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Drafting a last will and testament can help to ensure that your assets are distributed according to your wishes after you pass away. You can also use your will to name a legal guardian for minor children or choose an executor for your estate. Itâs possible to make changes to your will after itâs written, including removing or adding an executor if necessary. If youâre wondering how to change the executor of a will after the fact, the process is easier than you might think. As you go about the process, it may behoove you to find a trusted financial advisor in your area for hands-on guidance.
Executor of a Will, Explained
The executor of a will is the person responsible for carrying out the terms of a will. When you name someone as executor, youâre giving him or her authority to handle certain tasks related to the distribution of your estate.
Generally, an executor can be any person you name. For example, that might include siblings, your spouse, adult children or your estate planning attorney. Minor children canât serve as executors and some states prohibit convicted felons from doing so as well.
Thereâs no rule preventing a beneficiary of a will from also serving as executor. While beneficiaries canât witness a will in which they have a direct interest, they can be charged with executing the terms of the will once you pass away.
What Does the Executor of a Will Do?
Being executor to a will means there are certain duties youâre obligated to carry out. Those include:
- Obtaining death certificates after the will-maker passes away
- Initiating the probate process
- Creating an inventory of the will-makerâs assets
- Notifying the will-makerâs creditors of the death
- Paying off any outstanding debts owed by the will-maker
- Closing bank accounts if necessary
- Reading the will to the deceased personâs heirs
- Distributing assets to the persons named in the will
Executors canât change the terms of the will; they can only see that its terms are carried out. An executor can collect a fee for their services, which is typically a percentage of the value of the estate theyâre finalizing.
Reasons to Change the Executor of a Will
While you may draft a will assuming that your choice of executor wonât change, there are different reasons why making a switch may be necessary. For example, you may need to choose a new executor if:
- Your original executor passes away or becomes seriously ill and canât fulfill his or her duties
- You named your spouse as executor but youâve since gotten a divorce
- The person you originally named decides he or she no longer wants the responsibility
- Youâve had a personal falling out with your executor
- You believe that a different person is better equipped to execute your will
You donât need to provide a specific reason to change the executor of a will. Once youâre ready to do so there are two options to choose from: add a codicil to an existing will or draft a brand-new will.
Using a Codicil
to Change the Executor of a Will
A codicil is a written amendment that you can use to change the terms of your will without having to write a new one. Codicils can be used to change the executor of a will or revise any other terms as needed. If you want to change your willâs executor using a codicil, the first step is choosing a new executor. Remember, this can be almost anyone whoâs an adult of sound mind, excluding felons.
Next, youâd write the codicil. In it, youâd specify the changes youâre making to your will (i.e. naming a new executor), the name of the person who should serve as executor going forward and the date the change should take effect. Youâd also need to validate the codicil the same way you did your original will.
This means signing and dating the codicil in the presence of at least two witnesses. Witnesses must be legal adults of sound mind and they canât have an interest in the will. So, a beneficiary to the will couldnât witness your codicil but a neighbor or coworker could if they donât stand to benefit from the will directly or indirectly.
Once the codicil is completed and signed by yourself and the witnesses, you can attach it to your existing will. Itâs helpful to keep a copy of your will and the codicil in a safe place, such as a safe deposit box. You may also want to give a copy to your estate planning attorney if you have one.
Writing a New Will to
Change the Executor of a Will
If you need to change more than just the executor of your will, you might consider drafting a new will document. The process for drafting a new will is similar to the one you followed for making your original one.
Youâd need to specify who your beneficiaries will be, how you want your assets to be distributed and who should serve as executor. The new will would also need to be signed and properly witnessed.
But youâd have to take the added step of destroying all copies of the original will. This is necessary to avoid confusion and potential challenges to the terms of the will after you pass away. If youâre not sure how to draft a new will to replace an existing one, you may want to talk to an estate planning attorney to make sure youâre doing so legally.
What Happens If You Donât Name an Executor?
