that don’t have a deed or other record of ownership. One way to prove transfer of ownership for personal property is to sign a gift or assignment deed from yourself to your trust.
What Happens to the Bitcoin Trust Upon Your Death? Now onto your technical plan: how to give access to your trustee when you die.
One solution is to “shard” your seed phrase and break it into chunks. For example, give half of the words to your lawyer, then give the other half of the words to another trusted person. Only upon your death will these two people be able to connect with each other to complete the seed.
A component of those plans could be a “dead man switch." A dead man switch is where you routinely do something (ex. press a button) to indicate you are still alive. If you fail to press the button or miss two button presses, then it is presumed that you are dead. An email containing seed phrase then goes to your trusted people. (This is not a good plan, since it stores your seed on a ‘hot” device, the email server)
You could also give your seed to your trusted people in sealed envelopes. If this is worrisome, you could tell them to send you pictures to show that the envelope is still sealed (not ideal, just brainstorming here!)
We have worked on several Bitcoin revocable trusts, and these are the types of situations we encounter. It is exciting for us to learn about cryptocurrency and work with our clients to protect these valuable assets.
If you want to learn more about how a professional executor or trustee can help , check out my book, “How to Hire an Executor,” available on Amazon. I don’t have a Bitcoin chapter yet, but you'll get a sense of how choosing a professional can make things easier, especially for something complicated like an estate that includes Bitcoin.
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This is “Sam’s” cautionary tale of trying to DIY his dad’s estate over four years, with zero progress. I like to call this a Sisyphus story. Sisyphus was a figure from Greek mythology whose punishment for eternity was to push a heavy stone up a hill, but right when he would get to the top, the stone would come sliding back down to the bottom for him to start over again for all eternity. That is what Sam has felt like for the past four years.
Sam’s story Sam’s dad died years ago in Europe, and Sam had court hearings in European probate courts where they were declared Sam and his siblings the heirs. But in Europe the probate process is much different than New York and the U.S., as there are no actual executors; the court just declares who are the heirs.
A couple of years later, the heirs discovered a U.S. bank account that they wanted to collect. Sam spent the next four years following bank instructions into a black hole. The bank would tell him to do one thing which led to months of playing liaison with the European courts and the U.S., only to be told that it was the wrong information. Each time this happened, Sam had to start all over again.
Finally, Sam called us, and we realized that we needed to start from scratch. Even after hiring us, Sam kept talking to the bank, which created more problems, mixed signals, and cross information.
Common Probate Mistakes The first common probate mistake is to rely on the bank's “advice.” The bank is not an advisor. If anything, their incentives are to keep the money in the accounts.
The second common probate mistake is to underestimate the complexity of the situation. Many clients believe that they have a “simple” probate matter when they call our office for help. However, often after we ask them some preliminary questions, we find that it is actually a complex estate matter. Any time the estate deals with overseas factors, the situation is certainly more complex. This should have been a red flag for Sam.
Lastly, once an attorney is hired to handle the estate, it does not help for clients to continue to work on the estate. Clients may think that they can help reduce the amount of work or hourly cost if they do some of the probate work themselves. That is not how it works, and it could end up costing the client more to have the attorney fix the DIY mistakes.
Avoid Problems in Probate The bankers are bureaucrats, not your advisors. If you are not getting headway immediately with a bank, get a professional to help you. An experienced probate attorney can navigate the bureaucratic banking problems.
Everyone thinks their case is “simple.” What someone thinks is simple is probably just the tip of the iceberg of complex problems or twists. How do you figure out if you truly have a simple case or a more complicated situation? Many excellent probate lawyers offer free consults, so use that consultation to find out. Lawyers offer free consultations for a reason! It helps the attorney and the client to see if they are a good fit for each other.
Lastly, when you hire someone, let them do their job!
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Many of our Solo Ager clients want to make sure they don’t leave anything to a relative who is distant, estranged, or they just dislike. Here are a couple of common misconceptions - and the best solution.
Can’t I just omit them from the Will? The assumption is, “If I omit them from my Will, they have zero involvement, right?”
Unfortunately, that is not how the process works. They will still receive notice from the court regarding the Will. When you probate a will in court, you’re required to notify all the family members who would have inherited under the default inheritance law (what the inheritance plan would have been if there was no Will).
For example, you are unmarried with no children, and you have several nieces and nephews who are not involved in your life. Those nieces and nephews are the ones who would inherit if you didn’t have a Will, and they will receive a court notice even if you omit them from your Will.
That court notice is basically an invitation to come to court and contest the Will. Those nieces and nephews may not have legitimate grounds to contest, but may drain the estate’s funds fighting the legal battle, stress out your intended heirs, etc.
Can’t I specifically disinherit them in my Will? Yes, this is called an “In terrorem” clause, but there are two problems with this approach:
- You’re still notifying them and inviting them to contest your Will; and
- In terrorem works best with an “incentive,” which you probably don’t want to give.
For example, an In terrorem clause could state that if a nephew contests the Will, then he might not receive anything. The problem here is that you didn’t want him to receive anything anyway. Now, he has no disincentive to contest the Will.
The In terrorem clause works best by giving the nephew something as a disincentive for him to challenge the Will: “I leave $10,000 to my nephew, but if he contests the Will, he will not be entitled to receive the $10,000.” In this example, you have given your nephew a disincentive to challenge, but you’ve also given him money as advanced blackmail that you would not have given to him in the first place.
Solution: A Trust In the situation where you want to make sure a specific person does not get anything and cannot challenge your wishes - a Trust works best.
A Trust is a mechanism used to deliver assets to your heirs without the probate court process. If you don’t have the probate court process, then no notice is sent to heirs who are not named in the Trust. Even if an unnamed relative finds out about the Trust, there is no easy mechanism to contest your wishes. Unlike the In terrorem clause in the Will, there is no need to give an “incentive” in the Trust.
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Linda spent six months working with a general lawyer (meaning someone who practiced personal injury, litigation, and a dash of probate on the side). There was not much progress in those six months, so Linda became frustrated and transferred the case to us. Sadly, we had to basically start from scratch, because the general lawyer did essentially nothing.
What causes probate delays? Bad lawyers In Linda’s situation, six months went by and it was as if nothing happened in her case. One of the reasons for the delayed probate was because the general lawyer did not know what preliminary Letters Testamentary were. An experienced probate lawyer would have noticed right away that Linda had a complicated probate and would have immediately filed for preliminary Letters Testamentary. If this had been filed immediately, Linda could’ve started “executor-ing” months ago.
Another reason probate can be delayed is drafting the Petition wrong. In Linda’s case, the general lawyer didn’t understand which family members must be notified, and therefore hadn’t even begun collecting their contact information.
Lastly, probate can be delayed because a general lawyer might not realize that the Will isn’t properly witnessed. (As a side note, this is a good reason to find an experienced attorney to draft your Will). Getting the correct witnessing on a decedent’s Will takes a lot of time, including tracking down the witnesses and having them sign affidavits. An experienced probate lawyer would notice the incorrect witnessing and get started on the correction process immediately.
As with any practice, if a lawyer does not have much experience in a certain area of law, he or she will probably miss important details and cause delays.
When a lawyer gives bad advice In Linda’s situation, her deceased relative owned an income-producing property, and the general lawyer told Linda not to collect rent anymore from the tenants! This led to non-payment and problems with the tenants, which will cost the estate more money to work out. Instead of listing the house on the market during the summer, this lawyer’s bad advice means that Linda now must winterize the house. With proper legal advice, the house could have been sold and done with before the cold. In summary, bad legal advice causes more stress and aggravation for the client.
How can you avoid all this? Shop around: Compare lawyers, call their office, and visit their websites. Make sure you’re working with an experienced probate lawyer from the beginning.
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Bitcoin is currently a popular topic. Here, we are discussing the risk of theft verses risk of loss with these types of funds, specifically why that matters in the context of estate planning. We are by no means experts in this subject, but we’ve done our homework.
Estate planning for Bitcoin can feel like you are in a Divinci Code movie, with secret codes and memorized phrases. It can feel like a treasure map, compared to your traditional banking.
There is so much advice out there online telling you to take some extreme measures to prevent hackers and thieves from plundering your stash. However, you have to make sure you don’t overboard, at the expense of increasing your risk to another type of catastrophic loss, simply losing your Bitcoin!
Estate Planning for Bitcoin One of the most common ways of holding your bitcoin is on “hardware wallets.” That means that you have a device, not connected to the internet, that has access to your key (the fancy word for your secret password). One way to look at it is that it’s like your ATM pin. The only difference is that you can visit a bank to reset your pin, but when it comes to bitcoin, no one can help you recover it. We’re not talking about a simple passcode with 7 to 8 letters; we’re talking a combination of 24 words that will allow you access to your bitcoin (also called a seed phrase).
