Anthony S. Park

What is the minimum estate size that a professional executor will accept? A few prospective clients have called asking, so we’ll review bank executor minimums, our minimums, and some exceptions.

Bank executor estate minimum size requirements

Typically, bank minimum sizes are high. In New York, it has been as high as 5 million or 2 million liquid assets held with the institution. In most cases, the bank wants an estate with mostly liquid assets. It’s too much of a pain for them to deal with real estate, etc. They also want those liquid assets held at their bank. The bank generates fees and they get to have those assets invested in their products.

Our estate size requirements

We generally try to fill the niche between folks who have an estate large enough to need our services, but not large enough to use a bank as an executor. Generally, we’ve set the bar as low as $250,000, and we do not have a liquidity requirement. However, we do want to make sure there are enough liquid accounts to fund estate expenses. Usually $50,000 in liquid assets is plenty to cover estate expenses.

You’ll need to make sure the account with liquid funds does not have beneficiary designations. If you name a beneficiary on an account, that account will go directly to the beneficiary. This means the executor won’t have access to the account to pay for estate expenses.

These requirements may not be hard for many clients to meet, but we have run into some problems in the past. The biggest issue is beneficiary designations. Naming beneficiaries on an account means that the account will not go through probate. If there are only a handful of small accounts in your name alone (no beneficiaries), it’s not really worth it for a professional executor to do all the work and deal with all the taxes and creditors without much compensation. Compensation is based on the size of the estate.

A problem for New York clients is that many co-ops do not allow the ownership shares to be moved into a trust or have a beneficiary designations. This creates a need for a professional executor, even if your other assets are in trust or have named beneficiaries.  If you must have an executor to deal with your co-op, then you must make sure you leave at least one account of sufficient size (with no beneficiary designations) to go through probate.

Again, your executor needs enough liquid assets to cover fees, clean out costs, and other costs to sell your co-op. If you don’t leave sufficient liquidity, a professional executor will not accept. You don’t want to waste your time researching and choosing an executor who won’t accept based on your low liquid assets.

What if my estate is too small?

We do make exceptions for our clients and try our best to help.

One helpful tip is to add language to your will or trust setting a minimum fee. Even if your estate is below $250,000, you can state that you want your executor to receive at least a certain amount. That way, you are guaranteeing that your executor gets paid even if the size of your probate estate is small.

Even if your estate is small, you should still leave sufficient accounts without beneficiary designations so that your executor has funds to work with. And don't just leave that one perfect account, because that leaves little margin for error. If you forget and start spending from that account, then your executor may not accept due to low liquid assets.

Lastly, if you want a professional executor to administer a small estate, do your best to minimize the drama. If you think there will be conflicts with heirs or a contested will, you may want to consider a revocable trust. Also, do a decent job of record keeping. Your executor won’t want to deal with a huge forensic accounting problem for a small estate. In summary, make sure your estate is cost-justifiable for your professional executor to accept.

You can learn more about choosing a professional executor in my book, “How to Hire an Executor.”

Feel free to send questions via comments or email. We will do our best to answer them either directly or as the subject of a podcast.

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Economic recession affects probate, just as much as wages, gas, and your grocery bill. We’ll share a few ways we’ve seen how it’s been impacting probates.

Takes longer to collect probate assets

First, there are major delays in collecting assets. Banks, brokerages, unclaimed funds, etc. are taking way longer than usual to process claims and release funds. They are asking for more documents and are stricter in their requirements. In the past, these financial institutions let some things slide, but now they want all the T’s crossed and I’s dotted. They may just be rigorous in their requirements now. But another interpretation is that they want to keep the money in their accounts as long as possible.

This results in delays for the executor and heirs. The key takeaway is to start the process now!

Creditors will not settle

Historically, regarding an estate debt (exs. credit card or medical bills), creditors were willing to negotiate the bill down. It used to just take a phone call to get even 50% off easily.

Now creditors want full payment. Some will even wait as long as it takes or even sue the estate. The notion of debts getting discharged or reduced isn’t happening. The takeaway: don’t count on getting the debt reduced to increase the amount the heirs will receive. Just assume that debts will be paid in full.

This seems odd, considering we’ve been through recessions before. Even then, creditors were willing to settle estate debts to guarantee cash in hand. It is unclear what makes creditors so aggressive now.