If, for any reason, you choose not to name an executor in your will the probate court can assign one. After you pass away, eligible persons can apply to become the executor of your estate. The person the court chooses would then be able to carry out the terms of your will. If you donât have a will at all, then your assets would be distributed according to your stateâs inheritance laws.
Thatâs why itâs important to take the time to at least write a simple will. This way, thereâs no question of your estate being divided among your heirs the way that you want it to be.
The Bottom Line
Making a will can be a good starting point for shaping your estate plan. Naming an executor means you donât have to rely on the probate court to do it. But if you need to change the executor of your will later, itâs possible to do so with minimal headaches.
Tips for Estate Planning
- Consider talking to a financial advisor about creating an estate plan and what you might need. If you donât have a financial advisor yet, finding one doesnât have to be complicated. SmartAssetâs financial advisor matching tool can help you connect with an advisor in your local area. It takes just a few minutes to get your personalized recommendations online. If youâre ready, get started now.
- A will is just one document you may need as part of your estate plan. You may also consider setting up a trust, for example, if you have extensive assets or own a business. Life insurance is something you may also need to have, along with an advance health care directive and/or power of attorney.
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The post How to Change the Executor of a Will appeared first on SmartAsset Blog.
Taking care of aging parents is something you may need to plan for, especially if you think one or both of them might need long-term care. One thing you may not know is that some states have filial responsibility laws that require adult children to help financially with the cost of nursing home care. Whether these laws affect you or not depends largely on where you live and what financial resources your parents have to cover long-term care. But itâs important to understand how these laws work to avoid any financial surprises as your parents age.
Filial Responsibility Laws, Definition
Filial responsibility laws are legal rules that hold adult children financially responsible for their parentsâ medical care when parents are unable to pay. More than half of U.S. states have some type of filial support or responsibility law, including:
- New Jersey
- North Carolina
- North Dakota
- Rhode Island
- South Dakota
- West Virginia
Puerto Rico also has laws regarding filial responsibility. Broadly speaking, these laws require adult children to help pay for things like medical care and basic needs when a parent is impoverished. But the way the laws are applied can vary from state to state. For example, some states may include mental health treatment as a situation requiring children to pay while others donât. States can also place time limitations on how long adult children are required to pay.
When Do Filial Responsibility Laws Apply?
If you live in a state that has filial responsibility guidelines on the books, itâs important to understand when those laws can be applied.
Generally, you may have an obligation to pay for your parentsâ medical care if all of the following apply:
- One or both parents are receiving some type of state government-sponsored financial support to help pay for food, housing, utilities or other expenses
- One or both parents has nursing home bills they canât pay
- One or both parents qualifies for indigent status, which means their Social Security benefits donât cover their expenses
- One or both parents are ineligible for Medicaid help to pay for long-term care
- Itâs established that you have the ability to pay outstanding nursing home bills
If you live in a state with filial responsibility laws, itâs possible that the nursing home providing care to one or both of your parents could come after you personally to collect on any outstanding bills owed. This means the nursing home would have to sue you in small claims court.
If the lawsuit is successful, the nursing home would then be able to take additional collection actions against you. That might include garnishing your wages or levying your bank account, depending on what your state allows.
Whether youâre actually subject to any of those actions or a lawsuit depends on whether the nursing home or care provider believes that you have the ability to pay. If youâre sued by a nursing home, you may be able to avoid further collection actions if you can show that because of your income, liabilities or other circumstances, youâre not able to pay any medical bills owed by your parents.
Filial Responsibility Laws and Medicaid
While Medicare does not pay for long-term care expenses, Medicaid can. Medicaid eligibility guidelines vary from state to state but generally, aging seniors need to be income- and asset-eligible to qualify. If your aging parents are able to get Medicaid to help pay for long-term care, then filial responsibility laws donât apply. Instead, Medicaid can paid for long-term care costs.
There is, however, a potential wrinkle to be aware of. Medicaid estate recovery laws allow nursing homes and long-term care providers to seek reimbursement for long-term care costs from the deceased personâs estate. Specifically, if your parents transferred assets to a trust then your stateâs Medicaid program may be able to recover funds from the trust.
