Estate Planning by David Bock
Two thousand and twenty was a horrible year for many people for a variety of reasons. In addition to the most common, I lost both my parents that year. My father, who lived in Florida, died in April and my mother, who lived in New York City, died in September.
This post is not in any way an attempt to garner pity but to help others learn from my experiences.
When my father passed, it was not a complete shock as he’d been fighting cancer for a number of years. Also, as an engineer by training, his estate was fairly well organized. This greatly simplified things for his wife after he passed as most of the legal and other end of life arrangements and documents had been prepared. There were, of course, some snags and surprises here or there, but for the most part, my father had done his best to ease the path for his wife and heirs after he was gone.
My mother’s passing was more of a shock, but the post death situation was even more so. She had not left a will or any other end of life legal documents we could find when we were able to get to her NYC apartment in mid-October. The only thing she’d done was pre-pay her funeral expenses. While this helped, trying to deal with her estate from eight hundred miles away without those documents was challenging to say the least.
As my older brother no longer lives in the country, it fell to me to take care of things. Which I had to do remotely and during the times of covid, with all the shutdowns and restrictions New York City could apply. I was eventually able to get a copy of her death certificate from the county, which enabled me to contact her creditors and get that part moving.
With the help of a cousin (our angel when my mother was in the hospital and a great help after she died) who used to practice family law, I was able to apply to be assigned Administrator of the estate. This was simplified due to the value of my mother’s possessions falling below an arbitrary line and therefore considered a “small” estate. I mailed the paperwork, properly signed and notarized, to the county court at the end of October.
This is where things took a turn for the surreal. It took over two business weeks for my paperwork to get from Knoxville Tennessee to New York City. Half of that was just getting from Knoxville to Memphis. But it finally arrived. I’d been advised to let some time pass due to the offices being closed and people working from home.
For thee and a-half months I heard nothing. Finally, in mid-February I called the court, only to get a recording telling me the offices were still closed and try an email. My first two emails went unanswered, the third received a terse and uninformative reply. Six weeks after the first email, I finally managed to reach someone who could help. At this point, things started to move faster. It turned out there was a piece of information missing which they’d known about since mid-November but hadn’t informed me. With that corrected, I was told the paperwork would be mailed out by the end of the week.
Two weeks later I still hadn’t received anything so I emailed again. Someone had forgotten to put it in the mail and I was told it would go out on the following Monday. It arrived the next Friday.
At this point, it was over seven months since she’d died and because there was no will or a named beneficiary, we hadn’t been able to clear out her apartment, close her bank account, order her tombstone, or deal with a number of other issues.
A week after the paperwork arrived, we were back up in New York City working on all those things. While both physically and emotionally exhausting, the week was very productive, thanks in large part to some wonderful people who looked for solutions when others would have shrugged their shoulders.
The week after we got back with a carload of books, photos, and other keepsakes, I was able to get a Federal Tax ID number and open an estate bank account so I could start dealing with estate expenses and, assuming there’s anything left, disbursement to my mother’s heirs.
Most of this aggravation could have been avoided if my mother had legally named a beneficiary or estate executor. Detailed instructions regarding what she wanted done would have helped even more. However, as with many people, she didn’t want to consider her own mortality too closely.
The most important lesson to be learned here is get your legal house in order while you have time to consider options and make your own decisions. Everyone dies eventually, make it easier on those left behind by managing your estate as much as you can. Also, don’t forget to inform responsible parties and update any instructions as circumstances change.
Also, cull your old documents regularly. This was not a habit either of my parents had as we found paperwork, including tax returns that went back to the 1940s. Unless you run a business, there’s rarely a need to keep more than seven years of tax returns or one year of credit card statements, utility bills, etc. Make it a regular part of your annual routine to purge older papers. Consider it a favor to your heirs. As a bonus feature, it means less clutter for you.
Hopefully this post can help someone avoid repeating my experiences. They certainly modified my habits.
According To Hoyt 
Thank you, David.
I would just add, based on the near horror story Kris Rusch and her husband Dean Wesley Smith had to deal with when they were executors for a friend’s estate: ask about every single seemingly-silly paperwork detail that might possibly be vague. The law says “three signed and notarized copies of the will must be on file.” Does that mean photocopies of the original, or three clean copies, each one signed and notarized separately, in colored ink to prove that they are not photocopies? Yes, it can make a huge difference.
Also keep in mind, if you have intellectual property, that also needs to be accounted for. That’s a whole ‘nother topic, and varies from state to state, but keep in mind that royalties and income distributions might not be something your personal estate planning attorney is familiar with. Ask, double-check, and make plans accordingly.
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Very much with the intellectual property. That’s a nightmare when you’re dealing with your own, let alone someone else’s.
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A added note or two:
Strongly consider having Power of Attorney and Medical Power of Attorney documents. Really helped my spouse when her mom was in a coma.
Also document any policy or retirement benefits and review the beneficiaries annually. On two separate occasions, this has destroyed relationships in a large portion of my extended family because the beneficiary was not updated after the policy holder got remarried.
