Advanced Underwriting Consultants

Question of the Day – October 21

Ask the Experts!

Here’s the question of the day.

Question: I am working with a family where the mother passed away, leaving a modest-sized estate.  Is there any special, expedited probate process available for a small estate?

Answer: Maybe, depending on the state in which the person died, the value of the assets subject to probate and the complexity of the issues.

Probate is the court supervision of the transfer of assets. On its face, that seems OK.  In particular, where the family members don’t get along, the idea of having a probate judge act as referee seems like a good idea.

However, probate has its drawbacks:

  • It’s structured, and it takes awhile. Since probate is a court procedure, there are rules and forms for everything.  Also, in most jurisdictions for most estates, the process takes months to run from start to finish.  Sometimes heirs will have to wait a year or more before they get their complete inheritances.
  • It can be expensive. Since probate involves going to court, most executors opt to hire a lawyer to guide them through the process.  The probate court charge fees for paperwork filings.  Under certain circumstances, the executor may need bonding to be able to act on behalf of an estate.  The costs vary widely depending on the jurisdiction, how well the heirs get along and the complexity of the estate.

Some states have an expedited probate procedure available for small estates.  State rules differ about whether such a procedure is available, and what kind of estate qualifies for it.  In general, the small estate settlement process by-passes and shortens certain steps required by full probate.

In limited cases, the state or the asset custodian may permit a transfer at death through the use of an affidavit of heirship.  With such an affidavit, a close relative swears that certain family members are entitled to the asset in question, and that there are no other claims on the decedent’s estate.  The person filling out the affidavit usually takes personal responsibility if the information in the affidavit is wrong.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day.

Question of the Day – September 2


Today’s question is answered by John Lensi, VP of Sales  at Impact Technologies Group based out of Charlotte, North Carolina.


Question: “What should I tell my customers about estate taxes now?”

Answer: Don’t wait, act now!

There are a lot of diverse opinions on what the future has in store for estate & wealth transfer taxes on the federal and state level.  Recent history has told us legislators are unpredictable and with a major election year in 2012, any ‘permanency’ with estate tax legislation in my opinion is not in the near future.  I’m anticipating an eventual a 1-year extension to the current estate tax law before congress ever gets serious about doing anything on a longer-term basis.  Congress has too many other pressing issues to deal with than estate tax legislation and recent history has demonstrated they have difficulty agreeing on anything anyway.

High net worth clients can’t continue to sit around and wait for congress to enact a more ‘permanent’ legislation before planning their wealth transfer.  My advice would be building in flexibility into client estate plans so adjustments when and if needed can be made going forward.  Establish plans based on today’s legislation and work with a competent advanced sales attorney who will make the appropriate changes when the time comes.  Death can occur anytime, so waiting until the ‘right time’ can be a foolish ‘plan’ in itself.  Besides, if new life insurance is needed as part of the wealth transfer plan, delaying only increases the cost of the insurance (solution) and often, because of health and other underwriting reasons, prevents a HNW client from qualifying.