Settling an Estate

[Souschef]

In the cases I was involved with, the brokerage account was under their living trust. The living trust does require an EIN at death (it is under their SSN while living), as it goes from revocable to irrevocable at death, it's a different entity so needs a different ID.

So if the brokerage is not in a trust, and has named beneficiaries (avoiding probate), it seems it would be handled as you say. It would be good if someone here could confirm that.

-ERD50

That was exactly what happened when my wife died. I had to get an EIN and file form 1041's every year. Fortunately, in the trust documents was a statement that if the trust balance falls below a certain amount, the trust can be dissolved. That is exactly what I did.

 

[meierlde]

Definitly dont close the account for a month, at least since she will get the ss for this month if not already there and, and then you can close the account. (As far as ss payments are concerned.

 

[ExFlyBoy5]

My DIL's father is an estate attorney and a friend. Mom and Dad's attorney has retired, so I think I'll set up an appointment with him or one of his junior associates and ask for advice on how to do this all myself. It won't hurt and I will have the comfort of knowing if I am missing anything.

First off, I am sorry for your loss and understand the "relief" that comes after dementia. As to your post, this is a good idea. Settling the estate should be relatively easy, but spending an hour with a good atty is worth the couple hundred bucks it might cost...good idea making sure you have all you bases covered. Getting an EIN is painless and won't hurt if it's never used. I opened an estate account for my Dad and it's still open a couple of years later and has come in handy for a couple of "floater" checks that have been issued.

In our experience, the lawyers only made things more difficult and they charged unscrupulous fees when my FIL passed.

-ERD50

Find a better lawyer.

Maybe someone can chime in on that, or I may look into my NOLO book later.

-ERD50

So you will use your book and perhaps come back and offer legal advice? Got it.

 

[The Cosmic Avenger]

I opened an estate account for my dad's "estate", even though there was nothing to probate, because I ran his refund checks through there. (Mostly because he had debtors chasing him, and it's a long story, but while I paid most of his bills, there was one creditor that we were very upset with.) So I wanted documentation of the money coming in and going out. Anyway, it's a little over 3 years and the account still has $1 in it to keep it open. I think after the statute of limitations on the debt is up I will close it, but no reason to do so yet.

 

[The Cosmic Avenger]

Oh, and I paid for an hour's consultation with an estate attorney in my father's area that someone I trust recommended. She did a great job of answering questions, telling me what to anticipate, giving me a plan for handling any issues with creditors, and she even had time left over to call a couple of places while I was there to start transferring or closing accounts. She then answered 2 or 3 emails with helpful, specific advice.

If anyone in the NYC area wants their info, PM me.

 

[zedd]

I think the funeral director notifying SS take care of Medicare since presumably her Part A premiums were deducted from her SS benefits. You should notify United Healthcare for her MA plan.... though they may get a notification through SS.

Dear mother passed from pancreatic cancer ten days ago. Funeral home contacted SS but February direct deposit slipped thru. Visited DMs credit union with death certificate in hand. They took care of returning the payment. Evidently Medicare and MA were notified too as I received a condolence letter from BCBS indicating that it may take up to three months for premium to be refunded. Am co-owner of DMs meager checking/saving account, her only assets, so no probate.

 

[gayl]

Sincere condolences on your loss. It's always rough, no matter what.

When I was in the identical situation, I went to my county probate office just in case, but they told me I didn't have to do anything since the total was under their limit.

Get more copies of the death certificate than you think you'll need. They come in handy more often than you might expect.

^Same answer at Sonoma County office for assets that didn't have a joint owner or designated beneficiaries. For her FIDO account (slightly over 1m) I just needed 1 death certificate & FIDO account #s of all 5 beneficiaries (plus my son's / dtr's / nephew's). The assets were transferred and each beneficiary got a step up basis. Eldest sis spent hers ASAP. Another sister and I gave a boatload to our kids at that point.

[emoji1651] on the loss -- it's never easy

 

[gayl]

^Same answer at Sonoma County office for assets that didn't have a joint owner or designated beneficiaries. For her FIDO account (slightly over 1m) I just needed 1 death certificate & FIDO account #s of all 5 beneficiaries (plus my son's / dtr's / nephew's). The assets were transferred and each beneficiary got a step up basis. Eldest sis spent hers ASAP. Another sister and I gave a boatload to our kids at that point.

[emoji1651] on the loss -- it's never easy

One final cavaet:

I changed her mailing address to mine. BIG MISTAKE! She loved to donate to charities and I STILL get requests 8 years later. If you change her mailing address use a PO Box.

