An Estate Planning Q & A with Martin J. Lombrano, AIF®, LPL Financial Advisor
Pence Wealth Management
I suspect I am not unlike most other people in that I prefer to do business with individuals who are not only highly qualified with a proven track record in their respective area of expertise, but also operate with integrity, personal attention and a straightforward “say what you mean, and mean what you say” approach.
These characteristics are all the more important when you are looking to a seasoned professional to help handle the finances of an estate and navigate the myriad of issues facing a surviving spouse upon the death of their loved one. That’s why it’s so refreshing to come across a financial advisor like Martin J. Lombrano who believes that success is all about being “others centered” – doing what is best for others, “having a strong moral compass, integrity, follow through, taking responsibility when something doesn’t go as planned, being clear with expectations, valuing relationships and taking the time to really know his clients and thoroughly understand their unique financial goals.
This philosophy has served Martin well in the 23 years since he initially became a financial advisor. Armed with a degree in Business Administration with a concentration on Finance, Martin has completed the Certified Financial Planner (CFP) curriculum at the University of California, Irvine (UCI), holds the Accredited Investment Fiduciary (AIF) designation and attends annual state and federal continuing education classes to keep all of his securities and insurance licenses in good standing.
In the following interview, we asked Martin to address some of the frequently asked questions facing a surviving spouse or family member upon the death of their loved one.
Question: Upon the passing of a loved one, whom do I need to notify?
Answer: Every situation is unique, however notifying the following agencies and individuals is a key step after a loved one has passed and each is very important: Social Security Administration, deceased person’s employer or former employers, insurance companies, credit bureaus, credit card companies, mortgage companies, post office, utility providers, creditors.
Question: Do I have to file anything with the court?
Answer: After you have contacted the loved one’s attorney (if there is one) or at least spoken with an attorney or advisor experienced in estate or death administration, you should know which documents will be needed to be provided to the court if it is necessary for the decedent’s estate to go through probate court. Probate is a legal document and the legal process of administering the estate of a deceased person, resolving all claims and distributing the deceased person’s property under a will.
The Trust in particular is a detailed legal document that specifies every detail of the deceased loved one’s estate and how it should be handled, who should be in charge of handling the Trust, and how and to whom the Trust assets should be distributed.
Question: Do I have to find the will right away?
Answer: Typically one of the first documents to find is the Will or Trust. The Trust in particular is a detailed legal document that specifies every detail of the deceased loved one’s estate and how it should be handled, who should be in charge of handling the Trust, and how and to whom the Trust assets should be distributed.
Probate isn’t always necessary. If the deceased person owned assets in joint tenancy with someone else, or as community property with his or her spouse, or held their property in a Living Trust, those assets won’t need to go through probate.
Question: What should I do with the Will or Trust when I find it?
Answer: Ideally, you will want to take the Will or Trust to the attorney who originally drew up the documents. But if that isn’t possible, then finding an attorney or advisor that specializes in estate administration is the best avenue to pursue. You will want a professional on your side that can help make this process as cost effective and timely as possible.
Question: Do I have to probate the Will? How long do I have to probate the Will?
Answer: Probate isn’t always necessary. If the deceased person owned assets in joint tenancy with someone else, or as community property with his or her spouse, or held their property in a Living Trust, those assets won’t need to go through probate. The same is true for assets held in a Revocable Living Trust and accounts for which a payable-on-death beneficiary has been named.
If probate is necessary, then it must be initiated by the executor of the Will. It’s typically a time consuming process which can last 12-24 months or more and can be very costly in executor’s, court’s and attorney’s fees. In general, it is best to plan ahead and avoid probate.
Question: What important documents will the attorney want to see?
Answer: In general, you, your attorney or advisor will need: death certificates, Wills and Trusts, insurance policies, credit card statements, investment accounts, bank accounts, mortgage statements, last two years of tax returns, marriage and birth certificates, an up to date credit report of the deceased and family member’s contact information.
Question: What if my loved one did not have a will? What do I do to settle his/her estate?
Answer: You can settle the loved one’s estate without having to go to probate court depending on the total value of their estate, and their ownership and beneficiary designations. If a probate is needed and there is a Will, then the named executor will typically initiate the probate court proceedings.
Question: How long does it take to settle an estate?
Answer: With a Trust, the typical estate can often be settled within a few months. With a Will, it generally takes 12-24 months, and often longer. Typically in California, if you own a home, are married, or have children, then you and your loved ones can benefit from having a Revocable Living Trust. Some of the benefits of a Trust are the avoidance of probate, your estate remains non-public information, and a Trust may substantially reduce costs and time to settle the estate.
Question: My loved one has named me the beneficiary of his/her life insurance policy. How do I go about collecting the life insurance proceeds?
Answer: One of the most daunting tasks of a loved one dying is having to find all their accounts and financial documents and contact each company to see what they will require in order to pay a claim and/or transfer ownership of accounts to the named beneficiary or successor trustee.
Having an experienced advisor can help make this entire process simpler as he can reach out on your behalf to the financial institutions. This can save you time and aggravation in a time of mourning.
Having an experienced advisor can help make this entire process simpler as he can reach out on your behalf to the financial institutions.
Question: What taxes might be due after someone dies?
Answer: The loved one’s estate may need to pay off creditors, pay back taxes to the state or Federal government and in some cases may need to pay death taxes if the estate assets were significantly valued.
Question: What actions can a person take now to make this entire process simpler and easier for those family or friends who will be guiding the estate administration?
Answer: Either on your own or with an advisor, begin by making a balance sheet, a list of all your assets (what you own) and all your liabilities (whatyou owe). Be as detailed as possible with names, accounts numbers, phone numbers etc… for each entry.
If you have an estate plan in place, it should be reviewed every 3 years or with every major life event like birth, divorce, death, etc…
Make sure to review your beneficiaries on each account or asset you own including bank, retirement, pension, investment, insurance policies, and real estate to name a few. Most of all, have an up to date estate plan to help make this process simpler. If you have an estate plan in place, it should be reviewed every 3 years or with every major life event like birth, divorce, death, etc…
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.