Nothing brings envy and greed out on stage like the scent of possible money after a death. And it doesn’t have to be a large sum either. Just roll eyes and say “FFS!” at the petty avarice on display.
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IIRC, it was Dr Johnson who said “If you want to really know someone, split an inheritance with them.”
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True.
I’ve seen much of two older generations pass in a series of vitriolic behavior and backstabbing. People literally stealing, looting or destroying funds or property intended for the deceased’s children.
It made the lawyers rich. So much for “Honor thee father and mother”. My cousin and I joke: “Don’t need enemies, we have family.”
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My grandmother had dementia and ended her days in a state institution (long, sad story I was too young to ever hear much about). She didn’t have an “estate,” as such, but there were personal possessions…which everyone wanted, and since Grandmom had no memory to speak of, she promised the same item to all the kids. It was ugly. Years before some of them would speak to one another and one branch of the family just plain disappeared.
OTOH, my mother-in-law left a detailed list of which son should get which personal item, with the “suggestion,” that if any two of them wanted the same item they work it out. They did.
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Sigh… I avoided most of this, just by not being in the least acquisitive of physical things – and they couldn’t take the memories.
But it does go on forever. I’m probably going to lose most of this coming Sunday at my sister’s house, going through stuff that she still has from my grandfather’s World War One service. Trying to take as little as possible. (We’re trying, with some success, to thin down what our kids will have to decide what to do with.)
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World War 1 is far enough back that you might get museums interested in them– something to float as an idea.
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Hmm. That’s an idea. I’ll see if I can find something that tells me where he enlisted from (could be three different small towns in Kansas). Then I’ll have to see if the place has a museum, and if they’ll take it. Well worth it to get it off my hands and into a good place.
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We went to the Marine museum in Virginia– like 90% of the stuff was “someone brought this home and it was kept it in a closet until they heard we had a museum, and asked if we’d help remember their family.”
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We had some of that and my parents aren’t even gone yet. They were just moving to a seniors residence. Who was going to get what was all laid on, in writing even. None of it having any monetary value to speak of, naturally.
I managed it by staying the f- out of it. Bit my tongue and shut up. Yes, it was pretty hard to do.
The thing to remember is that emotions are running -high- and everybody has sentimental memories about that Christmas ornament, or that spoon, or that picture. Especially in a house that they’ve been living in since 1956. Nobody is in their right mind. They’re going to act out. Best to shut up and let it got.
In the end, we filled each of the three children’s basements with “cherished antiques”, and we filled an entire large-sized dumpster (the ones as big as a sea container) with “memorabilia”. It was agonizing. The Children of the Great Depression never threw anything away, you know? Chipped milk jugs from 1965, still in their little cubbyhole downstairs. Because you never know, right? You might need that ugly milk jug.
Thank God they didn’t have hobbies. I recall the passing of an old girlfriend’s father, who liked model trains. Oh, my god, the trains. So many. Half her inheritance came from selling those things, it turns out they’re worth their weight in gold. The old man did her proud, I must say.
Whoever shovels out Chez Phantom will need a Bobcat and two sea containers. I’m going to do my best to pare things down myself before being carted off to the Senior’s Residence, but I too keep the ugly milk jugs and such. Two flat-head Ford V-8 engine blocks! Not one, but two? Really? Yes. Because you never know, and besides I paid fifty bucks for one of those. ~:D
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Yes to that. BIL died (of “suddenly” in California) without a will. Glorious mess: Executor is BIL’s and $SPOUSE’s kid sister (we’re in Oregon, she’s in Nevada). Sole heir of the state has some legal presence in California, but lives and works in Europe. Added to the fun is a 20-year divorced ex-wife, with entitlement/control issues. (She got a legal slapdown at least once.) The silent party is BIL’s fiance. She might have been the beneficiary of an insurance payout. The Ex freaked at that…
It took two years before SIL got permission to sell the house. One complicating factor: BIL hid/destroyed all papers with SSN as well as most bills and other useful paperwork. Mercifully, the SSN was related to $SPOUSE’s and a helpful finance person was willing and able to confirm the number. (“I can’t tell you the number, but if you tell me, I can say if it’s right.”) I do not know (nor do I want to know) the legality of that.
We stayed away from that trainwreck. SIL plans to be elsewhere if a similar situation crops up.
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Even with a will, it can be complicated.
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Another comment of caution.
Be wary of autopay/autobill on bank accounts. Sometimes the bank will not close these down until after the estate goes through probate. And probate can take a year or more.
Nothing like a dead person paying auto insurance and cable bills months after they have transcended the mortal bounds.
But SSI will cut benefits ASAP and may claw back any funds payed after the data of death.
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If memory serves, it’s worse than that. I believe the SSI payout is done in advance, so when you pass off the mortal coil, they want money back from the last payment, assuming they were notified immediately.
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For mom. That is easy. I am suppose to be on all her accounts. Okay to talk to. Thus I can call and shutdown the account. I can shutdown the checking account (I am on) and credit card (may not be on, but should be on the talk to list). Cancel these and auto pay isn’t a problem. (Note to self, make sure I am on the “talk to” list for Insurance.)
