My loved one left a will, but I cannot find it?

Check with the attorney who prepared it. That attorney may have retained the original, or at least a copy. In certain limited cases, a copy can be probated if the original cannot be found.

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My loved one did not leave behind a will. What do I do?


If no will has been left behind, an administrator of the deceased’s estate will need to be appointed to disburse the assets of the estate and to pay any outstanding debts (such as taxes, bills, loans). The appointed administrator will be selected in the following order (assuming the potential administrator is competent and is at least 18 years old):

  • surviving spouse;
  • children;
  • grandchildren;
  • parents;
  • brothers or sisters; or
  • any other distributee (heir).

The proposed administrator must file a Petition for Letters of Administration in the appropriate Surrogate’s Court along with a death certificate. Similar to the Petition for Probate and Letters Testamentary, this Petition lists pertinent information about the deceased and his or her family, and the decedent’s assets and debts.

Once the Letters of Administration have been granted by the Surrogate’s Court, the administrator of the estate has the authority to and may begin to administer and settle the estate.

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My loved one left behind a will. What do I do?

The will should name an executor. The executor’s job is to collect the assets, pay the deceased’s debts, and distribute any remaining assets according to the provisions of the will. Once the executor has been determined, that person must then file a Petition for Probate and Letters Testamentary. The Petition for Probate and Letters Testamentary must be filed along with the original will and death certificate in the Surrogate’s Court. The Petition for Probate and Letters Testamentary lists pertinent information about the deceased and his or her family, and assets. Usually this filing must be done in the Surrogate’s Court in the deceased’s home county. Once the Letters Testamentary have been granted, the executor has the authority to proceed with the estate’s administration and settlement.

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The Estate: With a valid Will (Probate)- Without a Valid Will (Intestacy)

When someone dies and leaves a will the person is said to have died Testate. A Petition for Letters Testamentary is submitted to the Surrogate’s Court in the County in which the decedent was domiciled at the time of their death to have the Will admitted into probate. Probate is the legal proceeding used to prove the validity of a will and to supervise the orderly distribution of the Decedent’s assets to heirs and potential creditors insuring that valid debts of the estate are paid.  When a will has been left behind it makes the probate process easier in that the will acts as instructions on how to distribute the estate’s assets.  The Will also gives the decedent the opportunity to appoint an executor whom is trusted.  An executor is your personal representative who sees to it that your wishes, as contained in your Will, are carried out after your death.

When someone dies and does not leave a valid Will, the person is said to have died Intestate. A Peititon for Letters of Administration is submitted in the Surrogate’s Court in the County in which the decedent was domiciled at the time of their death.  In this situation the estate guidance and distribution is decided by the courts. The court appoints an administrator and the assets are distributed in accordance with state law. The terms of intestate distribution plans vary from jurisdiction to jurisdiction and can be very complex.  Many times, but. not always, the surviving spouse and children will receive first share of the estate.  Because the state must make assumptions about the intent of the deceased, it can not take into account if the deceased person wished to bequeath something to a good friend, in-law or charity.

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Power of Attorney

A Power of Attorney is your authorization, given to another person or organization, to act on your behalf while you’re unavailable or unable to do so. The person or organization you appoint is referred to as an “Attorney-in-Fact” or “Agent.”, Power of Attorney documents are commonly completed at the same time as the making of your Will and may be available as a part of a Last Will and Testament package deal from your lawyer.  An awareness of some of your options beforehand helps you make informed decisions.

There are several are several specific Powers of Attorney to choose from

General Power of Attorney – this document authorizes your Agent to act on your behalf in a variety of different situations. A general power of attorney is usually used to allow your agent to handle all of your affairs during a period of time when you are unable to do so. For example, when you are traveling out of the state or country or when you are physically or mentally unable to handle your affairs. A general power of attorney is frequently included as part of an estate plan to make sure that you have covered the possibility that you might need someone to handle your financial affairs if you are unable to do so. A general power of attorney is very broad and provides extensive powers to the person or organization you appoint as your agent. These powers usually include:

  • Handling transactions involving U.S. securities
  • Buying managing , or selling property
  • Purchasing life insurance
  • Settling claims
  • Entering into contracts
  • Filing tax returns
  • Handling matters related to government benefits
  • Maintaining and operating business interests
  • Employing professional assistance
  • Making gifts
  • Making transfers to revocable (“living”) trusts
  • Disclaiming interests

Special Power of Attorney – This document authorizes your Agent to act on your behalf in specific situations only. For example, you could authorize someone to sell a car or a house for you, or you may be unable to handle a specific situation because of other commitments, or health reasons.

