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Tuesday, May 6, 2014

Prove It First

Sue, the executor of her dad Luke’s estate in the probate court, decided to deny the creditor claim filed by a fen shui/interior decorating consultant.  So far as Sue knows, the consultant only met once with her dad, and Luke told Sue that he wasn’t buying anything.

So Sue files written notice with the probate court that she is denying the $20,000 claim and sends a copy of it to the consultant.  Now the consultant has to prove her claim in court before Sue has to pay her.  Then either the consultant or Sue can make a motion to be heard by the court to decide.

To prove the claim, the consultant might be able to submit copies of order forms for custom-made furniture signed by Luke before his death.  At the hearing, the consultant presents her proof of the amount owed, and Sue presents what evidence she has, such as the fact that no furniture was ever delivered, to show that it is not owed. 

The judge rules on whether Luke’s estate has to pay the claim.  If the judge rules the estate does not have to pay, the consultant cannot take Sue to any other court to collect the money she says is owed, unless she appeals the probate court ruling directly.  And if the court rules the estate does have to pay, Sue will have to pay the bill before she can close the estate.

For advice on taking care of a deceased family member’s bills and assets, call our office at (815) 436-1996 for an appointment.  © 2014 Gruber Law Office, Ltd.


Tuesday, April 29, 2014

What Furniture?

Sue, the executor of her dad Luke’s estate in the probate court, is deciding about paying the creditor claims she has received from people saying Luke owed them money.  

Six of them were about what she expected, although her attorney told her about a few late fees and other charges that she would not have to pay.  However, the $20,000 claim from a feng shui consultant is not what she expected.  She remembers that her dad did talk to an interior decorator about two months before his death, but Luke said he didn’t like what she had to say and wasn’t buying anything.

Sue does not have to pay the bill just because the consultant sent in a claim to the probate.  As executor, she can request more information.  Then she can challenge the bill in court if nothing can be worked out with the consultant.

Here, the consultant’s more detailed bill shows the ordering of custom-made furniture to the tune of $13,000, plus a $5,000 fee to the consultant.  Delivery charges of approximately $2,000 are expected, with some deliveries supposedly already made. 

Sue did live with Luke, so she knows that no new furniture has yet come.  Plus, from her previous conversations with her father, she thinks he never ordered any furniture.  So she has decided to “deny” the claim to force the consultant to prove the claim in court.

For advice on taking care of a deceased family member’s bills and assets, call our office at (815) 436-1996 for an appointment.  © 2014 Gruber Law Office, Ltd.


Tuesday, April 22, 2014

More Probate Protection

The last time we checked on Luke’s estate, Sue, his only child and the executor of his will, published notice of the probate to creditors in the newspaper as required by the court.  Plus, she sent copies of the notice to all of Luke’s creditors she knew about.

That system is partly to be sure that her father Luke’s rightful creditors get paid from his estate.  However, it also can protect Sue from inaccurate or fraudulent claims of creditors. 

In order to be assured of being paid, each creditor must file a claim saying how much Luke owed to the creditor and what the bill was for.  After she receives the claim from the creditors, Sue can review them all.  If six look right in light of what she knows from previous bills or conversations with her dad before his death, Sue can tell them that she will pay them. 

But one of them came from “nowhere” so far as Sue can tell.  In probate, Sue can challenge that claim before she would have to pay it.  The feng shui consultant submitting a $20,000 claim would have to prove his claim to the probate court if she challenges it.  We’ll talk more about why she thinks the consultant cannot prove his claim in our next column.

For advice on taking care of a deceased family member’s bills and assets, call our office at (815) 436-1996 for an appointment.  © 2014 Gruber Law Office, Ltd.


Tuesday, April 15, 2014

Protection From Late Creditors

Sue has learned that the court probate process is designed to be sure that her father Luke’s rightful creditors get paid from his estate.  However, the process is not a one-way street.  It also protects Sue from creditors who do not notify her that Luke owed them money in a shorter amount of time.

To do this, probate requires that Sue publish notice in a local Will County newspaper three times that Luke’s estate has been opened, that she wants to know about any creditor claims, and where any such claims should be sent. 

Sue also must send a copy of that notice directly to the creditors she already knows about soon after that.  But then the creditors have to file within six months of the first newspaper publication of the notice or forever hold their peace. 