 

[RobbieB]

I would keep the checking account open also. You will be surprised how many checks will come made out to her over the next 2 years. Just keep the minimum in it to avoid fees.

 

[ExFlyBoy5]

Dear mother passed from pancreatic cancer ten days ago. Funeral home contacted SS but February direct deposit slipped thru. Visited DMs credit union with death certificate in hand. They took care of returning the payment.

I am sorry to hear about your loss.

Banks are obligated to return the funds under federal law and there is no action required on the part of a beneficiary/account co-owner.

 

[Scrapr]

I am sorry to hear about your loss.

Banks are obligated to return the funds under federal law and there is no action required on the part of a beneficiary/account co-owner.

Speaking of that. You might want to check Missing money.com Just to see if there is anything out there. I looked for my wife after she passed and found some in Colorado. (we are in Oregon) Also found some for my niece, and Grandpa. Colorado was a bit of a pain so i'm going to let them keep it.

 

[Bamaman]

If you get down to it, going through probate is where the judge gives you, the executor, the authority to sign for the estate in order to liquidate or transfer assets to the family. It's real estate that's most often the cause of having to probate a will.

Fortunately your mother took care of business, and you're going to be capable of transferring funds and accounts into your name.

You have more need to talk to an accountant rather than an attorney. And skip the probate.

But you'll need to file with the IRS to get the estate a tax number. And you'll need to advertise in the local newspaper or legal periodical two different weeks that your mom has passed and anyone with any claims on the estate needs to speak up.

But the first thing I'd do is transfer all of the funds and accounts possible into your name. Remember that estate income taxes (until liquidated) are higher than most individual tax rates. Move fast, and the estate may not even have to file an income tax return.

 

[Gill]

I'm sure you're totally confused by now with all the conflicting advice, much of it wrong. From the facts you've given, you have no need for an estate account or a tax ID number for an estate. With all the assets payable to you there is nothing to be done other than to present death certificates and possibly file an individual tax return for your mother for 2019 and 2020.


As full disclosure, I'm a trusts and estates attorney and a CPA and have administered simple and complex estates my entire career.


Gill

 

[ExFlyBoy5]

You have more need to talk to an accountant rather than an attorney. And skip the probate.

But you'll need to file with the IRS to get the estate a tax number. And you'll need to advertise in the local newspaper or legal periodical two different weeks that your mom has passed and anyone with any claims on the estate needs to speak up.

An attorney (and not an accountant) would tell you about the district's publishing requirements as they are not the same in all jurisdictions. The advice you give is not suitable or legally sufficient where I live.

 

[Golden sunsets]

If you get down to it, going through probate is where the judge gives you, the executor, the authority to sign for the estate in order to liquidate or transfer assets to the family. It's real estate that's most often the cause of having to probate a will.


But you'll need to file with the IRS to get the estate a tax number. And you'll need to advertise in the local newspaper or legal periodical two different weeks that your mom has passed and anyone with any claims on the estate needs to speak up.

But the first thing I'd do is transfer all of the funds and accounts possible into your name. Remember that estate income taxes (until liquidated) are higher than most individual tax rates. Move fast, and the estate may not even have to file an income tax return.

I remember the advertising in the paper that the attorney did when my Dad passed, but that estate had to go through probate, because of the way in which the real estate was held. This must be local law on whether or not one has to advertise when there is no probate. At any rate I have been managing her affairs for the last 10 years. I know everything that has gone in and out of her accounts. I did just get a bill from the hospital that she landed in prior to her passing, for meds that were administered, that are not prescription strength. The bill is for $6.85.

It is my intention to present the death certificate this Thursday so I am hoping that there is no estate income tax to file for 2020.


This has been really helpful. Thanks so much.

And yes

 

[zippy2020]

I was just skimming through most of this thread, so I might have missed something here. But....did the OP say something about an IRA?

If so, be meticulous in how you handle the transfer. The IRS is very rigid about inheriting IRAs.

- Assume your mom was taking withdrawals, so as beneficiary you must continue those, but based on your age. Any tax adviser can help you with this, or just research it on the IRS website.

- Most important, be CERTAIN you instruct your designated financial institution to set up an Inherited IRA account to receive your mother's retirement account. Do not, under any circumstances, mix her assets into your own retirement account, nor take the assets in a check made out to you (with the laudable intention of opening a new IRA personally).

