LIVEBLOG: Estate Administration During Turbulent Times

2:04 p.m.

With regard to executive fees, clients should know and be told that, in estate administration, the last person to be paid is the executor. Unless determined otherwise in a court of law, the executor takes their compensation only after everyone else has gotten paid. Not knowing this can lead to costly court battles and, potentially, an executor who ends up being overpaid.

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1:57 p.m.

Make sure that insurers are taken care of and that crummey letters are sent out.

"Yes, it's a pain in the neck to get it done because it does take time to get the crummey letters, to get them all out," he said, but it's very important to do.

Make sure everything is done the way it's supposed to be and if it's not make sure you're in touch with the attorney to make sure it does get done. Because if it doesn't, if your paperwork isn't done, it will make life much more difficult for you, especially if you're looking to set up a trust for the purposes of estate planning.

Q: Should crummey letters be done retroactively?

A: I'm not an attorney. I can't answer that. One gentleman in the audience says that it's best practice to keep crummey notices current.

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1:47 p.m.

What do you do with commercial property? You have a family business, three children and one child involved with the business. There's a 20 year lease. And you die. Who gets the building? Who manages the business? And who decides these things?

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1:41 p.m.

Another important question to ask is who wants the house? Not everyone always wants the ancestral home because they may have a nice home of their own. The same goes for summer homes and other secondary residences. He told about one family who assumed their children wanted a vacation property and were prepared to build a compound and set up an LLC to oversee it but, after asking the children, found it was not what they wanted -- they found the location too inconvenient for them. The client narrowly avoided having to undergo a great deal of unnecessary work.

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1:38 p.m.

Charities can also be significant beneficaries from estates. Most charities are grateful to accept the money but they can lead to conflicts between the organization and the rest of the family, sometimes regarding how the donation is spent. Further, expect the charities to aggressively push for additional donations.

"If you thought they were pushy when you were alive, when they're named in a will they just won't stop."

And these are major charities, he said. 

One person in the audience has a client in her 80s and has decided to give everything to charity. He asked whether it's possible to talk her into redoing everything into a private foundation, "or will I be stuck there being bombarded by these guys." 

That is a long-term discussion to have with a client because some people wouldn't want that, they may want to send the money to a specific organization.  

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1:32 p.m.

The worst estate he's ever managed, he said, was his mother's because he needed to deal with his siblings and arguments over who gets what, especially the house. It's a lot of time and a lot of aggrivation.

The estate planning aspect and trying to get a client to committ and understand the importance of it ahead of time, will make everything easier.

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1:28 p.m.

Most parents die wanting to keep things equitable between their children. Sometimes it makes sense to not do this but if you do then it is a question that MUST be asked before the parent dies, so as to avoid any ambiguities as to intentions. These sorts of things need to be cleared up as soon as possible. In general, he said, it's a good principle to clear up issues beforehand.

"Whether or not it's going to be equal, everyone should know what's going on. All this secrecy only creates more anxiety. ... If everyone knows what's going on, they can't complain 'that's not what mom or dad wanted.'"  

This way, he said, everyone knows what the rules are.

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1:20 p.m.

You may think you know your clients but when money becomes involved you may see a whole different person. It's important to know the dynamics that exist between the beneficaries, the trustees and the executor to be aware of issues that might come up when new information is revealed. You can't know the number of times, said McEvoy, that huge conflicts have erupted in situations such as this.

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1:16 p.m.

Planning ahead in all aspects is important.

He brings up an example of a deceased client's house in Westchester county with a pool, a cabana, a couple of other houses, none of which have a certificate of occupancy. "Turns out everything that was done was done wrong. ... They can't get the CO without major changes."

In the time it takes to make these changes, the market can change and the house can lose a great deal of value off the original appraisal price, further complicating things. Make sure you're dealing with apprisals and appraisers who understand the market at the time. And do it as soon as you can or else you could be in for some unpleasent surprises.

"It's not just enough to hire the appraiser... and say 'you did a good job on the appraisal.'"

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1:00 p.m.

James B. McEvoy begins speaking with a request to those in the room and on the web to please bring in questions, as he wants the discussion to be interactive. He encouraged questions as professionals need to be as competant as possible to best serve their clients.

"It's very simple to talk about these things but the actual implementation is difficult." 

"There is no such thing as administration at a turbulent time, anytime a client dies it is turbulent." 

He noted that, when a client dies, you're there to help. You may not be a trustee or an executor but you're there to help people through the process of figuring out what to do next.

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12:45 p.m.

NYSSCPA Trust and Estate Administration Committee member James B. McEvoy is about to deliver a luncheon address at the Estate Administration Conference, which is being held today in New York City.

During his presentation, which will have an audience-participation component, McEvoy will discuss the administration of trusts and estates during turbulent economic times. He will address such aspects as real estate ownership, family partnerships, business succession and common problems.

Stay tuned for more from this presentation.