Dear PF,
I'm writing out my thoughts about my experience helping manage my in-law's passing and what I would have done differently in a similar circumstance.
They were wholly unprepared and really, truly, seemed to think they were going to live forever, even as their health plummeted. Despite our exhortations, they did nothing to prepare their financial affairs before death. Sure, the health was failing, but mind was sharp as a tack until the very end. Cigs and booze took up all the free time from 10AM to 8PM.
And yet they had paid no attention to updating beneficiaries after a divorce 5 years ago, and even when we sat with them and they told us what to fill out, they couldn't be bothered to sign and mail the forms. They had no will after revoking the one with their ex-spouse.
I'm thankful they passed peacefully with all the loving children and best friends at bedside. I'm thankful they all love each other and cared not for what few pesos were left. Nevertheless, settling the affairs has been a task, a serious one, and not a pleasant one.
If you want to know what you're SUPPOSED to do, I recommend what we all decided to use afterward - getyourshittogether.org. Not paid not sponsored and the in-law didn't use it either. But we learned our lesson.
This post is for a VERY specific situation, namely, intestate death of a family member where all heirs have excellent relationships and total asset value falls below a state's "small estate" laws.
To settle this, there's the legal way and there's the easy way. We chose the legal way, though this was MUCH more time consuming. I'm going to talk about the easy ways I wish we had done it.
Here's what we did right:
Task 1: Eke out final directives and gain access. We knew we weren't going to get a formal will established by state laws in time. But in the moments of lucidness they had left, knowing they would pass soon, gave us some idea on how to handle their worldly affairs after they continued on. We recorded it so it was clear to anyone who had any interest what was supposed to happen regardless of how the legal aspect played out, and we could play it back in case anyone had doubts or remembered differently. We didn't capture EVERY item, but we got every big ticket item that was 90% of the small estate and some of the bigger items like house, retirement accounts, etc. We also made sure we had access to various accounts. The single most important ones were 1) primary email, 2) phone access code 3) phone account login, 4) checking account username and password. We had 1, 2and 4, but not 3 and that was a huge problem.
Task 2: Funeral. They didn't want one and everyone who would have been there was already at bedside. They wanted a cremation. The state Cremation Society did it for <$2,000 including pickup, cremation, and delivery of the ashes. We paid for it with their credit card. Probably not the right way to do it, but we did and they took it. In hindsight, this was absolutely the correct choice, even if not the "legal" one. Get a dozen official copies of the death certificate. Lots of people want them later.
Task 3: Home items. We went by their house. It was definitely morbid going through the stuff. Best decision ever was to prompt the children, one of whom is my spouse: Focus on those things which give YOU joy to hold, not what gave THEM joy, and not just because you have an association with them as family. Their stuff doesn't have to be a part of your life, but if it can bring you joy, then it will bring their spirit joy as well. DOCUMENTS: Find 1) Car titles, current insurance information and payoffs for any loans 2) Any insurance policies, 3) retirement account information, 4) mortgage/housing insurance information, 5) social security card, most recent social security benefits statement, 6) health insurance information. Be prepared to find stuff you don't want to see, either.
Task 4: Meet with a lawyer. I called the day we arrived when it was clear what was going to happen. I called every family and estate lawyer in the area and set up a meeting for the first one that would see us. It was by far the best $300 we've spent on this whole process because it 1) put everyone on the same page about what was the LEGAL way to do things and what would be the expedient way and 2) gave us state-specific instructions on how to handle the assets that would pass into the estate and therefore to the children. We got specific forms to fill out as well as instructions on when certain forms could be filled and notarized. We asked and found out that electronic notarization was acceptable. Also, if we ran afoul of any rules, we had done our diligence to try to abide by the laws so that would mitigate some penalties. Ultimately we missed our opportunity to do some of the expedient things as they had passed by the time we sat with the lawyer, but you might still do some - I'll write them out later. As the spouse of one of the children, I volunteered to handle these tasks and would keep them regularly informed so that it didn't fall to just one of them. They each checked in with me from time to time and were very responsive knowing that the whole kit and kaboodle didn't fall on them.
Task 5: Get everyone to sign everything they can up front. Before the children scattered to the four winds again, we printed out copies of some of the paperwork the lawyer gave us that we would need to handle assets - specifically cars. Anything that didn't need notarization but needed to be signed by all the heirs was signed including extra copies. This was most important for handling of the cars and gaining control over their titles. We knew which items would need notarization and since 60 days was required before that could be done, we cleared everyone's calendar up front on day 61 for a family check-in and joint electronic notarization session.
Once we all returned home, then began the arduous process of actually executing the recorded directives, even if it wasn't in a will. Legally, we could do one thing, but because it was clear what they wanted after death, it smoothed the way for everyone else. The best friend was to buy the house. The children wanted the friend to have it too, and so that's what happened. If you have a buyer for an as-is sale, just use a lawyer permitted to do real estate, don't bother with a real estate agent. The same law firm we met before handled the real-estate transaction - told us which forms to fill and took care of our county reporting responsibilities for us. The house was sold within 60 days and for less than 1% in total cost to close. I recognize this was an unusual situation, but we set ourselves up for it by asking and abiding by the in-law's wishes. They wanted cars to go to certain people. We already had the signed documentation that gave me permission to negotiate the titles on behalf of the heirs. At day 61, we all met by zoom, shared a virtual drink and had the necessary notarizations completed.
