What You Will Need To Do At The Grantor’s Incapacity And Death

If you have been named as a trustee or successor trustee for someone’s trust, you may be wondering what you are supposed to do. Successor trustees can relax a bit, because you don’t do anything right now. You will only begin to act when the person becomes unable to manage his or her financial affairs due to incapacity, or when he or she dies. If you have been named as a trustee, you may already be acting in that capacity.

In either case, it is important that you understand your duties and responsibilities.

What is a trust?
A trust is a legal entity that can “own” assets. The document looks much like a will. And, like a will, a trust includes instructions for whom you want to handle your final affairs and whom you want to receive your assets after you die. There are different kinds of trusts: testamentary (created in a will after someone dies); irrevocable (usually cannot be changed); and revocable living trusts.

Today, many people use a revocable living trust instead of a will in their estate plan because it avoids court interference at death (probate) and at incapacity. It is also flexible. As long as you are alive and competent, you can change the trust document, add or remove assets, even cancel it.

How does a living trust work?
For a living trust to work properly, you must transfer your assets into it. Titles must be changed from your “individual” name to the name of your trust. Because your name is no longer on the titles, there is no reason for the court to get involved if you become incapacitated or when you die. This makes it very easy for someone (a trustee or successor trustee) to step in and manage your financial affairs.

Who are the people involved with a living trust?
The grantor (also called settlor, trustor, creator or trustmaker) is the person whose trust it is. Married couples who set up one trust together are co-grantors of their trust. Only the grantor(s) can make changes to his or her trust.

The trustee manages the assets that are in the trust. Many people choose to be their own trustee and continue to manage their affairs for as long as they are able. Married couples are often co-trustees, so that when one dies or becomes incapacitated, the surviving spouse can continue to handle their finances with no other actions or steps
required, including court interference.

A successor trustee is named to step in and manage the trust when the trustee is no longer able to continue (usually due to incapacity or death). Typically, several are named in succession in case one or more cannot act. Sometimes two or more adult children are named to act together. Sometimes a corporate trustee (bank or trust company) is named. Sometimes it is a combination of the two.

The beneficiaries are the persons or organizations who will receive the trust assets after the grantor dies.

What do I need to know now?
The grantor should make you familiar with the trust and its provisions. You need to know where the trust document, trust assets, insurance policies (medical, life, disability, long term care) and other important papers are located. However, don’t be offended if the grantor does not want to show you values of the trust assets; some people are very private about their finances. This would be a good time to make sure appropriate titles and beneficiary designations have been changed to the trust. (Some assets, like annuities and IRAs, may list the trust as a contingent beneficiary.)

You also need to know who the trustees are, who successor trustees are, the order in which you are slated to act, and if you will be acting alone or with someone else.

What responsibilities will I have as a trustee?
The most important thing to remember when you step in as trustee is that these are not your assets. You are safeguarding them for others: for the grantor (if living) and for the beneficiaries, who will receive them after the grantor dies.

As a trustee, you have certain responsibilities. For example:

You must follow the instructions in the trust document.

• You cannot mix trust assets with your own. You must keep separate checking accounts and investments.
• You cannot use trust assets for your own benefit (unless the trust authorizes it).
• You must treat trust beneficiaries the same; you cannot favor one over another (unless the trust says you can).
• Trust assets must be invested in a prudent (conservative) manner, in a way that will result in reasonable growth with minimum risk.
• You are responsible for keeping accurate records, filing tax returns and reporting to the beneficiaries as the trust requires.

Do I have to do all of this myself?
No, of course not. You can have professionals help you, especially with the accounting and investing. You will also probably need to consult with an attorney from time to time. However, as trustee, you are ultimately responsible to the beneficiaries for prudent management of the trust assets.

How will I know if the grantor is incapacitated?
Usually the trust document contains instructions for determining the grantor’s incapacity. The trust may require one or more doctors to certify the grantor is not physically or mentally able to handle his or her financial affairs.