In terms of security, you don’t want to leave this phrase accessible to anyone. The internet goes to great lengths to tell you how to keep this secure. They suggest never taking a photo, which is typically stored on your computer, phone, or cloud. This also goes for storing it on your computer. Again – hackable.
They suggest a handwritten note. Which in itself can be problematic. Paper is fragile. Not to mention, have you ever put a note in a “safe” place? A place that’s so safe even you can’t find it? There in lies the predicament. That’s quite a conundrum. One copy can get lost, while a few copies can be misused. Why we don’t have all the answers for storing not losing your phrase, we are here to compare the bigger risk – someone hacking your bitcoin and stealing it or you simply misplacing your phrase and losing it. Based on which is the bigger risk is how you should plan accordingly.
How Much Bitcoin Is Stolen? According to Casa, one of the bitcoin custody firms out there, 1.6 million Bitcoin has been stolen of all time, out of 18 million total. The vast majority of these thefts have occurred by hacking big companies, as hackers are going for the big score. This also includes Ponzi schemes and fraud. For example, someone says they will buy Bitcoin for you with $100,000, but instead buys a Lamborghini.
We believe that this number is underreported. Not everyone reports it when their bitcoin is stolen, as they may believe that there is nothing that can be done to recover it.
How Much Bitcoin Is Lost Forever? Let’s take a look at the statistics and compare lost vs stolen. By “lost” we mean that you’ve done such a good job of hiding your passcodes, that you cannot access the bitcoin. According to Chainalisys about 20% (or 3.7 million of 18 million) has simply been lost. That is more than twice the amount that has been stolen.
This number may be a little high, because Chainalisys may include super inactive accounts. However, even if you remove those accounts, the stats are still much higher than the amount of Bitcoin that is stolen.
As you decide to hold and you are learning how to use secure codes, keep these stats in mind. It is twice as likely that you will just lose your Bitcoin by your own doing compared to it being stolen. If you are that worried about having your second piece of paper hidden somewhere, it may be worth the risk of someone finding the second paper compared to you losing the only piece of paper.
When planning for your estate, you have to decide how you will leave these passcodes to your beneficiaries. There are a lot of ways, and they all come with their own risks. A family member may not be able to retrieve your access codes if given a treasure map to “find” the password. You have to balance the risk of simply not being able to access your bitcoin with the risk of having it stolen.
If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your Bitcoin situation.
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Another question that we receive often is “should I name a trust as beneficiary of my estate?” In a recent case, Rhonda reached out to us, because she wanted the benefits of a trust (avoid probate, reduce chance of a “will contest,” etc.), but she was not quite ready for the headache of a full-blown trust setup. In her particular situation, naming her trust as beneficiary makes sense. If you are considering this doing this, here are a few things you should consider.
How to Name Trust as Beneficiary A full-blown trust has to be set up and funded. It can be a nominal amount, even as little as $10. It has to own things and you will need to convert your banking accounts, houses, and related items from your individual name to the trust name. It may be quite a bit of work in some situations. For example. if you live in a co-op, this can be a lot of work to change your deed. You will likely need board approval, and this will take time and work. If changing your banking, you will need to go to the bank and open new accounts in the trust name. You’ll then need to change any direct deposits and withdraws once the new account is open.
In Rhonda’s case, instead of changing all of her accounts now, she is leaving them in her name and changing the beneficiary of the accounts to a trust. For example, when you have life insurance, you can name a person or multiple people as beneficiaries. However, instead of naming a person, you can name your trust to be the recipient.
In her situation, her trust will be unfunded until she passes. Upon her passing, the trust will be funded using the beneficiary designations.
To name a trust as a beneficiary, there are three basic steps. You must create the trust document, you then fund the trust (even a nominal $10), and finally, you name a beneficiary. Usually, you can obtain change of beneficiary forms for your accounts to change the names. The result: you have a hollow, but ready, trust on standby, which is ready to accept funds as beneficiary upon your passing.
Pros of Your Trust as Beneficiary One of the pros for taking this route is that, in theory, you get to avoid the costs and headache of probate. Probate is generally not easy and takes a long time. If there is a beneficiary on an account, then the account does not need to go through probate to be liquidated. You simply need a death certificate and a copy of the trust to withdraw the funds. Having a trust also reduces the chance of a will contest. If there is a wayward heir, they can contest the will if it is probated. If you do not probate, it’s much harder. You essentially create a challenge barrier with a trust.
There is also a phycological connection. Changing all of your accounts out of your name and into a trust name may feel as if it’s not yours. If that is an issue for you, then this option may be a good way around that feeling.
Cons of Your Trust as Beneficiary This way of doing a trust does not protect you from court-appointed strangers (known as guardians) controlling your funds during your life. If everything is still in your name and you become incapacitated or someone can assert that you are in cognitive decline, then a guardian can be appointed to control your funds. However, if everything is owned by the trust, then a court-appointed guardian can not access those items. Only the trustee of the trust, as chosen by you, can control what happens. Not only does a full trust prevent a court-appointed stranger from controlling your assets, but they most likely won’t bother with you, because there are no funds for them to control.
In general, Anthony is not really a fan of naming a trust as a beneficiary, because in his experience, people generally do not do a good job tracking their beneficiary designations. We see very often where people forget to change their beneficiaries after relationship ends and people die. It is very easy to forget, even if you are really well organized. The designations are not conspicuous and are not usually listed on the statements, so people do forget. Bottom line – people do not remember.
Another reason that Anthony doesn’t suggest this route is that honestly, doing it this way does not really save as much time as you would think. It is actually very similar to what you will need to do with your assets when you create a full-blown trust. In either scenario, you will have to submit forms and provide documentation, which is almost the same process in both situations.
Naming a trust as your beneficiary is a good steppingstone as first step to a fully funded trust. We suggest you talk out your wishes and situation with an experienced estate planner to determine the best route for you.
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Instead of appointing a family member to administer an estate, you can hire a professional executor. We often get asked if this is a safe and better route. In a recent case, Sean contacted us to discuss this option. In his particular situation, he is from a blended family. His mother died and she is survived by three adult kids and a stepfather who was separated from his mother for a long time before her death. In his case, he is facing some possible trust issues. For example, the family could tentatively agree to equal shares, but the stepfather could claim full spousal status and kids could try to disqualify the stepdad (there is certainly an argument that he is not a spouse).
If the stepfather acts as the executor, the children may not be completely trusting. Similarly, if the children are the executors, the stepfather may have trust issues. With this complex family dynamic, an independent professional executor makes tons of sense. However, some of the heirs in Sean’s case were a bit concerned about handing over the reins and control of the entire estate to a stranger. Being apprehensive is completely understandable, but here’s why it still makes the most sense.
What is an Estate Accounting? A professional executor will file a full accounting to close the estate. An accounting is an official record of all books. Everyone gets to see line by line every single dollar and cent that came in and went out of the estate. We are talking full transparency and disclosure. Every heir will get to see everything that happened without any questions. It’s all there in black and white. Professional executors do this not only to put everyone’s mind at ease, but it is also for their protection. Professional executors can only be released from liability from what they disclosed, which is why we disclose everything.
To put it bluntly, no matter how hard they try and how meticulously organized they are, amateur executors such as family members, friends, and neighbors keep terrible estate records. For example, in order for the estate to draft and file an estate accounting, our office has to work with the executor to gather all documents and records. Most of the time, many things are missing and there is a bunch of back and forth to find the missing documents. It costs the estate money to gather these docs and find the items that were never obtained or missing.
Usually, non-professional executor accountings are mediocre at best. On the contrary, professional executors will provide the estate with a clean and solid accounting. It’s not that we are more organized, it’s that professional executors are keenly aware of the risks of liability. We know that if we mess up, the courts will come down on us. We also know the end game, so we know how to start gathering and keep track of finances immediately upon starting the case. We are working the whole time towards producing a line-by-line accounting of all of the funds.
What Does an Executor Bond Do? An executor bond is an insurance against the executor for the benefit of the heirs. So, if the executor makes a mistake, loses something, or is an outright thief resulting in the heirs not receiving what they should have, then the bonding company will pay the claim. With a bond in place, the worse that will happen is that you, as an heir, get to file a claim against the bonding insurance company to get the money. It will then be the job of the insurance company to recover the funds from the executor, and not the heirs.
To get a bond you need exceptional credit, especially with large estates. Generally, they want 750+ credit scores. It is tough for some amateur executors to get a bond for this reason. As a professional executor, we have never had a problem getting a bond and have never had a claim against a bond. If not required, very often, we will get a bond anyway to put the heirs at ease. In some cases, the courts simply require them of the executor, regardless of experience.