Health Care Power of Attorney (Health Care Proxy) – This is a document that allows you to designate a person (an “Agent”) who will have the authority to make health care decisions on your behalf if you are unconscious, mentally incompetent, or otherwise unable to make such decisions. You may also express your wishes regarding whether you wish to receive “life-sustaining procedures” if you become permanently comatose or terminally ill. A Health Care Power of Attorney is different from a Living Will because it allows you to appoint someone to make health care decisions for you. A Living Will only allows you to express your wishes concerning life-sustaining procedures. Both Living Wills and Health Care Powers of Attorney are considered “Advance Health Care Directives” because you’re giving instructions on what you’d want to happen in the event that you become unable to make health care decisions in the future. Some states also have a specific “Advance Health Care Directive” document that combines elements of a Health Care Power of Attorney and a Living Will.

This document only becomes effective when you do not have the capacity to give, withdraw or withhold informed consent regarding your health care. You still have the right to give medical directions to physicians and other health care providers as long as you are able to do so,even if you have executed a Health Care Power of Attorney,

Durable Power of Attorney A durable or continuing general Power of Attorney is a document that grants another person the power to control your affairs as if they were you. It becomes effective immediately, and only ceases at the time of your death.  A durable or continuing General Power of Attorney is a very powerful document. However, a durable or continuing Power of Attorney is a useful thing to have on hand.  It means that the person named (usually your spouse or other immediate family member) may conduct all of your affairs as if they were you.  If you unexpectedly became incapable of making coherent decisions or even signing your own name.  Could anyone access your bank accounts and ensure that your obligations are paid on time or that your assets are protected?  Without a power of attorney in place, to gain access to your assets someone must petition a court to grant the right to administer your affairs, which can be a prohibitively costly procedure and time consuming.

Note: The general, special and health care powers of attorney can all be made “durable” by adding certain text to the document. This means that the document will remain in effect or take effect if you become mentally incompetent.

Revocation of Power of Attorney: A Power of Attorney can be revoked at any time by following the procedure specified by your jurisdiction.  By the same token, a person appointed to be a Power of Attorney might decline the appointment when the time comes, or having accepted, may become unable or unwilling to continue to act over a lengthy period of time.  For this reason it is prudent to appoint at least one alternate choice (successor).  Two or more individuals may be appointed jointly, meaning that they must act together and only if all parties are in agreement, or severally, meaning that each may act independently without the approval of the other.

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THE TAX AUDIT!

The IRS can audit  in a number of forms.  The most demanding are the face-to-face audits, which require sitting down with an auditor and reconciling your income and deductions.  However, correspondence audits, where the IRS has reason to believe that the taxpayer failed to include reported income or has overstated deductions, are less demanding.

Correspondence Audits – Employers, banks, lending institutions, schools, brokerage firms, escrow companies and others all feed data to the IRS, which the IRS, in turn, matches by computer the information reported on your tax return.  If there is a significant discrepancy, the IRS will correspond with the taxpayer.  Sometimes these discrepancies will result in additional tax liability, while other times a simple explanation or submission of documentation will satisfy the IRS and make the problem go away.  Here are some examples of typically-encountered discrepancies:

