Options for my mother

[sheehs1]

I have another update to report and its not a good one. I had last posted on 9/22 that my wife and I were coming up with a game plan on how to talk to my mother about all of the issues that I brought up. We visited and brought her meals each of the following days. One day she looked pretty bad, the next she looked better, was holding a normal conversation and moving around with her walker.

On Monday 9/26 we went to visit and she was in very bad shape. She was disoriented and confused. She was having trouble breathing and couldn't sit up by herself. We brought her to the emergency room and without getting into details, she passed away yesterday. We found out that she had a very aggressive form of lung cancer which had also spread to her liver. She had pneumonia and a variety of other less serious issues.

Obviously I felt very guilty about the whole situation but the doctor has assured me that she wouldn't have survived much more than another week or two no matter what we had done. After talking to more doctors I now believe that she knew she had cancer and was either in denial or didn't want to worry us (or both) which is why she didnt tell us anything and why she didn't get the care she needed. My brother and sister are all here and we are doing OK emotionally.

This brings me to the reason for posting so soon after her death. I am the executor of her will and would love to hear any advice you all have for me. She will be cremated and all of those arrangements have been made. I have notified Social Security. I have a power of attorney to handle all financial matters (bank accounts, real estate ect).

I have some specific questions

1) Do I need to file the will somewhere?
In our state, one has to file the will with the court and qualify as executor. A procedural thing.
2) Does the will supercede the beneficiary info on her IRA. There are 4 of us kids and we are all listed 25% each on her IRA but her will specifically excludes one of her kids entirely and says that all of her assets should be split 3 ways. My brother who has been excluded is not here with us and has no idea what money she does or does not have. I dont expect him to cause a problem but if the IRA beneficiary is not superceded by the will I assume they will send his portion directly to him?
Account titling normally supercedes the will. But check with an attorney none the less. As executor you will have to let the beneficiaries know about the assets thru an "accounting" which is part of the probate process and filed with the courts. You will have to account for every penny....so keep good records. (i.e., the governments don't know that you don't owe them money unless it is documented - that sort of thing)

3) My mother has a 6 figure estate, but I believe there is no death tax since her estate is under a million?
That is correct. The Federal Unified Tax Credit is currently 5 million. Anything below that, there is no Federal DeathTax. However, you need to check to see if your state imposes a death tax. All states differ on this matter. You will have to file her 2011 income taxes ...both State and Federal. You will (may) also have to file the Estate Tax Return...whether she owes money or not. The government does not know what value your moms estate is. It has to be recorded/filed.

4) I dont think she has life insurance but is there some way for me to find out? Is there some registry somewhere that can check? I cant very well call every insurance company and ask.

Feel free to advise me on any other isse you know will come up that I probably havent even considered yet.

THe best thing to do is to contact your local court system. They will tell you what you need to do. You can also quickly search the Internet for responsibilities of an "Executor". This is not a quick "job". Courts typically have or retain the services of a local lawyer and whose title is something like a "Manager of Accounts"....to work on behalf of the court system when a death occurs.

Everything is As of the DATE OF DEATH....meaning account balances. That is the starting balance on the estate. If you don't have those records....you could start gathering the data. If there is a house involved, ask the court if you can proceed with an appraisal...etc. Anything spent will have to be accounted for.

So very sorry for your loss...utrecht.

 

[utrecht]

I guess I dont understand why a court has to be involved in any of this. As long as I document everything and nobody contests anything why would a court care? My brother who is written out of the will may or may not find out that there is a substantial amount of money involved but I seriously doubt he will contest even if he does find out.

Also, another problem is that she hasnt filed tax returns for 2009 or 2010 and I have no idea how to handle that. Im pretty sure she doesnt owe anything as her only income was SS and a few small withdrawals from her IRA. She told me specifically that she was keeping withdrawals lower than whatever amount would cause her to owe federal income tax. She has numerous letters from the IRS asking her to file and asking for a number to contact her. I can call the IRS to ask what I need to do but Ive been thru her paperwork already and I dont have nearly enough info to correctly file her returns.