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In some locales banks freeze all personally titled accounts on finding out about an accountholder’s death for some number of days – 45 days is one freeze period I know about. That can even be if there’s another person named on the account, depending on how they are on there.
Best to ask the bank and confirm what they will be doing when one might need to pay something, or as noted not pay something.
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Or, since the bank finding out is often via getting a death cert from the family, make sure online access is available well beforehand, and in the event to configure things and move money around as needed before the bank finds out.
As one lawyer told a family member when a parent passed away, there’s nothing that says the bank has to find out before the family member is able get everything in order.
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On the Less Than Legal But Still Important Points section, sit down with your parents and a camcorder/cell phone video and go through the whole house for identification purposes. Things like “This set of china was from your father’s grandfather, who brought it back from Japan, although that gravy boat was my grandfather’s, and he bought it in Chicago, etc…” Don’t try to break it down by who-gets-what except for exceptional cases, but more of a ‘for insurance purposes and grandkids’ video. When my mother passed away, us kids (yes, that’s correct grammar) spent most of a month sorting through stuff and the most popular questions were “What is this? Where did it come from?” We still have this hand-carved wooden set of fruit people who sit on the shelf that we have no idea where our parents found them. Oh, and get those 8mm Kodachrome videos digitized with a company like ScanCafe (my favorite) so you can make copies for all the kids like you do with the videos above, and for the video experts, you can have mom or dad narrate an audio track so you don’t have to guess which silent kid on screen is Great-Uncle Harold.
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Also, please realize that each and every state has their own rules for how things should be done. Different rules on who inherits if there is no will, etc. Also, there may be specific rules for the local courts on what needs to be filed, how it can be filed, etc.
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^^this! Iowa has attorney fees for going through probate, better to skip probate altogether. Mom gifted her small property in Idaho to us long before she died: we thus missed out on a stepped up basis, but it also meant that my brother (getting Alzheimer’s) tried to force the sale. In the end we started an LLC with majority voting.
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Also: computer passwords, a friend lost the genealogy records for family and half the town. And the safe deposit box and keys.
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I have an envelope in the document safe with passwords, particularly the master password for one browser. I need to update; said browser doesn’t work with all the password protected accounts. (But I dislike the other browser.)
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Now that is something we never thought of; I guess a trip to the SD box is now in order…
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Check your state laws. Some banks are required to block access to the safety deposit box once a death is announced, until probate concludes or an officer of the court requires access. (MomRed barely got her father’s will out before the bank had to lock the box down.)
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Yeah, the issue of probate is most of what led us to create a trust, with myself and my wife as primary trustees, and my daughter and my wife’s brother as secondary. And everything is covered by the trust; no probate desired or required (in AZ; YMMV).
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Ideally, put at least one other person on the box with access, for example the will executor, and/or a trusted associate. This might not prevent the Idaho scenario, but greatly facilitates access by the proper person when the time comes.
This can also be done on accounts. But trust wisely.
As for Idaho, do they lock out other named users of the box if only one is dead?
And for everyone, let the key peopel know where to find your will, and what essential first steps are needed. One coudl provide them with a sealed “in case of death or incapacity” envelope.
And seconding somewhere else on passwords. A few web sites I used to frequent dies with their authors, because the authors didnt share the root passwords with anyone. In one case, the domain name wound up with (long obscene rant about a shitbag….)
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Wherever possible, always have accounts, titles, etc. as “X or Y,” not “X andY.” Of course, if you are “X,” you must trust “Y” to only do something with it when you are absolutely not available. (Or it is really a common account – such as mine and $SPOUSE$’s.)
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This is where we were afraid we might get in trouble, we only have the one account for both of us. With hubby as primary. Only time I had an account in my name was when we had our IRA’s and I had to have a separate savings account. IRA’s aren’t in a standard bank now, so only the one account. Honestly? Wasn’t even sure who was primary on the account (or a lot of accounts). Had reason to find out, so now I know. But generally when we call in on something they ask “who is primary”? They get a caught in the headlight stare. Dang if we know. Everything has been shared for 45 years. Usually gets a laugh. I do everything online, so not talking to anyone. If I do have to talk to someone and hubby is primary, they get a gruff “talk to her”.
Mom and dad were the same way. With their account originally opened ’55 when they were married. By default dad was primary, has always been primary. When dad died mom had no problem getting his name off the account, just needed death certificates (need a lot of death certificates), nothing else changed. Now getting her name on all the utilities were more difficult (grrrrr), especially the landline phone company (double grrrrr). A lot of “Now you’ve made her cry.” Generally got their attention. “What part of he’s dead don’t you get? We have the death certificate. Just need to know where to go. Who to talk to.”
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I have heard of a widow who faced a DMV that insisted that her husband had to pay his ticket in person, and without that she couldn’t sell the car (or some such, I forget what it was an impediment for).
She brought in the urn.
