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Question - Or account and estate
Old 05-12-2021, 10:22 AM   #1
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Question - Or account and estate

Currently I have POA on my father's bank account and checking account, but as I understand it, the POA will cease upon his death.

I will be the executor of the estate.

Leaving things as is, will there be a problem paying for the funeral expenses and the various bills associated with caring for the house until it is sold?

I have seen mention of titling the bank accounts as father or son, so I would have access to the account after his death. If I were to do that, would that mean that the assets in the accounts would pass to me upon his death and not be part of the estate?

The intent of the will is to divide the estate equally between me and my brother, so me getting the cash in the bank accounts would interfere with that.

Any advice or thoughts will be appreciated.

Thanks.

Joe
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Old 05-12-2021, 11:18 AM   #2
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My sister and I were POAs for our bachelor uncle who lived in Canada. We had similar concerns about our powers expiring upon his death.

With this in mind, we shopped for and prepaid for the cemetery plot, the grave marker, the casket, funeral expenses, etc.


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Old 05-12-2021, 12:21 PM   #3
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Well, technically as you know upon you're Dad's death the POA goes poof and the account is part of the estate so I don't think you can write any checks out of the account until the court appoints you as executor.

The easiest thing is to have that account set up with you and your brother as beneficiaries... the account would transfer to you both upon your dad's passing and it should be quick and easy. Another alternative, if your brother trusts you is to have your name on the account with your Dad's... then you can disburse out of the account for final expenses and the cost of keeping the house without skipping a beat... and you just include in the analysis of the estate the balance as of your dad's passing and the additions and deductions since that time.
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Old 05-12-2021, 12:58 PM   #4
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Quote:
Originally Posted by joesxm3 View Post
... The intent of the will is to divide the estate equally between me and my brother, so me getting the cash in the bank accounts would interfere with that. ...
Really? Why? Just total the estate value, divide by two, and distribute assets to suit. My mom's estate was the same and I had no problem distributing dissimilar assets so we (3) ended up equal. The final tuning was done by splitting some Roths to fill each bucket to the brim.
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Old 05-12-2021, 12:59 PM   #5
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My aging mother put me as a co-owner of her checking and savings account a few years ago so that I could pay for anything I need to both before and after her death. Obviously, there has to be a level of trust in the equation. The banker made clear to my mother that I could bleed the account dry if I chose to do so. My mother trusts me not to do that unless needed for HER expenses. My 3 brothers probably aren’t aware that she has set this up. Upon her death, I will use the money in those accounts to pay funeral expenses as well as any final bills closing out her financial obligations and then split the remainder with my 3 brothers. I am her co-executor with one of my other brothers and I may have told him about this arrangement, I can’t recall. We trust each other.
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Old 05-12-2021, 01:05 PM   #6
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My husband's experience with his mother's bank account tells me not to trust a family member as a co-owner. His mother died and his sister claimed it all.
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Old 05-12-2021, 01:23 PM   #7
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This was 20 years ago.

Setting up an estate account was simple. Paid all bills from it, then split the remainder with my brother.

The funeral home was fine to wait for payment until this was all set up.
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Old 05-12-2021, 03:24 PM   #8
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Quote:
Originally Posted by PaunchyPirate View Post
My aging mother put me as a co-owner of her checking and savings account a few years ago so that I could pay for anything I need to both before and after her death. Obviously, there has to be a level of trust in the equation. The banker made clear to my mother that I could bleed the account dry if I chose to do so. My mother trusts me not to do that unless needed for HER expenses. My 3 brothers probably arenít aware that she has set this up. Upon her death, I will use the money in those accounts to pay funeral expenses as well as any final bills closing out her financial obligations and then split the remainder with my 3 brothers. I am her co-executor with one of my other brothers and I may have told him about this arrangement, I canít recall. We trust each other.
I had a similar situation when a great aunt died... when she moved into a nursing home I was named as a co-owner of her main checking account so I could pay her bills for her. At the time she passed the checking account actually had a six-figure sum in it since we had been liquidating assets in anticipation of a longer nursing home stay. Technically, since I was a co-owner or the checking account it was not part of the estate... I could have legally transferred the balance to my personal account once she died. However, the reality is that it was her money, not my money so I treated it as if it was part of the estate and it was distributed to her heirs in accordance with her will.
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Old 05-12-2021, 06:37 PM   #9
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Quote:
Originally Posted by joesxm3 View Post
Currently I have POA on my father's bank account and checking account, but as I understand it, the POA will cease upon his death.

I will be the executor of the estate.

Leaving things as is, will there be a problem paying for the funeral expenses and the various bills associated with caring for the house until it is sold?

I have seen mention of titling the bank accounts as father or son, so I would have access to the account after his death. If I were to do that, would that mean that the assets in the accounts would pass to me upon his death and not be part of the estate?

The intent of the will is to divide the estate equally between me and my brother, so me getting the cash in the bank accounts would interfere with that.

Any advice or thoughts will be appreciated.

Thanks.

Joe
If you are set up with rights of survivorship, yes, the assets in the account would go to you and not be part of probate.

DF did that with me and my brother - he was named alternate executor. There are two other siblings. I managed DF's bill paying. And the funds in the checking account have been used to manage his estate. When I get done I will disburse the remainder equally to the heirs. DB is in agreement with this.

DF prepaid funeral expenses, but there have been plenty of other estate expenses.
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Old 05-12-2021, 08:12 PM   #10
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A lot depends on level of trust between you and brother. Since you two are the only heirs, IF you trust each other, then settling the estate becomes a whole lot simpler.