What do I do if the grantor is incapacitated?
If all assets have been transferred to the trust, you will be able to step in as trustee and manage the grantor’s financial affairs quickly and easily, with no court interference.

First, make sure the grantor is receiving quality care in a supportive environment. Give copies of health care documents (medical power of attorney, living will, etc.) to the physician. If someone has been appointed to make health care decisions, make sure he or she has been notified. Offer
to help notify the grantor’s employer, friends and relatives.

Next, find and review the trust document. (Hopefully, you already know where it is.) Notify any co-trustees as soon as possible. Also, notify the attorney who prepared the trust document; he or she can be very helpful if you have questions. You may want to meet with the attorney to review the trust and your responsibilities. The attorney can also prepare a certificate of trust, a shortened version of the trust that also proves you have legal authority to act.

You will want to become familiar with the grantor’s insurance (medical and long term care, if any) and understand the benefits and limitations. Assuming the insurance will cover a certain procedure or facility could be a costly mistake.

Have the doctor(s) document the incapacity as required in the trust document. Banks and others may ask to see this and a certificate of trust before they let you transact business.

If there are minors or other dependents, you will need to look after their care. The trust may have specific instructions. If the grantor’s incapacity is expected to be lengthy, a guardian (of the person, not assets) may need to be appointed by the court. The attorney can help you with this.

Become familiar with the finances. You need to know what the assets are, where they are located and their current values. You also need to know where the income comes from, how much it is and when it is paid, as well as regular ongoing expenses. You may need to put together a budget.

If you cannot readily find this information, others (family members, banker, employer, accountant) may be able to help you. Last year’s tax returns may be helpful. Also, if you discover any assets that were left out of the trust, the attorney can help you determine if they need to be put into the trust and can assist you.

Apply for disability benefits through the grantor’s employer, social security, private insurance and veteran’s services. Notify the bank and other professionals that you are now the trustee for this person. Put together a team of professionals (attorney, accountant, banker, insurance and financial advisors) to help you. Be sure to consult with them before you sell any assets.

Now you can start to transact any necessary business. You can receive and deposit funds, pay bills and, in general, use the person’s assets to take care of him or her and any dependents until recovery or death.
You’ll need to keep careful records of medical expenses and file claims promptly. Keep a ledger of income received and bills paid. An accountant can show you how to set up these records properly. The trust may require you to send accountings to the beneficiaries. Also, don’t forget income taxes (due April 15) and property taxes.

What happens if the grantor recovers?
You go back to being a co-trustee or successor trustee and the grantor resumes taking care of his or her own financial affairs. It’s very easy, and there is no court involvement.

What do I do when the grantor dies?
You will have essentially the same duties as an executor named in a will would have. But if all titles and beneficiary designations have been changed to the grantor’s trust, the probate court will not be involved. That means you will be able to act on your schedule instead of the court’s.

The trustee is responsible for seeing that everything is done properly and in a timely manner. You may be able to do much of this yourself, but an attorney, corporate trustee and/or accountant can give you valuable guidance and assistance. Here’s an overview of what needs to be done.

Inform the family of your position and offer to assist with the funeral. Read the trust document and look for specific instructions. Notify a co-trustee as soon as possible.

Make an appointment with me to go over the trust document, trust assets and your responsibilities as soon as possible. Do not sell or distribute any assets before you meet with the attorney.

Before the meeting, make a preliminary list of the assets and their estimated values. You’ll need exact values later, but this will help the attorney know if an estate tax return will need to be filed (due no later than nine months after the grantor’s death). If there is a surviving spouse or if the trust has a tax planning provision, the attorney may need to do some tax planning right away. The trust may also need its own tax identification number.

Collect all death benefits (social security, life insurance, retirement plans, associations) and put them in an interest bearing account until assets are distributed. If the surviving spouse or other beneficiary needs money to live on, you can probably make some partial distributions. But do not make any distributions until after you have determined there is enough money to pay all expenses, including taxes.