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Do not put anything in a Safe Deposit box that is needed for someone to access the Safe Deposit box.
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I have mom’s passwords (and ours) in KeePass2 on my computer. I print that out before we leave on vacation, plus instructions on where it is in computer or backup (since we take my computer to backup pictures), and how to access. Also know where mom hides hers.
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Expensive funerals are stupider than expensive weddings. Better to throw just a party for both.
As for pre-paid burial plots and such. Funeral homes and commercial cemeteries have learned Hollywood accounting, (or originally invented it), and such items are now wrapped in more fees than a Ticketmaster event even if the plot and services were “locked-in” at a lower cost years ago.
If you do consider cremation, there are lower cost options available in some states. Also if the deceased is a regular member of a decent church, services should be cheaper than a funeral home.
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I think I want a cotton shroud and to be planted under a sapling, probably live oak.
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I’d pick a sycamore for me.
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Easy for us. Dad was cremated. Mom wants cremation. Dad’s plot was free. Cremation no burial box (grandfathered in, not true new burials even cremation, for reasons). Can still hand dig but backhoe for win. Mom will share dad’s plot just have to add date of death to headstone. Plot free because within family historical cemetery. Please note, “free” is not inexpensive. Standard burial still requires a containment box (not just casket), the cost of digging, and interment, by legal funeral home (location in the middle of nowhere). Both of which should be included in a commercial graveyard plot. Cremation remains, can have site dug by family by hand (strongly recommend a small backhoe, seriously recommend).
Been getting a lot of inquiries lately of extended family on the “free” plots. To the point where the families that generation after generation has actually cared for the graveyard, but have continued to use the graveyard have picked out preferred spots (next to predeceased child). Also make sure to point out how “free” the plots really are not. (An aunt, who technically is not family (divorced from dad’s younger brother) but has a daughter buried already buried in the graveyard has requested that she be cremated and her remains added to her daughter’s casket. That is what her surviving children will do. Also solves the problem of which parent gets the grave site closest to their daughter (although uncle, last I heard, hasn’t learned of her solution). The odds are he is going to die first, and guess what the surviving kids likely to do?)
Used to be extended family could dig the plot to required dimensions for the containment box, then the funeral home installed the box, for regular burials. No longer true. Don’t know when changed, but the last time family legally dug the grave site for regular burial was ’73 for great-uncle.
Maternal grandparents were also cremated. Their plots were prepaid but in a Masonic graveyard (also in the middle of nowhere). Mom used one plot for both of them, and gave the extra one. They had someone dig the site from the masonic hall, interned their ashes, and then it was filled in. One headstone for the two of them. Not sure how this would have worked in a normal commercial graveyard somewhere else. The masonic graveyard is next to “the other Applegate” graveyard (Charles Applegate). Both graveyards are now administered by the City of Yoncolla. That side of the family chose not to go with the Historical non-profit 501(c) designation.
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Interment of cremains depends on the State, actually. Here, the cremation is regulated, but not what is done with cremains. (My family knows that I am to be put into a Miracle Whip jar. A mayonnaise jar will get them haunted.)
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A Mason jar is better, preferably one which just had the last of the home-distilled contents consumed at the wake… :lol:
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Pop passed in 2017. Had purchased cremation services from Neptune society. We had data on that and they were amazing to deal with. Compassionate and very straight forward. We did have to pay extra for a box for ashes as we were going to inter him at a later date in a national cemetary . FIL died same year and though as financial guru had left much in order the SIL who was executer had a less than cordial relationship to the truth and ethics as we might know them.She managed to singlehandedly destroy relations throughout the family.
Motivated spouse and I to get things in better order and to shed much of the collected crap.
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Megadittoes on the need for durable power of attorney and medical power of attorney. My parents struggled with mental illness throughout their lives, as well as dementia towards the end. But they wanted to do the right thing and gave me those documents, as well as wills. That allowed me to step in and handle the hard conversations about taking the car keys, hiring home health aides, clearing out some of the hoarding so the HHAs could get IN the house, and of course, handle all the paperwork after death. If you love your kids/heirs, do this for them. Because there are no guarantees, except that we’re all going sometime.
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Consider setting up a living trust. Being a successor trustee is vastly easier than being an executor of an estate. Getting the major titled stuff titled in the name of the trust sidesteps a lot of work for the folks who get to deal with it.
And make sure part of the trust setup generates notarized financial POA and health care POA with advanced directive, the latter including the boundaries on what you want done and what you don’t want done if you can’t answer for yourself. Someone in a waiting room will be on the hook to tell the docs something, and if you have anything written down it will make their decisions much easier.
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It can also sidestep a lot of estate taxes, re-titling, re-registration, etc. Check with a tax accountant / attorney on the nasty details.
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The Reader is in the midst of doing this to replace his will. One piece of advice – make sure you thoroughly understand the relevant state law before you start. Don’t ask the Reader how he knows…
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This. There are ways one can proceed without talking to a lawyer, but you really need to understand the laws on this, which vary state-to-state and change over time in odd ways. The easiest way to access this information is to rent it from an experienced estate lawyer’s head.
