Practical estate question

[SecondCor521]

My Mom passed away last year and we've worked through most of the items regarding her estate and it for the most part has gone smoothly, in part because of the good job she did in pre-planning.

Now I'm looking at my nearly 81-year-old father and the related planning needs with him. I think we've got nearly everything covered except one relatively minor detail: final expenses immediately after he passes away.

When my Mom passed away, my Dad was there to write checks and/or provide a credit card. When my Dad passes away, the situation will be different.

There will very likely be enough money to pay for everything, it's just the practicality of how that I'm stumped with.

Expenses will include cremation, interment, obituary, death certificates, and probably a moving van to get his stuff out of his retirement apartment. Probably about $3K total.

Ways to pay for it:

1. Out of the life insurance proceeds. From prior experience, these don't arrive until a few months after death.

2. Out of his checking account or Vanguard brokerage checking account. But nobody has POA currently, and anyway those expire at death in my understanding. My sister will be executor but filing the paperwork with the court and being named executor takes time also.

3. Out of our own pockets (I have two sisters), and then truing things up later. This seems the most practical option and is what I am planning on.

How do you plan / how did you handle this stuff?

 

[H2ODude]

No. 3 seems the most practical. In most recent instance (MIL) we had a will but didn't execute it as DW had her name on her checking account, only liquid funds. Were willing to pay off ~1,000 CC bill, but as soon as they found out she was deceased (called them to clarify something) they locked us out of her account on line and we never heard from them.

In cleaning up her paperwork found ability to make claims for hospitalization insurance she had that we filed. Got a check for over $1,000 made out to "estate of" which really threw a wrench in. We have had a long term relationship with the credit union that we (and she) used and they relented and let us deposit under DW signature. Phew. Then ANOTHER similar check came in and back we went, this time they made us get a notarized letter from DW brother that it was OK. Just really did not want to file probate paperwork and in end didn't have to.

 

[COcheesehead]

For my family, we added my sister to my Dad's checking account while he was still alive so it was seamless upon his death.
For my father in law, one of my wife's brothers got a POA and was added to the checking account so he could do much more.

 

[powerplay]

You could encourage your Dad to set up a prepaid cremation, internment, and death certificates which would take care of part of the final expenses.

 

[rodi]

This is an interesting question. My husband is legal guardian of his mother (she has dementia) so he has full access to all her accounts - but I suspect that will disappear as soon as they find out she's dead. From what I understand POA and Guardianship terminate upon death of the grantor.

I assume we'll cover the expenses out of our own account, set up an 'estate of' account to receive funds, and go through all the proper probate paperwork to reimburse ourselves. Should be interesting since MIL lives in one state, SIL and DH are co-executors and live in 2 different states, and 2 of the 3 siblings who live in the same state as MIL will be jostling to the front of the line to get "their share".

At 90 and in her 2nd year of memory unit living, her finances are in "spend down" mode for medicaid. Her retirement accounts (TSP and IRAs) all have beneficiaries... but she's got lots of random treasury bonds - only some have co-owners...

 

[Brat]

Consider a living trust if the elder has the cognition to sign one. Then title all the assets in the name of the trust (a detail often overlooked). When the grantor trustee dies the trust provides for another trustee to fulfill the grantor's wishes, just like a will. When my Mom died I provided a copy of her trust to all heirs so that they could know what to expect.

 

[dadu007]

Having just recently dealt with my father-in-law's death, I would highly recommend putting all checking, savings, and brokerage accounts (not IRAs) in a living trust. My wife is the successor trustee. All we had do was show up to the bank with an original death certificate and certification of trust (with wife's notarized signature). That gave us immediate access to father-in-law's funds from which we could pay for estate costs. Brokerage account took longer to "transfer" (have to set up a new account at same brokerage, transfer assets in to that, and then that account can be transferred to our brokerage house). IRAs are not held in trust, since they have a beneficiary; same thing with annuities.

 

[SumDay]

For my family, we added my sister to my Dad's checking account while he was still alive so it was seamless upon his death.

This is exactly what we did. My parents had prepaid funeral plans, but there were still ~$800 in extras, like obituaries, death certificates, etc. Interestingly the company that sold them the prepaid plan had gone belly up, but the funeral home that "sponsored" it was nice enough to honor it.

The checking account was handy for keeping heat & lights on in the house until it was sold, along with other odds and ends.

Funny story: I called MaBell to get their phone turned off, and they all but begged me to move the # to our house. WHY? Anyway, I looked at a bill that came immediately after my dad passed, and they'd been paying ~$4 a month to RENT their DIAL phones for at least 45 years. They weren't even gold plated. There ought to be a law...

 

[pb4uski]

For my family, we added my sister to my Dad's checking account while he was still alive so it was seamless upon his death.
For my father in law, one of my wife's brothers got a POA and was added to the checking account so he could do much more.