Notify the bank, brokerage firm and others of the grantor’s death and that you are now trustee. They will probably want to see a certified death certificate (order at least 12), a certificate of trust and your personal identification.

To finalize the list of assets, you will need exact values as of the date of the grantor’s death. Some assets will need to be appraised. An estate sale may need to be held to dispose of household goods and personal effects.

Keep careful records of final medical and funeral expenses, and file medical claims promptly. Keep a ledger of bills and income received. Contact an accountant and attorney to prepare final income and estate tax returns, if required. Verify and pay all bills and taxes. Make a final accounting of assets and bills paid, and give it to the beneficiaries.

If the assets are to be fully distributed, you will divide the cash and transfer titles according to the instructions in the trust. That’s it…you’re finished and the trust is dissolved.

If the assets are to stay in a trust (for minors, for a surviving spouse, for tax purposes or if the beneficiaries will receive their inheritances in installments), each trust will need a new tax identification number, and proper bookkeeping and reporting procedures will need to be established.

Should I be paid for all this work?
Yes, trustees are entitled to reasonable compensation for their services. The trust document should give guidelines.

What if the responsibilities are too much for me?
Consider hiring me, bookkeeper, accountant or corporate trustee to help you. (A corporate trustee can manage the investments and do the recordkeeping.) If you feel you cannot handle any of the responsibilities due to work, family demands or any other reason, you can resign and let the next successor trustee step in. If no other successor trustee has been named, or none is willing or able to serve, a corporate trustee can usually be named.

Trusts may be categorized in many ways. One useful way to differentiate between trusts is intervivos and testamentary. An intervivos trust is simply a trust which is created during life. Another name for an intervivos trust is a living trust. A trust need not have intervivos or living in its title. A trust, intervivos or testamentary, may be named whatever is desired by the client, as long as it is not misleading or in violation of copyright, for example.

Conversely, a testamentary trust is one created at death. A testamentary trust is, by its nature, not revocable by its grantor. Of course, the document creating the testamentary trust might be revoked prior to the death of the grantor. For example, a Will could create a testamentary trust. The Will could be revoked during the life of the testator/grantor and a new Will could be drafted which has different terms for the testamentary trust.

An intervivos trust might be income taxed to its grantor. A testamentary trust is not income taxed to the grantor.

Intervivos trusts may be either revocable or irrevocable. In some states, if a trust does not specify whether or not it is revocable, it is revocable. In other states, a trust is irrevocable unless specified otherwise. Therefore, it is always prudent to specify whether a trust is revocable or irrevocable.

A revocable trust means that it may be modified or revoked by the grantor during life while the grantor has capacity. A revocable trust may also be restated. A restatement leaves the shell of the trust but guts the substantive provisions and replaces them with the new ones. When a trust is created, assets are retitled into the name of the trust. If one simply does a new trust, the assets would need to be retitled into the new trust. A restatement obviates the necessity of retitling the assets into a new trust because the old trust still exists, only its terms have changed. Typically, a restatement is more convenient than amendments which require referencing back to the original trust and may be cumbersome. Also, when amending a trust, the drafting attorney risks being liable for any errors in the drafting of the underlying document. This is fine if the drafting attorney’s firm drafted the underlying document and has that liability anyway. However, if someone else drafted the underlying document, then a restatement is typically the best route to go.

Otherwise, it is necessary to go through the original document with a fine-tooth comb to ensure there are no drafting errors in its language. If you are doing a restatement, errors in the language of the original document become irrelevant as the underlying document has been replaced in its entirety. Only the shell has been retained and the restatement document has added all new substantive provisions. As a result, restating a trust is often far more efficient and less time-consuming than amending a trust.

An irrevocable trust is a trust which may not be revoked, restated, or amended by the grantor. Once it has been drafted, it is etched in stone. This does not mean the trust cannot have flexibility. 