When you work with a professional executor and request for them to be bonded, make sure you are ok with the payment of the premium. This is the amount that will be paid annually to the bonding company by the estate. The premium fluctuates depending on the size of the estate and the bond amount. We can certainly get a quote beforehand and you can decide if it’s worth the annual payment.
Are Co-Executors a Good Idea? In Sean’s case, one of the questions the family asked was if we can have one family member and one professional working as co-executors. They wanted to know if co-executors are a good idea. The short answer is no. It boils down to too many “cooks in the kitchen.” When you have too many people involved with what is really a one-person job, then it becomes more complicated.
You will need each executors’ original signatures on all documents and authorization for all decisions. So, all the benefits of hiring a pro as a centralized decision-maker with experience to move the estate along properly and quickly is being thrown out the window. There are situations where executors are required to do things in person, such as opening the estate bank account. Both executors would need to go the bank together, and this may be challenging to coordinate, especially if one executor lives out of town or out of the country.
It also complicates the financials. You will have two people keeping financial records differently, that you have to merge together at the end. Collecting and combining two executor’s documents will take substantially more time and the estate will bear the cost.
While we do not advocate this route, if it’s the only way the family will be on board with a professional, then we can explore it. For the right family, we are willing to do it. We recommend that you speak with the professional and research what goes into administrating an estate before deciding on the co-executorship route.
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Happy New Year! Solo Ager experts Joy Loverde, Sara Geber, and Carol Marak were kind enough to share their thoughts with us on what Solo Agers should map out in the new year. Here are your seven new year resolutions from your favorite Solo Ager experts:
Joy Loverde, is the author of two books, The Complete Eldercare Planner and Who Will Take Care of Me When I’m Old. She is an expert in this area of solo agers and we are grateful that she shared her insight with our followers on our podcast Episode 192: How to Plan for Old Age and Being Childless with Joy Loverde podcast. She offers the following New Year’s Resolutions:
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Learn More About Shared Housing Shared housing can be summarized in two words: “Golden Girls.” Instead of going into a facility, this is a situation where people share housing. This can be a more intimate, cozy environment, compared to a institution setting. Last year reminded us how important social interaction is, and a lot of people have learned that they want to be in the company of others. She believes that shared housing will increase in popularity and will take off this year, as a result of 2020. This may or may not work for everyone, but it is certainly something for a Solo Ager look into. Joy recommends researching and exploring this option to see if it is something to consider.
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Be More Aware of the Full Responsibility of Pet Ownership Another result of 2020 is increased pet ownership. Many people sought companionship from pets when isolated from the real world. Solo Agers need to know the extent of what it takes to care for a furry family member. If they haven’t done so already, now is a good time to research the financial and physical aspects of pet ownership. In particular, what will happen to your pet if you are unable to care for them? Joy recommends exploring a pet trust. While Anthony isn’t a fan of pet trusts, he explains that they are a vehicle to care for the pet financially. Instead of giving funds outright to a person to care for a pet, it’s put into a trust. Anthony suggests that instead of a pet trust, you find someone that will care for your pet properly if given an outright lump sum.
Sara Geber, PhD. is the author of Essential Retirement Planning for Solo Agers. She is also a retirement transition coach and a professional speaker on retirement and aging. Sara shared essential retirement planning tips with Anthony recently on his podcast. You can listen to them here (part 1) and here (part 2). Sara She suggests these New Year’s Resolutions for Solo Agers:
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Review and update your planning documents Sara suggests that Solo Agers take the time to review their estate planning documents. In particular, she suggests reviewing your Power of Attorney and Advance Directive, especially if you have not done so in five or more years. While this isn’t the easiest and most uplifting resolution, it is very important. Anthony suggests that you review these documents every 4 years, which coordinates with the Olympics. To him, it is an easier way to remember. This is like going to the dentist – you may not love it, but you have to do it.
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Have “the conversation” with your family and/or other loved ones Again, while not a fun topic of conversation, it’s important. You don’t have to make a whole to-do about telling them, but it’s a good time to start talking, even if it’s informally. If you don’t share your end of life wishes and emergency contacts, then no one might know. It doesn’t necessarily have to be family. It may be your Super or Doorman that may learn of your passing before others. They see you daily and may know if something is wrong. You will want them to know who to call.
While not easy to talk about, if you share your burial and inheritance wishes beforehand, it may make it easier on those who will help with your funeral planning and finances.
Carol Marak is a solo aging advisor and advocate. She is the founder of the Elder Orphan Facebook Group, which launched in 2016 has almost 10,000 members. She also has a very successful YouTube channel called Solo and Smart and her book Solo and Smart, is slated for publication in 2021. We were thrilled to have spoken with her in podcast Episode 194: Tips from Founder of The Elder Orphans Support Group.
- Shift uncertainty to predictable outcomes Carol says that you should work to shift uncertainty into predictable outcomes. Generally, uncertainty can be stressful, so she suggests you fix it. If you’re feeling stressed about your health – fix it. Talk to your primary care physician about things you can do to change your daily habits and feel better.
She suggests that you build a team of support. Not knowing who will help you when you need it can be stressful. A family can be built with friends and Carol calls these your “family of choice.” It does not necessarily need to be relatives. Find your team – your friends, your doorman, etc.
- Never buy into the idea that you are powerless Carol suggests that you list two goals you want to accomplish. They do not have to be big goals. Simply pick two things that you have thought about doing and do them. She suggests that to do this, you should find the people who can help you learn the skills or strategies to achieve them.
Anthony, a Solo Ager expert as well shares his resolutions for Solo Agers:
- Read more books, less “news” Anthony recommends that you read more books and watch less news. Books help to educate and sharpen your mind. Authors of books typically spend substantially more time researching and writing the book then say a blog post or news article that was written on the whim. He feels that books immerse you, contrary to news articles which tend to enflame you.
Reading keeps you sharp and talking about books makes you a better conversationalist than talking about news. Set a goal to read one or two books a year. Anthony suggests that you never put pressure on yourself to finish a book. If you start it and don’t like it, put it down. You can go back to it or you can simply never pick it up again. If you go into a book with that pressure, it’s much harder to get started reading. Knowing you can stop when you want gives you some mental freedom to try more and more books.
Let’s face it - book clubs sound more fun and social than news clubs! Another bonus – you don’t have to purchase books. You can borrow them from a library or even your friends.
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You may be surprised to learn that we receive requests quite often from people who wish to change their probate lawyer. This was the exact situation one of our clients was facing recently. “Linda” started her probate case with another lawyer but realized along the way that he was not doing a good job. So, she reached out to us to take over the case. Here’s a look at how that works.
First, from our perspective, changing firms is a double-edge sword for a lawyer. As a rule of thumb, attorneys do not particularly like to take clients who have fired their previous attorney, as it could potentially be a red flag. On the other hand, if a client has been legitimately been deprived by a past attorney, they are grateful to have help and are a pleasure to work with, as is the case with Linda.
“Linda’s” story Linda hired a “flat-fee” probate lawyer, which she thought was a great deal. However, after 9 months, Linda realized the lawyer had not done much. She also learned he didn’t really know what he was doing. For example, he hadn’t notified any heirs, collected any of the preliminary financial documents, or even gathered the basic information, which is typically what seasoned probate attorneys do right away. That led Linda to seek out another lawyer. Not only did she want a new lawyer to help her, but she also wanted to recoup as much of her “flat-fee” as possible. After all, not much had been done in 9 months.
How To Change Lawyers In The Middle Of A Case If the previous lawyer hasn’t done any work on the case yet, then it is pretty easy. You can request they stop working and hire someone new. However, it gets more complicated if the attorney has spent any time on the case, which can include opening the case and corresponding with the court. If that’s the case, you will want to decide wisely – even if you can’t stand working with a particular attorney, if you are close to the finish line, it may be in the best interest of the case to see it through to the end. You will have to weigh it out.
How To Transfer Case From One Lawyer To Another If the case has progressed to the point of filing documents with the court, the attorney who filed the documents is called the “Attorney of Record.” This means they are your official lawyer in the eyes of the court. If this is the case, you simply can’t change who represents you without the approval of the court. The court requires documentation to change attorneys at this point, essentially granting permission to change attorneys. This document must be signed by all parties, including yourself, the previous attorney, and the new attorney.
This puts you in a position of needing something from the previous attorney. Therefore, it’s not advisable to air your grievances or place a nasty phone call to their office (which is actually never a good idea). Even though you may be upset with them, you need that document to be signed.
One thing to keep in mind is that an attorney may elect to not sign the document until all invoices have been settled. You may have to pay the balances in order to move on. Although you may disagree with the invoice, in reality, if they have done the work, they should be paid. You have to weigh out if paying the outstanding balances, even though they didn’t do much work in your opinion, is worth it to change attorneys.
