Settling My Sister's Trust/Estate

[Midpack]

I'm not done yet, but I'm well over 2 months in so probably not too soon to share. I thought it would be fairly straightforward as my sister established a Trust in 2021, and kept pretty good records.

It's been a lot tougher than I imagined. On the bright side, I imagine it would all be even tougher if I had to go through probate too. Just a few observations (I could go on and on).

By all means make your checking account POD, and keep the balance at some useful level. My sister put her major assets in Trust, but chose to leave her checking account out. She told me she made it POD, and put me on the account - when she passed I found she'd done neither. She gave me her username/password so I was able to use her checking account to pay a few bills for about a week, but once they were notified of her death, everything was frozen. It took me 2 months + 2 days to get those funds released. Didn't help that I had to pay a probate attorney $2500 and add 4 weeks to get a court order from a probate judge to recover $8600 in her checking account. No where near enough to cover all the expenses I've had to cover so far...

...All the experts vigorously warn to use estate/Trust funds to pay expenses for the deceased while settling the estate, or you will be personally liable. That's useless IME. Vanguard brokerage & rollover IRA, USAA, all credit cards, Morgan Stanley 401k, her mortgage company, home/auto/umbrella/LTC, gas/elec/water/TV/internet/phone, Soc Sec/Medicare Advantage ALL FROZE her accounts and all associated funds most within days of her passing. Furthermore none of them would share any information on balances, etc. - so I was flying blind in every case. All of them wanted a death cert understandably (that took me 2 weeks) but all wanted other various documents, no common list. Vanguard was the first to release funds, took 24 days - though it took them a few weeks to get step-up basis correct. I am still working to release other funds. Our total out of pocket to date is $25K, will be in excess of $46K to settle my sisters estate, and I realize not everyone can cough up that kind of money.

re: above. I can tell you I will never do business with John Hancock LTC or Target credit cards ever again - their service was/is disgraceful, and deliberately so IMO.

Keeping my sisters phone and email accounts live using her logins have been crucial to see pending bills. Fortunately she left a fairly current list of usernames/passwords, and I was able to get into others using her iPad/iPhone Passkeys. That approach has also been nice to keep at least some of my personal information separate from hers, I still use her logins/passwords where possible - though of course that does not work with anything of note.

Selling my sisters house from afar will be the last major asset hurdle. Unfortunately she had a mortgage, and an insurance settlement for a water leak/floor damage that she never followed through on the repairs. After a lot of back and forth beginning Dec 2023, Travelers paid her in Aug 2024 so the funds have been there all along. The water leak was finally corrected Mar 2025 at $65K, but she never had the restoration company make the extensive repairs, $30K plus. So I've had to do that post mortem. She passed mid December, finally got the house listed two days ago! Wish me luck.

She passed away mid December, fingers crossed I have her estate settled by May.

And finally it's disappointing all the vultures that are now sending additional junk mail to me using her name and my address. Disgraceful, but that's how it works now days...

 

[MarieIG]

DF kept a six figure balance in his checking account and had added me as a joint owner, so that really helped with the estate related expenses / overhead.

I had been paying his bills for a few years prior to his passing.

 

[Ronstar]

My sister's demise created hurdles for me as well. She had no will. And had maybe $20k to her name when she passed with at least $15k in known liabilities. We had her cremated and her ashes put with those of her deceased husband in a military cemetery. I paid funeral expenses of around $3k.

I had her cell phone, checkbook, savings account info and was collecting her mail at a PO Box at the time of her passing. I originally intended to pay off her known bills with the proceeds of her checking and savings accounts, but the bank would not release the funds to me without me executing a small estate affidavit. The Illinois affidavit states that the signee is responsible for all of the decedent's liabilities. I decided not to pursue getting her small amount of assets due to the personal liability that I could incur. I had no correspondence with her creditors - I just ignored her bills after she passed. Like Midpack above, all her accounts were frozen shortly after her passing.

I was getting her mail and bills for a few weeks after her passing, and then the PO Box key would no longer open the box. I didn't bother discussing this with the PO - I just quit going to get the mail. I've had nothing to do with her estate since. That was 6 months ago.

