Are you unwittingly making mistakes as an Executor of an Estate? If so, you could be in for a legal battle of your own! To help protect you in your role as Executor, we’re sharing a few of the most common mistakes we’ve seen made by Executors, that you’ll want to avoid.
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1. Rushing to pay Estate bills. Out of habit, an Executor may be inclined to pay Estate bills and invoices as soon as they receive them, just as he/she might do for their own personal bills. However, as an Executor, your job is not that simple. In fact, paying some bills, like credit cards, before other Estate debts, such as taxes and funeral expenses, may expose you to personal liability for a breach of fiduciary duty. We advise seeking guidance from a probate attorney before paying any Estate bills, to ensure that Estate creditors are paid in the proper order according to your State laws.
   
2. Trying to increase Estate funds. It can be tempting to invest Estate assets in an investment opportunity you believe to be a “sure thing”. No matter how convinced you are in the return on the new investment, unless you are willing to personally cover any losses the Estate may suffer, it’s just not worth the risk. Your role as Executor is to CONSERVE the assets; not necessarily grow them. If you elect to invest the Estate funds in a manner inconsistent with the decedent’s existing investment plan and decrease the value of the Estate, you could open yourself up to a lawsuit for breach of fiduciary duty.
3. Mismanaging Estate real estate. If the Estate you are managing owns real property, you need to determine whether the property requires security or needs any maintenance to preserve its current value. We recommend that you consult the property’s insurance agent to ensure proper coverage remains in effect until the property is sold or distributed. If someone is currently living in the Estate home, you may need to negotiate a rental agreement with them or seek assistance for eviction purposes. Additionally, you likely will need to arrange for an appraisal of the property. If the property is a residence, your job may include arranging for the clearing of any personal property and a cleaning of the home. You also will be charged with determining whether improvements should be made to the home in preparation for a sale. 
4. Losing track of Estate personal property items. Would you notice if a few of Grandma’s favorite rings disappeared? Once you are appointed by the Court to your position as Executor, making an inventory of all Estate assets should be a priority. Failing to do a timely inventory of assets, specifically personal property, will make it difficult to determine if items go missing. It is not uncommon for family members to “help themselves” to personal items of a deceased family member, without obtaining the required permission from the Executor. It is often recommended that the Executor change the locks on all properties containing personal items as soon as possible to avoid anything going missing. This move will help protect you from being sued by beneficiaries who may claim they did not receive their full distribution because you did not responsibly protect the Estate assets.
5. Distributing Estate assets too quickly. You must reserve sufficient assets to pay any Estate bills, such as creditor claims, utilities, professionals (i.e. accountants, attorneys, and realtors) and taxes. Executors are often pressured by heirs to distribute some or all of their inherited share as soon as possible, sometimes within weeks of the funeral. We advise taking a very cautious approach to asset distribution as you will be held personally liable if the distribution is mishandled. Your Estate accountant and attorney will be helpful in deciding how much and when to make distributions. Your role does not require you to meet the distribution demands of the beneficiaries. Instead, your job is to oversee the Estate in such a way that the assets are preserved, Court requirements are fulfilled, final Estate bills are paid, and THEN distributions can be made.
   
   If you have questions about Kansas probates, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.

You may find a point in time when your parent needs assistance with their finances. Taking over financial responsibility for a parent can be a touchy topic, but if done properly, can often provide a great sense of relief.

If you have been appointed as your parent’s financial power of attorney and the time has come to begin assisting them, here are a few pointers to ease the transition:
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• ​​​​Begin the conversation early. Do not wait until your parent begins to show signs of senility or other serious health complications to talk about how they would like their business affairs handled. Ask your loved one to prepare a list of their assets. This list should include other information such as locations of assets, helpful business professionals, passwords, etc. If your parent is willing, you might begin by working together to pay bills, review bank accounts, balance checkbooks and prepare taxes.
• Understand your role. As a financial power of attorney, you owe a special duty to care for your loved one’s assets called a “fiduciary duty”. This means that you have a legal obligation to act in their best interest and to do everything in your power to preserve the assets under your control. An intentional failure to do so can have you facing legal consequences.
• Be respectful to your loved one. Accepting help from someone, even a child or other trusted individual, is difficult for many people. Once you assume full responsibility for their finances, make an extra effort to maintain an open line of communication with your loved one to reassure them of their financial status.
• Keep good records. As a financial agent for someone else, your record keeping needs to be clear and concise so you can provide quick and accurate answers regarding the current state of your loved one’s finances. If you are not an organized person, you may want to reconsider accepting the role as financial power of attorney. Banks with a trust department are usually willing to act as financial power of attorney for a fee if a family member is not able or willing to serve in that capacity.