Heirs need cash

Heirs need and want their cash as soon as possible. If you’ve listened to any of our prior podcasts, you know that paying heirs quickly is unrealistic. Estates take a long time to settle, but there are some solutions to make payments to the heirs sooner rather than later.

One way is to pay reimbursements immediately. Sometimes heirs front money to pay for court filing fees, house clean-out, or the attorney’s retainer. Normally, when the matter isn’t urgent, the heirs get reimbursed at the end of the probate process. Why have multiple rounds of checks mailed out if it’s not urgent? But, if you are an heir who has fronted money, just ask the executor for it. The executor should have no problem repaying you.

We are also seeing heirs and executors making concessions during the accounting phase to get it done faster. In the past, parties might dispute how much money was spent on certain tasks (house clean-outs, for example). Now all sides just want to get the accounting done.

Another option is to prepare an intermediate accounting. Instead of waiting until the end for the full accounting to distribute the inheritance, the executor can do a partial accounting to pay out a portion of the shares to the heirs. The problem is that the same level of work is required to produce an intermediate accounting as it is for a full accounting. Basically, the heirs pay for the accounting to be done twice, whether by the executor or an accountant. We may start seeing a trend where the heirs don’t mind paying twice just so they can get some cash now.

I hesitate to even mention the last option, since it is a bad idea. Inheritance funding companies can give cash to the heirs in exchange for a legal right to their share of the estate. For example, if your inheritance share is $50,000, the inheritance funding company will give you less than $20,000 now and they’ll keep the rest when the accounting is done. These are horrible terms, so try to avoid this option!

Probate

If you want to learn more about probate, check out my book on Amazon, “How Probate Works.” If you fill out the form below, we will give you a free chapter. As always, send us comments or questions by email. We will do our best to answer them either directly or as the subject of a podcast.

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A shared Bitcoin family wallet sounds like a simple way for your heirs to inherit upon your death. We’ll discuss the advantages of this setup, as well as some important drawbacks.

What is a Bitcoin family wallet? It is a shared Bitcoin wallet, but not a multisig wallet. It is a singlesig wallet/device/app that multiple family members have access to.

Hot wallet example: husband, wife, and kids use an app and all of them have the password and seed phrase.

Cold wallet example: husband and wife share physical custody of the hardware wallet, PIN, and seed phrase. The kids know where the parents keep the hardware wallet and perhaps even know the PIN (but not the seed phrase)..

Pros of Bitcoin inheritance with a family wallet

Compared to other inheritance solutions, a family wallet is easy to set up and maintain. Unlike mulitsig or secret sharing, there are no extra steps. If you are comfortable with self-custody, then you are most likely comfortable updating your hardware device and keeping firmware up-to-date.

It is also easier to make transactions during your lifetime. If you want to send or spend during your lifetime, it is easier with singlesig. With multisig, you have to get multiple signatures, and with secret sharing you might have to reconstitute your key to sign any spending transactions. With a shared family wallet, for example, your just sign the transaction with no extra steps.

Because the shared family wallet is one wallet (and everyone knows it’s stored in mom’s dresser), there is very little treasure hunting upon death. It’s even easier if everyone knows the PIN.

Cons of a Bitcoin family wallet

It is extremely poor security to have so many different people with access to a single wallet.

First, there is the risk of a family member going wayward and just taking the wallet. Sadly, there was a news story of a son who drugged his dad’s tea to get to dad’s Bitcoin. No family is perfect, and if someone decides they are entitled to something more, they have instant access to a shared wallet.

Second, when you have multiple people who have full access to a wallet, there are multiple points of careless error. For example, the son doesn’t quite appreciate how self-custody works and leaves his copy of the seed phrase laying around. Everyone who has access to the wallet needs to take steps to maintain a high level of security. They all need to understand that the seed-phrase needs to be better protected than saving it on Google Drive (bad idea!).

Similarly, there will be varying levels of interest and understanding of self-custody among the family members.

Inheritance problems with a Bitcoin family wallet

Recently, we’ve seen a case with a shared family wallet and multiple family members have been contributing/purchasing into the wallet. That can cause confusion as to who really owns what. Sure, you can figure out which transactions and which UTXOs belong to which purchaser. But it creates accounting issues and increases the risk of family drama even to the point of litigation. Commingling of funds is never a good idea, and this is a good example as to why.