 

[REWahoo]

I guess I dont understand why a court has to be involved in any of this.

For the same reason cops ticket speeders: it's the law.

Maybe you should slow down just a bit and allow yourself some time to begin working through the loss of your mom. I'm sure the folks who are handling the funeral arrangements can direct you to whatever legal authority, if any, you need to contact.

My sincere condolences for your loss.

 

[GregLee]

utrecht
I guess I dont understand why a court has to be involved in any of this.

For the same reason cops ticket speeders: it's the law.

What law is that which requires wills to be probated?

 

[Nords]

I've learned some of this from watching my father probate his father's estate, and from researching the same with my father's estate.

I guess I dont understand why a court has to be involved in any of this. As long as I document everything and nobody contests anything why would a court care?

Regardless of your logic or your opinions, you should check with the court system to find out what the rules. You could argue the issue all you care to but I bet you still have to follow the rules. Every state is different, and you may even have county/locality issues. We don't know.

My brother who is written out of the will may or may not find out that there is a substantial amount of money involved but I seriously doubt he will contest even if he does find out.

In this situation, the IRA beneficiary designation takes priority over the will. In fact the custodian of the IRA will break up the account and disburse the assets in accordance with the beneficiary designation, and they probably won't even consult the estate executor.

Also, another problem is that she hasnt filed tax returns for 2009 or 2010 and I have no idea how to handle that. Im pretty sure she doesnt owe anything as her only income was SS and a few small withdrawals from her IRA. She told me specifically that she was keeping withdrawals lower than whatever amount would cause her to owe federal income tax. She has numerous letters from the IRS asking her to file and asking for a number to contact her. I can call the IRS to ask what I need to do but Ive been thru her paperwork already and I dont have nearly enough info to correctly file her returns.

You can download a copy of TurboTax 2011 (for 2010 year returns) right now, and it may even have the features you need to file a 2009 "prior year" return.

As executor you can obtain her Social Security benefits statements. When you notify her financial institutions of her death you can also obtain their 1099 statements for 2009 & 2010.

When you call the IRS they'll want the returns, of course, and they might even have already calculated her taxes from the copies of the 1099s provided to them by her financial institutions. Even if she owes no tax (or is owed a refund) there are still penalties for not filing a return.

You could get a CPA or a tax lawyer to assist you with the returns, but if the IRS quotes you a small amount due then it might not be worth the legal fees to contest the IRS's numbers.

After you're done with the IRS then you'll probably be repeating the exercise with the state tax agency.

 

[REWahoo]

What law is that which requires wills to be probated?

Probate law

 

[GregLee]

Probate law

That's not much of an answer. Consulting the list of references that Google constructs, the very second one has this: "There are no laws that require probate." (info.legalzoom.com/wills-through-probate-4286.html)

 

[harley]

Utrecht, my condolences.

Adding to what the others have said, don't forget state taxes. Even if the estate is below the federal estate tax limit, states have different rules.

As far as probate, I believe that if the estate isn't passing to a spouse and isn't in a trust, it's required to go to probate whether there is a will or not. It's to allow time for claims against the estate and other legal issues. It's a long and annoying task, and I wish you the best with it. If your mother had a will to make her wishes known, that should make it easier. Good luck.

 

[REWahoo]

That's not much of an answer.

It wasn't intended to be.

The point was to demonstrate how you can get answers to your questions without asking others to do it for you.

 

[GregLee]

It wasn't intended to be.

The point was to demonstrate how you can get answers to your questions without asking others to do it for you.

Well, you're the one who said earlier "it's the law". I knew that was wrong, so I didn't really need you to instruct me how to figure out that your earlier statement was mistaken. My mistake was being excessively polite.

 

[MichaelB]

That's not much of an answer. Consulting the list of references that Google constructs, the very second one has this: "There are no laws that require probate." (info.legalzoom.com/wills-through-probate-4286.html)

Did you read the link after the part that says no laws require probate? The part that says

Beneficiaries usually do not legally own the property that they have inherited until a will passes through probate.