At Elizabeth Edwards’ funeral, Glenn Bergenfield, a close family friend who presented a eulogy, said that in her final days, as he looked around the Edwards household for any guidance she had regarding funeral arrangements, he found none. Since she was such a detailed planner, he thought surely she would have left copious notes. Bergenfield said, “As the week has worn on I have begun to think she saw the sad and beautiful metaphor: We must go on ourselves.”

Edwards did make plans for her children’s Christmas, but not her own funeral. At least the family knew she wanted to be buried next to her son Wade and have the funeral in the same Methodist church where his funeral was held. Some people don’t even express that extent of their plans or wishes.

The funerals of U.S. presidents are now fully pre-planned by the Naval District of Washington, D.C., but it wasn’t always that way.

Jessica Mitford, author of the landmark book, The American Way of Death, published in 1963, told the story of President Franklin D. Roosevelt’s unheeded last wishes. Roosevelt had written down instructions, but kept the document in his private safe and apparently did not tell Eleanor.

Roosevelt wanted a simple, dark wood casket; no embalming; no hermetically sealed coffin; no grave lining; transportation by gun carriage, not by hearse; and no lying in state anywhere. The document was discovered a few days after his burial. Unfortunately, the only instruction followed was that he did not lie in state.

While conducting research for my new book, A Good Goodbye: Funeral Planning for Those Who Don’t Plan to Die, my husband and I met with a mortuary to preplan funeral arrangements for my father-in-law, Norman. We were surprised at how much information was needed that we did not have on hand.

We were glad to have the luxury of time and Norm’s availability to provide more details, which he did gladly. We were also dismayed by my mother-in-law Myra’s “see-no-evil/hear-no-evil/speak-no-evil” denial. She refused to discuss the topic.

That was three years before Norm actually died. After his death, at the end of an exhausting seven weeks of hospitalization, finalizing the funeral arrangements was quick and relatively easy. After the arrangement meeting, Myra told me, “I really didn’t like it back when you were pre-planning, but now, when we needed it, I’m glad it was done.”

Here’s a thought to consider. With a wedding, you have weeks, months, even years to plan, purchase, and implement all the aspects: clergy, location, communications to family and friends, flowers, clothing, music, food, transportation, and so on. With a funeral, you have only an average of three to five days to make similar arrangements, while also dealing with the emotional impact of the loss of a loved one.

Planning a funeral right after a family member dies is probably the last thing you want to do. Hence, funeral directors are the equivalent of wedding planners for the last step in the life cycle, handling all those details for you. You still need to have basic facts about the deceased to process death certificates, and it would be comforting to know you are handling the disposal of the body the way that person would have wanted.

As columnist Ellen Goodman commented, “How many families actually have ‘the talk,’ something as dreaded as ‘the talk’ about sex? How many tiptoe around the questions that surround death, parents not wanting to upset children, children not wanting to upset parents? As if we were not in it together.”

We are all in this together, and we will all be making an exit at some time. Elizabeth Edwards helped her family and society at large start thinking about how to make a graceful exit. Today is a good day to have a conversation about what a graceful exit and a good goodbye would mean to you.

People think trusts are all about probate avoidance. Sure, a living trust allows the grantor to avoid probate. That may or may not be a big deal, but in Illinois it is and then again depending on the jurisdiction. Certainly, if the grantor owns real estate in multiple jurisdictions, a trust is the way for them to go to avoid multiple ancillary probates.

Whether a will or a trust is used as the primary estate planning vehicle, thought should be given as to how the assets should be left to beneficiaries. A trust is like a tube of toothpaste. The tube can provide many protections which are not available once the toothpaste is squeezed out of the tube.