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On our “to do” list for 2024. We’ve chosen an estate lawyer. Just have to make the appointment.
Hardest part of mom’s estate will be the house. She has already filed the appropriate form that names us 3 equal owners on her death. (It would have to be refiled if one of us dies before she does to full fill the intent of the will. Not a high probability event, but possible.) All we have to do is file the death certificate. Then we can sell the house.
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same, but need to find lawyer
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Cannot emphasize enough “to get a lawyer.” They know how and what to move into a trust (f’rinstance, Mom moved all of the real estate into the trust – except her house – Arizona has a “widow/widower exemption” from property taxes – but only when titled in the person, not a trust). Also can help organize what the trustee will need, and how to keep it updated.
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Wish mom had that option. Oregon has a property tax deferral at 6% compounded per year. Actually 9% first year not paid because if you pay off property taxes when due, there is a 3% discount. Mom, sisters, and I, have a fundamental problem with giving the county (not city, yet) more money than they are entitled to. Let’s just leave it at “it will add up fast!”
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I did my Will before the first of a number of surgical procedures I’ve been through. Since I have no family I’m leaving everything to a friend of mine. He is also the Executor with his middle son as a backup.
Since then I wrote up a page of suggestions for specific items. The 100oz of silver should go to his youngest son. My 1986 Dodge should go to a waiter at my local coffee shop. Woodworking tools should go to another friend. Those sorts of things.
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In California, it was not legal for the heir to be the executor (again, no will). BIL’s ex-wife volunteered, but crucifixes and plenty of garlic persuaded her to sod off. (Her trustworthyness ranks with FJB.) So, it was either hire an executor, or SIL. (Who came to regret it for multiple reasons.)
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What the heck? We’ll make son the executor. Why not? He gets everything whether he wants it or not. We are not in California.
That bad?
Ouch.
Mom ended up taking the services of a retired lawyer (friend, who was the brother of an ex-neighbor). He actually did it probono plus expenses. Took a fee on paper, but gave it back along with making sure mom got the up front estate percentage for being the executor. That is what cash she shared with her siblings. Enough cash in the estate after the property sold for that, court costs, cremation, and headstone, expenses. Rest was the memorial which the appropriate Masonic organizations handled. Remaining cash paid their creditors (not that the creditors got much).
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The “executor not an heir” on one level is to prevent a clear conflict of interest and a protential for self-dealing. On the other hand, it tends to feed the lawyers guild.
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I can see that. Important to choose wisely. Seriously though where is the conflict when one and only?
As far as me being the executor of mom’s estate. Not enough to fight over. As far as personal items? We’re trying to downsize ourselves. Most the personal items will go to grandchildren. Even what was just distributed (mom is still with us, items she needed out of the house) essentially went to the grandchildren. Yes, there will be spreadsheets.
There is a slight question whether SIL split what was left equally or did what the will fully specified. Which was beyond start up loans (regardless of the amount), the subsequent not repaid loans were to be “paid back” from that child’s share, then that money split evenly. Guess who had a lot of loans. Also, guess who got MIL 24/7 for most of the next 3 years? SIL and her two girls should be slated for sainthood. Seriously. Personally? Don’t know. Don’t care. That was up to the 4 of them to deal with. When it came down to that talk when it came to the distribution, BIL’s wife & I took the kids and left. I know the hubby and BIL discussed it briefly before hand, and decided it didn’t matter. An impartial executor would have had spreadsheets.
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One thing that my Mom did was explicitly write into the will that all personal loans (from her) were null and void on her death. Yes, there were spreadsheets (REAL ones, she never believed in those new-fangled electronic ones). Her financial executor (me) was instructed to destroy them, which I did, looking only at mine. (I kicked back that small forgotten remaining amount under the table, just to feel virtuous…)
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We actually had two. The initial financial help to move to where we started work. And a second, to have the down payment in the bank, which was required by the loan process. We had it paid back before the loan closed. We had to declare that we’d borrowed part of the down payment but also showed we’d already paid it back. But would the loan process accept the proof we had the money coming in, just not in the bank, yet? Of coarse not. The closing title company agent just shook his head.
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I found that in my new state I can name a beneficiary for house and car. Aside from bank accounts (also with named beneficiaries) I have no other assets.
Still researching a trust for intellectual property.
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Consult a real attorney, not an Internet Rando!
I beleive there is a way to put someone on the deed such that he named parties all have rights to live in it and dispose of it. Avoids probate. (lawyer time) Usually used so surviving spouse owns it free and clear, no probate.
aha – joint tenancy with right of survivorship (JTWROS)
https://www.nolo.com/legal-encyclopedia/joint-owners-survivorship-32441.html
Hmmm and some other things too. Need to call an attorney..
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Make sure of the “Rights of Suvivorship” verbiage. Without it, each owns a share, so if someone dies, their 1/2 or 1/3 or whatever becomes part of their estate. With Rights of Survivorship, that share reverts to whoever on the deed is still living.