 

[Spock]

Dad died a year ago this past Monday.
We had to get conservator/guardianship/sole successor trustee in 2020, which probably greased the skids a little for dealing with all the parties.
Things were mostly wrapped up by mid-June... so 4 months... which included vacating, fixing, and selling 4 rental properties.... (one of which the tenant had turned the upstairs into a dog kennel... we had to list that one "as is").

The conservator/trustee could have fought the Transamerica LTCI for premium refunds (policy stated Dad should not have had to pay premiums between 2013 and 2025), but trying to do battle with an insurance company via a reluctant/passive 3rd party wasn't worth it.

I had kept all of the income/expenses in Simplifi, so I was able to draft reports for the CPA to do his 2025 taxes.
The complication there will be the 1099s vs. the calendar date of death for claiming personal SSN income vs. trust EIN income. Either way there will next to no tax owed as he only had 7 weeks of income in 2025 but gets the full year standard+bonus deduction. The trust got the step-up in basis on the rentals, so minus sales commissions/expenses the K-1s should be distributing 70-80K in losses to the beneficiaries . By my numbers the trust might owe the IRS $18.67. (Trust tax brackets are surprising to see for the first time).

 

[joesxm3]

Reading this makes me realize that I got off pretty easily settling my parents' estate.

In summer 2019, once I realized that I would have to take over, I swooped in and took photos of every bill and document I could find and took them to an attorney to update the wills and grant me powers of attorney.

Good think that I did that, because in December 2019 my mother was in the nursing home and starting with dementia . I had to fill out the massive Medicaid application. As part of this we had her do a quit claim deed to give her half of the house to her husband.

Fast forward to 2023. I was now taking care of stepdad as well as mom and we were scrambling to sell his house before he died. But . . . the quit claim deed gave my mother lifetime use of the house . . . Luckily she was with it enough to have her sign to take that away.

Mom died in August 2023. Stepdad fell over and ended up in the nursing home in November.

Having durable power of attorney, I was able to do everything related to selling the house. In fact telling the buyer that he had better not be picky on his inspections because stepdad might die before he could close helped move things along.

Stepdad died two years ago today in 2024. By that point all his assets were in two CDs, saving and checking at the same bank. I prepaid his funeral hardly a month before he died. Luckily since I did not expect him to die so fast.

I opened an estate account at the bank but they would not transfer the CD's until they matured. An then only offered 0.5% even on CD's for the estate account. I opened an estate account at Fidelity, transferred the money over and bought T-Bills.

It still took me over six months to do everything. The 1040 and 1041 were simple given the asset structure.

I paid an attorney but since I did so much of the work myself prepping documents for him, he charged only a couple thousand.

Side note. Before stepdad died, I opened a Fidelity account for him by bringing my power of attorney to the Fidelity office. However, my Fidelity powers were like a financial advisor. I could trade in his account but I could not move money in or out and could not link his checking account to transfer in the money. They wanted him to do it and by that time he was too out of it for that. I never was able to fund that Fidelity account.

 

[Koolau]

Reading this makes me realize that I got off pretty easily settling my parents' estate.

Both my parents and hers died with perhaps a couple of thousand dollars to their name and no property. We'd already sold everything via POA. Even then we had lawyers handle the papers to the court certifying that the estate was too small for probate. It went fairly smoothly, but it still too over 6 months. What a racket.

 

[Dalton]

Thanks for the recount/update, Midpack. I earned a lot from both parents' (divorced 40 yrs ago) passing, and being the one to deal with closing out their estates in the last 5 years. Both had wills. Dad's bank account had a surprise co-owner (I wasn't all that surprised, but she seemed to be when I informed her after that was the only info the bank would provide me).

Mom's stuff was pretty straightforward, no debt, I had been doing her taxes for a few years (so knew where all her income was coming from), and she passed mid Feb, so most of her 1099 stuff was sitting there on the dining table because I was supposed visit her the next week to go over some RMD confusion. Oh, and she was in hospice for a week, so we had time to discuss some pertinent stuff. Mom lived very frugally, almost exclusively on her SS checks, and she told me she had $4,000 cash stashed in one spot, and more cash stashed in her bathroom (never found this $). I think we wrapped up probate in Sept, and that $4,000 paid all her utilities, funeral home bill, some hardware store parts I bought to do a few little repairs (my sibling ended up buying out my half of the condo immediately after probate closed), some dump fees, and probably 1/4 of the probate attorneys fees (she billed hourly). I kept receipts and an accounting of that cash, as I did with all the other property accounting.