1. Trusts can be drafted to be excluded from the beneficiary’s taxable estate. This can be great for a beneficiary who will have an estate which would be taxable, either by the state or federal government, when including the assets to be inherited. Of course, the beneficiary could even be the trustee of such a trust, as long as an “ascertainable standard” is utilized, such as health, education, maintenance, and support.
2. Trusts can be drafted to keep the assets free of claims from the beneficiary’s creditors. A fully discretionary trust is free from almost all creditors in most states. The beneficiary would not be the trustee of such a trust.
3. Trusts can be drafted to allow the assets to be available for the beneficiary’s “special needs,” yet allow the beneficiary to qualify for Medicaid. If a beneficiary has disabilities and may need Medicaid or Social Security in the future, a special needs trust should be considered.
4. Trusts enable someone other than the beneficiary to manage the funds for the beneficiary’s benefit, if appropriate. This is particularly useful if the beneficiary has not attained sufficient maturity or discretion, even if they have attained the legal age of majority.

There are many good reasons to use trusts. Probate avoidance is but one. Continuing trusts are appropriate in a wide array of circumstances.  Part of my job is to educate you on the value of estate planning and the many protections it provides.  Upon learning of the protections available with trusts, many of my clients who initially express a desire for outright distributions to their children or other beneficiaries opt for distributions in trust.

Remember, once the toothpaste is out of the tube, it may be difficult or impossible to get it back in the tube, i.e., to get those protections in another manner.

Bob

There are many reasons to use a trust. Here are a few:

• Probate avoidance. This is not the most important reason, but it is the reason most attorneys think of first. At death, the assets titled in the name of the individual must go through a process to retitle the assets to the appropriate people who’ve inherited them. In some states this process may be rather simple, while in other states it may be cumbersome. There may be substantial legal and court costs associated with the probate process, as well.
• Privacy. A trust is a private document. A will, on the other hand, must be filed in the probate court before it is determined to be valid. This process called probate is a public process (except in very rare circumstances). Thus, everyone who wishes may know the contents of the will and the assets which were part of the probate estate. So, for example, they would know about the child born out of wedlock who received an inheritance or the child who was disinherited because of a family dispute. The nosy neighbor would know the dirty laundry and could spread the gossip. Also, predators would know how much money beneficiaries are inheriting. For example, they might know that a weak-willed beneficiary is inheriting $200,000 and could be approached for money. So, if a client is at all concerned about privacy, a trust will serve their needs better than a will.
• Incapacity planning. A will does nothing to help with incapacity planning. As is often said, a will only “speaks” at death. So, if the testator is not dead, the will does not control anything, even if the testator is incapacitated. Conversely, a trust can provide for the management of the assets upon the grantor’s incapacity. This is one of the great benefits of a trust compared to a will. The trust can have whatever standard is desired to determine incapacity. For example, it could require the certification of one or two physicians.
• Management. A trust can provide a vehicle for the management of assets during life and after death. Often, even if a grantor of a trust has capacity, they may reach a time in their life when they no longer wish to manage their assets. A trust provides a simple mechanism for this to happen. The grantor, who typically serves as the initial trustee, simply resigns and the person who was named as the successor trustee is notified and takes on the management responsibilities.

In addition to the benefits which revocable trusts have which wills do not, the trust has other capabilities which wills can also achieve. For example, trusts and wills both can save estate taxes, spawn trusts for beneficiaries at the death of the grantor/testator, etc.

What should you say when a client wants to leave everything in joint tenancy with their kids? To the layperson, this can seem like the perfect quick fix. Mom adds her children to all her assets in joint tenancy, the kids get rights of survivorship, probate is circumvented, and everyone is happy – right?

Joint tenancy only keeps assets out of probate as long as there’s a surviving owner left to inherit the property. At the death of the last surviving owner, where does an asset usually end up? In probate.