Another reason to keep the peace is for the transition to be smooth. Your new attorney will need to get the files from the previous attorney. While some records can be obtained from the court, the previous attorney may have originals that is easier to get from them then to retrieve otherwise.
Are Lawyer Retainer Fees Refundable? The short answer is technically yes, but in reality, they are usually not. In New York and in other states, attorneys are not allowed to charge non-refundable retainers. Although found in most attorney agreements, it is not usually permissible. Unless you change your mind the day after you send the check, most lawyers would have done enough work to have earned the retainer. For example, opening the file, reviewing the documents, gathering preliminary documents, calling the court, etc., adds up, which may use most if not all of the retainer. Lawyers are definitely entitled to fees for the work they do, even if you are not satisfied with their work.
If you are considering changing attorneys, you may find that the cost of keeping your current attorney outweighs starting over with a new attorney. Alternately, depending on the particular situation, it’s worth it to start over. As with any decision, weighing your options before making the switch is important.
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In this case, “Robin,” a solo ager, is looking to update her estate plan. She is divorced and has two biological daughters. One is living abroad and one not on good terms with her mother. One lives too far away to be a part of the estate plan and the other has been neglectful and the relationship is strained. For these reasons, she does not want to give her inheritance either daughter.
How to Disinherit Someone in a Will In theory, you can simply just omit them. However, some people prefer to have a simple explanation as to why a particular person will not inherit, such as “I have already given generously over their lifetime” or “my daughter has not treated me well so I am choosing to leave her out.” You don’t need to over justify, but you are simply explaining to those reading your will after you passed why you left someone out.
What is an In Terrorem Clause? During probate, anyone who would have received an inheritance in the absence of a will has a right to object by default. In Robin’s case, in the absence of a will, her estate would be divided equally between her two biological daughters, leaving them both with the right to object. This could lead to litigation and lots of problems.
An In Terrorem clause is designed so that if a rightful heir objects to the will, then they receive nothing. However, in this particular case, the daughters already get nothing. So, is there really anything to lose by objecting? Honestly, not really.
This clause is typically stronger if, instead of omitting a person, the person you would like to leave out instead receives less of a percentage of the estate. In Robin’s case, let’s say that she decides to leave 75% of her estate to her overseas daughter and 25% to her estranged daughter. This way, if the estranged daughter objects, she gets nothing. The risk of loss is greater than if she was simply omitted in the first place.
If you plan to go this route, there is an argument that you need to leave them an amount large enough to dissuade from objecting. It can be small, but not too small ($10 for example, isn’t enough to dissuade them). Depending on the size of the estate, this amount could be $1,000, $10,000, or even $100,000.
However, in Robin’s situation, she doesn’t want to leave anything to the estranged daughter and leaving her $10,000 is contrary to what she wants. It’s not going to feel great to leave her money as a type of advanced extortion.
Setting up a Trust for Grandchildren In Robin’s case, we came up with an elegant solution to disinheriting a child, which is to set up a trust for her grandchildren. Robin’s goal isn’t to disinherit the family, she just isn’t happy with the daughter. Therefore, she is going to skip her daughters and give to her grandchildren. Not only does it keep her estate in the family, but it will also create less conflict within the family.
Additionally, the daughters are less likely to object, since the estate will go to their kids. Robin is happy with this solution, as it will keep the peace and keep the money in the family.
Another bonus is that trusts come with huge benefits: trusts protect the assets. For example, if the grandchildren get married and divorced, the trust is protected. A trust is essentially a gift in addition to the monetary gift.
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Believe it or not, we have clients to do not wish to accept their inheritance. Although extremely rare, there is actually no legal obligation to accept, and it’s completely okay to decline. There are often situations where it is best.
In a recent case, our client “Evette” lost her long-time boyfriend. They were never legally married but were practically husband and wife. Everyone knew them as a couple, including their family and friends. In this case, Ed did not have a Will. As we have discussed previously, non-married spouses do not legally inherit from the deceased partner. Under the laws of New York, Ed’s biological adult daughter would receive 100% of his estate. The daughter, acknowledging that Evette was for all intents and purposes the spouse, has opted to include Evette in the estate distribution.
Disclaimer of Inheritance Rights Disclaimer is a fancy word for not accepting and forfeiting your share of the inheritance. In Evette’s example, the daughter could simply say “I don’t want anything to do with it. I do not accept.”
The pro is that the daughter signs one form and she is done with the estate. No one will bother her again. If you are estranged, which isn’t the case here, that may be the best route. This option is the least hassle, but it removes all control.
The con is that if you forfeit, you no longer have a say in anything. The default inheritance laws would kick in and the share would go to the next in line. In this case, Ed still has brothers, and by law it would go to them, which is not what he wanted.
Can I Give My Inheritance to Someone Else? Sure, you can give your inheritance to someone else, but only once you receive it, which could be months or years after probate starts. The drawback is that there is much uncertainly. In this case, the daughter will be waiting for quite a while to receive the funds. In that time, she can simply change her mind about giving a share to Evette. Additionally, the daughter will need to stay involved in the probate process, whether she wants to or not.
Transferring an Inheritance by Executing an Assignment In this case, an Assignment of Interest is the best option. Here, the daughter will sign a document agreeing to assign a percentage of her share to Evette.
Instead of waiting to see if the daughter will actually share the inheritance with the girlfriend, this this formality creates certainty and can help eliminate any issues that could arise between a family.
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Quite often we are asked by family members and heirs what the process is to sell a deceased person’s home. It can be a complex and typically you should have a lawyer, but this blog shares a general understanding of how it works and what you can do to get started.
Did the Deceased Own Property? While most people assume that the decedent owned their home, we have seen on many occasions that isn’t the case. For example, they may have been renting or owned the home jointly.
The first thing you should do is look up the deed. This is actually easier than you think. Most counties have online searching capabilities, and a quick Google search will help you find the right place (the New York City system is called ACRIS). By pulling the deed, you will be able to confirm if the property was owned by the decedent, owned along with another person, or owned by someone else.
Two Names on Deed, One Person Dies You may discovery that the decedent owned the property along with another person. If it’s a husband and wife, then you generally don’t need to do anything in terms of probate. The house will simply go to the wife.
Similarly, if it is a Joint Tennant deed, wherein two people are the joint owners. Using Jack and Jill for this example, then the house would be solely owned Jill if Jack dies, without having to go to probate court.
Lastly, the deed may say that Jack and Jill are the non-married owners or Tenants in Common. If that’s the case and Jack dies, then Jack’s estate still owns 50% of the property. You would have to go to probate court to deal with Jack’s half.
What Happens to House in Trust After Death? Another scenario you may discover when you review the deed is that the house is owned by a trust. In this situation, you need a copy of Jack’s Trust to see what should happen to the property when he dies. You most likely can avoid probate court, depending on the trust wording.
Didn’t Own His Home As we mentioned, it’s common for the person to not own their home at all. They could be a renter, be living in a home owned by a deceased grandparent, etc.
It’s important to pull the deed to figure out the ownership so you can move forward properly.
Do You Need Probate to Sell A House or Can You Sell a Deceased Person's House Without Probate? The short answer is yes, you can sell it without probate if the property was owned by a spouse or in a trust. However, if it’s in the decedent’s name alone, then you will need to go through the probate process.
PRO TIP: Some will try to tell you that technically you can sell without probate, with simply signing a document called an Affidavit of Heirship. Some fast-moving brokers may try to sell you on this idea. However, be aware that in most cases the title company may not accept it. The title company does not want the liability of ensuring that there are no issues with the estate and property. It’s too risky for them.
How to Get Access to House After Death Another reason you may have to go through probate is to gain access to the house. In New York, if a decedent died at home, then the house is sealed with police tape. No one can enter the house until you have proof that you are entitled to be there. If the home is in a condo, co-op, or other managed building, they’ll want to see proof of authority before giving access. This proof comes from the court in the form of Letters of Testamentary.
Who Does Probate Protect? Although you may think you want to avoid probate at all costs, that may not be the right concept. Probate is a process meant to protect you as an executor as well as the heirs. It safeguards all parties from being held liable for debts, such as the IRS and creditors that may come up down the road.
Considerations When Choosing an Executor Specifically relating to selling a deceased person’s property, there are a few key points to keep in mind. See How to Choose an Executor, which digs deeper into how to choose an Executor.
Does Executor Have to Live in Same State? Technically, no. You can be a US citizen and live outside of the state. But there are major drawbacks to not living in the state where the estate is probated.
Do I Have to Travel to New York for Probate? Yes! Although as the executor it’s not technically required to live in New York, be aware that the executor will need to travel to New York. Typically, this is not just one trip. Even though we’re in 2020, some things still must be done in person, such as opening an estate bank account. So yes, living in New York is the best option.