  • Unreported Pension Income – Whenever a taxpayer takes money out of one IRA account and rolls it over within the 60-day statutory limit into another IRA or qualified plan, the income is not taxable.  However, the financial institution from which the funds were withdrawn will issue a 1099R and report to the IRS that you made a withdrawal.  To show the rollover, a taxpayer must report on their tax return that the distribution was in fact rolled over. a taxpayer may fail to bring the distribution to their return preparer’s attention thinking that they have met the 60-day rollover requirement.  Because the rollover is unreported, it will result in a correspondence audit.
  • Gross Proceeds of Sale – When real estate, stock or other securities is sold, the IRS computer knows what it sold for.  Even if there is no gain or loss, it still needs to be reported on the tax return.  Otherwise, the IRS will assume the entire sales price (gross proceeds of sale) is taxable profit.  By reporting the sale on the return, the taxpayer is able to show what he or she paid for the sold investment, thus minimizing or even reporting a deductible loss.
  • Alimony Paid or Received – A taxpayer who pays alimony is able to deduct the amount he or she paid.  On the other hand, the recipient of that alimony must report that amount as taxable income.  The IRS computer checks to make sure the amounts match; otherwise, a correspondence audit will be initiated by the IRS.  This is an area of frequent mismatch because there is a lot of confusion with what constitutes alimony, child support and property settlements.
  • Home Mortgage Interest – Each of your mortgage lenders will report to the IRS the interest paid on your mortgage for the year and issue you a 1098 for the same amount.  If these amounts don’t reconcile, expect a correspondence audit.  Where this frequently becomes an issue is when the loan is from a private party and the paying taxpayer must report on his or her tax return the name and social security number of the individual to which the interest was paid, thus allowing the IRS to make sure the private lender is reporting the income.  Another frequently encountered area of mismatch is when two or more individuals are on the same loan, but lenders report the interest paid only under one of the borrower’s social security numbers.  Here again, a notation must be made on the return showing the individual who actually received the income, so the IRS can make sure that they are not claiming 100% of that interest and that the total reported paid by all parties does not exceed the total reported paid on the loan.
  • Tuition Paid – Because of the American Opportunity, Hope and Lifetime education tax credits that can be claimed for paying tuition to a qualified education institution, the IRS requires those institutions to report the tuition received to the IRS and issue the 1098-T to the taxpayers.  Thus, the IRS has the ability to verify the tuition paid during the year, and any mismatch could result in a correspondence audit.
  • Interest and Dividends – The IRS allows many financial institutions to issue substitute 1099s, i.e., forms that are not in the traditional standard 1099 format.  These substitute forms can often be misinterpreted by an untrained eye, with various types of interest and dividends reported separately and spread throughout lengthy annual account statements.  To make matters worse, many brokerage firms have been issuing amended 1099 statements late in the tax filing season, due to their errors in determining the allocation of a taxpayer’s earnings between dividends, qualified dividends, capital gains dividends, and original issue discount interest.  Thus, if the taxpayer has already filed, but the changes are significant and the taxpayer does file an amended return, he or she will probably receive a correspondence audit.
  • Non-Taxable Interest – Interest from municipal obligations are tax-free for purposes of computing federal tax.  However, tax-free municipal interest income is added to income for purposes of computing taxable social security income.  It is also counts as income for purposes of determining whether a taxpayer qualifies for earned income credit (EIC).  Thus, payers of tax-free municipal interest must report the interest paid to the IRS and issue a 1099 to the taxpayer so that the IRS can match the tax-free income to the computation of taxable social security and EIC disallowance.
  • Cash Charitable Contributions – Regardless of the amount of cash contributed, a charitable contribution must be backed up with either a bank record or written communication from the donee organization showing the: (1) name of the donee organization, (2)  date of the contribution, and (3) amount of the contribution.  The recordkeeping requirements may not be satisfied by maintaining other written records.

    What this means is that unless the charitable organization provides a written communication, cash donations put into a “Christmas kettle,” church collection plate, and pass-the-hat collections at youth sporting events will not be deductible.  Donations by debit or credit card can be substantiated by bank records.  These rules will give the IRS the ability to audit taxpayer’s charitable contributions via correspondence audits since all contributions must be backed by written receipt or bank record.

Don’t assume that just because you received a notice that the IRS is correct.  They are frequently wrong.  Please call this office before responding to any IRS notice.  Tax laws are complicated, and the notices are not always easily understood.

Face-to-Face Audits – The more demanding face-to-face audit is rarely encountered by wage-earning taxpayers who report all their income and have deductions that are within the general norms.  Self-employed, high-income taxpayers, those who have omitted substantial income, or those who repeatedly fail to show income to support their lifestyle are more likely to be subject to these types of audits.