Probate is required in most states and depends on the type and amount of probatable assets. Most assets not in trusts or IRAs are subject to probate when exceeding a limit that can be just a few thousand dollars. Exceptions are usually made for spouses or minor children. I'm not an attorney but have dealt with and am currently dealing with probate.

[-]The advice here[/-] Some of the advice here has been good. Check with the court system to determine what the probate requirements are in your Mother's state of residence. Get >10 copies of the death certificate. The IRA beneficiary designations are final.

This may take many months. Don't try to circumvent the system. Here are a couple of web sites that provide attorney references.
Lawyers, Legal Forms, Law Books & Software, Free Information - Nolo
Lawyers Find A Lawyer, Law Firm, Attorney & Legal Services: martindale

NOLO also provides literature and information on many legal matters, including probate.

 

[sheehs1]

I guess I dont understand why a court has to be involved in any of this. As long as I document everything and nobody contests anything why would a court care? My brother who is written out of the will may or may not find out that there is a substantial amount of money involved but I seriously doubt he will contest even if he does find out.

Also, another problem is that she hasnt filed tax returns for 2009 or 2010 and I have no idea how to handle that. Im pretty sure she doesnt owe anything as her only income was SS and a few small withdrawals from her IRA. She told me specifically that she was keeping withdrawals lower than whatever amount would cause her to owe federal income tax. She has numerous letters from the IRS asking her to file and asking for a number to contact her. I can call the IRS to ask what I need to do but Ive been thru her paperwork already and I dont have nearly enough info to correctly file her returns.

utrecht....I realize this is all new to you and you may be grieving....but please get up to speed as soon as possible on what your role is as Executor. Your role...is to do all leg work and filings to close the estate as required by law in your jurisdiction. It is also to legally and formally notify all beneficiaries, send all beneficiaries a copy of the will.....as well as to protect the assets for all beneficiaries...which includes your brother.

If you waste assets or use assets for things not needed by the estate....or if you somehow receive more money that is not designated in the will or associated with the legal rates for Executor fees.....your siblings can sue you. And it happens!!!

Said another way.....being an executor does not give you control over her assets to do as you want. Her will controls her assets and beneficiary designations control her assets. As Executor...you have to follow the laws.

It can be a thankless.....very time consuming job .........

 

[sheehs1]

I guess I dont understand why a court has to be involved in any of this. As long as I document everything and nobody contests anything why would a court care? My brother who is written out of the will may or may not find out that there is a substantial amount of money involved but I seriously doubt he will contest even if he does find out.

Not to throw another glitch in here....but you state your brother was written out. Was he indeed written out....meaning did it specifically state that he was? Or was he just not mentioned. There are/may be specific phrases or words that have to be used when writing the will to "cut out a child", even an adult child. Usually it requires "stating a legitimate reason". Only a lawyer can say. You may find....that what may appear simple on the first, second or third read of a will....is really not simple. They are or can be like puzzles.
As Executor....I don't think you want to tell your siblings whether they were cut out or not. That is rendering a "legal opinion"....and again be careful about getting sued. It is the beneficiarys' (your siblings in this case) responsibility to find out what their legal rights are. But first you need to send them all a copy of the will so they can do just that. Typically all mailings to beneficiaries should be done via certified mail....so you can prove you did it.

 

[GregLee]

Did you read the link after the part that says no laws require probate? The part that says Probate is required in most states and depends on the type and amount of probatable assets.

Yes, I did. And I noted the adverb "usually" in the statement "Beneficiaries usually do not legally own the property that they have inherited until a will passes through probate." And a bit later you will have seen a paragraph describing "joint tenancy", which describes a circumstance in which beneficiaries do own a property they have inherited, without probate. In a posting above, I said that probate was not necessary "unless she had property whose ownership is left unclear." In the case of joint tenancy (with rights of survivorship), the ownership is left clear. Though not a lawyer, I'm reasonably clear about some of this, because I consulted a lawyer about inheriting my mother's property, though her will was never probated.

 

[Meadbh]

Condolences on the death of your mother, Utrecht.

 

[REWahoo]

Well, you're the one who said earlier "it's the law". I knew that was wrong...