When is an Estate Bond Required? Bonds are sometimes required of the executor by the probate court. To get a bond, the executor will need excellent credit. When you are deicing about an executor, make sure it’s someone who will qualify. Those with financial issues and bankruptcies are not good candidates. They most likely will not get a bond.
How to Empty a House After a Death When it comes to a deceased person’s home, not only do you have to empty the contents, but you may have to remove people that live there.
Eviction After Death of Owner There are times that eviction may be necessary to remove a tenant. Commonly, once the owner dies, tenants feel they don’t need to pay, essentially living rent free. Therefore, eviction is necessary to be able to sell the home.
Eviction is a long process which takes on average 6 to 9 months. Therefore, you should get the ball rolling right away. If you wait for the tenants to do it on their own, you may add months or even years to the process.
Can an Heir Be Evicted? Absolutely. Even if it’s family. While there are steps and complications, it can be done. And it may be necessary for it to be done.
Removing Items from House After Death Lastly, you will need to clean out the items from the house, possibly disposing of the belongings. When serving as a professional executor, we take photos and videos of everything. After items are distributed according to the will, we send the photos to the heirs and ask what they would like. From there, we either have to find others that would like the items, donate them, or simply dispose of what is left.
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We are thrilled to have spoken with Carol Marak, solo aging advisor and advocate. Carol is the founder of the Elder Orphan Facebook Group, which launched in 2016 has almost 10,000 members. She also has a very successful YouTube channel called Solo and Smart and her book Solo and Smart, is slated for publication in 2021.
Carol attributes her seven years of family caregiving as how she learned to plan for the future. Between her and her two sisters, caring for their ailing and aging parents took almost all of their time.
Carol, a solo ager who does not have a partner or children started to wonder who was going to
do the things for her that she did to help her parents. She does not have children to rely on as
her parents did, and knowing the amount of care that they needed, she knew she had to plan
her future and figure out what to do.
Not long after this realization, she launched the Facebook group. She wanted to know if there
were others who considered themselves “elder orphans,” also referred to as those “aging
alone.” She started by reaching out to news publications and was surprised to receive quite a bit
of press. After that, the Facebook page started to take off, and that is when she realized that
there are more people than she thought that are just like her.
Using US Census data, Carol learned that in 2010, 27% of individuals 65 and older live alone.
These numbers are growing, and it’s believed that 2020 Census will have increased to 31%.
The Facebook group is for those 65 and older and without a spouse. You do not necessarily
have to be childless, as some of those with children living far away are also considered to be
aging alone. The group is very resourceful, as most have ample of real-world experience and
knowledge. They have many discussions about aging alone. For example, when a member
posts a question, they usually receive 400+ recommendations! One bonus is that they do not
allow politics or drama and there are over 30 sub-groups for specific areas, including New York.
Fear of Aging Alone The reality is that there are risks to those living alone, which can cause a bit of fear and apprehension. Carol believes that you have to shift your mindset. You can’t focus on all of the potential issues or problems and live in fear. You can’t live in a constant state of fear and never leave your home. She suggests shifting out of seeing yourself as “being alone.”
After all, there are close to 22 million people who are 65 and older across the nation who are in the same predicament. Instead of focusing the fact you are alone, change your thinking to connecting with the millions of others that are like you. There is most likely someone in your city, in your neighborhood, or even on your block. If you stay in the negative mindset, you run the risk of exacerbating your current illnesses and even becoming depressed. Negative thoughts to not help you to thrive, so Carol suggests you have to change your thoughts.
Building a Family of Choice A “family of choice” is a family built by meeting people, opening your heart, and being friendly.
Carol said that when her parents passed and she realized she was aging alone and would need to rely on herself, she knew immediately that she could not live in a single-family residence isolated from a larger community. This was her personal realization. Even if you live in a single-family residence in the suburbs, there’s no reason you can’t connect with your neighbors. It takes effort and a mindset shift to “yes, I can do this.”
A life coach once gave her an exercise when she was feeling alone and isolated. She wanted Carol to start small at the grocery store by making eye contact with the clerk and ask them how they are. Over time, Carol got better at saying hello and started to use this technique everywhere. This gave her confidence and the feeling of connection to the outside world. Now, she talks to everyone and focuses on making social connections wherever she goes.
She said that it’s important to remember that this takes time. She suggests being patient and loving to yourself during this time. Carol is confident and thriving, but it took patience and work.
Advantages of Elderly Living Alone There are advantages and positives to living alone. Personally, Carol loves to live to alone. She has implemented strategies and systems to make it work and she truly appreciates her life the way it is.
Carol believes that biggest reward of aging alone is you have so much time to create a life that you want to live and create a passion, such as volunteering and helping the community. You have the freedom to thrive and make the world a better place.
To learn more about Carol and read her blog, please visit her website at carolmarak.com.
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It’s not uncommon for couples to forgo marriage. Instead, they choose to live their lives together as
partners and significant others. But what does that mean for the other person when their partner dies?
In this particular situation, “Ed” wants to leave his estate to his long-time girlfriend, but he doesn’t want to
make one lump sum payment. Ed wants to leave her a set amount per month when he dies. We will use
Ed’s situation to explain how an inheritance works with non-married partners.
Should a Girlfriend Get Inheritance? Depending on the situation – absolutely, but the courts see it differently. Although many couples live as if
they are married, there is nothing official to legally bind them. So, while the other partner may want them
to inherit their estate, the laws dictate otherwise.
If there is no estate plan in place and the decedent died without a Will, then the reality is that the partner
will receive nothing. Unfortunately, the laws do not include a non-married partner when distributing an
estate without a will.
In the absence of a Will, the decedent’s next of kin would inherit the estate. By default, this would be the
kids, grandkids, extended family, and so on, but not the partners. This may be completely contradictory to
the decedent’s wishes, as the case with Ed.
While Ed intends for his girlfriend to inherit his estate, he will also need to evaluate and ask himself “are
my heirs ok with this?”
What is the Best Way to Leave an Inheritance? In this situation, as Ed wants to leave his estate to his girlfriend and does not want to leave a lump sum, a
Trust is recommended. A Trust acts as a wrapper for your assets; protecting them after you die. The trust
distributes your estate as you wish, and in this case, it’s to be distributed over time in monthly increments
to his girlfriend.
A Trust is actually a gift in and of itself. It is asset protection that your partner can’t buy for themselves.
Not only does a Trust protect your assets, but it eliminates risk factors such future divorce, bankruptcy,
creditors, and IRS. For example, if Ed’s girlfriend gets remarried, then divorced, the Trust protects the
assets from being distributed to the ex-husband.
How to Control How Heirs Spend Your Money A Trust can limit how the money is spent. After all, it’s your estate and legacy. By articulating your wishes
in a Trust, you control how the money is used, who it is used for, and when it can be used.
With a Trust, you have the ability to use your money to afford your heirs a good life by limiting the
recipient’s spending to health, home, education, etc. This is actually quite broad, as many expenditures fit
into this category, such as a new home and college.
Another bonus – limiting spending with a Trust helps to control free-spenders, gamblers, and addicts.
How Do Trust Funds Pay Out? A trust can set a specific dollar amounts or a percentage to be distributed. In Ed’s situation, he has
decided to allocate $1,000 per month to his girlfriend. While this is great for the current financial climate, it
does not consider inflation. In 10 to 15 years, $1,000 could feel like $500 or less. Therefore, some opt to
give a percentage. Then, as the Trust grows and normal inflation occurs, they will grow together.
A trust can be paid monthly, quarterly, or annually. The drawback to annually, is that it feels like a lump
sum. Generally, payouts are done monthly. People often as us, “how do you get the money – do you
have to call someone every month to receive it?” The short answer is “no.”
It is very easy to setup direct deposit or automatic checks. The administrator of the trust typically sets this
up in the beginning and the recipient receives their payments automatically, without asking.
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We had the privilege of speaking with Joy Loverde, author of two books, The Complete Eldercare Planner and Who Will Take Care of Me When I’m Old. She’s an expert in this area of solo agers and we are grateful that she shared her insight with our followers.
Who Will Take Care of Me When I Get Old? This is a very important question and Joy says that the answer is yourself. It’s a mindset. You
have to have the willingness to talk to others, make plans, and be willing to have these difficult
conversations right now. These conversations include signing legal documents, having them in
order, and having money in the bank.
Joy says that quite often, people are surprised to learn they are the person to take over the roll
of caring for someone. You never know who will land on your doorstep or something will happen
to us.
The reality is that some people do not have family members that will around when the time
comes. There are community groups out there for just this situation.