Joint tenancy can also open the door to more troubling consequences, like:

• Financial Worries. Joint tenants have rights to the entire asset in question. When a parent adds a child to a financial account, the child has access to the entire account balance. Money trouble for the child can turn into a disappearing bank balance for the parent.
• Legal Woes. Joint tenants share more than just property rights – they can also share legal worries. If the child gets divorced, is named in a lawsuit, or otherwise has his assets jeopardized in a court action, property owned in joint tenancy becomes vulnerable. Even if a parent’s interest in the property is not subject to the child’s legal claims, sorting out who owns what – and how claims should be paid – can be a lengthy and expensive process.
• Loss of Control. What happens if mom adds her son to her property deed, then later wants to sell or refinance? She has to get her son’s signature. If he won’t cooperate, she can’t do what she wants with her own property.
• Uneven Distribution. Many clients don’t understand the interplay – or more accurately, lack thereof – between joint tenancy and estate planning documents like wills and trusts. Mom might add one child’s name to all the assets, but leave a will distributing everything equally among her three children. The problem is, she never realized assets owned in joint tenancy aren’t controlled by her will. Unless the child who got all mom’s assets as a co-owner is particularly benevolent, the remaining siblings are disinherited. Not only does this undermine mom’s intentions, it can lead to family discord and litigation.

Joint tenancy can also create big problems for a client who needs to qualify for Medicaid.  To discuss alternatives to joint tenancy, please call me at 630-215-3676.

Bob

This time of year many companies are tackling the daunting task of tax planning. However, this part of managing your business doesn’t have to be one of those pull-your-hair-out, give-you-a-headache kind of tasks. Rather than looking at tax planning as a chore, try instead to consider this an opportunity to assess your business’ activities and determine year-end profitability.

While it’s always healthy and positive for a business to end the year in the black (profitable), profits also mean taxes and we can all agree nobody likes to pay taxes. Use tax planning as an effective method to help reduce your tax liability.

The best way to reduce your tax liability is to make sure you have maximized your deductions – in other words, you have considered all tax deductions that are applicable to your business. Your accountant will review deduction scenarios with you during your tax planning meeting, but the following considerations are just a few basic areas to get you in the right mindset:

Income now? Income later? Known as deferred income, this is something to review with your accountant and determine if you can reduce your taxable income by recognizing your income after January 1st. Reducing taxable income may reduce your tax liability (and that’s a good thing!).

Write off bad debts. The end of the year is a good time to review your accounts receivable and determine if there are any clients who haven’t paid you in a while. There may be receivables you know are un-collectible and therefore deemed as a bad debt. Writing off those receivables as bad debt will essentially reduce your income.

Now is the time to invest in new technology! Need to stock up on office supplies like updated computers or software? Do it now! Any purchases you can make before December 31st will help maximize your deductions. These can be cash or credit card purchases.

Have you donated lately? Charitable contributions are not only a compassionate act, but they can also help your bottom line! Remember, you don’t necessarily have to give money, you can always donate items. This might be a great time to give away that desk in your office that’s just collecting dust, or some old computer monitors that aren’t being used anymore. Remember when donating to get documentation and keep your receipt.

Every business is different, so certain deductions may or may not be applicable to your business. Be sure to discuss with your accountant the many deductions that may be available to you and have them thoroughly review your company’s financials and tax situation.

The “Secure Act” was part of a larger law that passed with (rare) bipartisan support in late-December 2019. It is effective January 1, 2020, for most purposes. This is a series of articles on the Secure Act. This first article looks at the basics of the Secure Act.

What does it do?

The Secure Act does many things, but here are a few of the biggest changes. First the good news:

• It changes the age at which you must start withdrawing from your IRA or retirement plan. It was age 70 ½ under prior law while under the Secure Act it increases to age 72. This is a good change because it allows you to keep money in your plan longer. Remember, it can grow tax-deferred while it is in the plan.
• It allows you to contribute to a traditional IRA past age 70 ½ if you have “earned income” from employment rather than from investments. Again, this is a good change.