I'm planning to get my own legal stuff drafted this year. Pretty simple for me, with the big stuff being in beneficiary accounts. Really only my house and checking account, vehicle and personal household property will be left to deal with (oh, and some cash I keep in the house, coincidentally). For some reason I thought I'd asked the bank about filling out a beneficiary form years ago, and my recollection was that it wasn't an option. Well, I asked last week, and it absolutely is an option. So, at this point, I'm debating if I should just do a simple will, and maintain my cash and a balance in the bank, with no beneficiary so would go into an estate account, for whichever niece or nephew ends up getting to deal with my estate. It's not a terribly valuable house, and presuming I don't die fairly early, I'm resigned to the idea I'll end up in some level of long term care facility later, and would sell the house and belongings at that time, and have no or minimal estate to probate, like my dad did.

 

[audreyh1]

DF kept a six figure balance in his checking account and had added me as a joint owner, so that really helped with the estate related expenses / overhead.

I had been paying his bills for a few years prior to his passing.

Same here. I had let it build up from his SS and pension while he was alive and after I managed his accounts, not six figures, but five. Still being joint on the account with rights of survivorship was a godsend. I was already using it to lay his bills while he was alive.

 

[APP01]

It is definitely a learning experience no matter how prepaired you are when setting an estate for the first time. After going through it I learned things to make life easier on our children.

My dad passed away last November, and this week I checked off the last item on my to do list for him. Mom recently moved into assisted living, so her list is a work in progress.

There were 2 things that were difficult with settling my dads stuff.

First was getting his Veterans life insurance from the VA. Even though 3 years ago the beneficiary was changed to his and my moms trust, they still wanted to make the payment to his estate. The trust was set up to avoid probate. After many emails, phone calls and sending new requested documents over 2 months, finally got paid.

The 2nd thing was getting his final long term care insurance reimbursement check that needed to be reissued. Again that was made out to his estate even though dad filed documents with them 1 year ago to name the trust for any reimbursements after his passing.

Everything else and there was lots, went smoothly, including selling their home.

Fortunately my parents trust was the owner of their home and all accounts (except IRAs), including checking, that allowed making payments, fund transfers and check deposits to the trust accounts very easy.

History. Their financial stuff was a mess 3+ years with accounts everywhere. Dad being in his 90s had the view to spread things around incase a bank went under. Parents and siblings wanted me to handle all estate and financial stuff, so I did, but I made sure all were involved in key stuff so all were in agreement.

Three years ago had them update their estate plan making sure siblings were involved, consolidated many accounts, reduced financial institutions, putting all assets except IRAs, with their trust as the owner. I was a co-trustee, POA, etc. At that time I started developing a relationship with the financial institutions so they got to know me.

Then over a year ago I started helping them with managing all accounts and paying bills. If not for all this advanced work things would of been a total nightmare.

As a side note, to be fully transparent I documented everything, had an updated networth spreadsheet and would leave this with my parents so they and my siblings could see everything that was done. No one ever asked for this and I have no idea if anyone reviewed the folder except for mom

 

[pb4uski]

I'm not done yet, but I'm well over 2 months in so probably not too soon to share. I thought it would be fairly straightforward as my sister established a Trust in 2021, and kept pretty good records.

It's been a lot tougher than I imagined. On the bright side, I imagine it would all be even tougher if I had to go through probate too. Just a few observations (I could go on and on).

By all means make your checking account POD, and keep the balance at some useful level. My sister put her major assets in Trust, but chose to leave her checking account out. She told me she made it POD, and put me on the account - when she passed I found she'd done neither. She gave me her username/password so I was able to use her checking account to pay a few bills for about a week, but once they were notified of her death, everything was frozen. It took me 2 months + 2 days to get those funds released. Didn't help that I had to pay a probate attorney $2500 and add 4 weeks to get a court order from a probate judge to recover $8600 in her checking account. No where near enough to cover all the expenses I've had to cover so far...