Upon your death, the question becomes: who’s the boss? Whenever the answer is unclear, it increases risk of family conflict. With legacy probate, it's usually legally clear who’s in charge (the named executor or trustee). That named person has the authority over the estate and that person also bears all the responsibility.

If there are multiple key holders, whoever starts signing first is in charge. It’s easy to imagine someone sweeping the wallet into a different wallet and seizing control. Now that person gets to decide who gets what. That is a recipe for family drama.

Another problem is: will your heirs figure out what to do with Bitcoin upon your passing? Even if you are a Bitcoiner, your kids may not care enough to figure it out. For example, our client called saying: “My son is very intelligent, but he has no interest in learning Bitcoin custody now. He says he’ll figure it out if anything happens to me.”

It’s a bad idea for even the smartest people to try and figure out Bitcoin on the fly. They can still make stupid mistakes compounded by the emotional stress of the loved one’s death. If you make a mistake with self-custody Bitcoin, the result can be catastrophic loss. You can’t pursue unclaimed funds, and there is no password reset.

Executor (can apply to Bitcoin)

If you have a shared family wallet, you may want to consider naming a professional Bitcoin executor, hiring a professional service, or naming a friend who is very familiar with the process.

My book, “How to Hire an Executor,” is not specific to Bitcoin, but it will help you understand more about professional executor services that are available.

As you know, we love this topic. Please email your questions or leave a comment on other Bitcoin-related topics you’d like us to cover.

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Sometimes a revocable trust makes great sense for a solo ager estate plan. Generally, revocable trusts aren’t so great in New York, because they can be hard to fully fund. The main goal of a revocable trust is to avoid probate. Since revocable trusts are hard to fully fund, the goal of avoiding probate is not usually met. Here are a few reasons a revocable trust may nonetheless work for a solo ager.

Distant or disinherited heirs

Solo agers tend to have distant or disinherited heirs. By definition, a solo ager is usually unmarried, without children, or those individuals are not in the picture. Naturally, this puts the solo ager in a situation where their heirs are distance (nieces, nephews, siblings, etc.).

We had a recent client whose solo natural heir was a distant cousin. In this case, a trust makes sense to avoid probate. When the remaining heir is a first cousin, there are extra hurdles during the court process such as: hiring a genealogist to submit a genealogy report, having the Public Administrator (PA) review court dates, and it generally makes probate longer and more difficult.

To be clear, this process not only applies when you leave something to that distant cousin. Rather, the probate process requires you to notify you natural “default” heirs under New York State law, which includes distant cousins. Even if you don’t want to leave anything to the distant heir, the estate is still required to go through this process if the estate is probated.

Similarly, if you have a disinherited family member, they have the opportunity to object to your will or wishes during the probate process. Having a trust still gives them the opportunity to object, but it is not as structured as probate. Under the probate process, the heirs must be served notice of the proposed will distributions, during which they have the right to object. When administering a trust, the heirs are not required to receive notice. Unless the heirs do some digging on their own, they may not actually object.

As mentioned above, you must fully fund your trust in order to avoid these problems. Say you have an apartment, a few bank accounts, and a few brokerage accounts. If, for example, the apartment does not make it into the trust, you still have to go through probate even if the bank and brokerage accounts are in the trust. Even if only one asset goes through probate, you are at risk for a longer probate process (described above) and the potential issues with distant heirs.

In lieu of guardianship

A revocable trust can be useful in lieu of guardianship. Putting your assets into a trust can help avoid and maybe deter the dreaded court-appointed stranger. There are situations where court-appointed strangers/guardians might impose themselves on a solo ager with no advocates. They might get the court to agree that the solo ager is incompetent to manage assets (when in fact, the solo ager is able). Thus, the court-appointed guardian gains control over the solo ager’s assets. The Netflix movie, “I Care a Lot,” is a dramatized version of how something like this could happen.

If all of your assets are in a trust, and the trust is drafted properly, the court will not appoint a stranger or guardian to gain control of your assets. The trust states who will receive your assets, so there is little incentive for a person to try to get appointed as your guardian.

