Executor Seeks to Resign from Role in Texas Lawyer’s Estate

Conference roomWhen the famous Texas attorney John O’Quinn died in 2009, he had over 1,200 automobiles—but no children and no heirs.

  1. Gerald Treece, who was a longtime friend of the late O'Quinn, recently filed a petition to resign as executor of O'Quinn's estate. He served in that role since shortly after O'Quinn died in October 2009 when he crashed into a tree going 60 miles an hour with his Chevy Suburban and his own private driver and friend in the passenger seat.

Texas Lawyer’s recent article, “Treece Will Resign as O'Quinn Estate Executor,” reports that an amended petition was filed on June 21 in O'Quinn's probate case.

Treece, vice president and associate dean of advocacy at the South Texas College of Law in Houston, informed the court that he wants to resign, despite that fact the administration of O'Quinn's estate is not finished, and there are the outstanding claims still pending, due to litigation.

The details of the April 6 settlement, which followed a one-day mediation, are confidential. But on June 6, the John M. O'Quinn Foundation filed an application with Houston Probate Court Judge Mike Wood to appoint J. Cary Gray, the managing partner of Gray, Reed & McGraw in Houston, as his successor.

The foundation contended that it’s necessary to appoint a successor to Treece to serve as successor independent administrator, "because claims against the decedent's estate remain and all of the assets in the decedent's estate have not been distributed." In addition, the foundation said that the alternate executors in O'Quinn's estate, both declined to serve as Treece's successor. One of them is the president of the board of trustees of the foundation, and the other is Bank of America.

Treece is asking for a "full judicial discharge" from all liability for all of the actions that he’s taken as executor. In his application to resign as executor, he noted that this would include all fiduciary fees. He also asked the judge to have the estate cover his attorney's fees and expenses relating to any litigation related to the estate. This would cover a lawsuit filed by O'Quinn's longtime companion against a funeral home seeking to get O'Quinn's body returned to Texas from Louisiana.

Reference: Texas Lawyer (June 23, 2017) “Treece Will Resign as O'Quinn Estate Executor”


Estate Planning with No Heirs

Old lady gardeningSome people have a somewhat unique estate planning challenge: they’re childless and not sure what should happen to the assets they leave behind or whom to appoint as their proxy decision-maker.

CNBC’s recent article, “Planning your estate when you've got no children or heirs,” says there may be no close family members, resulting in questions of who they should leave their estate to. These folks also often don't know who to name as executor of their will or who to trust to make decisions for them, in the event that they become incapacitated.

Studies show that most childless people don’t make out a will. The issue with having no will (or “dying intestate”) is that the state will decides who gets your assets. Therefore, it is recommended that for those with no family ties or close friends, to focus on your interests and tie them to charitable giving. You can immediately establish your legacy and enjoy it, while still living.

Another tough decision is choosing someone to have medical power of attorney, which allows that person to make important health-care decisions if you’re unable to do so. Usually married couples will name each other as their health-care proxy, but after the death of one spouse, the other with no children has the challenge of naming someone else. The same is true for childless singles who never married.

Likewise, a living will details your wishes if you’re on life support or suffer from a terminal illness.  It also instructs your proxy's decision making. You also should give someone durable power of attorney to act as your agent, if you’re unable to handle your finances. You can designate different people to handle healthcare and financial decisions.

You also need to designate someone to be the executor for your estate. This can be challenging for those without any family. The executor or “personal representative” has the legal authority to handle your estate. It should be someone you trust and someone who has the bandwidth to take on this responsibility.

If you can’t think of a person to name, your bank's trust division may be willing to serve as executor. You may also consider setting up a trust. Remember that some assets have beneficiaries, like 401(k) plans and life insurance policies. These accounts don’t pass through the will.

Doing something is better than doing nothing. Speak with an experienced estate planning attorney to get help with making these decisions and creating a plan.

Reference: CNBC (May 31. 2017) “Planning your estate when you've got no children or heirs”


Dad Just Died Without a Will… Now What?

Old boots“You can’t be forced to take on the burdens of the administration of an estate, merely because you are an heir.”

If your father died suddenly of a heart attack in New Jersey without a will – but had a home with a second mortgage, a vehicle and significant credit card debt – what would you need to do? A recent nj.com’s post asks “Who is responsible if dad dies with no will?”

Needless to say, when someone dies without a will and leaves nothing to guide their heirs, things can get complicated. But the process of being appointed as executor if there’s a will (or as administrator if there’s no will), typically isn’t that difficult or expensive.

Bonds are typically waived for executors, but many times administrators must post a bond. The bond amount is derived from the value of the estate. If you’re appointed as an executor (or as an administrator of your father’s estate), it doesn’t make you personally responsible for any of his unpaid debts or obligations. You can’t be forced to take on the burdens of administration of an estate, merely because you are an heir.

However, once you agree to serve and you’re appointed as an executor (or an administrator) by the court, you can’t just bail. You’d have to have the court’s okay to resign. A successor fiduciary would then need to be appointed.