Each state has specific laws on how estates should be administered. Although probate may not be required in every circumstance, an executor should not attempt to carry out his/her duties without doing at least what you did - consulting with an attorney.

BTW, you should have gone to law school - that way you'd have a good excuse not to be so darn polite.

On we go...

 

[MichaelB]

Yes, I did. And I noted the adverb "usually" in the statement "Beneficiaries usually do not legally own the property that they have inherited until a will passes through probate." And a bit later you will have seen a paragraph describing "joint tenancy", which describes a circumstance in which beneficiaries do own a property they have inherited, without probate. In a posting above, I said that probate was not necessary "unless she had property whose ownership is left unclear." In the case of joint tenancy (with rights of survivorship), the ownership is left clear. Though not a lawyer, I'm reasonably clear about some of this, because I consulted a lawyer about inheriting my mother's property, though her will was never probated.

Notwithstanding the adverbs or the paragraph describing "joint tenancy", based on

1) Do I need to file the will somewhere?
2) Does the will supercede the beneficiary info on her IRA. There are 4 of us kids and we are all listed 25% each on her IRA but her will specifically excludes one of her kids entirely and says that all of her assets should be split 3 ways. My brother who has been excluded is not here with us and has no idea what money she does or does not have. I dont expect him to cause a problem but if the IRA beneficiary is not superceded by the will I assume they will send his portion directly to him?
3) My mother has a 6 figure estate, but I believe there is no death tax since her estate is under a million?
4) I dont think she has life insurance but is there some way for me to find out? Is there some registry somewhere that can check? I cant very well call every insurance company and ask.

and without additional detail it is likely probate would be required. Laws governing probate and inheritance differ by state, so without that information more detailed recommendations are difficult to give.

 

[Dimsumkid]

My condolences on your mother's passing.

I can tell you the Power of Attorney is of no use when the person dies. Any insurance payouts and assets held with POD, TOD, Jt. tenancy, bypass wills and probate.

If the estate value < 100k, you could use the Small Estate Affidavit, but you mentioned it's more than this already. If your mother held any real estate in her name only, you need to go to probate and you also are required to do a public notice for a minimum time (6 months in IL) to allow anyone that's owed money to make their claim against the estate for repayment.

This is what I had to do for IL, yours may be different: As an executor, you need to get a "Letter of Office" from the court (no one wanted an original) and certified death certificates (some required the original, rest took copies after verifying it was original) so you can take care of all the financial transactions and sell real estate if necessary. You need to keep all records of financial transactions and any expenses incurred as you're required to file a final accounting to the court and all parties before you can distribute any proceeds. I just completed my long journey as an executor this year with two problem siblings and futile attempts to challenge beneficiary designations. Even if the claims are baseless, be prepared for everything and anything to happen if you think anyone might cause an issue. One thing that attorneys never like to mention, in the event the estate was to go negative, the executor could end up footing the bill! I came close, but my attorney didn't want to tell me this until it almost happened and I asked 2-3 times.

You need to check if there's any estate taxes for the state you are in as some have this.

For insurance policies, the only way I found them was by collecting the mail and searching any statements as I went through old paperwork.

 

[DangerMouse]

Sorry to hear about the passing of your mother. I hope you and your siblings get an opportunity to grieve as you should.

 

[Walt34]

THe best thing to do is to contact your local court system. They will tell you what you need to do. You can also quickly search the Internet for responsibilities of an "Executor". This is not a quick "job". Courts typically have or retain the services of a local lawyer and whose title is something like a "Manager of Accounts"....to work on behalf of the court system when a death occurs.

Like several others here I was the executor of my mother's estate. It is a steep learning curve and was a part time job for the first six months, then things slowed down a bit but it still wasn't fully settled for a year. And hers was pretty simple.

Understand that the estate is a separate legal entity, like a corporation. As executor, your fiduciary responsibilities are to the estate, not the heirs. Be careful to establish separate bank accounts (no commingling of estate funds with your own!) and document every penny in or out. If you improperly distribute funds, you as the executor are personally responsible for it. That means all the estate's creditors are fully paid off before the heirs get a nickel or the difference comes out of your pocket.