For the goal of avoiding guardianship, partial funding of the trust if ok if you are able to get the majority of your assets into the trust. As long as the assets that don’t make it into the trust are not enough of to lure a court-appointed stranger, then it should be fine. Again, it is a lot of work for someone to convince the court that you are incompetent.

End of life planning (maybe)

When you are terminally ill, you know that the end is near. This makes planning easier, because you know what your assets will be upon your passing. In contrast, planning at a younger age means that bank accounts will change or you may buy and sell houses.

Knowing roughly when you might die makes it less likely that you will miss something during the trust funding process. But, even if you know that exact date and time that you will die, it’s still hard to capture every asset. Also, if you are terminally ill, you may not want to spend your last moments planning your trust.

Solo Ager Book

Again, revocable trusts don’t make a lot of sense for most situations in New York, but they do make sense for solo agers for the reasons listed above. If you want to learn more, check out my book, “The Solo Ager Estate Plan,” on Amazon. Or, if you fill out the form below, we’re happy to send a free copy to you.

Free copy of "The Solo Ager Estate Plan"

Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”

Which offer for probate real estate is better: an experienced investor cash buyer, or an individual financed offer that’s supposedly $80,000 more?

In a recent case, turns out the individual offer was actually more like $30,000 (~3.5%) higher, plus tons of headaches and delays.

Nitpicked during buyer’s inspection

Individual buyers heavily nitpick during inspections. Unlike an investor, the individual buyer is the one who will live in the house. He has a vision of how everything should be for his new home.

This inspection showed some problems, some legitimate and some were very cosmetic. Note that this sale was an as-is contract. It’s an estate sale; take it or leave it!

At the end of the day, the buyer demanded about $20,000 worth of repairs and buyer credits. For some items, he wanted a credit so he could pay to fix it himself. The repairs that he demanded from us added months of delay to the process.

Months equals money out of the estate. Not to mention all the problems that can arise from leaving a home vacant for months. If the roof leaks or a pipe bursts during that time, it is still our problem since the house hasn’t officially been transferred.

Cash buyers will inherit problems

Cash buyers only care about big problems, except ones that affect title (such as boundary line issues or environmental problems).

But cash buyers are willing to deal with cosmetic problems. Why? Because they usually tear down and rebuild, meaning they will end up fixing those problems anyway. What about large cosmetic problems? Cash buyers have experience and teams that can easily fix cosmetic items. Since they deal with this often, cash buyers are very efficient, and their repair estimates are much lower than an individual buyer who may have to negotiate with a contractor.

Cash buyers close quickly

It’s a big deal how long the probate property sits. The longer it sits, the more risk the estate bears. Even if someone trips and falls on our sidewalk while we’re waiting for a buyer, that’s our problem.

In probate real estate, we don’t have weeks of open houses, marketing, etc. In fact, we may not even use a broker, which will save another 6% in broker’s commission (in this case, about $35,000!).

As discussed above, there is no negotiation for repairs with a cash buyer. Similarly, there is less likelihood that we will need to spend months making repairs. The cash buyer just wants to get the deal done, fix the real estate, flip it, and move on to their next investment.

Compare this with choosing an individual buyer. The legal bill will be higher, because you will spend months working on a deal that could have been completed in a couple of weeks with a cash buyer. Instead of spending $1,000 or $2,000 for closing, it could be $5,000 or even $7,000.

In conclusion: the cash buyer is still net less than the individual offer (in our case, about $30,000, or 3.5% of our deal). This estate had 4 heirs, so that comes to $7,500 each.

Was it worth it the months of delays and stress to all involved in the estate? Executors in these situations have to weigh the facts and decide for themselves.

Probate

Real estate can be messy. To learn more about selling probate real estate, check out my book, “How Probate Works,” available on Amazon.

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Here’s what I learned about bitcoin inheritance at the recent Adopting Bitcoin conference in El Salvador (my full bitcoin inheritance presentation here).

Background: (1) One year ago, El Salvador was the first country in world to make bitcoin legal tender, and (2) these conferences tend to be attended by the most hardcore bitcoiners, not so much the everyday users.

How does Chivo wallet work for bitcoin inheritance?

When El Salvador launched bitcoin as legal tender, that came along with a government-maintained software wallet that you can keep on your phone (called Chivo). Based on my conversations with locals and with the researcher that I hired, Chivo is by far the dominant wallet in use in El Salvador.