That protects Sue from a creditor coming back in a year or more, finding out about Luke’s death, and then saying Luke owed them money after Sue thinks all is settled.  If there were no probate and its required notice, any creditors would have two years to let Sue know about Luke’s bills.

For advice on protecting your family from potential claims against your estate, call our office at (815) 436-1996 for an estate planning appointment.  © 2014 Gruber Law Office, Ltd.


Tuesday, April 8, 2014

Protection From Potential "Heirs"

Sue is learning that the court probate process protects her as well as any other potential beneficiaries and creditors of her father Luke’s estate.  Sue thinks she is Luke’s only child. However, a man a few years younger, Chandler, was raised by his mother to believe that Luke was his father; Luke denied it, and never spoke to his family about it at all.  

Chandler now lives in Arizona.  Since Chandler is not mentioned in Luke’s will, he might be able to challenge the will based on his paternity claim.  Probate requires that Sue give notice of the will and probate to all of Luke’s heirs.  Then those heirs can file a challenge to the will in court.  But they have to file within six months of the court admitting the will to probate or forever hold their peace. 

Sue does not know about Chandler or that he thinks he is also Luke’s son.  That makes Chandler an “unknown heir”.  When Sue publishes the Notice to Heirs in a local Will County newspaper in the legal notices, the court accepts that as sufficient notice even to Chandler. 

After six months, then, Chandler is barred from contesting the validity of Luke’s will.  That protects Sue from Chandler coming back in a year, finding out about Luke’s death, and then making a claim on Luke’s assets after she thinks all is settled. 

For advice on protecting your family from potential claims against your estate, call our office at (815) 436-1996 for an estate planning appointment.  © 2014 Gruber Law Office, Ltd.


Tuesday, April 1, 2014

Probate Protection For Sue

After widower Luke’s death several weeks ago, his only child Sue has discovered that she had to go to the probate court to get access to Luke’s money to pay his bills and get the leftover assets for herself. 

Although probate is designed to protect creditors and other potential beneficiaries from losing their fair share of a deceased person’s estate, it also can protect Sue. 

She found and filed Luke’s Will that leaves everything to her, names her to serve as executor, and waives her having to obtain an executor’s bond.  After preparing the Petition and supporting documents for the court, her attorney obtains a court order stating that Sue is the independent executor of Luke’s estate.

That means that only Sue is authorized to gather Luke’s assets and decide what bills to pay.  She authorizes her attorney and/or others to get confidential information about Luke’s money and property.  But Sue is the only one who can legally move his money, sell the house, or pay bills from his money. 

Probate court protects Sue from others getting to Luke’s estate assets too soon after his death, including creditors.  The probate process allows her the authority and time to properly determine what everyone’s fair share is.  For advice on avoiding or simplifying probate for your family in the event of your death, call our office at (815) 436-1996 for an estate planning appointment.  © 2014 Gruber Law Office, Ltd.


Tuesday, March 25, 2014

Others Protected By Probate

Sue’s father, Luke, passed away last week six years after his wife, and Sue is his only child.  At the bank, Sue has learned that she cannot get access to Luke’s money to take care of his estate without going to court. 

She finds this aggravating, and she has found his Will that leaves everything to her as expected.  So she asks again, why should I have to go through a court process when no one else has anything to gain or lose? 

Well, certain other people may have something to gain or lose, and probate is set up in part to protect them.  Those people are Luke’s creditors.  Luke actually owed $20,000 in back taxes and $30,000 in medical bills at the time of his death.

Those creditors are entitled to be paid before Sue gets any money from his estate over and above the funeral bill and expenses of probate.  If Sue could get the money without court, how would those creditors get paid if she had already spent Luke’s money before the creditors tried to collect?

Probate court is designed in part to prevent chaos and a race to the bank after someone’s death.  Getting to the money first with a good story should not be all it takes to get someone’s assets after his death. 

Court authority is designed to make it so everyone gets paid his or her fair share.  For advice on avoiding or simplifying probate for your family in the event of your death, call our office at (815) 436-1996 for an estate planning appointment.  © 2014 Gruber Law Office, Ltd.


Tuesday, March 18, 2014

Why Probate Court For Only Survivor?

Sue’s father, Luke, passed away last week.  Sue is his only child and lived with him since her mother’s death six years ago.  Sue needs to pay Luke’s funeral bill, but she does not have the cash (or credit card limit) to do it herself.  And, as we explained last week, she also can’t get to the money he had in his bank accounts. 