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I is Rando, not Law-do.
Rando, or do not, there is no whine.
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Die broke and avoid probate! “Being of sound mind, I spent it all.” ( grin )
Still, leave a will. I could (but won’t) cite a bizzare case where it mattered much later.
Humans…..
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Also if possible try to file whatever documents with a lawyer, the county, or something. At the very least, copies should be sent to everyone involved.
My sister told me she had a written will which she had trusted to another individual as the executor. That person stated that she had died intestate and got herself named as the executor, essentially disinheriting my niece.
Long story.
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If you use Google, you can set up automatically granting account access to someone else for some or all of what’s there after a set time period of account inactivity – to configure this, go to:
https://myaccount.google.com/inactive
On the other hand, Google requires a court order to give whoever is managing the estate access. If you do not leave a list of passwords and make sure any MFA is accessible to whoever you put in charge, this can be a non-trivial lawyer expense.
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I’m a long-time lurker on Sarah’s site but I’m inspired to say something about setting up a living trust. I did that a couple of years ago & it was more work then I expected.
It bypasses the aggravation of the probate process but you’ll have plenty of aggravation on the front end. You really do need an estate attorney to set it up properly (including the financial and health POAs). And they’ll help you start the process of getting your assets into the trust. That’s where the aggravation will come in. I now believe what the attorney told me – that many people set up a trust and never put their assets into it – and I know why. You can’t just go to your bank, credit union, mutual fund, brokerage acct, whatever, and have them change the owner’s name from you to your trust. You’ll probably end up transferring over to a new account number – which means new checks and changing any direct deposits. The transfer paperwork will probably need at least a signature guarantee (if not a notary seal) and they’ll all want a copy of the abstract of your trust. You’ll get a few copies from your estate attorney and you’ll need them. You’ll also need a pourover will for anything that might not be in the trust when you die. I didn’t bother with my car, though I did transfer my house. Ironically that was much simpler to transfer than my credit union account. I made my trust the beneficiary of the will and my 401-K (on the attorney’s advice). It’s easier to do when you’re younger, if you can afford the extra legal expense over a will.
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The problem of making the living trust the beneficiary of your IRA/401(k) is that on your death the trust gets the entire amount and pays taxes on it immediately. Fine if you don’t have many assets in it. In our case that means paying tax rates way higher than our or our only beneficiary tax bucket, instead of paying taxes out over 10 years, or spousal lifetime.
Our intent is to create the living trust. Then feed the trust the money as required distribution kicks in. Should be more than we need to live on. Then there is the house and vehicles. We will be talking this over with the estate lawyer and adjust accordingly.
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Yep. Main reason for a lawyer. They can advise you on what – and what not – to put into the trust, and how. See above for why my mother didn’t put her house into the trust.
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When I retired that is the first thing I did is pull all taxes prior to the prior 7 years. For us that was 1978 – 2008 (retired 2016). Haven’t been good about keeping that up. I think I need to purge 4 or 5 years after 2023 taxes are filed. Good news is the file folders are a lot narrower these days (mostly just the income notices). Still have all the actual filing PDF’s back to mid ’90s sometime, on backup. Mom did this after dad died in ’09. (She still has a lot of paper stuff to go through. Have hinted that she needs to deal with this or I’ll let sister do it ;-) ;-) ;-) Mom does not want that.)
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The thing to keep in mind is you (mostly – go read the IRS rules) only need to keep records for the prior 7 years returns, BUT if you do have older years records, the IRS can get them to look for anything they can find.
Best to only keep what you must.
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One of the exceptions to that is your house. Keep records of the purchase price, and also any major improvements or repairs, because all of that plays into calculating capital gains / losses.
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County will have the original purchase price on file.
Repairs and maintenance do not count toward improvements. Must be extensive improvement.
We’ve been through this before with our first purchased home, turned rental (which then all expenses past turning into rental counted). Guess what was the contention with the IRS on our audit?
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My tax accountant specifically told me that the costs of re-piering my foundation would offset capital gains if I ever had to sell the house.
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There’s normal maintenance, which is not an “improvement” – and extraordinary maintenance, which is. Re-piering a foundation is definitely extraordinary. Painting a house isn’t – but adding siding is.
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Which is why I recommend asking a tax accountant on what records older that 7 years you need to keep. Most people have heard of the 7 year rule, and not the exceptions.
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Major repairs count. “re-piering my foundation” would definitely count.
New roofs, new patio, painting, despite the expense, not so much. Replacing patio, expanding, and covering the patio, counts. Not just replacing. New upgraded windows, count, even if they are replacing storm windows, that also counted. Adding insulation, counts. Adding a new lawn sprinkler system, counts. Replacing fencing, doesn’t count. Adding fencing would count. However, the majority of the work to refresh our house in 2001, including new flooring, does not (darn it). Repair due to environmental damage (earth quake, flooding) beyond paid by insurance, would count too. It is a maze. Still need to track it for no other reason of who knows what will count or not. Plus it is frustrating as heck to be asked “when was the roof last replaced”. Um? Right now it is ’23. But before then? Mid/late ’90s, we think (We’ve had the house since ’88. Yes, we had it done.) Dang if we could find the paperwork. (It is somewhere “safe”, honest.) Might vary by state?