This is unlike other parts of the world where there are at least a dozen popular wallets (hardware and software). While the rest of the world is still scattered, El Salvador has one main wallet that everyone uses. It’s not like Mac vs. PC or Apple vs. Android phones (where people usually have one or the other).

The Chivo wallet is highly centralized and KYC (“know your client”), which means you can’t get this wallet unless it is linked to your national ID number. It is managed by a centralized entity (the government). This is the antithesis of what U.S. bitcoiners are into.

One pro is that because it is centrally managed, you don’t have to worry about losing your seed phrase. The government knows that the bitcoin belongs to a certain person.

Another pro to this is that you can name a beneficiary on your wallet, like an IRA or life insurance. If you pass away, your heirs can theoretically call customer service. The heir would need to submit the equivalent of a death certificate, letters testamentary, and a claim form to have the bitcoin transferred to the heir’s Chivo wallet.

While in El Salvador, my researcher and I tested customer service for a death claim. We called a few times to get different representatives. They had no idea what to do for a dead customer. To be fair, even if you call Binance, Gemeni, or even Bank of America, they don’t know what they are doing either!

Salvadoran bitcoin estates data

There’s not much data on how it’s been working, since it’s only been one year. Most of the bitcoin users are on the younger side. El Salvador has a population of six million. Not many of the deaths in the past year were of younger people. Those who died were not bitcoin holders and also not using Chivo. For this reason, we weren’t able to gather much information about self-custody issues or seed phrases lost, etc.

Recently, Chivo enabled linking your bitcoin wallet to your legacy bank account. There’s no privacy, but the point is to minimize volatility. For example, I pay my Uber driver $10, and he doesn’t want to take the risk of bitcoin going up or down. He has the option to accept the bitcoin then immediately convert it to dollars. This is how the government addressed the users’ fears of volatility, etc.

People who need this money for daily needs want something that won’t fluctuate. If users are using bitcoin like PayPal or Venmo (converting everything to dollars), there may not be many probate issues. These users aren’t investing in bitcoin, rather just using bitcoin like a Venmo system.

Bitcoiners are thinking about inheritance

The conference in El Salvador was surprisingly well-attended: there was standing room only, but people were also sitting on the floor. There were so many other presentations cooler than bitcoin inheritance, that I thought I’d be lucky to see a dozen people.

During the Q&A part, it seemed like multisig was the most popular solution. Remember, these were hardcore bitcoiners, and multisig is not a technically easy solution.

Shamir's secret sharing was also a very popular solution. As you may recall, this process involves splitting up a seed phrase that’s not too risky. I will look into this further and make future posts about my findings.

But what about solutions for everyday users? They want to keep the bitcoin in their own custody without living in fear of catastrophic loss upon their passing. One possible solution is to have a multisig with someone who knows how to execute it, such as a professional bitcoin executor.

Some other observations from my time in El Salvador: the bitcoin tourists were the ones paying with bitcoin. Vendors were reluctant to let us pay for things with bitcoin. One cabbie said he accepted bitcoin, but when I arrived at the destination, he asked for dollars because his phone wasn’t working. After a little prying, I found he could open his Chivo app just fine. It seems that he didn’t know he could immediately convert the bitcoin to dollars.

Probate book

My book, “How Probate Works,” can relate to bitcoin inheritance as well. At the conference, I handed out many free copies of the book, and people were interested. If you did not get a free copy at the workshop, you can also find my book on Amazon.

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We’ll discuss a recent case study of how bad neighbors can harm probate real estate sale, and how to deal with them.

Bad neighbor blames estate for water leak

I am the professional executor for an estate with real estate that needs to be sold. During this process, we’ve had a neighbor with complaints.

First, the neighbor blamed our unit for a water leak. He had water damage in his unit, and he thought it was coming from us. Water damage can lead to mold issues, so we took the complaint seriously. We responded immediately and gave him access to a plumber.

The real estate is in a co-op building, which, as we discussed before, are a different animal! In this situation, the co-op manager appreciated our fast response to the problem.

As it turns out, the bad neighbor was blaming us for no reason. It had nothing to do with our unit, and the water issue was completely internal to his unit.