Sue figures she should get a quick and easy home equity loan from the bank.  After all, her dad had the house completely paid off long before his death.

But the bank cannot give her a home equity loan either.  Why?  Because it is in her parents’ names only.  “But I’m their only daughter and the house is mine now,” complains Sue. 

The bank still cannot make the home equity loan; Sue does not have proof that she owns the home.  In fact, the house will probably be Sue’s in the end, but not necessarily. 

What if the bank let her have a home equity loan and then Sue’s cousin Gracie filed a Will for Sue’s dad that said that Gracie was supposed to get the house?  That could be a problem for the bank, Sue, and Gracie.

Probate changes ownership via a court process, which prevents money from being taken based on a race to the bank by convincing relatives after a death.   Until there are court documents saying who is in charge after death, no one is authorized to take out a mortgage or home equity line on the house. 

For advice on avoiding or simplifying probate for your family in the event of your death, call our office at (815) 436-1996 for an estate planning appointment. © 2014 Gruber Law Office, Ltd.


Tuesday, March 11, 2014

Why Have Probate Court At All?

Sue’s father, Luke, passed away last week.  Sue is his only child and has lived with him since her divorce and her mother’s death six years ago.  They were very close, but after Mom passed away, they did not like to talk about death at all.  So they never changed the house deed or any bank accounts, for example.

When Luke passed away, he had several large bank accounts still joint with his wife, and the house was also in both of their names.  Sue’s part-time retail job had allowed her to care for Luke and also provided her own spending money.  But Luke took care of all the house expenses, most groceries, and car costs. 

Sue wants to pay Luke’s funeral bill.  But she doesn’t have enough cash of her own.  The Bank has told her that they won’t allow her to use any money from Luke’s accounts even for the funeral without something from the probate court.

That’s because Luke’s death means that neither account owner (Luke and his deceased wife) is able to sign for money from those accounts, so the Bank is not allowed to release any money, even to Sue who the Bank knows well from the many years she brought Luke to the Bank.

Probate court steps into the breach.  It can authorize the bank to release the money, but it means the money is not the Bank’s to release to anyone until it receives court papers. 

For advice to simplify bill-paying for your family in the event of your death, call our office at (815) 436-1996 for an estate planning appointment.   © 2014 Gruber Law Office, Ltd.


Tuesday, March 4, 2014

Putting Assets into Trust

Dan is taking care of his daughter, Ann, after his beloved Abby’s death in a car crash.  Last week, we wrote about Dan deciding to create a trust that protects both Ann and him in the event he becomes disabled or passes away unexpectedly. 

To make his trust work, Dan needs to transfer his assets into his trust.  Most transfers are done by changing the owner of his assets to his trust, with his name as trustee instead of as an individual. 

His checking account, for example, will no longer be in his own individual name.  Instead, his monthly statement will list him as trustee of his trust.  His printed checks need not be changed, but his statement confirms that the bank paperwork has been properly changed.

Certain assets, like his life insurance, 401K plan and IRAs will not immediately change ownership.  Instead, the beneficiary designations of those items will be adjusted to name his trust rather than another person or his own estate. 

This process is often called “funding” the trust and is absolutely essential for Dan to actually receive all the important benefits of having his trust, minimizing possible guardianship in the event of disability and avoiding probate after death.

For help properly creating and funding your own trust, call our office at (815) 436-1996 for an appointment.

© 2014 Gruber Law Office


Tuesday, February 25, 2014

Another Option for Dan

Dan is taking care of his daughter, Ann, after his beloved Abby’s death in a car crash.  Last week, we wrote about Dan coordinating the beneficiary designations of his life insurance and 401K with his Will. 

However, Dan wonders if he should do a trust for himself right now, with a contingent trust for Ann in the future.  That way, his estate would not need to go through the probate court to get into Ann’s trust.  

More important to Dan, though, is that his trust would be in effect before his death, when it could avoid probate court while he’s still alive.

If Dan were to become disabled, his trust would allow his brother, Sam, to manage Dan’s assets to pay the necessary bills for both Dan and Ann.  And Sam would not have to petition the probate court to do it or file yearly reports with the court.

That takes care of both Dan and Ann, in the event Dan has some unexpected accident that disables him either permanently or temporarily.

Surviving spouses need to take action to protect themselves and their family in the event of another unexpected death.  For help with your own estate plan, call our office at (815) 436-1996 for an appointment.

© 2014 Gruber Law Office


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