And of course, this is where it started to go off the rails a little.
Mistake #1: Closing the bank account and CC too soon (and notifying the bank of the death too soon). This broke every autopay, most importantly, the autopays on phone, credit card, and car payments. It also made it impossible to negotiate some of the refund checks coming from home-owners insurance, car insurance, tax refunds. That was a dumbass mistake. Don't make it. The bank account is the LAST thing you close, even if it has the most money in it. We actually weren't trying to close the account, but rather provide all the necessary documentation so that we could close it when we were ready, but once the bank had been notified of the death (we sent them the certificate!), they quickly shut down access online and the only way to access the money was to have it transferred to the designated successor using the small estate form.
Mistake #2: Having username/password access but not having account manager privileges on the phone bill. Once the phone got cancelled, we lost ALL ability to 2-factor authenticate ANY account they had and all of our access went away. And it became VERY difficult to get it re-activated because we didn't have the requisite information - no account number and they hadn't updated a billing zipcode in 3 moves. It took a very long time and a Verizon rep probably doing something he wasn't supposed to, and I got added as an account manager and the phone was up and running again.
Mistake #3: Not having a long-enough record of bank statements to know what intermittent auto-payments were being missed. There was a heating oil delivery through a company and it was on credit, but it was one that didn't show on the credit report and was only billed once a year. Auto insurance premiums were being billed every 6 months. There was a private Meals on Wheels type service we only found out about when they tried to deliver and a friend happened to be at the house.
What I would do differently. Note, a lot of this isn't the LEGAL way to do it, but in the specific situation we had, this would have made the whole process a lot easier.
1) Notify the bank as LATE as possible, make sure you have seamless access to their bank account with mobile deposit features.
2) Make the person who's doing this legwork an account manager on the phone bill as early as possible. Phone numbers, as terrible as it is, are basically a form of ID now, and being able to respond to login requests is really important.
3) Visit a local DMV before you leave and if your state allows, negotiate the titles immediately. If you have time, dispose of the vehicles while you're there.
4) Let EVERYTHING continue autopaying for at least 3 months and check what's being sent out. It'll tell you who is being paid regularly and you can generally figure out for what. Then cancel services one by one as they appear.
5) Let RMD's continue unabated - the inheritors will have to take RMDs at the amount of the deceased's in year one anyway, but watch for social security payments - the government will find out quickly and halt SS payments, and they WILL take back any payments made after a person passes. So don't see and spend that $$ because the government will take it back one way or another.
6) Settle tangible assets first. Sell cars, houses and as you dispose of the assets, cancel their associated insurance policies. Deposit the refund checks directly into the existing bank account. I discovered many institutions cannot negotiate refund checks into a designated heir's name in small estates, only appointed estate administrators can negotiate them directly, it seems. We will have to wait over a year for the funds to pass into unclaimed property then use our small estate affidavit to claim it from the state.
7) Pay the bills. There will be bills. It's true that you're not on the hook for those, but the estate is. And when someone dies intestate, there's a lot of money in the estate and that first belongs to creditors. So do the right thing and pay the bills. Once I let creditors know that the person they were trying to reach was dead, some said they'd just waive it (got a $1,500 hospital bill waived that way) or dramatically reduce the price in the hopes you'll pay something. Paying the bills is important to make step 9 as safe as possible.
8) Dealing with inherited IRAs. Nevermind that because the beneficiaries were never changed, the ex-spouse stood to benefit from all the annuity inheritances that were intended for the children, since ERISA follows federal rules inheritance rules and not state ones. The ex was half a mind to keep the money until we made it clear it would fry the relationship with the children and (and revoke access to the grandkids). Since the ex did the right thing and disclaimed the inheritance, it passed as intended to the children. The easiest way to make this happen is for each person receiving an inheritance to set up an Inherited IRA at the same institution as the one used by the deceased. That way the internal institutional machinery will move the money easily into the names of those receiving the inheritances. THEN, initiate a transfer out to your favorite institution - then between institutions there's no question as to whom the money belongs.
9) Transfer the phone number to an account you control or if you're confident you don't need it anymore you can let it lapse or close the account.
10) Once you've settled all these matters, THEN go to the bank and close the account. Don't transfer money out of it and then inform them of the death. That can get you into really hot water when the bank wonders how a dead person transferred the full balance out. This is when you present the small estate affidavit and death certificate and close the account. In retrospect, I probably could have transferred the money out and used their secure platform to simply send a message asking to close the account altogether. If you're a designated heir, you have a fiduciary duty to divide the estate equally among all heirs. It's no joke, there are significant penalties for doing this wrong - some legal/financial, but worse, ruining family relationships.
11) Look for a Guide to handling the estates of deceased persons through the State Bar website. There is a process for OFFICIALLY notifying any potential creditors and closing the estate officially by court order, even when a person with a small estate dies intestate. The truth is most likely no one will come for money, but someone might. But it's a LOT of work to do it the official way, so if you've been diligent about paying all the bills, you might be good to just let it slide, but if you want to be certain, like we were, go through the process. It's long but the State Bar's guides can help, and we found the County Clerk quite helpful too.
12) And for the sake of everyone around you, Get Your Shit Together, please. Use a website, use an estate lawyer, hell just look it up on the internet, but actually DO IT. Don't make family members deal with this afterward.
Thanks PF, hope this helps someone someday.
Submitted July 04, 2023 at 01:24AM by wastedkarma https://ift.tt/0mBrFlt