Bad neighbor blames estate for insects

Second, the bad neighbor blamed us for a sudden infestation of bugs in his unit. His theory was that when we cleaned out our unit, something was shaken which caused bugs to move to his unit. We took the complaint seriously again and responded by giving him access to an exterminator of his choosing.

When selling probate real estate, you need to try to get along with the neighbors and building management. Getting off on the wrong foot with building management can make things very difficult for the executor. Even though we felt that the neighbor was not being truthful (as we saw no indication of bugs in our unit), we responded promptly. Again, the co-op manager appreciated our fast response to the problem.

It turns out that the bad neighbor cried wolf again. The neighbor’s hired exterminator was so dismissive of the neighbor’s theory that he didn’t even bother to spray our unit. Even though the cost of spraying would have been low, the exterminator said there was no point.

Despite all of this, the bad neighbor threatened to block our probate sale by lobbying the co-op board to not allow our unit to sell. However, the co-op saw that the neighbor lied twice and that we had been cooperative throughout the process. Thankfully, we did not need to worry about the board preventing our sale.

Bad neighbor sends us a “buyer”

Those were the last of the complaints, but oddly enough, the bad neighbor sent us a buyer. He suggested selling to someone, so we looked into it.  The bad neighbor “vouched” for an “investor,” which is odd because investors usually don’t do well with co-op rules.

The buyer turned out to be an inexperienced kid (late teens, early 20s) who apparently saw on Tik Tok how to flip probate properties. The kid offered a wildly high offer, which is unlikely to actually close at that price. As we’ve discussed before, if a wildly high offer does go through, it’s because the buyer nickel-and-dimes the price down to the asking price. This strategy is used to get the buyer’s foot in the door by making an attractive offer and thus eliminating the competition. (link to E291 What is a Strong Offer on Probate Real Estate?)

In this case, the heirs had been tracking the situation and understood that this buyer was recommended by the bad neighbor. Therefore, they were not bamboozled into demanding that we accept this “high” offer, like they might have been if they did not know the back-story. The bad neighbor actually helped us with this bad buyer. If we didn’t know who sent him, it would have taken more time and research to know to reject the offer.

This is a situation where a professional executor can help buffer and deal with curveballs. An inexperienced executor may get bullied with empty threats of blocking the sale, etc. Professional executors know what to look for and can help the heirs avoid the stress of threats. We continued to address the false alarms and adjusted our treatment of the bad neighbor accordingly.

To learn how a professional executor can help you avoid probate headaches, check out my book, “How to Hire an Executor,” available on Amazon.

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After many months (maybe years), the estate is finally nearly finished. What are the final steps to close probate? We’ll explain the accounting, receipt and releases, and the reserve.

What is the estate accounting?

The estate accounting are the full books and records of everything that has transpired during the executor’s duty of administering the estate. It accounts for every dollar in and out, every asset collected and sold, and what is left over.

Sometimes preparing the accounting can take a while because:

1. It takes time to get all bank statements, records, and identify missing transactions.
2. The documentation has to be compiled into a court-specified format, so you need a specific type of accountant or lawyer to prepare the accounting. We’re not talking about the guy who prepares your 1040 or the lawyer who drafted your LLC.
3. Unfortunately, the court requires a very niche type of format, and you must account for and balance every penny. The accounting often spans more than 1-2 years with complex transactions (stock sales, real estate closings, business sale, etc.). It is a thick stack of paper!

This is the executor’s opportunity to show everything he has done for the estate. This is also the opportunity for the heirs to either object to or accept the accounting.

Why must heirs sign a receipt, release and refunding agreement?

The heirs have the chance to review the accounting, and they can hire their own attorney to help them understand it, if they wish. If there are no objections, the heirs are asked to sign a s receipt, release, and refunding agreement. Here, we’ll discuss the three elements of the agreement.

1. Receipt

The heir acknowledges receipt of the money. This seems a bit odd, since the heirs sign this BEFORE actually receiving the check. It's understandable for heirs to be nervous, but the only alternative is to hold a closing to coordinate simultaneous exchange and court filing. Otherwise, we deliver the signed receipt and release to the court and await the court’s approval before distributing the money.

In some contested estates, we have done closings. However, there really shouldn’t be a lack of trust, because the executor is bound to the court. The court will know if the money isn’t distributed as agreed upon. Also, a closing would be hard to do it the heirs do not live close by.

