None of us likes to think about death. We’re not wild about paperwork and procedures, either. Administering the estate of a deceased person unfortunately involves death and taxes and careful accounting and attention to detail. Many people lighten the load on themselves by using a lawyer’s services at this difficult time. This also assures that the job is done right.

Who administers an estate? In your will you name an executor to handle your estate. If you die without a will—as all too many of us do—the court will appoint a personal representative to carry out this function.

Who should this person be? It's important to be sure that he or she is capable of doing the job. The executor has to be detail-oriented, able to persevere in dealing with bills and insurance reimbursements (especially the hospital, Medicare, ambulance and doctor charges incurred in a last illness), and comfortable in handling a lot of paperwork.

Also, the executor may have to cope with relatives who may be wondering why it's taking so long to receive their inheritance, or why their bequests are smaller than they expected. This can happen if, for example, the decedent’s money was aggressively invested in the stock market, and those stocks nose-dived after he or she wrote the will.

The executor or personal representative is also responsible for various tax returns and may have to manage the decedent’s property throughout the probate process, which can last more than a year. This can involve managing an investment portfolio and making important investment decisions.

The lawyer as executor. Many people name their lawyer executor, rather than naming their spouse or another relative. This assures that the process will go smoothly, saves family members work and anxiety, and has the additional benefit of assuring that the executor has no possible conflict of interest, since the lawyer will not stand to gain from the will. In general, the larger the estate, and the more the potential for conflicts, the more you should consider naming a professional as executor.

An additional benefit is that having a professional executor lessens the possibility of personal liability for a family member. If you choose a family member and he or she is incapacitated by grief, illness, or disability, the person could be personally liable for unpaid estate taxes and fines for late filings.

Delegating some tasks to the lawyer. Another alternative is to name a family member as executor but specify that you expect your executor to appoint a competent attorney to assist in settling your estate. For example, you could direct that your executor use a lawyer’s services for court appearances, filings, and other technical matters requiring legal expertise.

A quick look at the process will show that there are a number of occasions when a lawyer’s services may be helpful and even necessary.

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The Process, Step by Step

Opening the Estate. If the decedent left a will, the first job is to submit the original copy to the probate court having jurisdiction—the court in the county where the decedent lived. In some states, it may be necessary to prove that the will is valid in a brief hearing. This is usually routine, but if there is a will contest—someone disputes that the will is valid, is the decedent’s last will, etc.—or if there are complications, a lawyer’s help will definitely be required.

To "open the estate," the executor completes certain forms that notify the court and interested parties of the death. At this stage, depending on state law, the executor may have to choose among several types of probate—supervised, unsupervised, small-estate. This decision is important, and it may be a good idea to get your lawyer’s analyses of the pros and cons of each.

Collecting the Estate’s Assets. The next step is to inventory the assets of the estate. Once again, a lawyer might well be helpful in differentiating the property that passes through probate from the property that is out of the probate process. For example, if you own property in joint tenancy with right of survivorship, it passes immediately to the surviving owner upon your death.

(Many spouses own their home in such a joint tenancy.) Other property that does not pass through probate includes life insurance payable to a named beneficiary, property held in a trust, and retirement plans payable to named beneficiaries.

As for assets that do pass through probate (assuming they are held in sole ownership), the value of stocks and bonds depends on their value on the date of death. The same is true of bank balances. The value of other forms of property, such as real estate, may have to be set by professional appraisers.

Managing the Estate’s Assets. If the decedent owned a business, or income-producing real estate, or an active portfolio of stocks and bonds, the executor might well have to take on responsibility for managing this property. That’s why it’s a good idea to specify in a will that the executor has authority to retain certain kinds of property in the estate, continue running the business, buy or sell real estate, borrow money, and take advantage of tax savings. All these decisions may have significant legal dimensions, and the executor may benefit from legal help.

Handling Taxes. The executor must notify the IRS of his/her appointment by sending in a form and applying for a separate taxpayer ID number for the estate. The executor must file a form to pay the federal estate tax for estates totaling $675,000 or more. There may also be state estate taxes to pay, sometimes even on smaller estates.

The executor must also file some income tax returns. A personal return covers income the deceased person earned in the tax period before dying. A return for the estate covers income above a very modest minimum earned by the estate while the estate is being administered, such as through dividends, income from the sale of property, etc.

Taxes may have to be paid before money and other assets can be distributed to the beneficiaries. The executor has many decisions to make regarding how and when to pay taxes, a number of which could significantly affect the amount of taxes that are due. The help of a professional could result in savings of thousands of dollars.

Closing the Estate. This process could well vary state by state, but generally it involves filing various forms with the court. These require the executor to show that all interested parties—including creditors—received timely notice of the death, that the time period in which claims can be filed against the estate (specified by state law) was observed, and that all valid claims (including taxes) were paid. A final accounting—totaling up all the estate’s assets, minus expenses—will also be required. This will also indicate the amounts to be distributed to beneficiaries.