You wouldnât have to worry about being sued personally in that case. But if your parents used a trust as part of their estate plan, any Medicaid recovery efforts could shrink the pool of assets you stand to inherit.
Talk to Your Parents About Estate Planning and Long-Term Care
If you live in a state with filial responsibility laws (or even if you donât), itâs important to have an ongoing conversation with your parents about estate planning, end-of-life care and where that fits into your financial plans.
You can start with the basics and discuss what kind of care your parents expect to need and who they want to provide it. For example, they may want or expect you to care for them in your home or be allowed to stay in their own home with the help of a nursing aide. If thatâs the case, itâs important to discuss whether thatâs feasible financially.
If you believe that a nursing home stay is likely then you may want to talk to them about purchasing long-term care insurance or a hybrid life insurance policy that includes long-term care coverage. A hybrid policy can help pay for long-term care if needed and leave a death benefit for you (and your siblings if you have them) if your parents donât require nursing home care.
Speaking of siblings, you may also want to discuss shared responsibility for caregiving, financial or otherwise, if you have brothers and sisters. This can help prevent resentment from arising later if one of you is taking on more of the financial or emotional burdens associated with caring for aging parents.
If your parents took out a reverse mortgage to provide income in retirement, itâs also important to discuss the implications of moving to a nursing home. Reverse mortgages generally must be repaid in full if long-term care means moving out of the home. In that instance, you may have to sell the home to repay a reverse mortgage.
The Bottom Line
Filial responsibility laws could hold you responsible for your parentsâ medical bills if theyâre unable to pay whatâs owed. If you live in a state that has these laws, itâs important to know when you may be subject to them. Helping your parents to plan ahead financially for long-term needs can help reduce the possibility of you being on the hook for nursing care costs unexpectedly.
Tips for Estate Planning
- Consider talking to a financial advisor about what filial responsibility laws could mean for you if you live in a state that enforces them. If you donât have a financial advisor yet, finding one doesnât have to be a complicated process. SmartAssetâs financial advisor matching tool can help you connect, in just minutes, with professional advisors in your local area. If youâre ready, get started now.
- When discussing financial planning with your parents, there are other things you may want to cover in addition to long-term care. For example, you might ask whether theyâve drafted a will yet or if they think they may need a trust for Medicaid planning. Helping them to draft an advance healthcare directive and a power of attorney can ensure that you or another family member has the authority to make medical and financial decisions on your parentsâ behalf if theyâre unable to do so.
Photo credit: Â©iStock.com/Halfpoint, Â©iStock.com/byryo, Â©iStock.com/Halfpoint
The post An Overview of Filial Responsibility Laws appeared first on SmartAsset Blog.
Planning a funeral can be an expensive prospect. The average funeral costs more than $7,000 and in many cases as much as $10,000 â or more, depending on the arrangements. Prepaid funeral plans offer a way to help manage those costs while easing the financial and emotional burden of planning a funeral for your loved ones. Whether it makes sense with your budget to purchase a prepaid funeral plan can depend on your wishes as well as your financial situation. There are different ways to preplan a funeral and itâs important to consider whatâs involved in the process along with the cost.
What Are Prepaid Funeral Plans?
A prepaid funeral plan simply involves making all the arrangements for a funeral and paying for it prior to your death. This plan can be tailored to your wishes and those of your family and cover everything from where the funeral should take place to whether you should be buried or cremated.
Having a prepaid funeral plan means the funeral home knows what you do or donât want to happen once you pass away. And because youâve paid ahead, there are no lingering bills or funeral costs for your family members to worry about.
How Prepaid Funeral Plans Work
Preplanning a funeral typically means sitting down with your loved ones to map out the details of your funeral. For example, that might include specifying:
- Where the funeral should be held
- Whether you want a burial or cremation
- What type of casket or urn youâd prefer
- Whether any type of viewing will be allowed
- Which songs or type of music should be played at the funeral
- What kind of flowers youâd like to have
- Who will deliver your eulogy
- What should be on your headstone or memorial plaque
- What should be included in your obituary
A prepaid funeral plan can be as detailed as you like. If youâre unsure of what kinds of things to include, you and your family may want to meet with a funeral home director to discuss typical arrangement options.