Where I was the court system was very helpful, they even had downloadable forms in MS Word format to fill out. Regarding the past taxes, I started in on that but even though I do my own tax returns this one was going to be so complex that I figured for a "one-time" case it was worth hiring a tax guy for it. The cost was a reasonable $200 for something that would have taken me several weeks to figure out.

And yes you will need ~20 death certificates at a minimum.

A friend at work loaned me a couple of books on handling an estate but if he hadn't I would have bought them. Well worth buying.

 

[Buckeye]

Even if she owes no tax (or is owed a refund) there are still penalties for not filing a return.

I believe the penalty for failure to file is calculated on the amount owed. If she owed nothing, the penalty is $0.

 

[utrecht]

Ive done a little research and found out that here in Texas I do need for the will to be probated due to their being titled property (house, car and bank account). I also found out that there is no state death tax here.

I already ordered 10 death certificates. I guess I'll have to go back and order more if needed. I was told that SS needed one, but they didn't so maybe not everyone will require an original.

My brother is specifically excluded in writing in the will, as are my mothers husbands adult children. Her husband died 5 years ago and they contested his will and fought it for several years tooth and nail. They lost but it would not surprise me if they tried to contest this one, although they will probably not find out about my mothers death for a long time if ever. I wonder if I have to send my brother a copy of the will since he is not a beneficiary? I now know that he will get 25% of her IRA even though he is excluded from the will. I dont think he knows that she has any other money so Im hoping there wont be any massive tension caused by this (although we dont really speak anyway which you could probably deduce by him being written out of the will). Its a bit awkward right now though because his daughter (my neice) is here with us now helping out with things and she has no idea about the will. She is very sweet and nothing like him. She loves to bake and Ive offered her my mother baking items and pots and pans. However, I guess at this point I cant let anything leave the house until I speak to an attorney.

As far as co-mingling assets, I'm already having to pay for a lot of things with my own money since I have no access to her bank accounts yet. Ive had to pay all of her bills that were due and over due, pay for the cremation and things like that. I assume this is customary and normal and wont cause a problem later when I reimburse myself as long as I keep records?

 

[utrecht]

The problem with doing her taxes isn't that it will be complicated enough to need a tax guy. Its that I don't have any records. She hasn't worked in about 4 years so the only income should be SS and IRA withdrawals. I do have the name of the IRA custodian so I guess can contact them for the info I need? I also have her SS statement so maybe it wont be as difficult as I thought. I doubt that her property taxes would be enough to get her over the standard deduction. The house is paid for so no mortgage interest to worry about.

 

[Buckeye]

The problem with doing her taxes isn't that it will be complicated enough to need a tax guy. Its that I don't have any records. She hasn't worked in about 4 years so the only income should be SS and IRA withdrawals. I do have the name of the IRA custodian so I guess can contact them for the info I need? I also have her SS statement so maybe it wont be as difficult as I thought. I doubt that her property taxes would be enough to get her over the standard deduction. The house is paid for so no mortgage interest to worry about.

She might be due refunds if she had taxes withheld from her IRA withdrawals. You would be able to receive any available refunds going back up to 3 years. 2008, 2009, & 2010 at this point in time.

Based on her comment to you about keeping withdrawals just low enough to avoid taxes, sounds like she might not have had any taxes withheld.

 

[MichaelB]

Good to see you’re making progress.

Social Security needs an original copy of the death certificate regardless of what they have told you.

You need a probate attorney to assist you. You may have to pay some bills, and you need to keep very careful receipts, but it is also customary to inform creditors that the person is deceased and they now need to wait to collect without charging penalties. Every effort should be made to pay as little as possible with your funds.

As executor you will need to determine what has value in your mother’s belongings. Things like clothing, kitchen and other household items can be removed, given to relatives, friends or donated as long as they don’t have real commercial value. If probate takes 6 months, you don’t want to have to wait that long to begin dealing with the things left behind.

You also have no obligation to inform anyone about the will, even if they are beneficiaries, until probate is concluded. Until you have paid her obligations it is best not to create expectations regarding potential inheritance.