...All the experts vigorously warn to use estate/Trust funds to pay expenses for the deceased while settling the estate, or you will be personally liable. That's useless IME. Vanguard brokerage & rollover IRA, USAA, all credit cards, Morgan Stanley 401k, her mortgage company, home/auto/umbrella/LTC, gas/elec/water/TV/internet/phone, Soc Sec/Medicare Advantage ALL FROZE her accounts and all associated funds most within days of her passing. Furthermore none of them would share any information on balances, etc. - so I was flying blind in every case. All of them wanted a death cert understandably (that took me 2 weeks) but all wanted other various documents, no common list. Vanguard was the first to release funds, took 24 days - though it took them a few weeks to get step-up basis correct. I am still working to release other funds. Our total out of pocket to date is $25K, will be in excess of $46K to settle my sisters estate, and I realize not everyone can cough up that kind of money.

re: above. I can tell you I will never do business with John Hancock LTC or Target credit cards ever again - their service was/is disgraceful, and deliberately so IMO.

Keeping my sisters phone and email accounts live using her logins have been crucial to see pending bills. Fortunately she left a fairly current list of usernames/passwords, and I was able to get into others using her iPad/iPhone Passkeys. That approach has also been nice to keep at least some of my personal information separate from hers, I still use her logins/passwords where possible - though of course that does not work with anything of note.

Selling my sisters house from afar will be the last major asset hurdle. Unfortunately she had a mortgage, and an insurance settlement for a water leak/floor damage that she never followed through on the repairs. After a lot of back and forth beginning Dec 2023, Travelers paid her in Aug 2024 so the funds have been there all along. The water leak was finally corrected Mar 2025 at $65K, but she never had the restoration company make the extensive repairs, $30K plus. So I've had to do that post mortem. She passed mid December, finally got the house listed two days ago! Wish me luck.

She passed away mid December, fingers crossed I have her estate settled by May.

And finally it's disappointing all the vultures that are now sending additional junk mail to me using her name and my address. Disgraceful, but that's how it works now days...

WADR, I think some of your problems was from the way that your Dsister set things up. Usually if you have a trust you also have a trust checking account. In my parent's case it was with an different financial insttution (Wells Fargo) than where the trust funds were held (Vanguard). My aunt and uncle's trust also has a checking account with a bank that effectively replaced their joint checking account before the trust was established that is linked to the trust brokerage account at Fidelity.

I think it would have been easier for you, even after your sister's passing, to, as trustee, have the trust establish a checking account for the trust. Preferably with the same financial institution that held the trust assets so it woud be easy to transfer money from the trust's brokerage account to the new trust checking account and then use that new trust checking account to pay the bills. As the successor trustee, you have wide latitude to do direct the trust to do such things.

For my parent's trust we had a trust checking account for years as is recommended. When Dad was alive he was signatory and used that trust checking account the same as he would a joint checking account. His SSN was the tax ID when he was alive and it changed to Mom's SSN whn dad died and DM, Dsister and I were all signatories sice we were successor co-trustees of Dad's trust.. When mom died we changed the TIN to the trust's EIN. The same account for 30+ years.

If the house was in the trust and the trust's name was on the mortgage, home insurance, utilities, etc. then you should hae been able to access those. Perhaps when she put the house in the trust she neglected to have those vendors change the name of the account holder from her personally to the trust. Note to self: give uncle a homework assignment to do that.

If she passed away in December and you expect to have the trust settled by May, that's pretty good IMO, though it could have made things easier for you if she had set things up better. My mom's was quicker (about 30 days) but we didn't have any real estate to deal with and we didn't have the half-completed major repairs to deal with.

 

[DrRoy]

Sympathy for your difficulties. It’s all too typical.