1. Release

The heirs agree to release the executor from any future and past liability. The heirs agree that the executor did a good enough job, and they won’t sue. This is what the executor really wants; he’s probably ready to put the estate behind him and move on!

1. Refunding

If any unexpected tax, debt, or bill comes up after the estate is closed, the heir agrees to pay back a portion of his inheritance, pro-rata, to cover that debt. Usually, a refund is needed due to taxes, an unpaid medical bill, or a creditor.

What is a probate reserve?

A probate reserve is a “rainy day fund.” Though the estate is technically closed, and the heirs agreed to refund money if needed, it’s unrealistic to believe that the heirs will actually refund the estate.

Say an unexpected expense comes up a year later, and every heir is supposed to return $10,000. Most heirs are going to ignore the executor’s calls (yes, there will be some honorable folks).

For that reason, it’s better to have cash on hand (a reserve) to pay anything that pops up. Even if it seems that all the bills have been paid, it could still take a year or more for something to pop up. The reserve amount depends on how complicated the estate is, the size of the estate, and the risks involved. Usually, it’s good to have at least $10,000. If the reserve is even $1,000 short of the unexpected bill, you’d still have to contact the heirs for the extra money. I’ve seen reserves as high as $100,000 in 7-figure estates.

The reserve should be held at least a year, but even up to three years to be safe. One reason is that the IRS takes a long time to get through their backlog, so it’s better to be prepared. Even if the heirs don’t want to pay, the IRS bills MUST be paid.

Again, the executor wouldn’t close an estate if there was a large lingering liability out there. The executor works hard to get to the point where he thinks it’s safe to close.

Once the executor is done holding the reserve, that money gets distributed proportionately like the rest of the inheritance. Distributing the reserve is much less formal, as it is a smaller amount. Plus, the heirs may be excited to receive a little more later on.

A lot of people don’t know what the finish line looks like in the estate process, so hopefully this helps to better understand it. If you want to learn more, check out my book, “How Probate Works,” available on Amazon.

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How do you find the original will after someone dies? We’ll cover where to search, how to get access, and what happens if you can’t find the original.

Did the attorney keep the original will?

It is common for an attorney to hold the original will. If you have a copy of the will, the lawyer’s name is usually written on it. You can look for the name on the backer, or maybe he was a witness or the notary.

If you don’t have a copy, check the decedent’s contacts app or rolodex for any attorneys. Don’t overlook the attorneys who don’t do estate planning; you never know what leads you will get. You can also ask the decedent’s CPA or others who may have referred the decedent to an estate planning attorney. Eventually, one of these contacts should lead to the attorney who holds the original will.

New York petition to search the home

If you determine that the will must be in the decedent’s home, you need a court order to enter the home. Thankfully, court is pretty quick in issuing this kind of order, unless the will is contested. Typically, it shouldn’t take longer than a couple weeks to get the order.

When you enter the building, you must be accompanied by a police officer or building management. The reason is that an order to search the home is different than acting with full executor powers. You will be limited to searching for documents such as the will, life insurance policies, funeral arrangements, etc. If you find the documents, you must immediately turn them over to the court.

The procedure for searching a safe deposit box or a storage unit is substantially the same. To enter a safe deposit box, you’ll be accompanied by the bank officer. It’s better for everyone involved that there are witnesses. You don’t want to be accused of anything.

What happens if the original of a will is lost?

If can prove that the will was not in the decedent’s possession when she passed, then it is possible to ask court to probate the copy. Perhaps the attorney or the CPA says they had it at the time of her passing.

However, if the decedent must have had the will, the law assumes that the decedent intentionally destroyed/revoked the will. This is the legal assumption, even if it’s not what really happened. In this case, you must move on with administration, which is the process in which the default inheritance laws are applied.

So, do your best to find the will!

If you are young and you have a will, it may not help to tell your executor where it is; you could live for many more decades. But, if you are older or terminally ill, it is a good idea to let your executor know where to find your will when you pass.

To learn more, check out my book, “How to Hire an Executor,” available on Amazon.

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Choosing an executor can be very difficult if you feel you don’t have many choices, especially if you own non-traditional assets such as Bitcoin. We previously discussed this topic, generally (https://anthonyspark.com/help-i-dont-have-an-executor-for-my-will/), but what about Bitcoin?