Inherited retirement accounts must always be kept separate, and the "cleanest" way to do it is to have the assets transferred directly between financial institutions, never personally touching it. The IRS just loves those unknowing inheritors who aren't aware of the rules so the Feds can claim the whole thing as income tax-liable, LOL.

My condolences to you on your mom's death. Dementia is so hard on families. You're right, it's something of a relief when you don't have to face an ever-worsening situation. It's a cruel disease and too often heart-breaking.

 

[pb4uski]

I'm sure you're totally confused by now with all the conflicting advice, much of it wrong. From the facts you've given, you have no need for an estate account or a tax ID number for an estate. With all the assets payable to you there is nothing to be done other than to present death certificates and possibly file an individual tax return for your mother for 2019 and 2020. ...

+1 Drain most of the money in the joint account but keep it open in case a stray check or bill comes along.

And where Gill says possibly file individual tax returns for 2019 and 2020 I think it is because your mom's income may have been low enough that she didn't need to file an individual tax return.

 

[Sue J]

Golden Sunsets,

Sorry for the loss of your mother. I went through a similar process when my Dad died. He had a will but everything he had was POD/TOD or had beneficiaries so no need for probate.

In closing all his accounts, final tax return, etc I remember feeling that I was proud to be able to take care of things for him and wrap up his life. He was a money and details guy and he and I were on the same wavelength in regards to finances. I was happy to be the one to close the books for him.

 

[Souschef]

The only mistake I made in settling my MIL's estate was paying PA inheritance tax. I live in CA, have no ties to PA, and should have told them to come and get it

 

[aza455]

For the accounts where you are beneficiary...

Can a bank account have a beneficiary or you are talking about the POD designation?

 

[Ronstar]

Sorry for your loss. Although a lot of the advice here makes this process sound easy, I would still hire an attorney. An estate attorney practicing in the state that your mother lived in.

We recently hired an estate attorney to prepare a trust and POA for my MIL. Money was well spent. The attorney had tons of good advice on issues I had no knowledge of, even though I handled my father’s estate in the early 1990’s. Things change and it makes sense to get professional help to make sure everything is done right.

 

[gwraigty]

I'm sure you're totally confused by now with all the conflicting advice, much of it wrong. From the facts you've given, you have no need for an estate account or a tax ID number for an estate. With all the assets payable to you there is nothing to be done other than to present death certificates and possibly file an individual tax return for your mother for 2019 and 2020.


As full disclosure, I'm a trusts and estates attorney and a CPA and have administered simple and complex estates my entire career.


Gill

+2

I was just skimming through most of this thread, so I might have missed something here. But....did the OP say something about an IRA?

If so, be meticulous in how you handle the transfer. The IRS is very rigid about inheriting IRAs.

- Assume your mom was taking withdrawals, so as beneficiary you must continue those, but based on your age. Any tax adviser can help you with this, or just research it on the IRS website.

I believe the bolded part above is incorrect under the SECURE Act. Since OP's mother passed this year, the new rules take effect. OP has 10 years to empty out the inherited IRA.

8 Moves to Consider for IRAs, 401(k)s Under New Secure Act

Before the Secure Act, if you inherited an IRA from someone other than your spouse, you were required to take distributions from that account, but you could stretch out those payments over your entire life.

Under the new law, if an IRA owner dies in 2020 or after, the account’s beneficiaries must take all of the money out of the inherited IRA within 10 years after the year of the death. (Some beneficiaries, including spouses and minor children, are exempt from this rule.)

 

[Golden sunsets]

I filed a return for mom for 2018 which resulted in a zero tax liability as her Memory Care facility costs dwarfed her income. 2019 will be the same. 2020 for 32 days I expect will be the same. Care costs dwarf income.

+1 Drain most of the money in the joint account but keep it open in case a stray check or bill comes along.

And where Gill says possibly file individual tax returns for 2019 and 2020 I think it is because your mom's income may have been low enough that she didn't need to file an individual tax return.

 

[Gill]

I filed a return for mom for 2018 which resulted in a zero tax liability as her Memory Care facility costs dwarfed her income. 2019 will be the same. 2020 for 32 days I expect will be the same. Care costs dwarf income.

You still may be required to file a return.
Gill

 

[pb4uski]

I filed a return for mom for 2018 which resulted in a zero tax liability as her Memory Care facility costs dwarfed her income. 2019 will be the same. 2020 for 32 days I expect will be the same. Care costs dwarf income.

Makes sense.