There are situations where there is no one to care for you and you run the risk of becoming a
ward of the state. This is not ideal. Joy says that you should do your research now to see what
you may need down the road. The worst thing you can do is do nothing.
Benefits of Aging in Place There are quite a few benefits to aging in place. But you need to show up and get out in the
community where you live so that others get to know you and you get to know them.
We get to know our surroundings and navigate them by memory, and if we get to know our
strengths and weaknesses now where we live, it will be beneficial to aging in place. You have to
be conscious of where you live. You can’t assume that things will be in place all the time. That
goes for both inside and outside of the home in the community.
Disadvantages of Aging in Place There are certainly a few disadvantages and risks, starting with the home aging along with us. A
bedroom on the second floor or basement laundry may also pose problems.
Another huge issue is that as we age, we may become forgetful. Being alone and forgetful is a
recipe for disaster, especially financially. We need to remember to keep money in the bank, pay
bills, etc.
Lastly, there is a caregiver shortage. There may not be anyone available to help when you
finally make the call to an in-home agency.
Manhattan and other big cities are a great place to age alone, as the city is walkable, and the
buildings have security. One advantage is that it’s easier to make friends. People tend to get
know their doorman, neighbors, and even the mailman. Buildings become their own community.
There are also many social activities you can get involved in that you can walk to.
Outside of the city, transportation can become an issue. Particularly driving cars as we age.
This is something to consider. You will need to factor in the cost of paying for ride share cars
each time.
How to Reduce Social Isolation (Zero Isolation) Joy’s chapter Zero Isolation talks about how to make friends. She says that one of the things we
need to look for when we join an organization is to make sure there is new people coming in all
the time. You want to look for clubs where there is a revolving door which will keep the
organization thriving. If there are no new members, the pool of friends and members may dry
up. You can also seek out new things online – cooking classes, language classes, etc. Just get
out there and meet people.
Another discussion is eating alone. While eating alone is fine, Joy recommends trying to eat
with people as often as you’re able. This can be as simple as eating on a park bench with a new
friend and inviting them to share your meal. Sharing your thoughts and ideas over food is a
great way to meet new friends.
During the holidays, Joy says that you do not have to feel obligated to go to family dinners.
Family dinners aren’t always positive and happy, and you simply don’t have to go. However, you
should be prepared that you may be lonely. A good idea is to plan something for yourself on that
particular day, even if it’s to clean and reorganize your closet.
How We Both Got Into Serving this Community Anthony is a professional executor. He is hired to navigate estates and probates for families and
heirs that are not nearby or are unable to serve. He realized that there is a great demand for this
type of assistance, and he enjoys being able to help people in this situation.
Joy saw a group of elders sitting alone in the dark at a nursing home on Thanksgiving when she
was just 14 years old. She didn’t understand why they ended up this way, especially since she
comes from a large Italian family. Over time, she realized that it was a lack of communication
between family members, leading her to write her first book. She wanted to get people talking
and we are grateful she has.
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If you’ve done your research, you know that a good probate lawyer is not cheap. So how can you start your probate case even if you can't pay now?
How much are probate attorney fees? Lawyer fees for the simplest probate case start at $3,000. But probate is naturally messy, since is involves family, money, death, and high emotions.
So probate fees are usually more, sometimes tens of thousands of dollars!
When to probate fees have to be paid? Generally, lawyers require an upfront payment, or retainer, before starting work on your case. The upfront payment is usually a few thousand dollars, depending on the estimated total fees.
Many folks, understandably, just don't have that money readily available, and ask "can probate fees be paid from the estate," at the end?
Yes, but only under certain circumstance. Why? Because estates can be unpredictable, with many twists and turns. While you may feel certain that there'll be plenty of funds to cover the lawyer fees, we've often seen:
- Unexpected mortgages or debts
- Unknown huge taxes due
- Assets aren't worth what you expected
- Assets had a named beneficiary, and therefore not part of the estate
What to do if you can’t afford probate fees? If you don't have the cash on-hand to pay a lawyer's retainer, here are some of your options to start your probate case now.
Deferred lawyer fee Work with a lawyer who will accept a deferred fee (paid at the end, from the estate). If you're able to find a lawyer to work with no upfront payment, expect some conditions.
For example, our office usually only accept deferred fee cases if you've also asked me to serve as your professional executor for the estate.
Contingent lawyer fee Contingent fees are the ultimate "no win, no pay" arrangement. If your lawyer in unable to get your inheritance for you, then you don't owe any fees. He only gets paid if he succeeds in getting your inheritance.
As you might expect, the trade-off is the fee will be higher than if you paid upfront: usually 1/3 of your recovered inheritance. But if you don't have the cash to start your case otherwise, you'll be glad this option even exists.
Contingent fee probate is limited to certain types of cases, such as:
- Will contests
- Proving kinship
- Unknown assets
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When does the executor tell the beneficiaries? Once the court process starts, which is usually shortly after death.
We often get this question when our Solo Ager clients name me as executor in their will.
When does the executor notify beneficiaries? No, the executor does not notify the beneficiaries upon you signing your will. This is a common concern. An executor only notifies the heirs after death.
When exactly? Usually during the court probate process. But sometimes informally before probate.
Example: if you best friend and beneficiary is working with me to coordinate funeral arrangements, it may naturally come up during conversation that she's named in the will.
Otherwise, the executor notifies all beneficiaries by mailing them a formal court document.
What does an executor have to disclose to beneficiaries? All beneficiaries in the will receive the same court form, which lists:
- The names of all beneficiaries
- A general description of what each beneficiary receives
For example: the form will not specify that Jane received your diamond ring, and John received $10,000. Instead, it will say something like "Jane received items of tangible personal property" and John "a cash bequest."
Generally, the executor does not send beneficiaries a copy of the full will. However, he must send the will to any beneficiary who also happens to be a distributee (next-of-kin).
Note: if you have a trust-based estate plan, rather than a will, then the notification requirements are different. You can keep information as private as you like.
Who else does the executor notify? In New York probate court, the executor must send notice to your closest surviving family, even if you disinherited them in your will.
Your executor must serve a court document and a certified copy of the will on each surviving family. So any disinherited heir will definitely be aware they were cut out.
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No, it's not a good idea to have an out-of-state executor. Although it's technically legally allowed, in reality an out-of-state executor causes tons of problems.
Banking Problems Opening the estate account You probably think opening a bank account is a piece of cake. And you'd be right, if you were opening an account for yourself, personally.
But banking for an estate is a different animal. But an estate account has tougher "know your client" rules, and the executor often must meet with a banker in person, at a branch, to open an estate bank account.
Troubleshooting problems When you have a problem with your personal bank account, these days you have limitless customer support options. Website, email, live chat, tweets, or call or walk in.
But with estates, you usually must walk into a branch and speak with a banker to get that missing statement or re-issue that 1099. And that can be a pain for an out-of-state executor.
Selling Real Estate Clean out Yes, cleaning out the home or apartment is part of the executor's duties. For an out-of-state executor, this can mean several trips in and out of New York to supervise the clean out.
Closing New York is one of the few states where most real estate closings are in-person, with all parties sitting around a table for a few hours.
Yes, it's sometimes possible to close with an out-of-state executor by signing and FedEx-ing the documents. But if any problems popup (as they often do with estate sales), it's better to close in-person, so the lawyers can troubleshoot any problems in realtime, and avoid an aborted closing.
Minor stuff (mail forward, etc.) There are countless small executor tasks to get the home ready for sale. Forwarding the mail, small repairs, returning extra keys, conversations with the super, etc. All much easier to handle with a local, New York executor.
Travel restrictions Sometimes an executor simply cannot legally enter the US:
- Unable to get a visa
- Immigration problems
- Quarantine or other travel restrictions
If any of these apply, the heirs may be better off hiring a New York professional executor, rather than a non-New York person.
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Erica Loberg shares the story of her mom's court-appointed stranger, and what she would to do differently to avoid a court-appointed conservator.
Erica first shared her full story at NextAvenue.org.
About Erica’s mom When all this happened, Erica's mom was 70 years old. She was not diagnosed with dementia, technically. But for years Erica's dad had handled everything. So when he passed away, it created a vacuum for mom's care.
How did she end up with a court-appointed guardian? Unfortunately, Erica's family was divided on how best to care for mom. So their uncle (mom's brother) stepped in and hired his own attorney. And that attorney recommended an independent, court-appointed conservator to have legal authority over Erica's mom.
Once that lawyer got the ball rolling, there wasn't much discussion or debate. This was happening. And before they could get their bearings, Erica and her sisters were in court.
What was so bad about mom's court-appointed stranger? First, he was a total stranger. Neither mom, nor Erica, nor any of the family members had ever met this person. And even after he received his court-appointment, he only met Erica's mom once.