Now the bad news:

• It accelerates the timing of when most beneficiaries must take distributions from your IRA or retirement plans after you die. This is the painful part of the Secure Act. It doesn’t necessarily increase the tax they’ll pay, but it means they’ll have to pay it sooner in most circumstances.

Under the Secure Act, most people designated as beneficiaries of IRAs and retirement plans of people dying in 2020 and beyond must take all distributions from the plan by the end of the 10^th year after the death of the plan Participant. Prior to the Secure Act, the beneficiary would have been required to take distributions over their own life expectancy, which could have been many decades, depending on the age of the beneficiary at the Participant’s death. So, this substantially accelerates distributions for the typical beneficiary.

Some beneficiaries are considered “eligible” beneficiaries and don’t face the 10-year rule, but the old rules continue to apply. Eligible beneficiaries are:

• The spouse of the plan Participant. Just like under the old rules, the spouse can take it as an inherited IRA using their own life expectancy or can choose to roll it over into their own IRA.
• A child of the Participant under the age of majority (typically 18). There are two caveats here. First, it must be a child of the Participant, not just any minor child. Second, once the child reaches the age of majority, the 10-year rule applies at that time.
• A person who is medically disabled or chronically ill.
• A person who is less than 10 years younger than the Participant.

What does this mean for you?

During your own lifetime, you don’t have to start taking distributions until age 72, rather than age 70 ½. Otherwise, you’ll take distributions according to the same schedule as in the past, based on the “Uniform Table” which considers your life expectancy (and the life expectancy of another person 10 years younger than you).

Your beneficiaries will be required to pull out retirement plan benefits over a 10-year period (unless they fit in one of the exceptions above). In other words, they won’t get as much of an income tax deferral as in the past. This means your beneficiaries will be required to pay the income tax due on the assets (if any) faster than in the past. It doesn’t necessarily increase the tax they’ll owe, but it means they’ll owe it sooner.

Have you ever gone to a party, showing up with a bottle of wine as a gift for the hosts, and found they’re not ready yet? Maybe they are still cleaning up or putting the kids’ toys away, the food isn’t ready, or oh no, the bar’s not set up!

Two attributes that set a gracious host apart from an unprepared one are the ability to organize and communicate. Most experienced party throwers know it takes some planning to put together a successful event. Celebrations all have similar elements: deciding on a date, time and place, extending invitations to guests, planning unique features to make the occasion more meaningful for the celebrants, and constructing a menu.

Parties get a bit more complicated as you move up the chain of life cycle events: a birthday for a two-year-old is simpler than a Sweet 16 affair. As families grow, there are graduations, anniversaries, and weddings to plan and celebrate, each more involved than the next.

And then there are funerals. These are the parties no one wants to plan. Yet this is a life cycle event that every family will undertake for every member at some point. They have the same elements of party planning as any other get-together. But if brides and grooms planned their weddings the way most people plan their funerals, they’d be scrambling to pull every element together in three to five days. Talk about stress!

By doing some advance planning, using organization and communication, families can minimize the emotional and financial chaos that often takes hold when someone dies.

Why preplan a funeral or memorial service? There are three very good reasons.

1.   You can reduce stress at a time of grief and minimize family conflict. Think about this:

If you don’t have information on hand needed for a death certificate, like a social security number, place of birth, veteran information, and mother’s maiden name, how are you going to get it when that person is dead? That’s one stress you can avoid by pulling facts together while everyone’s alive and well.

If family members have preplanned, or at least discussed a preference regarding burial, cremation, or other options, you can avoid the stress of wondering what they would have wanted.

Organization and communication can also help minimize family conflict. We’ve all heard of Bridezillas created by the stress of weddings. Funerals can create family feuds over the smallest items.

My friend Roger McManus experienced the death of both parents in very different ways. His dad had ALS (Lou Gehrig’s Disease) and had planned extensively before he died – everything went smoothly. His mom, on the other hand, sat down on the couch to watch TV, fell asleep, and never woke up. She had absolutely no plans in place. The family started fighting over who got the cat, the good china – almost everything.