We haven’t had to worry about this yet. Longview house we turned into a rental for 3 1/2 years. So different situation. With current house, short of wining the lottery, the house base value will accrue basis to what it is market value when one of us dies regardless of what improvements or maintenance we’ve done. Which is why mom’s house basis is $275k as of ’09 when dad died, not the $35k, plus improvements, they paid in ’63.
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We have TurboTax files, and maybe the PDF (definitely PDF last few years). If no PDF the TurboTax file won’t load without the appropriate year program, and that (especially from ’90s and early ’00s) probably won’t install let alone run. That the IRS has anyway. No other records. Since before I retired, we’ve been standard deduction, other than income reporting, there is nothing else. Retirement is 8 years and counting.
We’ve been through a federal IRS audit. Do not get me started. Trust me. Don’t. Grump, grumble, and growl. (In the end they paid us money. But still: Not. Worth. It.)
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dep729 made me go back to my Trust notes to check. My attorney did recommend separate beneficiaries for 401Ks and IRAs. People are the best for Roths but charities are OK for a 401K or regular IRA. That’s what I get for going from memory.
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Several years ago my wife and I took in my aging mother (now 85 and in hospice). I got hold of all her papers that I could find. Two copies of a will with three of the four children named as executors. The will was filled out with the lawyer, but does not appear to be notarized and I’m betting it isn’t on file at the court house either. I do have durable POA and medical POA. She has been diagnosed with dementia. Some days are better than others.
Personal property has already been pretty well distributed from the family home. So that isn’t an issue. Most of what is left is old books and pictures. There are a couple of small financial assets and the rest in real estate.
I’m seriously thinking of selling the real property and cashing out the financial assets. There won’t be anything left for probate other than what ever is in the checking account that I control. Pay whatever bills she has (none) and the funeral home. Split what’s left over with my siblings. What do I need a judge for?
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BIL with his mother. She was in an alzheimers nursing home ward. He and his sister had POA and medical POA. With him on all her accounts. Technically the house could have been sold while she was still alive but they didn’t. Until the day she died their mom swore she was “going home”. Nope she tried that. It was a disaster. Next time she was in the hospital the doctor said “no way”. Instead BIL daughters, second oldest, then next oldest, “rented” it, to keep it lived in. Each moving out as they got their down payments saved to buy their own homes. Youngest daughter was getting ready to move in when grandma died. Property was then sold. Given where and what the property was, none of the grandchildren could compete at the premium property was going for. Whether some one bought the house and fixed it up, or tore it down, subdivided the property, sold the lots, or built homes then sold, they haven’t bothered checking. Subdividing would have made some money over costs. Building would have made a lot more. Not something either sibling wanted to deal with.
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Mother died intestate. 0/10 would not recommend.
The only good part of that was I could FINALLY wash my hands of most of family. I’ll be happy never interacting with them again, ever.
And yeah, need to set up a will myself, like heck is anyone related to me getting my intellectual property….
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I missed out on all that fun and my sister had to deal with whatever my mom had going on.
Which is fine with me since I “divorced” that side of the family decades ago due to how they dealt with other family estates and raided a bunch of joint accounts setup for college funds and such.
My spouse has a saying similar to my cousins and mine: “Nobody disappoints you like your family”.
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Steals your money like family, threatens you with the cops like family, tries to murder you like family… yep.
Yep, I am bitter. Although honestly, given Cluster Bs are gonna do what Cluster Bs do – be sadistic and take advantage of anyone in reach – I have to admit a lot of days I’m just as bitter at Regular People, who always – always! – insisted that It Couldn’t Be That Bad, and You Have To Take Care of Your Family. (Or Else.)
(Because otherwise my family members might have been their problem, and they couldn’t have that.)
…Ah, man, I’m just looking for the holidays to be over so I can stop dwelling on it so much. Cold brings back too many bad memories. And pain. Meh.
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And on all above, like 11B, I are Internet Rando. For legal advice pay a lawyer. For tax accounting advice pay a tax accountant.
For internet rando advice, generally you don’t pay for that up front, but later.
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Do not die without a will. (Intestate). Do not allow anyone you like to die without a will. Spouse and I are military retirees who have spent the last year volunteering for a veterans support organization and charity handling survivorship and estate issues and previously served as Casualty Assistance Officers while still on active duty. We have stories. Please, spare your relatives and have a will and a plan, and mail copies to a primary and contingency Executor. Leave happy memories, not a burden on others and a source of strife and stress.
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Tried to post three times. Giving up.
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er…. this came through.
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Okay, WPDE seems to be working this morning. Tried posting several times last night and I’ve no idea what happened.
Anyway.
Several years ago my wife and I took in my elderly mother who was no longer able to live alone. Since that time she’s been diagnosed with dementia and is currently on hospice. When we got her, I got the papers. There are two copies of her will, one in her safe and one in mine. It was drawn up by a lawyer, but I don’t see a notary stamp or have any idea if it is on file anywhere.