Once you and your loved ones work out the details of what will happen at the funeral, the next step is deciding how to pay for it.
Types of Prepaid Funeral Plans
Prepaid funeral plans arenât one-size-fits-all when it comes to how you pay for them. There are several options you can choose from, depending on your estimated costs and needs, including:
- Life insurance
- Burial insurance
- A trust
- A joint bank account
- A payable on death (POD) account
Life insurance policies can provide your chosen beneficiary with money to pay for funeral expenses, as well as other expenses. For instance, you might purchase a life insurance policy naming your spouse as the beneficiary that will give them enough funds to pay for your funeral and your mortgage, while also covering basic living expenses.
Burial insurance is a specific type of insurance policy thatâs designed to help you pay for burial expenses. With this kind of insurance, it may be possible to name the funeral home or funeral director as the beneficiary of the policy if your state allows it. In that case, it would be the responsibility of someone you have chosen for filing a claim with the life insurance company to collect the death benefit.
A trust is another option for transferring assets that youâd want to use for funeral planning. A trustee is responsible for managing assets in the trust according to your wishes on behalf of the trust beneficiaries. You can set up a revocable living trust, which could be changed in your lifetime if needed, or an irrevocable trust. An irrevocable trust makes the transfer of assets permanent so think carefully about which type of trust would be more appropriate.
If youâre married, an easier solution may be opening a joint bank account with your spouse and depositing the funds you want to earmark for funeral expenses into it. This way, they can write checks or make withdrawals as needed to cover funeral and burial costs without having to go through the insurance company. And if thereâs extra money left after your funeral expenses are paid, they could use that as needed to pay other expenses.
A POD account, also called a Totten Trust, could be an option if youâre unmarried or a widow(er). With this type of account, you can hold money on behalf of a beneficiary, but they canât access the funds until you pass away. If youâre considering a POD account, itâs important to make sure you choose a beneficiary that you can count on to carry out your funeral plans.
Pros and Cons of Prepaid Funeral Plans
The chief advantage of having a prepaid funeral plan is that it allows you to take the burden of planning your funeral off your loved onesâ shoulders. You can make all of the arrangements and pay for them up front or arrange for them to be paid using life insurance, a joint bank account or a POD. That means they donât have to try to make choices about your funeral arrangements or deal with the bills for funeral expenses when theyâre in the initial stages of mourning.
On the other hand, preplanning a funeral can have some risks if youâre also prepaying for it. If you pay your chosen funeral home for the entire cost of the funeral, for example, but the funeral home goes out of business before you pass away it might be difficult to get that money back. For that reason, you may be better off creating a funeral plan and setting the money to pay for it aside rather than paying outright.
The Bottom Line
Planning your funeral in advance can make a stressful event less so for your loved ones. And it can offer you reassurance as well that your wishes are being carried out and your final expenses are paid for. But itâs important to consider any potential downsides of prepaid funeral planning before you commit your time, energy and funds to creating one. Keep in mind that you have other options than a prepaid funeral plan.
Tips for Investing
- Consider talking to your financial advisor as well to determine whether prepaying for a funeral is the right move. If you donât have a financial advisor yet, finding one doesnât have to be complicated. SmartAssetâs financial advisor matching tool can help you find a professional advisor in your local area. It takes just a few minutes to get your personalized recommendations online. If youâre ready, get started now.
- If youâre thinking of purchasing a life insurance policy to help pay for funeral expenses, consider whether it makes sense to get a term life or permanent life policy. Term life insurance can offer lower premiums but permanent life insurance covers you for life. And some policies, such as universal life insurance, also offer an investment component that can help you grow your money over time.
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The post What Is a Prepaid Funeral Plan? appeared first on SmartAsset Blog.