DFIL died last April. DW is the executor. DMIL died long ago, and he remarried some years later. He had a will, but no trust. All in probate (still). We floated the funeral until some funds cleared, about 6 weeks.
Big Problem #1 - His will and notes included his 401K in his general estate for his children only. However, federal law grants 401K’s to the surviving spouse, unless those rights are expressly signed away, which he did not arrange for. It went directly to wife #2.
Big Problem #2 - Wife #2 was granted life tenancy in their house, and a trust to cover listed expenses, with the trustee to be a named bank in town. After wife #2 passes, the house and trust funds go to his children. The bank declined, and there was no successor trustee. Our estate lawyer sent letters to the beneficiaries to approve DW becoming the trustee, but wife #2 refused. We have finally found another bank that will do it, and a letter is out to wife #2 and her lawyer for agreement. To be continued.

 

[Midpack]

Misery loves company? Looks like everyone else who's been through this has had some successes, and some headaches. Again, I can't imagine if I'd had to deal with probate on top of this - probably similar headaches over a longer timeline. At least I'll be miserable for less time...

Trusts make it easier, but not easy?

After all this, I am seriously thinking about putting a hired corporate trustee in charge of our estate despite the high cost - 1% of estate or more. I really don't want to put BIL or favorite niece through this on our behalf.

Now that the home is finally listed, I'm in the home stretch...fingers crossed. I'll take the first offer I get just to sell, within reason. I've listed for $30K less than the current appraised value. But I know unless there are multiple offers I'll have to take less.

 

[pb4uski]

Big probem #1 is a good argument for rolling over a 401k to a traditional IRA with your children designated as beneficiaries ASAP when eligible.

It is very odd that the trust didn't have any provisions for selection of a successor trustee if the named successor trustee delclined.

 

[joesxm3]

I am pretty sure that in my state the probate court has a probate court fee that is based on the value of the estate and includes the value of POD accounts and revokable trusts.

I will need to dig a bit more deeply but I think the trust provides a little privacy in that you can simply provide the value of the trust assets so they can take their cut. You may need to provide an inventory of trust assets, but that can be separate from the estate inventory and you can petition to make it not-public.

Before stepdad died I wanted to set up POD thinking that I would skip probate, but not so. Even if everything is POD and trust you still need to do probate to pay the court fee.

Like Koolau said "what a racket."

 

[audreyh1]

In GA, rural town and county seat, small county which probably helped, probate was quite easy and quick. I had DF's lawyer to facilitate. Everything but the real property was already set up for POD so proceeded immediately. Life insurance benefits as well. The big job was selling the farm which took a while longer including surveys and reappraisals because we split it up.

I don’t think the probate fee was based on the estate value because no where did I have to disclose it. The lawyer rolled it into his fees.

 

[Dtail]

Interesting thread.
For my mom, the irrevocable trust represents 60% of "her" assets. No house or mortgage.
I am a co owner on two investment accounts and checking account. All her accounts have beneficiaries.
Only account that I don't effectively control is a dreaded variable annuity, but that also has beneficiaries.
I think I am in good shape, but who knows.

 

[SJhawkins]

Midpack,

Sorry for your loss. After being thru this a couple of times I get what you are going thru, your in good company.

What you posted is a good reminder for most folks here to keep it as simple as you can and don't over complicate it just because you can.

I vowed to never to use a trust unless I have a really good reason too (I do not), keep all beneficiaries up to date, property transfers on death, etc. I live in a state that makes all of this fairly simple, may not work so well in other states.

You post was timely and a good reminder to me to keep my own house in order as I'm updating our plan!

 

[Spock]

.....

After all this, I am seriously thinking about putting a hired corporate trustee in charge of our estate despite the high cost - 1% of estate or more. I really don't want to put BIL or favorite niece through this on our behalf.
.....

Is that 1% per year? Or just a one time 1% to process the estate?

 

[pacergal]

When my last parent died, my two older siblings were co trustees. We all assumed everything was in order and proceeded to clear out the house, sell it and the FA divided dads accounts etc.
Something(don't remember what) was triggered and resulted in dad's lawyer getting involved and having to open probate after the fact. Took two years to finally get the mess cleared up.

OP--thank you for sharing the issues you are having, It is making me think DH and I should review everything with our estate lawyer again, just to make sure all is in order. We did a review after Dad died, but that was 2015.

 

[Midpack]

Is that 1% per year? Or just a one time 1% to process the estate?

One time charge, but I've read it can be more than 1% - probably depends largely on the value of the estate, presumably a higher % for small estates and less for a large estate.