One drawback to being named on your Dad's account as co-owner is if someone sues you they can go after your dad's account.

You could ask bank if it is possible to name both you and your brother as TOD (transfer-on-death) beneficiaries where you both become owners of the account after your dad passes.
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Old 05-12-2021, 09:18 PM   #11
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When DF passed a few years ago it was easy to visit the courthouse with the will and death certificate, get appointed executor, then drive to his bank with the letter of appointment, open a checking account in the name of the estate, and transfer the money from his old account. I needed an EIN number for the estate and the bank let me use one of their computers to get one from IRS on line so I didn’t have to go home and come back (small town bank). Then it’s a matter of carefully keeping detailed records for the accounting of the estate. My county required everything to balance to the penny. Yeah, that’s the fun part.
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Old 05-12-2021, 09:25 PM   #12
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DF’s will stated no accounting required, so I didn’t have to provide such records to the county. Only deal with federal tax returns.
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Old 05-12-2021, 11:05 PM   #13
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Quote:
Originally Posted by joesxm3 View Post
Currently I have POA on my father's bank account and checking account, but [1] as I understand it, the POA will cease upon his death.

I will be the executor of the estate.

[2] Leaving things as is, will there be a problem paying for the funeral expenses and the various bills associated with caring for the house until it is sold?

I have seen mention of titling the bank accounts as father or son, so I would have access to the account after his death. [3] If I were to do that, would that mean that the assets in the accounts would pass to me upon his death and not be part of the estate?

[4] The intent of the will is to divide the estate equally between me and my brother, so me getting the cash in the bank accounts would interfere with that.

[5] Any advice or thoughts will be appreciated.

Thanks.

Joe
[Numbers added for reference.]

1. Correct. At death, generally the executor and any trustees for any related trusts then become in charge.

2. Dunno. The process that @GalaxyBoy outlines above is the proper way to do things. You take the original will to the probate court, get appointed executor, get letters testamentary, then you can do whatever you need. I've no idea how long that process takes.

I *think* that it's OK for you (or your brother) to put expenses on your own credit card or from your own bank funds and then have the estate reimburse you for those expenses as appropriate.

As someone else noted, funeral homes are probably familiar with the issue and I think they're pretty accommodating.

3. If you have the account titled as JTWROS then the money would pass to you. However, depending on state law, some, half, or all of the value of the account as of your father's date of death would still be includable in his gross estate and his taxable estate *even though it didn't pass through probate*.

But this has drawbacks. If the account is joint, then you can, in theory, take the money legally since you're an owner of the account. Also, the money in that account is subject to seizure if you have a judgment against you, or don't pay your taxes, or fall behind on child support. Probably not a problem for you, but it's a consideration.

A better choice is probably a POD designation. In this case, you can get the money just by showing up with your ID and the death certificate (maybe after a state-mandated waiting period). It sidesteps the issues in the previous paragraph. It still would be part of the gross estate and taxable estate even though again, it wouldn't pass through the probate process.

4. As executor, if the terms of the will permit, you can even things out by just keeping track of what you spend out of the bank account on estate-related items and what you distribute to yourself and to him. I'd probably just keep a spreadsheet, wait for everything to settle, and then settle up the tab with your brother. Even if the terms of the will don't allow you to do it directly, you can always gift your brother the proper amount, assuming the "tab balance" is less than $15K, which it probably is.

I'd think, though, that if there is, say $10K in the bank account, and you take $2K from that account for paying for house stuff, burial expenses, whatever, then you could just divide the remaining $8K 50/50 and give your brother $4K because your dad probably wants you to share 50/50 after final expenses. You shouldn't have to pay $2K for burial and house stuff and then have your brother expect $5K (half of the original amount).

5a. Maybe ask your Dad for a copy of his will and make sure that the way it's written means that it's 50/50 after expenses.

5b. Consult with your Dad's estate attorney who should be licensed to practice in the state where your Dad is domiciled. Lots of stuff written on forum boards about estate stuff is just plain wrong (quite possibly including stuff in this very post of mine).
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Old 05-12-2021, 11:57 PM   #14
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OP - Depending upon your Father's estate size (and his State) it's possible you can simply fill out an affidavit and act as executor, instead of doing the more expensive probate method.

This is possible in some cases even with Millions of dollars, as bank accounts and brokerage accounts could all be POD/TOD so are not part of the estate, and not ruled by the Will.
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Old 05-13-2021, 12:51 AM   #15
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Quote:
Originally Posted by joesxm3 View Post
Currently I have POA on my father's bank account and checking account, but as I understand it, the POA will cease upon his death.

I will be the executor of the estate.

Leaving things as is, will there be a problem paying for the funeral expenses and the various bills associated with caring for the house until it is sold?

I have seen mention of titling the bank accounts as father or son, so I would have access to the account after his death. If I were to do that, would that mean that the assets in the accounts would pass to me upon his death and not be part of the estate?

The intent of the will is to divide the estate equally between me and my brother, so me getting the cash in the bank accounts would interfere with that.

Any advice or thoughts will be appreciated.

Thanks.

Joe
Sister and I trust each other (and I lived close to Mom and Sis wanted no part in the day-to-day paying bills, selling house, yada, yada.) SO in addition to the POA with Mom, my name and hers (either) was on check book.

All worked out as there was less than a couple thou in check book when all was settled. Could work for you. More complicated than that, and I'd work it out with your attorney who will probate - we did not need to as Mom had nothing to probate (no real estate, no antiques, no money - to speak of.) YMMV
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