Distributing the Assets. Again state laws may vary on details, but the general pattern is that all the assets are not paid out to beneficiaries until the court has approved the executor’s filings regarding assets, claims, taxes, etc. In many states, a portion of the assets can be paid out before the final stages. This helps minimize financial hardship for the decedent’s family.

Legal issues that can arise in distributing assets can involve the spouse’s right of election. State law generally gives surviving spouses the right to a certain percentage of the estate, despite what the will says. So a disinherited spouse may have the right to claim a percentage of assets of the estate. Also, the family homestead is usually shielded from creditors, and that could be an issue in certain estates.

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Administering estates can be routine, but issues that can arise—besides those specified in this article—include

bonding requirements for the executor (has it been waived by the will?)

methods of serving notice of the death and proving that all interested persons received such notice out-of state vacation homes or other real property, which can necessitate ancillary probate

disputes over what provisions of the will mean (is it clear which person is to get which property?)

discovery of assets (have they all been located? Has the executor shown proper diligence?)

letters of administration for the executor (what do they entail? Does the executor need a court order in addition?)

disputes among beneficiaries and

disputes regarding creditors’ claims.

When these or other difficulties surface, a lawyer’s help can be invaluable.

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Tips on How to Hire Lawfully

Many small business owners are finding it tough to add good people in a tight job market. Many of the suggestions lawyers make on avoiding legal trouble can also help you find the best qualified people.

Various federal laws prohibit discrimination in hiring, specifically targeting racial and ethnic minorities, persons with disabilities, persons age 40 or older, and women. State laws may protect an even larger group of persons.

The key is to make the whole hiring process as objective as possible. Don't stereotype applicants in any way, but rather focus on what the job requires and how each particular employee matches up.

Advertisements: Don't say or imply that a job is for one gender or the other (no "Gal Fridays" wanted); don't engage in age stereotyping by saying you're looking for a "recent college grad"; make sure your ads get to a wide segment of the population. It never hurts to put in the ad: "Equal Opportunity Employer."

Checklist: Go into interviews with a series of questions that focus on the specific requirements of the job. Try to ask all applicants the same questions. Take notes.

Avoid Questions that Show Stereotyping: You may want some assurance that an employee will be with you for at least a few years. Don't ask a female applicant: "Do you plan to get married?", "Do you plan to have children?", "Is there a chance your husband will be transferred?" Keep the focus on the job. Ask "Is there any reason you might not stay with us for the next few years?" or "Where do you see yourself in five years?" And, of course, ask the same questions of all applicants.

Contrary to popular belief, you're not required to offer employees any vacation time. And the law does not require you to offer health and pension benefits either. In a tight market for good people, you might want to offer benefits, but you don't have to.

Ask Only What You Need to Know. If filling the job doesn't require you to ask certain questions, then don't ask them. Do you have to know the applicant's marital status? Number of children? Religion? Age? Financial status? National origin? Then don't ask the question. (You may have to ask about some of these matters after the person is hired. For example, you might need this

information-for the purposes of a pension, health-care insurance, knowing who to contact in an emergency, or certifying that the person is entitled to work in the U.S. However, saving these questions for later means they didn't influence the hiring process.)

The law does not regulate requests for references. However, if you unnecessarily pry into private personal information or use unreasonable methods to gather data you may open yourself to tort liability for invasion of privacyCin other words, you might face a personal injury lawsuit from the disgruntled applicant. You will generally be safe if you limit any background or reference check to issues relating to the performance of the job in question.

If you decide to run a credit check on prospective employees, you should be aware that this practice raises questions under both Title VII and the Fair Credit Reporting Act. Requiring good credit as a condition of employment has been held to adversely impact on minority candidates and thus raises issues of discrimination under Title VII. If you decide not to hire an applicant based on information obtained from a consumer credit reporting agency, the Fair Credit Reporting Act requires you to advise the applicant of that fact and provide them with the name and address of the agency that provided the report.

These suggestions will help you focus on the qualifications the person needs to do the job and should help you avoid problems with laws against job discrimination.

• List the essential functions of the job: What are the core duties to be performed by the person holding the job? What percent of an employee's time is spent on each duty? What is the primary purpose for this job?
• List the requirements needed to perform the essential functions of the job: What skills are necessary to perform the job? What level of formal education or training is necessary to successfully perform the job? What, if any, work experience is necessary? What personal characteristics are linked to successfully performing the job?
• State where the job fits into the business structure: To whom does the person holding this job report? Is the person in this job responsible for supervising others?
• Set a salary level for the job.

The law limits the types of tests you can use to screen out applicants. To be on the safe side, any test should measure an applicant's ability to perform the job in question. Tests that are not job-related and that screen out disproportionate numbers of minorities or women have been held to violate the anti-discrimination laws.

The Americans with Disabilities Act (ADA) forbids requiring medical tests of applicants unless you've offered to hire the person and all employees who hold the job in question are required to take such an exam. Any information obtained as a result of the test must be kept confidential, in a file separate from the applicant’s personnel file, and cannot be used to discriminate against the applicant because of any disability disclosed.

The Employee Polygraph Protection Act prohibits you from requesting or suggesting that applicants undergo a lie detector test. You can test for drugs, but several states regulate how you can conduct such tests.