Whether it’s because your friends and family lack knowledge, or because you don’t want to leave behind stress or drama, there are many reasons why so many Bitcoiners feel they don’t have anyone to name as their executor.

Your Family and Friends Don’t Understand Bitcoin

You are afraid that when you pass, they will lose your Bitcoin. They don’t understand custody or any basic security protocols (OPSEC).

Another worry is that your family and friends will dump it, and immediately turn it into cash. They might fall for the hype that it is bad for the environment or actively believe it’s a “ponzi scheme.”

Or they may just be completely clueless; never heard of Bitcoin.

You Don’t Want to Burden Your Bitcoin Friends

Maybe you have friends in the developer/Bitcoin community who are technically savvy enough, but you’re not close enough to ask them to take on this big job. Appointing an executor requires trust, and executorship is a burdensome job (lots of time and work).

Besides, Bitcoin may only be a small portion of your entire estate. I’d guess that most technologically advanced folks will get SUPER frustrated by the archaic parts of probate. As we know, probate includes lots of phone calls, faxes, standing in line, all without many apps or elegant solutions. Your friend who is used to cutting edge technology probably won’t want to stand in line to close your bank accounts with a physical signature. They’ll be ripping their hair out and looking for a way to do it online!

You Don’t Want to Cause Disputes Among Your Family and Friends

Even if you have family members or friends who can do the job, the rest of your heirs (who don’t understand Bitcoin) may have a million questions, suspicions, and doubts. The heirs’ lack of Bitcoin knowledge, compared to the executor, will breed suspicion of the executor. Your executor will probably be frustrated with the constant questions and doubts.

When all the heirs and executors know each other and there is distrust, it can ruin relationships, cause resentment, and tear families apart. It’s easier for a completely independent executor to weather that storm.

You Can’t Find a Suitable Service

Most technically knowledgeable custody service providers (Casa, Unchained) have great inheritance guidance, but, to my knowledge, they don’t offer executor services. Their advice is to talk to your attorney.

You can also find someone like myself.

Or you can look for a bank to serve as an executor. However, banks have high liquid asset requirements. Most Bitcoiners who are self-custodied probably don’t trust the banks anyway...

Do Any of These Situations Apply to You?

If any of these situations apply to you, your best solution may be hiring a professional Bitcoin executor. Some of the benefits we offer:

1. We have a fully staffed office available to handle all the various burdensome tasks that come with being an executor.
2. We are focused on and committed to staying up to date on Bitcoin custody, OPSEC, and other need-to-know issues surrounding Bitcoin inheritance.
3. Choosing an independent executor, instead of friends or family, can help prevent drama and disputes, since a professional executor is a neutral and unbiased party.
4. We’re bonded and carry malpractice insurance to cover any wrongdoing as executor. This provides an additional layer of protection you wouldn’t get when working with a loved one, friend, or even a trusted financial planner or accountant.

How Do You Appoint a Professional Bitcoin Executor? Name us in your will or trust

Just tell your estate planning attorney that you appoint Anthony Park as executor. In most cases, using estate planning software yourself is fine, too.

Next, schedule a call with me to make sure we’re a good fit. Then send us a pdf copy of your fully signed will/trust so I know I’ve been formally nominated.

After that, we will have annual check-in calls to stay in touch.

Nominate Us as Executor After Someone Has Died

After someone has passed away, the heirs may realize that person owned Bitcoin and they become intimated. Even if I am not named in the will or trust, there is a process for naming me post-death. It requires a little more work, but in most situations, we can work with the court and get appointed as executor even after death. The heirs can rest assured that we will now handle everything for them.

In review: just because your executor knows about Bitcoin now doesn’t mean they will still have knowledge of the ever-evolving process when you pass away. Even letters of instruction for your executor can become outdated fast! The best solution is to hire an independent professional executor who is committed to staying up to date on Bitcoin.

Probate (can apply to Bitcoin)

To learn more about executorship in general, check out my book, “How to Hire an Executor,” available on Amazon. Or you can call us and we’ll be happy to speak with you.

I’ve received more and more questions on this topic, and I am actually slated to speak at a the Adopting Bitcoin conference in El Salvador. Hopefully, I will meet some of you down there and I’ll be happy to answer your individual questions.

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