Second, Erica discovered that he had a history of complaints. She spoke with the families of several of his past conservatees, and they had one message: keep him away if you can!
As for his actions:
- He isolated mom from her daughters
- He changed mom's phone number several times to hinder contact
- He cleaned out mom's house, disposing of all family and sentimental items
- He ordered renovations to the house, not for mom's benefit, but to generate rental income or sell (once he moved mom to a nursing home)
- The court-appointed stranger was able to coerce mom into all these steps with the constant threat that he would move her into a nursing home, otherwise
How did Erica finally get rid of the conservator? Erica contacted every agency and authority she could think of: from the court, to the police, and even the FBI. Finally, she had a breakthrough when she complained to the county Probate Investigator's Office.
After some struggle and negotiations, they were finally able to rid themselves of mom's nightmare court-appointed stranged.
What Erica would do differently? 1. Discuss with mom her wishes and intentions. And not just when a crisis is at hand. Do it way before mom or dad is on the verge of losing capacity 2. Help mom and dad make a will or estate plan 3. The rest of family needs to keep their act together. Conflicts will only get everyone dragged into court,
More about Erica Read the full version of Erica's story at NextAvenue.org.
Erica is also an author, and published a book of poetry inspired by her experience titled "I'm Not Playing"
FREE Copy of “The Solo Ager Estate Plan” Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Many people who ask me to be their executor commonly make their will using do-it-yourself methods. DIY estate planning can be tricky, so here are some tips on how to maximize the chances your DIY estate plan will actually work.
Our Methodology We created identical estate plans using 3 popular free DIY will sites. Here is the fictional persona we used:
- John Doe is a solo ager. That is, he's unmarried with no children
- Unless your will is super-simple, you should work with a lawyer. So John's plan is very basic: he'd like to give his estate in equal thirds to two friends and one charity
- John would like to nominate me as his professional executor
- John will hire a lawyer to supervise his signing, as we recommend. Therefore, we did not review each site's signing instructions
We generated John's will on the 3 free sites. Then, my trusted colleague Maureen Pritchard, Esq. and I reviewed the results.
FreeWill.com Our top pick for DIY will software is FreeWill.com. The site is well-designed, and pleasant to navigate, and John's will had zero errors.
The only caveat is the constant requests for donations. The site was funded by various charities, and they're not shy about asking to be named in your will. We were interrupted several times with prompts asking if John would like to add charitable beneficiaries to his will.
But if you're thick-skinned and can ignore the pushy requests, or if you plan to give to charity anyway, this is a great choice.
Pros * Very professional product. The will did not have any typos or substantive errors * Well-designed site. A very pleasant user experience * Includes health care documents, too
Cons * Barrage of requests for charitable donations * Your will includes signatures lines and initials on each page. These are not legally necessary, and feel like overkill
DoYourOwnWill.com DoYourOwnWill.com is truly a 100% free option for making a DIY will. You don't even have to give you email address (unless you want to save your will). This means that you're not even paying with your personal data.
But, just as in most of life, you get what you pay for. It may be completely free, but it has a few problems.
Pros * 100% Free. Not even an email required * Most private option * Easy-to-follow user-interface * Includes health care documents, too
Cons * Several typos in John's will. Despite the typos, the will was substantively fine * John's burial instruction is written into his will. In real life, this doesn't make much sense, since in many cases no one even looks at the will until after the funeral,.
RocketLawyer.com RocketLawyer is the most well-known brand on this list but be prepared to be up-sold from their free option to one of their more profitable packages.
It doesn't feel like they spent a lot of effort on this free version. The user-experience is very clunky, and John's will has substantive errors. Maybe the plan is to nudge free users to a better, paid version?
Pros * RocketLawyer is big name in legal DIY * You may already have a RocketLawyer account and feel comfortable with their platform
Cons * You must create an account, and it feels like you'll get up-sold a lot * John's will had a substantive error (the will treated the charity as an individual. Not necessarily fatal, but can cause headaches later during the probate process) * We couldn't find healthcare documents as part of the free package
There are many DIY estate planning sites out there. We hope that our review and recommendations will help you pick the one that's right for you. To learn more about the process of planning your estate, complete the info below to receive a FREE copy of my best-sellingbook.
FREE Copy of “The Solo Ager Estate Plan” Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
This is an important question for Solo Agers, or for anyone without family nearby.
Friends, Neighbors, Community Pros Your close friends, neighbors, etc. probably know your wishes best. And they also most want to honor you, have a nice remembrance.
Cons It’s a big ask, even for close friends. Tending to final remains, and organizing a funeral service is a big and emotional job. Your friends may prefer to attend your funeral, not run it.
Distant Family Pros Blood is thicker than water, right? You may feel than any relative, even estranged, is most appropriate.
Cons Just like with close friends, it’s a big ask. And distant relatives won’t know much about you or your final wishes.
Hired Professional Pros Want something done as you like? What better way then to hire someone? With friends and family, it’s either an honor or an obligation. Hire a pro, and it’s their job. A professional with a reputation to protect will reliably carry out your final wishes.
Cons A professional may not have the same warmth as a friend or family. But remember, someone like a professional executor is just organizing burial and the funeral. Your friends are still in attendance, and free to focus on remembering you.
The Public Option: Pauper’s Funeral Pros Well, it’s free. Yes, the state has a burial option of last resort for anyone with no family or no money.
Cons It’s in the name: this is a pauper’s funeral. Typically for the homeless, your burial will be carried out by New York’s incarcerated.
FREE Copy of “The Solo Ager Estate Plan” Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Want a professional executor, but prefer an institution such as a bank or trust company? Here’s what to expect.
The application process Like all other bank interactions, you must complete lots of forms and paperwork. It’s a lot of documentation, it may feel like you’re applying to college all over again.
And just like applying for college, you may feel like you’re applying for acceptance. Banks do not accept all executor nominations, and they have internal committees to decide which estates they will serve.
Bank minimums The lowest minimum I’ve seen is $1 million liquid assets, and it usually must be invest with the bank. But more usually the minimum will be in the range of $2-5 million, liquid and invested.
Trusts only Anecdotally, we’re beginning to hear that banks prefer to accept trustee appointments, and not executorship.
Some financial institutions flat-out reject clients who ask them to serve as executor, even when that client has millions invested with them.
Apparently some banks have acknowledged that being an executor is tough work, and perhaps not worth it for them.
Customer (higher) fees Most states have laws that set the executor’s compensation. But banks will usually ask you to sign a contract with it’s own fee schedule. Higher fees, of course.
Banks have many advantages (“immortality,” private client perks such as fine dining, tickets, etc.), just be aware of what it entails.
Contact Us for a Free Consultation
Here are the results of a survey and statistics to illustrate why folks think being an executor is so difficult.
Is being an executor difficult? The average executor doesn’t think the job is particularly difficult to understand. But, they do think carrying out the role can be difficult.
Source: https://www.statista.com/statistics/281604/difficulty-in-being-an-executor-of-an-estate-among-wealthy-americans/
Based on a survey by Statista, non-professional executors feel the most difficult parts of serving as an executor or trustee of an estate are:
Commitment of time required Many tasks seem simple, and would be if you were doing them for yourself (closing a bank account, getting financial records, etc.). But many executors realize how difficult those tasks are with an estate.
Insufficient legal or financial knowledge Yes, you can hire an attorney or CPA to advise on most matters. But what executors really want to know is: what are my chances of getting sued if I make the wrong decision?
Filing tax returns Executors must get tax clearance, to avoid being haunted by the IRS later. This can frustratingly take months.
Managing disagreement among heirs This is particularly awkward and stressful if it’s your own family. Thanksgiving gets even more awkward!
How much time does it take to be an executor? According to a survey by EstateExec.com, the average non-professional executor spends 570 hours to settle an estate.
Source: https://www.estateexec.com/Docs/General_Statistics
How long is 570 hours?
- 71 full workdays
- 14 full work weeks
- 3 1/2 months of work
Make sure you’re ok with this level of disruption to your job or leisure time, before accepting executorship.
How long do estates take to settle? On average, 16 months. In our experience, 16 months sounds low.
Source: https://www.estateexec.com/Docs/General_Statistics
Also be aware that it’s not a steady stream of work. Rather, there will be bursts of hectic activity, with long gaps of waiting in between.
FREE Copy of “The Solo Ager Estate Plan” Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Let’s take a look at a real world example of whether a Solo Ager’s estate plan worked towards the end of her life.
Ms.H’s Plan: DIY Will + Professional Executor Background Ms. H is a solo ager (unmarried, no kids, over 60 years old) who’s been estranged from her closest relatives (siblings and nieces and nephews) for decades.
She made a do-it-yourself will leaving everything to charity. Thankfully, she hired a lawyer to supervise her will signing.