You can appear for the audit yourself, but that is probably a bad idea since you are not trained in the rules and regulations regarding audit procedures and what limits the IRS’s incursion into your private life.  You can authorize this office to handle it for you.  Often, this is the best way to prevent the audit from escalating beyond the original areas that attracted the IRS’s interest in the first place.  Practitioners experienced with IRS audits are less likely to become emotional or to make statements that would lead to additional IRS questioning.

Caution: It is strongly recommended that you notify this office immediately upon contact from an IRS agent or the receipt of any inquiry from the IRS.  Don’t procrastinate! That only leads to further action on the part of the IRS.

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Checking the Status of Your Federal Tax Refund

Generally, If you e-file, you can get refund information 72 hours after the IRS acknowledges receipt of your return.  If you file a paper return, refund information will be available within three to four weeks.  If you already filed your federal tax return and are due a refund, you can check the status of your refund online.

Where’s My Refund? is an interactive tool on the IRS web site at IRS.gov which will give you online access to your refund information nearly 24 hours a day, 7 days a week. To gain access you must provide your Social Security Number (or your spouse’s), your filing status and the exact refund amount shown on your return.

Where’s My Refund? also includes links to customized information based on your specific situation.  The links guide you through the steps to resolve any issues affecting your refund.  For example, if you do not get the refund within 28 days from the original IRS mailing date shown on Where’s My Refund?, you can start a refund trace online.

If you do not have internet access, you can check the status of your refund by calling the IRS TeleTax System at 800-829-4477 or the IRS Refund Hotline at 800-829-1954.

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Commuting v. Deductible Business Mileage: Temporary work location/ Union members/ Multiple work locations

If you have one or more regular work locations away from your home and you commute to a temporary work location in the same trade or business, you can
deduct the expenses of the daily round-trip transportation between your home and the temporary location, regardless of distance. If your employment at a work location is realistically expected to last (and does in fact
last) for 1 year or less, the employment is temporary unless there are facts and circumstances that would indicate otherwise. If your employment at a work location is realistically expected to last for more than 1 year or if there is no realistic expectation that the employment will last for 1 year or less, the employment is not temporary, regardless of whether it actually lasts for more than 1 year. If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to last more than 1 year, that employment will be treated as temporary (unless there are facts and circumstances that would indicate otherwise) until your expectation changes. It will not be treated as temporary after the date you determine it will last more than 1 year. If the temporary work location is beyond the
general area of your regular place of work and you stay overnight, you are traveling away from home. You may have deductible travel expenses as discussed in chapter 1. No regular place of work. If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area. Generally, a metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area. You cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. These are nondeductible commuting expenses. Temporary work location. If you have one ormore regular work locations away from yourhome and you commute to a temporary worklocation in the same trade or business, you candeduct the expenses of the daily round-triptransportation between your home and the temporary location, regardless of distance.If your employment at a work location isrealistically expected to last (and does in factlast) for 1 year or less, the employment is temporary unless there are facts and circumstancesthat would indicate otherwise.If your employment at a work location isrealistically expected to last for more than 1 yearor if there is no realistic expectation that theemployment will last for 1 year or less, the employment is not temporary, regardless ofwhether it actually lasts for more than 1 year.If employment at a work location initially isrealistically expected to last for 1 year or less,but at some later date the employment is realistically expected to last more than 1 year, thatemployment will be treated as temporary (unless there are facts and circumstances thatwould indicate otherwise) until your expectationchanges. It will not be treated as temporary afterthe date you determine it will last more than 1year.If the temporary work location is beyond thegeneral area of your regular place of work andyou stay overnight, you are traveling away fromhome. You may have deductible travel expenses as discussed in chapter 1.No regular place of work. If you have noregular place of work but ordinarily work in themetropolitan area where you live, you can deduct daily transportation costs between homeand a temporary work site outside that metropolitan area.Generally, a metropolitan area includes thearea within the city limits and the suburbs thatare considered part of that metropolitan area.You cannot deduct daily transportation costsbetween your home and temporary work siteswithin your metropolitan area. These are nondeductible commuting expenses.

According to rev. rule 94-47, daily transportation costs between the temporary job site and a residence if outside the metropolitan area where the taxpayer normally works and lives can be deducted. Also daily commuting expenses are deductible between the residence and a temporary work location in the same trade or business regardless of the distance if the taxpayer has one or more regular work locations away from the residence.