If your loved one is facing admission to a nursing home for long-term care and you’re concerned that you won’t have enough money to cover their expenses, there are a few things you should consider. With an average cost of over $5,600 per month for a semi-private nursing home room in Kansas (2019 Genworth Cost of Care Survey), very few of us could afford to private pay for a nursing facility for very long. KanCare is the Kansas Medicaid Program that you will apply to if you need government benefits to assist with payment in Kansas.

Too often, well-intentioned friends, neighbors and non-elder law attorneys or other professionals make recommendations on how to apply for Medicaid benefits to cover nursing home expenses that result in a denial or extended delays in benefits, both of which result in unnecessary expenses to the applicant. To prevent this from happening to you, we’re sharing some things to consider:

1. Consider who is giving you advice. Everyone seems to have advice to give in this situation, because many people have experience with someone going into the nursing home. However, Medicaid rules change frequently and planning is extremely specialized to each individual’s personal needs and their assets. Thus, what worked for your neighbor’s grandmother WILL NOT work exactly the same for your loved one.
2. Seek knowledge from someone who is going to look out for your best interest. This is typically going to be someone that you hire, like an experienced elder law attorney. While most nursing homes offer to file your Medicaid application for free, you should keep in mind that their goal is simply to get you eligible for benefits so that they can continue to receive payment for their services. It isn’t their job, nor do they have the time or the resources, to put an elaborate Medicaid plan in place. Alternatively, an elder law attorney hired by you is there to create a plan that allows you to preserve the maximum amount possible and establish eligibility quickly and efficiently in the most cost-effective manner.
3. Be careful when spending down assets for eligibility and be honest on your application. Recommendations on how to spend down assets in order to qualify for Medicaid benefits from anyone other than a highly trained individual, like an elder law attorney, can result in a prolonged denial of Medicaid benefits. If an individual does become eligible, but it is later determined that they improperly spent down assets that were not reported correctly, they could find themselves facing fraud charges. Elder law is a complicated body of law and without a full understanding of the rules, you can easily and unintentionally make costly mistakes.
4. If you have filed an application and been denied, don’t despair. While it is better to not be in this situation, it doesn’t mean that all hope is lost. Because elder law is not generally well understood by the public, mistakes commonly happen with people who are sincerely trying to help their loved one receive the financial assistance they need for nursing home care. As the phrase goes, “You don’t know what you don’t know.” As quickly as you are able, you will want to make an appointment with an experienced elder law attorney to discuss whether an appeal is possible.

Now that you are armed with more knowledge, remember to consult with an experienced elder law attorney should you need to file for Medicaid benefits in the future. More than one client has told us after we corrected an inaccurately filed Medicaid application, “I wish I would have just come to see you first!”

If you have questions about Kansas elder law or Medicaid planning, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.

It’s not uncommon for new clients to be undecided on what type of estate planning vehicle will work best for their situation. A good attorney will listen carefully to a client’s needs and wants to suggest the ideal estate plan to achieve a client’s goals (or explain why those goals are unrealistic or unachievable).

To help you prepare for your initial visit with your estate planning attorney, we’ve put together some of the questions you should consider before your meeting. This list isn’t comprehensive, but if you can answer most of these questions, your attorney will be better able to guide you toward the type of estate plan that will best serve your needs. 

• Who would you want to act as your agent for healthcare and financial purposes if you were incapacitated?
• Who would you want to be in charge of your estate after your death?
• Are you planning for distributions to minor children?
  • If yes, do any of these children have special needs that cause you concern, such as a disability or health condition?
  • Have you selected guardians and conservators to care for those minor children in the event of your death?
• Are you planning for distributions to adult children?
  • If yes, do any of these children have special needs or circumstances that cause you concern, such as creditor issues, substance abuse, rocky relationships, etc.?
  • Is there any conflict between the children that causes you concern?
• If you are married, do you have any concerns you wish to address regarding distributions to your surviving spouse? (ie…restrictions on property transfer if remarriage occurs, liquidation of property, etc.)
• Do you want your estate details to remain private after your death?
• Are you concerned about the speed of the distributions to your heirs after your death?
• Do you own a business outright or as a partner/shareholder?
  • If yes, do you already have a succession plan and a dissolution plan?
  • Do any of your children work with you in the business?
• Do you own real estate, wind energy, or minerals?
  • If yes, is/are the real estate, wind energy, or minerals located in Kansas or in another state?
  • Are the minerals and wind energy currently producing?
  • How is ownership currently titled? (jointly with spouse, tenants in common, sole owner)
• Do you have a taxable estate? ($11,580,000 for married couples in 2020)
• Are you concerned about capital gains taxes?
• If you are a single person with no children who would you like your property to go to after your death?
• Are you interested in supporting or establishing a charitable organization after your death?
• Are you concerned about preserving your assets for your beneficiaries in the event you need long-term nursing home care?
• Is life insurance or long-term care insurance part of your plan?

​If you have questions about Kansas estate planning, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.