Technically, if you add one of you to your Dad's checking account then when he dies the money in it becomes the property of the other named owners.... it also bypasses probate just like other jointly owned property.

That happened with my great aunt's bank accounts... technically my aunt and I who were also named on the account could have kept the money but we recognized that it was great-aunt's money... not ours.. and distributed consistent with her wishes in a will that we know was signed at one time but no one could find a signed copy. The bonus was that it also avoided probate... which was news to me.

An easy solution might be to set up a separate bank account with $4k with all of you, your siblings and your Dad as owners and use that for the final expenses and then after the final expenses are paid just split the remaining funds between you and your siblings.

 

[Walt34]

When my mother passed away I was joint on her checking account so that allowed me to write checks for the few immediate expenses that came in, and I was the executor (administrator in MD) of her will. I did have to wait a few weeks for the court to send me the "Letter of Administration" that was the document proving I was the administrator. With that I could set up an "Estate of...." checking account and things went smoothly after that.

My sister did pay for the grave site opening and closing with her Visa card and I simply wrote her a check from the estate account to reimburse her. For the funeral itself, there was (barely) enough time to pay for that out of the estate account before interest charges began.

Re the checking account, while legally it was mine, the out for that was for me to write a letter to the court explaining that I was joint on it for convenience and I waived my right to the funds, so that went into the general estate assets.

 

[COcheesehead]

Technically, if you add one of you to your Dad's checking account then when he dies the money in it becomes the property of the other named owners.... it also bypasses probate just like other jointly owned property.

That happened with my great aunt's bank accounts... technically my aunt and I who were also named on the account could have kept the money but we recognized that it was great-aunt's money... not ours.. and distributed consistent with her wishes in a will that we know was signed at one time but no one could find a signed copy. The bonus was that it also avoided probate... which was news to me.

An easy solution might be to set up a separate bank account with $4k with all of you, your siblings and your Dad as owners and use that for the final expenses and then after the final expenses are paid just split the remaining funds between you and your siblings.

We had no issues with our arrangement.

 

[Sunset]

Add your name to a bank account or two, so you can pay the bills. Be upfront about it, so nobody thinks you are stealing the goods.
If the account has too much money in it, then open a new joint account and have Dad put some cash into it.

Get Joint signing/authorization on the safety deposit box so you can open it after the death. or at least be sure to get POA, and open the safety deposit box without telling the bank about the death, or they bank will seal the box, which causes lots of problems. { this is slightly illegal, but less so if you are executor and may really only violate the bank rules protecting their butts)

 

[GrayHare]

Number 3 is best. If, and only if, all beneficiaries agree you can probably do number 2 (pay out of the decedent's checking account) without anyone hassling you. In practice banks will honor most any check regardless of who signs it. Only if someone challenges a paid check might the payment be reversed or other trouble ensue. Even so I'd recommend better alternatives, such as adding a Transfer On Death notation to the checking account.

 

[pb4uski]

We had no issues with our arrangement.

I don't think there would be issues in most similar situations, but technically your sister could have kept the account... like in the situation I described that I was in, your sister knew that it was not rightfully "her" money and did the right thing... but I have heard of similar situations that the parties were not so honorable and just wanted to make sure posters were aware of the potential perils of that approach.

 

[SecondCor521]

We're all honorable and will respect my Dad's wishes to the letter, so in our particular case that's not a problem.

Adding one of us as joint owner on his checking isn't quite right for us. Not really an issue in practice, but there are downsides to joint ownership, at least one of which is mentioned on this thread.

TOD designation is probably the best idea for us. Not sure if we'll go through with it though.

Leaving the checking account open for a month or three also makes it easier to deal with the final pension, social security deposits and bill pays for medical insurance, cable, credit card, etc. Just wait until it all settles and then deal with it.

I've been tempted to just take shortcuts and do things like impersonate my Dad for dealing with financial things now - it's easier, he's sitting right there listening to me, I'm doing what he wants, why complicate things by saying, no, I'm actually the kid, but my Dad's right here and he'll authorize me to talk with you about X. But I haven't done that yet and probably won't, as my Dad is old school and likes to do things by the book, and I choose to respect that.

No safety deposit box in this case, which is also nice IMHO.

 

[tulak]

I went through this as executor of my mom's estate and I don't remember it being an issue. I'm guessing that I must have received executorship quickly, since I paid for all of these items out of the estate checking account I opened after she passed away.

It's good to be prepared, but you might be overthinking this one.

 

[CardsFan]

I went through this as executor of my mom's estate and I don't remember it being an issue. I'm guessing that I must have received executorship quickly, since I paid for all of these items out of the estate checking account I opened after she passed away.