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Investing in real estate through an IRA-Self Directed IRA

Self- Directed IRA

A Self Directed IRA is an IRA account which you directly control and direct into investments of your choosing.  Investment Real Estate is one of the more popular options for using a Self-Directed IRA, otherwise known as a Checkbook IRA, Real Estate IRA or Self Directed IRA LLC. The self- directed IRA allows you to invest in real estate, notes, private placements, tax lien certificates and much more. The Self -Directed IRA retains tax-free profits, tax deductions, asset protection and estate planning in the same fashion as your traditional IRA.

Creating a Checkbook/ Real Estate/ Self-Directed IRA LLC:

  1. Create a Self-Directed IRA: choose a company that has experience with these types of IRA’s.
  2. Have your funds rolled from your old IRA account into the newly created self-directed IRA,
  3. Form an LLC (Limited Liability Company)- specially created for the self-directed IRA
  4. Open a bank account in the name of the LLC from which to engage in investment activities – hence the term “Checkbook IRA.”
  5. Direct the self-directed IRA custodian to wire funds from the Self-Directed IRA into the LLC bank account.

Once completed, you, the account holder, acting on behalf of the IRA, may invest into anything allowed by law.  This includes practically everything except collectibles (like art, jewelry, etc) and life insurance. You are allowed to sign all checks and sign all purchase and transaction documents yourself without prior permission from the custodian. The IRA now owns the LLC and the LLC is under the umbrella of the IRA. Therefore all profits are tax deferred.

NOTE: Having “checkbook control” with a Self Directed IRA has distinct advantages over having funds deposited with a self directed IRA custodian.  Many of the most profitable investments such as foreclosure properties and tax liens require immediate action.  The 2-3 day investment review period with a custodian virtually guarantees lost opportunities. Other advantages of the Checkbook Control IRA include asset protection, the ability to more easily partner with others in structured investments, and greatly simplified escrow transactions.

IRS PITFALLS AND PROHIBITED TRANSACTION FOR SELF- DIRECTED IRA’S

Certain kinds of investments are prohibited in IRAs. These are generally described as “collectibles,” including such items as artwork, antiques, gems, stamps and coins. Real estate is not a prohibited investment. But there’s a completely different rule that may cause a prohibited transaction when you invest your IRA in real estate.

Prohibited transactions : A prohibited transaction occurs when you interact with your IRA in certain ways. Here are some of the things you aren’t allowed to do:

  • You can’t sell property to your IRA, or buy property from your IRA.
  • You can’t loan money to your IRA, or borrow money from your IRA.
  • You can’t use the account, or any part of it, as security for a loan.
  • You can’t receive goods or services from your IRA, or provide goods or services to your IRA.

You aren’t allowed to do any of these things directly or indirectly. That means you can’t avoid this rule by having your IRA deal with a company you own, or with a family member. And these are outright prohibitions: they aren’t allowed even if you do everything in a fair and reasonable manner.

Example: Suppose you have your IRA buy a broken-down property and fix it up so the IRA can sell it at a profit. That seems like a great way to add value, but if you personally do the remodeling work, or do it through a relative or a business you own, the IRS may say you’ve made a prohibited transaction because you’re providing services to the IRA.

Ugly result: What happens if you have a prohibited transaction in your IRA? It’s almost unbelievably bad. The IRA is considered terminated as of the first day of the year in which the prohibited transaction occurred. Here’s what that means:

  • You have to pay tax on the same amount of income as if you withdrew the entire balance of your IRA.
  • If you’re under 59½, you have to pay the 10% early distribution penalty on that income.
  • You lose the benefit of having that money in your IRA for all the years you would have retained it for your retirement.

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Will the courts review the fairness of my Marital Property Settlement Agreement?

In an uncontested divorce, the court nearly always approves the agreement of the parties if it is generally fair and the court is convinced that the agreement was entered into by both spouses without fraud or coercion. Often the court may want to review financial affidavits attached to the agreement in order to determine its fairness.

In negotiating your agreement, you should be guided by how a court is likely to divide your property, award custody and child support, and deal with other issues.

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