 

[Midpack]

OP--thank you for sharing the issues you are having, It is making me think DH and I should review everything with our estate lawyer again, just to make sure all is in order. We did a review after Dad died, but that was 2015.

FWIW, there was nothing really wrong with the Trust, Will or other documents in my case. My sister made a few less than ideal choices, but the institutions (broker, banks, credit cards, mortgage company, home and LTC insurance, etc.) made it very difficult, some deliberately IMO (e.g. definitely John Hancock and Target credit card).

 

[Golden Mean]

DF kept a six figure balance in his checking account and had added me as a joint owner, so that really helped with the estate related expenses / overhead.

I had been paying his bills for a few years prior to his passing.

Same here. I had let it build up from his SS and pension while he was alive and after I managed his accounts, not six figures, but five. Still being joint on the account with rights of survivorship was a godsend. I was already using it to lay his bills while he was alive.

My mother wanted to do this with me, but when I read up on it, making me joint owner would instantly make me the full owner of those assets when she passes. If I remember right, this would have complicated handling/following her trust and estate wishes.

Also, if I remember right, adding me to her account could have technically been considered a gift wrt IRS stuff. Not sure.

I think what I really would need, is to be an authorized signer, but her financial institution didn't do those for non-business accounts.

 

[MarieIG]

My mother wanted to do this with me, but when I read up on it, making me joint owner would instantly make me the full owner of those assets when she passes. If I remember right, this would have complicated handling/following her trust and estate wishes.

Also, if I remember right, adding me to her account could have technically been considered a gift wrt IRS stuff. Not sure.

I think what I really would need, is to be an authorized signer, but her financial institution didn't do those for non-business accounts.

I included the total amount in the checking account in the estate for accounting and tax purposes.

I also retained a tax attorney to consult, who was, in addition to being a tax attorney (JD, LLM), a CPA and former IRS attorney to prepare my estate tax and estate income tax returns. I suspect even @OldShooter would have approved his credentials / background, lol.

 

[pb4uski]

My mother wanted to do this with me, but when I read up on it, making me joint owner would instantly make me the full owner of those assets when she passes. If I remember right, this would have complicated handling/following her trust and estate wishes.

Also, if I remember right, adding me to her account could have technically been considered a gift wrt IRS stuff. Not sure.

I think what I really would need, is to be an authorized signer, but her financial institution didn't do those for non-business accounts.

The first part is right. If you are co-owner and one owner dies then technically the account is yours and no probate is needed.

But it doesn't need to complicate things. I had that happen with my great-aunt. When she went into a nursing home we added me as a co-owner of her checking account. When she died that allowed me to finish paying her bills.

I just included the account balance as if it was part of her estate in calculating what her two beneficiaries received (after all it was "her" money).

If you have a trust, the better practice is to simply have a checking account in the name of the trust. Typically, while you are living you are grantor, beneficiary and trustee. Then when you die the successor trustee becomes authorized to sign on behalf of the trust and can take over. In the case of my aunt/uncles trust their checking account is in the name of the trust and as co-trustees uncle and I are signatories over the checking account. Since his is still living, the TIN for that account is uncle's SSN.

 

[socca]

DF kept a six figure balance in his checking account and had added me as a joint owner, so that really helped with the estate related expenses / overhead. ...

To amplify this a bit: I agree that estate settlement is MUCH easier when the decedent added the personal representative as joint owner to one of their checking accounts prior to their death.

Why?
• checks will arrive with the decedent as payee. These are easily deposited either IRL or online.
• checks will arrive with the “estate of the decedent” as payee. These are trickier:
(1) some bank tellers refuse to deposit a check to an individual account when the payee is an estate. I had good luck depositing such a check online using the bank’s app after being rejected by a teller. I guess the bank doesn’t closely scrutinize the payee for online deposits.
(2) some companies (e.g. AMEX) will refuse to issue a check to other than an estate if the account owner has died. This ignores the fact that for some estates all assets pass outside probate so an estate checking account is never opened (and, perhaps, can’t be opened - I wouldn’t be surprised if the typical bank refuses to open an estate checking account without a letter of authority issued by a probate court).