When there’s real estate involved—in this case the father’s home—and you’re an heir of the estate, when the foreclosure of the mortgage is started, the heirs will likely be named in the proceedings—regardless of whether you’re an executor (or an administrator). But you don’t necessarily have to respond to the pleadings.

If no family member is willing to serve as a fiduciary to administer the father's estate, and with assets in the estate to be administered and debts to be paid, the court most likely would appoint an attorney to serve in that capacity. In New Jersey, the statute says creditors can also apply for the job. The administrator is paid from the sale of the assets.

Assuming that the father in this example wasn’t married at the time of his death, his only children are three siblings and there was no will, each sibling would be entitled to a one-third share of his estate based on the laws of intestacy. They’d also each be entitled to be appointed and to act jointly as administrators of his estate. However, any one or two could renounce in favor of the other(s). This has no effect on that person’s one-third share of the estate.

Reference: nj.com (February 23, 2017) “Who is responsible if dad dies with no will?”


Selecting the Right Executor for Your Estate

Question mark with peopleWhen you look at the desired traits of an executor for your estate, look for a person who has the capacity to carry out the needed tasks, is willing to serve in this role and is very familiar with your unique situation. However, The Brainerd Dispatch’s recent article, “How to find an estate plan executor outside of your immediate family,” explains how to find an executor if you don't know an individual who meets these three criteria. What are the options for getting an executor, if there are no immediate solutions within your family or your close friends?

Many experienced estate planning lawyers say that it's typically best to find an individual to serve as the executor of your estate. If you can’t think of any readily obvious choices that you believe would be a good fit, expand your thinking. Perhaps there is an adult grandchild who might be a possibility. You might also have a good relationship with the adult child of a close friend who’d be able to carry out the tasks of executor.

Folks are typically very willing to help, if asked.  However, make sure that it’s not just anyone, but someone with some financial or legal knowledge and who is familiar with your wishes, even if they're not a member of your immediate family. They should also not be afraid to seek help from an experienced estate planning attorney.

There are some alternatives to working with an individual. If finding an individual you trust and is willing and able to serve as an executor for your estate is impossible, then you may consider engaging a third party to serve as your executor.

A financial advisor probably won’t be able to serve as the executor of your estate, due to his or her potential conflict of interest. However, you may be able to hire an experienced estate planning attorney. At the very least, he or she may have some relevant recommendations.

Whether you name an individual you know and trust or a professional third party as the executor of your estate, it's crucial to review the details of your financial and estate plans. You should also let the executor know the location of your important financial documents and information. This will make settling your estate an easier task and lighten the burden that you’ve entrusted to your executor.

Reference: Brainerd (MN) Dispatch (December 23, 2016) “How to find an estate plan executor outside of your immediate family”


Should I Just Copy and Paste an Estate Plan from the Internet?

Senior couple at computerHave you considered creating your own estate plan from a template on a website, instead of using the services of a qualified estate planning attorney? Is that smart?

Modern Medicine’s article “Estate planning: Don’t make these mistakes”, says that, in some instances, folks try to create their estate plan without consulting an experienced lawyer. These folks think that because they may have a general understanding of estate planning, they can do it for themselves without the help of an estate planning lawyer. But everyone’s different, and boilerplate forms won’t always cover a specific situation. Take a look at this list of potential estate planning mistakes that you can help to avoid by working with an experienced attorney.

Failing to update your estate plan. Your life and financial circumstances may change over time. As a result, you need to change your estate plan accordingly.  You should also make sure to review your plan regularly.

Failing to revise your will. The will that you drafted 15 years ago may no longer apply for a variety of reasons. You can’t just cross-out provisions or names on an old will, add or change information, and initial the document. That won’t work and could revoke the entire will. You need to see an estate planning attorney.

Failing to use more than joint tenancy to avoid probate. Many assets are transferred outside of wills, like assets titled in joint tenancy that pass to the surviving joint tenant, not under your will. Remember this only avoids probate on the first death. When the surviving spouse dies, the home will usually end up going through probate.

Failing to coordinate the will and trust. If you have a will and a trust, you must ensure that the documents are aligned so your wishes will ultimately be carried out. If you don’t, there will be delays and unnecessary expenses.

Failing to title assets correctly. You want your primary residence, vacation home, bank accounts, brokerage accounts, retirement accounts, and vehicles to be passed on to the persons you designate.  Therefore, be certain to keep beneficiary designations up-to-date and to properly title accounts.

Failing to name successor or contingent beneficiaries. If you don't update a beneficiary designation after a beneficiary dies, there’ll be no successor to receive those assets when you die. You should name more than one beneficiary on your accounts and keep your designations up to date.

Failing to name a person to make health care decisions. Designate someone that you trust to follow your wishes as far as your healthcare decisions in the event you are incapacitated. Depending on the state, this may be called a living will, a medical directive, a health care proxy or an advance health care directive.

Failing to update outdated financial powers of attorney. If you chose a person to make financial decisions for you with a power of attorney some years ago, his or her circumstances may have now changed, along with your situation. Consult with an attorney about how to proceed.

Reference: Modern Medicine (December 1, 2016) “Estate planning: Don’t make these mistakes”

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