I do have a durable POA and medical POA. There isn’t much in the way of assets. A couple investment accounts and her checking (which grows and she has next to nothing as far as expenses), and some real estate. I was thinking of liquidating the investment accounts and selling the real estate to me and the siblings as joint owners. Pay for the eventual funeral out of the checking account, split the remainder four ways. The contents of the home were only of sentimental value and have been divided up. What do I need a court and a judge for?
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As noted above, I am not a lawyer, I are internet rando, but it’s my understanding that any POA expires at the death of the person who granted it, so doing anything with the estate assets after the person’s death would not be under the authority of that POA but rather under the will assuming you are named as executor. Even then, probate rears its ugly head, and you might need a court to bless things depending on your local laws.
You can search on “does POA survive death” for reading material before you talk to an attorney in your jurisdiction about your plans.
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Good point. Fortunately one of the siblings is on the account, and we are executors in the will.
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As the black sheep and self-made bastard of my family, I didn’t have any issues to deal with when my parents died. Probably all that was left of the estate was their house that was worth about $300K (with no mortgage) when my mother passed. I have no idea what hassle my brothers and their families might have gotten into over that. All I got was a formal letter from my older brother acting as executor noting that I had been written out of the estate. Honestly, I didn’t care about the money and was glad to not have to deal with them.
Now that it’s been 2 years since the love of my life went on to her reward, I really need to increase the speed of cleaning things out, so my executor doesn’t have to come in with a flame thrower. I had a lawyer draw up my will soon after my wife’s passing. The only estate we had to really deal with was for my mother-in-law. The estate wasn’t a problem. The hard part was a few years earlier when she was conserved by the county. (She was physically OK, but had been increasingly hallucinating–telling us people were coming up through the floor of her apartment and stealing from her at night and, we learned, had been wandering around town, disoriented). She had moved from her previous apartment a few years prior and had not bothered to unpack most of her stuff from the moving boxes.
I took several days off work, so we could go through her stuff. We called on Disabled American Veterans (her favorite charity) to haul away most of her stuff, but my wife wanted to save a few things like a couple of desks from her great grandparents. Also my wife insisted that we had to search everything to make sure she hadn’t squirreled something valuable away. In fact, I found $3K cash stuffed into 1 of 20 otherwise empty sunglass cases. I’m hoping not to leave such a mess for my executor.
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Inlaws with her father. His wife died. He was early ’90s. They found cash stashed away everywhere. MIL said they had to make sure to go through everything individually. Books, papers, boxes, drawers. He was a WW1 veteran. They found close to $100k. Not a small amount of cash in the ’70s.
Inlaws learned from cleaning out her father’s house. No cash stashed away. Another difference she was actually able to help go through everything.
We did the same for grandparents. Didn’t find thousands of dollars stashed away. Old checks they received from most us grandchildren (to help) they never cashed (subsequently destroyed). Coins they thought might be worth something (no). Did find the WW2 ration stamps for the 4 of them (youngest born after the war). I kept those. We took trailer after trailer to the dump. Anything that would have gone to the dump but could be burned was (wet spring, place had acreage). When my paternal grandmother died she had things stashed too. Mason jars (canning). Yarn (for multicolored non-pattern afghans). Fabric (she made non-pattern leftover fabric quilts). I kept the mishmash serving platters (I had one, now I have 4) and I scored a quilt. Most everything went to Goodwill/St Vinny’s.
The inlaws and both sets of my grandparents were the generation that went through the depression with young children. They all had multiple backups for dang near everything. Grandfather-inlaw it was evident they went through not only the depression, but WW2 and early 1900’s. Didn’t trust banks.
I wonder what our generations, those raised in last half of the 20th century, in what we choose to let those we leave behind to sort through. We still have stuff from the inlaws and hubbies grandparents, even after all the purging and donating we’ve done. OTOH a lot of it is from hubby’s great-grandfather who made furniture by hand. Now our son is doing woodworking for pay, some of it specialty by hand work. Some of the old tools might come in handy or at least interesting to him.
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A month before Mom passed (cancer) she told me she had 30k hidden in the house. I asked her where, and she said “No! I’m going to beat this thing!”
We never did find most of it.
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We have been fortunate in having amicable family dispositions of affairs and property from both mine and AesopSpouse’s parents, and hope our children will carry on (come to think of it, I don’t remember much uproar over 3 of the grandparents’ goods, and the 4th wasn’t all that bad; at least, we didn’t have to deal with any of it).
“Also my wife insisted that we had to search everything to make sure she hadn’t squirreled something valuable away. In fact, I found $3K cash stuffed into 1 of 20 otherwise empty sunglass cases.”
I had an elderly friend whose kids had to search everything that could possibly be a hiding place before disposing of it. If irritated, I threaten our kids that our money & important papers will be scattered among the library books and they will have to open each one.
We have at least 6000 in the open shelves.
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