Other laws also directly affect the hiring process. Federal immigration law requires that all employers must complete an eligibility form (Form I-9) for

every employee hired. You can download a copy off the Internet at http://www.ins.usdoj.gov/forms/download/i-9.htm, or you can contact the nearest office of the Immigration and Naturalization Service of the U.S. Department of Justice. The purpose of this form is to ensure that you have verified the legal eligibility of the applicant to be employed in this country.

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With worries about health insurance becoming as common as refrigerators in American homes, many of us have come to rely on COBRA for at least a measure of comfort. COBRA is the acronym for the Consolidated Omnibus Budget Reconciliation Act of 1985. It lets you and your dependents continue your group insurance coverage for a specific period of time after you leave a job.

Here are answers to some common questions about COBRA.

Why is COBRA important? You want to be able to keep your group insurance if you quit your job or are fired. Group insurance costs a lot less than buying an individual policy. With group insurance the health risks are spread among many people, which makes your premiums lower.

Also, you probably did not have to get a physical before getting your group insurance policy. With an individual insurance policy, you and everyone in your family who would be covered might have to take a physical exam. If you or any of your dependents have pre-existing conditions, that may not be included in your individual policy. You could be left with a big medical bill to pay out of your own pocket.

To whom does COBRA apply? COBRA applies to private employers and local and state governments that:

Employ 20 or more people on a typical business day, and

Sponsor group health plans for their employees.

COBRA applies to all group health plans regardless of whether the plans are self-insured or health maintenance organizations. It also applies to dental and vision plans.

What terms do I need to know? COBRA offers continued coverage to qualified beneficiaries whose group insurance is terminated because of a qualifying event. When you decide to keep your health plan under COBRA, you elect to be covered.

You are a qualified beneficiary when you have group insurance through your employer. Your spouse and dependents are also qualified beneficiaries. COBRA allows you to continue your insurance coverage until you get group insurance someplace else. A qualifying event is when you lose your insurance coverage because you lost or quit your job or your hours were reduced. If you are fired because of gross misconduct, you are not entitled to COBRA. Your spouse or dependents qualify for COBRA when they lose insurance coverage because:

• you die;
• you are fired (unless you were fired for gross misconduct) or quit your job;
• your hours are reduced;
• you and your spouse are divorced or legally separated;
• you become eligible for Medicare; or
• your child is no longer considered a dependent under your health plan.

How long do I have to choose COBRA insurance? You have 60 days from the date of your qualifying event. COBRA is retroactive to the day of your qualifying event. Hence, if you elect COBRA on day 60, your health plan will also cover those first 59 days after your qualifying event.

Do I have to pay for COBRA insurance? Yes. Your employer can charge you up to 102 percent of the total cost for your benefits. The total cost for you must be calculated the same way it is calculated for other people with the same type of benefits under your health plan. Your premiums are typically required to stay at a set rate for 12 months.

Do I have to undergo a physical to get COBRA coverage? No. You do not need to do anything more than any other person with the same health plan as far your insurability is concerned.

Will my benefits be different under COBRA? Your benefits must be the same as employees with the same health plan. If the coverage is changed for all the employees, it is changed for you too.

How will I find out about COBRA? COBRA only applies to companies with 20 or more employees. With most companies that size there will be either a human resources person or an administrator in charge of your health plan and benefits. That is the first place to start when you have a question about your health plan or COBRA.

Does my employer have to tell me about COBRA? Yes. There are three different stages at which your employer must educate you about COBRA. An initial notice will be sent to you—usually in the form of a letter—telling you that can choose to continue your coverage under COBRA and what you must do to make that choice. An event notice will be sent to you when you leave your company or your hours are reduced or when something else happens that would terminate your health insurance. Finally, you will receive a termination notice telling you when your COBRA coverage is about to end.

When can I expect the initial notice? The health plan administrator for your company has 14 days to notify you of your right to elect to continue your coverage under COBRA. You then have 60 day to decide whether you want to elect to continue your coverage.

How long will my COBRA coverage last? If you lose your job or your hours are reduced, your continued coverage lasts for 18 months or until you get other insurance. If you die your coverage ends, but your spouse and dependents may pay for continued coverage for 36 months. If you are divorced or your child is no longer a dependent, continued coverage lasts for 36 months or until your spouse or child finds other insurance.

My state offers continued coverage too. Can I add that to the COBRA coverage? No. Some states offer insurance laws similar to COBRA. If your state requires your employer to offer you continued coverage, that coverage runs at the same time as COBRA. You can not tack one onto the end of the other.

When can my COBRA insurance be taken away? You can lose your COBRA coverage when:

• your employer stops offering a health plan to its employees;
• you do not pay your premiums;
• you qualify for Medicare (although your dependents may still qualify for COBRA); or
• you become insured under another group health plan.

Generally your COBRA coverage ends when you enroll in a new health plan. The exception to this is when your new policy excludes or limits your coverage for a pre-existing condition. In that case you might be able to keep your COBRA coverage for the full 18 or 36 months.

This is considered a new health plan and your COBRA coverage will end.

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