Ms. H named me her professional executor in her will, and over the past 10 years her wishes have remained largely the same.
Recently Sadly, age has caught up with Ms. H, and she was recently hospitalized for lack of self-care. Her doctors agree they cannot discharge her to live alone anymore, so we’re making arrangements for Ms. H to move into assisted living.
She’s understandably anxious about all this, and even contacted her long-estranged niece and asked her to visit.
What Went Right with Her Plan? Ms. H avoided a few problems by naming me her professional executor.
First, she won’t have to deal with any “court-appointed strangers,” such as a guardian. Instead, she can turn to me, someone she’s chosen and has a relationship with.
Second, she felt comfortable reaching out to estranged family, without fear they’d try to sneak into her inheritance. Since Ms. H already has a will and an attorney-executor standing by, her niece has focused solely on reconnecting with Ms. H emotional, not financially.
And lastly, Ms. H’s doctors, hospitals, and social worker have all been grateful to have me as a main point of contact for her care.
What Went Wrong with Her Plan? Her plan does have a couple of weaknesses.
Since an executor steps in after death, I don’t have authority to help Ms. H now. For example, I can’t help make financial arrangements for her to access a better assisted living. She much choose among the options thru Medicare.
Also, if unscrupulous and aggressive family comes out of the woodwork, I have fewer tools to fend them off. We’d have to battle in court, which could waste Ms. H’s time and money, and cause her stress.
Why a Trust Could Have Been Better If Ms. H had made me trustee, I’d be better to avoid any court-appointed strangers for her. And more ability to upgrade her care, and deter unwanted family, without having to go to court.
FREE Copy of “The Solo Ager Estate Plan” Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”
Most NYers know the deal with co-ops: they’s less expensive than condos, but they come with a lot of rules and headaches. Here are 3 real world examples:
- Last to unlock
- Quick to Sue
- Release of lien
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- iTunes: https://apple.co/2XvtoVz
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- iHeartRadio: https://ihr.fm/2JwhDnV
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Today we’ll share a few recent examples of why folks were so happy and relieved to find me, and name me executor in their will
Today's stories:
- Don’t want to burden the boyfriend
- Former co-worker as a last resort
- Relieving an old friend
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- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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What do you do if you need a probate lawyer, but you don’t have the money now? Let’s talk about contingent fee probate.
- What are contingent fees?
- Some limitations
- Will contests
- Kinship
- Uncertain assets
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- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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Since we keep seeing folks who are going the DIY will route, a few more tips on how to make sure that software or will form actually works
Today we’ll discuss:
- Use local software/forms
- Keep it simple
- Hire a lawyer to supervise the signing
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- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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Talking Solo Agers and Hospice Care with Helen Bauer and Jerry Fenter from the Heart of Hospice podcast.
Helen shares her personal experience helping during a Solo Ager friend's final weeks. And Jerry shares some Solo Ager statistics and what he learned from Solo Ager Facebook groups.
Links: http://www.theheartofhospice.com/
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- iTunes: https://apple.co/2XvtoVz
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- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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I keep getting calls, asking me to be executor outside New York. I’m flattered, and honored, and yes AVAILABLE for that role.
- Locality becoming less important
- In-state agent requirement
- Reciprocal nonresident executor law
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LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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We’ll share the story of how one of my trusts played out, and how it’s accomplished the goal of keeping it in the family
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- iTunes: https://apple.co/2XvtoVz
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- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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We’ll share a few real-world amateur executor bloopers (of course, anonymized to protect our clients’ privacy)
- Choosing a disappearing banker
- The case of the missing $10,000 check
- "Oh yeah, taxes!"
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- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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Question from a listener: “Can you cover how to set prices as a virtual paralegal business owner (price high enough to cover the paralegals salary, subscriptions, training marketing, etc). Thank you!”
We’ll discuss:
- Calculate overhead
- Work backwards from an office salary
- Market research: your competitors
- Mark up for special training, experience
- Don’t forget taxes
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LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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An insider’s look into how the lockdowns are making probate even more difficult than usual. Even if lockdown over by the time this airs, probably lingering residual effects.
Today we’ll discuss how lockdowns are affecting:
- The courts
- Banks and brokerages
- Real estate
- The IRS
- Lastly, creditors
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- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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Against all advice, you’ve decided to use a DIY will. But you also want to name me your professional executor.
Today we’ll discuss:
- When you call me
- Show me your DIY will
- Supervised signings
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LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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For our paralegal listeners who want to add this practice area to their toolbox. For our clients, a sneak peek behind the curtain to see all that Janice does for you.
The 5 tips:
- Research, research, research
- IRS and taxes
- Use checklists
- Phone skills
- Learn your attorney
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LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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So you’ve named me executor in your will (or trustee of your trust). What’s next?
We’ll discuss:
- Regular check-in calls
- Where are your documents?
- How else I keep in touch
- How I’ll be informed when you pass
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LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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Today in our 3rd and final part, Janice will walk you through a day in the life of a work-from-home virtual paralegal. Today we’ll discuss:
- What does a virtual paralegal do?
- What does a virtual assistant do?
- Janice will walk us through her typical day
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LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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Today in Part 2, Janice will share how she grew her Virtual Paralegal & Administrative Services business. I’ll ask Janice about:
- How can a virtual assistant be a security risk?
- Manpower: when to expand?
- How to find virtual assistants?
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LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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If ever, now is the time to learn how to start your own work-from-home business. Today in Part 1, Janice will share how she started Virtual Paralegal & Administrative Services, and what steps you need to take to get started
Today I’ll ask Janice:
- What is a virtual paralegal?
- How to become a virtual paralegal?
- How to start a virtual paralegal business?
- Where to find virtual assistant clients?
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LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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Yes, I can and have served as executor for clients outside of New York. You just need to be aware of the pros and cons.
Pros:
- General legal and tax knowledge
- Independence
- General understanding of process
Cons:
- No local knowledge
- No boots on the ground
- More expensive
==========
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LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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Rich people don’t walk past free money, they pick it up (metaphor, not literally). Let’s discuss an estate planning example: asset protection trusts instead of direct gifts
Today we’ll discuss:
- What’s a direct gift?
- What’s an asset protection trust?
- Why it’s “free money” that EVERYONE should take
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LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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There are lots of reasons why a trust is better than just a will. And post-coronavirus, a trust makes even MORE sense.
Today we’ll discuss:
- Video notary instead of witnesses
- Quarantine is a new type of incapacity
- Locked down courts: another reason to avoid probate
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LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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Do you want to make or update your estate plan? But how, with social distancing?
We discuss:
- Fewer in-person meetings
- In-person signings
- Document handling
==========
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LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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Coronavirus and death is on everyone’s mind. So is it a good time to update your estate plan?
We’ll discuss:
- Reminder: no one can predict the future
- Yes, get started
- Be in the right state of mind
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- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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Market news probably makes you think you lost money in the stock market. Not true!
Here’s how you should react, by life stage:
- Students and Kids
- Working, not close to retirement
- Working, close to retirement
- Retired, fixed income
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- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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One bad tenant can blow up any real invest investment. Being a professional executor has shown me just how nightmarish a tenant can be.
We’ll discuss:
- Which estates have nightmare tenants?
- What are “nightmare tenants?”
- What to do about bad tenants?
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READ Pick up my books on Amazon. Reviews always appreciated!
==========
JOIN Sign up to my email list for book announcements
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WATCH Subscribe to my YouTube channel
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LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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I’m working on my next book about how to teach kids about money. #1 priority: make sure they understand and learn to love compounding interest!
We’ll discuss:
- Why compound interest is so important
- Why every parent should have a brokerage account for their kids
- Where to compound your kids’ money
==========
READ Pick up my books on Amazon. Reviews always appreciated!
==========
JOIN Sign up to my email list for book announcements
==========
WATCH Subscribe to my YouTube channel
==========
LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
==========
The second most common question about probate is: why does probate take so long? Lately, one of the biggest culprits is getting tax clearance.
We’ll discuss:
- Why tax clearance is so important
- Estate tax on the 1%
- The IRS and the Deceased’s 1040
- See you next April
- Don’t Forget form 5495!
==========
READ Pick up my books on Amazon. Reviews always appreciated!
==========
JOIN Sign up to my email list for book announcements
==========
WATCH Subscribe to my YouTube channel
==========
LISTEN Subscribe to the “Simple Money Wins” podcast at:
- iTunes: https://apple.co/2XvtoVz
- Google Play: http://bit.ly/2XRWDRK
- Stitcher: http://bit.ly/2Xuct5A
- Spotify: https://spoti.fi/2XMDYa3
- iHeartRadio: https://ihr.fm/2JwhDnV
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