The experience with his mother’s death prompted Roger to create an organizer called From Here to Hereafter: Everything My Family Needs to Know. As Roger is a frequent flier, in chatting with his seatmates, the conversation invariably turns to funerals and the conflicts they provoke. His first question is usually, “So when did the fight start?”

2.   You can save money, potentially thousands of dollars. Shopping around for the best price is the last thing you want to do when a loved one has died. On top of that, you might make purchasing decisions with your heart – rather than your head – and overspend out of guilt or remorse.

My friend Gary, who doesn’t want a fuss when he dies, wanted a cheap, simple, prepaid cremation, so everything would be taken care of when the time comes. I went with him on shopping excursions to several local funeral homes. His plain request resulted in a $750 price variation between providers for essentially the same services. The difference was due to overhead for the upscale funeral home setting of the highest priced provider.

We also found funeral directors can have a great sense of humor, when there’s no death imminent. When someone has recently died, or is about to die, the conversation has an appropriately somber tone. In addition to saving money, it’s a fascinating shopping trip and a much more upbeat experience.

3.   With advance planning, you can create a really meaningful event that becomes a treasured memory. You don’t even have to wait until the person is dead to hold a celebration of their life. Living memorial services give the entire family a chance to speak words of love and admiration, or to make amends before it’s too late.

In one case, I coached a woman whose elderly father was fading fast. With organization and communication, she pulled the family together before Thanksgiving for an event not unlike a celebrity roast.

While the family wasn’t sure about the appropriateness of this event, her father really enjoyed being the center of attention. Those who did not approve initially came around to see it as a wonderful, memorable time. Her father died six weeks later. Everyone in the family who attended now treasures the warm memories of his living memorial service.

With just a bit of forethought and planning, the life cycle event formerly known as a funeral can be a warm celebration of life. It takes organization and communication to reduce stress at a time of grief, save money, and create a meaningful, memorable event.

When there’s a death in the family and friends come bearing casseroles, will you be the perfect picture of grace under fire? Or will you be the host who scrambles to put everything together at the last minute? The choice is yours.

How does the law treat human remains? It’s not a common topic of conversation, and the answer may be surprising. In most situations, you have more control over what happens to your property after you die than you have over the final destination of your own body.

American law on this topic, as in other areas, is based on English common law. Historically, under English common law, there were no property interests in corpses. The reason for the rule can often be illustrative. If there were property interests in corpses, then those property interests could allow people to bring the dead with them from town to town and repeatedly exhume loved ones. Certainly, the lawmakers in Britain wanted to avoid this gruesome prospect. Eventually, under American common law, a quasi-property right was established. Essentially, the “next of kin” have a limited property right in the remains of a deceased person, but only for the purpose of burying or otherwise disposing of the body.

Who exactly qualifies as “next of kin?” That question has spawned its share of lawsuits. Perhaps the most memorable example from the recent past was the fight over where to bury Anna Nicole Smith’s body. In that case, Howard K. Stern, her long-time companion, argued, as executor of her will, that she should be buried in the Bahamas, next to the grave of her son. Smith’s estranged mother, on the other hand, argued that she was next of kin and thus had the right to bury Smith’s body in Texas, where she grew up. Ultimately, the case was resolved with Anna Nicole Smith’s body being buried in the Bahamas, but only after the fight over who should have control of her remains raged for nearly a month.

What’s the bottom line when it comes to control of a decedent’s remains? Preference is generally given to the decedent’s wishes. However, no one has an absolute right to dictate what will happen to his or her own remains. Because of their quasi-property rights, the decedent’s next-of-kin can overrule the decedent’s wishes and make the final decision; unless, of course, the court denies those wishes based on public health concerns or the norms of society.

What do you think? How should the law develop in this area?