It's good to be prepared, but you might be overthinking this one.

That was my experience 15 years ago. I had the estate account opened within a week or two (biggest delay was getting the death certificates, and be sure to get many originals, you will need them).

 

[splitwdw]

Your father should prepay his funeral costs and you and your sisters split the cost to clean out of his apartment.

 

[RockyMtn]

For my family, we added my sister to my Dad's checking account while he was still alive so it was seamless upon his death.

+1. This is what we have done.

 

[H2ODude]

Having just recently dealt with my father-in-law's death, I would highly recommend putting all checking, savings, and brokerage accounts (not IRAs) in a living trust. My wife is the successor trustee. All we had do was show up to the bank with an original death certificate and certification of trust (with wife's notarized signature). That gave us immediate access to father-in-law's funds from which we could pay for estate costs. Brokerage account took longer to "transfer" (have to set up a new account at same brokerage, transfer assets in to that, and then that account can be transferred to our brokerage house). IRAs are not held in trust, since they have a beneficiary; same thing with annuities.

This is what DF did with his...everything in a revocable trust in which he and I were co-trustees. The trick is to get EVERYTHING titled in the trust, plus a "pour over" will (I think that's the term) in case anything escapes. All his assets were with Fido; all I had to do was send them his death certificate and that was it, all transferred to our accounts. No probate, no public notice, no solicitation from lawyers or investment advisors. We haven't seen the impending grim reaper but intend to do same eventually.

 

[tulak]

I went through this as executor of my mom's estate and I don't remember it being an issue. I'm guessing that I must have received executorship quickly, since I paid for all of these items out of the estate checking account I opened after she passed away.

It's good to be prepared, but you might be overthinking this one.

Out of curiosity I took a look at the paperwork from this time.

Here's the timeline:
12/26 - Mom passed away
1/7 - I was appointed executor of her estate.
1/11 - I opened bank accounts for her estate.
1/23 - I reimbursed myself for all the expenses I incurred, ~$3200.

So I ended up paying all of the costs myself until I was able to reimburse myself as executor. Of course I kept receipts, etc, in case they were needed. Looking over the receipts, they were mostly for the funeral home and reception. Mom was cremated, so we had time to find a permanent location for her remains.

In retrospect, maybe this approach wasn't without risk, but in my case it would have been negligible. At the time, I didn't even think of it. There was too much going on. I wasn't worried about getting the money back from the estate since I was executor and dealing with my siblings wasn't an issue.

Every family is different. I guess this is a case where you need to figure out what works best for your family.

 

[Brat]

My Aunt was on Grandmother's bank account. When Grandma died her lawyer son-in-law told Aunt that legally the account was hers so she kept it. Father didn't speak to his sister's family again and instructed us to do the same. Until that time Grandma's kids had a great relationship. My advise, DON'T CREATE A JOINT ACCOUNT.

Honest, a living trust that holds the assets solves the problem.

 

[COcheesehead]

My Aunt was on Grandmother's bank account. When Grandma died her lawyer son-in-law told Aunt that legally the account was hers so she kept it. Father didn't speak to his sister's family again and instructed us to do the same. Until that time Grandma's kids had a great relationship. My advise, DON'T CREATE A JOINT ACCOUNT.

Honest, a living trust that holds the assets solves the problem.

I am sure there is way more to the story. Family problems likely at the root of this. Shame on everyone involved.

 

[Bamaman]

Don't make things more complicated than they have to be.

Get your father to go ahead and put your sister, the executor, on his checking and savings accounts.

When something happens, she'd pay for the funeral, pay for moving his stuff, and pay any other expenses like doctor's bills that may be due out of his checking/savings. That's based on him not having any liabilities.

Then split the remaining funds as per his will.

In most cases where someone dies without any property or home in their names, the will doesn't have to be probated.

 

[Sue J]

We just went through this last April when my Dad died.

I was POA on his checking account, so I was an authorized signer but not a joint owner. A few months before he died we prepaid for the funeral. It was a life insurance policy, payable to any funeral home, although we were arranging it with a specific funeral home. It prepaid for a basic funeral and then after the fact we owed a small amount for adjustments like an extra $150 for a night pickup and a $120 credit for something small we prepaid and then didn't use. It was all clearly itemized and the prices were very close to the prices for my Mom's funeral in 2011.

POA ends at his death so I covered a few small incidentals. My sister and I were listed as Payable On Death on his bank account so when I got the death certificate I closed his account and got 2 certified checks.

My sister was the one who suggested the prepaid funeral and she was correct in that. It made the whole process easy, neither of us had to lay out the money, I had paid for it out of Dad's checking account while he was alive.

He had a will and I was the executor but he only had assets with beneficiaries (IRA and a small life insurance from 1948, no property) so there was nothing to execute.


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