Real Life | Get comfortable with idea of estate management

So, now Loved One’s funeral, memorial ceremonies and the sympathy gatherings are over, or Loved One has just been judged incompetent. Now the house abruptly becomes eerily quiet. The family and closest associates sit looking at each other, wondering:

“Now what?”

Thus, we begin a miniseries about the “what,” estate management, hopefully making the seemingly complicated, daunting, mysterious, intimidating process manager-friendly and comfortably doable.

Fiduciaries designated in the estate plan documents — personal representatives, guardians, agents, custodians — if your jobs haven’t already started, they start now. Your first duty is to get the property will or other appropriate documents with the state’s authority. That’s unless you’re a trustee only, because one of the advantages of trusts is that they’re self-empowering, immune from probate estate requirements. Or, if there’s no valid testamentary will, someone has to step forward now to petition the probate court to be appointed estate administrator.

If the law firm is involved, either by documentary mandate or to be engaged by the estate’s representative, bring it on board right away, to begin working and guiding you. As you know, many testators nominate the law firm to be the personal representative — and therefore, you won’t have to be — in even a modestly complex estate, lucky you! Expensive, but worth it.

So that you’ll become comfortable with your role and be good at it, we’ll give you the basics about the tasks, procedures, terminology, property titling, participants, documentary tools, pitfalls and facts of life in estate administration, and some of its frustrations. You might recall some of these in previous columns about other subjects, but they certainly belong here also, so please welcome them and treat them as refreshers and amplifications.

But, hold on for a minute! Let’s examine an important fact of estate-management life before proceeding:

Just because we’re nominated to be a fiduciary, and even approved and appointed by the state, we don’t have to accept the job. Why in the world would we want to refuse to serve Loved One in such a vital, trusted and noble capacity? We all can think of some obvious reasons, such as sickness, job and family duty preemptions, or physical location preventing adequate performance.

But, how about these?:

What if, after all of this, there’s no logical, willing candidate? Impasse? Not quite. The beneficiaries can petition the court to appoint one, likely an estates-specialized attorney, but who costs money, of course, and is a stranger to them.

Hear ye: Because you’re fortunately still alive and mentally competent, may I suggest that you make sure that your own estate plan documents concur with all of this, that your nominees are quite willing to serve, and that you’ve fully briefed them about everything? Today!

When the estate has to be managed because the person has become profoundly demented or incapacitated, and is declared incompetent to manage, then there are special considerations. Usually a family member, the long-term-care institution or the state itself petitions the appropriate court in the state of residence to appoint a person or firm, or both, to take over the person’s affairs.

If the evidence warrants a decree, the court appoints a guardian to have physical and legal custody of, to care for, and to be responsible for, the person. The same fiduciary, someone else or a firm also is appointed conservator, trustee, custodian or some other label customarily employed by the state, to manage the person’s estate (assets, liabilities and personal business). Because these petitions are complex and must satisfy precise criteria, they usually are handled by law firms.

Incompetence often occurs long before death does, so fiduciaries for these tasks need even greater regard for, and familiarity with, the client and with his/her affairs, than at-death fiduciaries do, because they’re responsible to guru all aspects of a still-alive and still physically needful and feeling human being. For that reason, qualified family members are preferred, very often the same ones who later become at-death fiduciaries. As part of our estate planning process, before becoming incompetent, we can — and should — nominate candidates in our medical powers or ethical will documents, but the judge is not required to agree with our choices.

Once appointed, the fiduciary(ies) “stand in the client’s shoes,” as they perform day-to-day care and management. Like attorneys-in-fact, PRs, administrators and trustees, they, too, must adhere to competence, ethical and performance standards even higher than those that the client would be expected to achieve when he/she still was lucid. Because the state takes a supervisory interest in the still-living incompetent client, and even sometimes appoints itself to be guardian, fiduciaries also are answerable to state supervision and reporting requirements.

More info? If you google “estate administration,” keying in your state’s name, you can expect to find many websites, mostly law firm infomercials, but also some excellent consumer-friendly state government info-sites. Pick the brains of experienced, well-informed acquaintances, but not cousin Bert. Consult, heed and trust your estate-specialist attorney. And stay tuned here.

You’re beginning to feel better about it already, right? Now that you’re comfortable with the concepts, next time we’ll begin the specifics, starting with getting it all together, “Discovery and Assembly.”

Like to share your ideas? Please do.

This story was originally published February 7, 2015 at 12:00 AM with the headline "Real Life | Get comfortable with idea of estate management."