Settling My Sister's Trust/Estate

[Dtail]

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 am the co owner of some of my mother's investment accounts. The beneficiaries besides me also know, so no issue with the eventual distribution.

 

[Lewis Clark]

One word of caution about adding someone (such as a child) to any account of an elderly person (such as a parent). The parent's account could potentially become liable for the debts of the child, perhaps in the case of a divorce or lawsuit.

 

[audreyh1]

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-teuatees uncle and I are signatories over the checking account. Since his is still living, the TIN for that account is uncle's SSN.

Yeah, pretty much what I did.

 

[MarieIG]

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).

There was no trust. There was no will. My parents worked themselves up when discussing estate planning so I didn't push them. DM passed first. After DF passed, I paid the funeral expenses out of the joint account with rights of survivorship, and subsequently transferred the joint checking account to my name and did continue to pay expenses out of that account. Everything paid out of that account was documented until eventually closed.

However, I was the only child and had Letters of Administration from the Surrogate's Court in hand w/n six weeks. I subsequently deposited checks payable either to my father or, to the estate, into the estate account. Checks made out to my father were deposited into the estate account, which I opened in the bank next door to my office. That bank also had a medallion seal and kept a copy of my Letters of Administration on file to be pulled when I came in with documents which needed the seal. For me, the painful part of the process was neither probate, nor the marshalling of assets, it was loosing DF.

 

[Midpack]

It's very odd to me, I am successor trustee, executor and sole beneficiary. So having an intermediate EIN trust account seems unnecessary but that's how I am handling it. I'm told I could run afoul of the IRS if I don't, not sure I understand. Most of the funds once released to me (that takes time), are then going into the EIN trust account and into my personal accounts within days. I am keeping 10-20% in reserve in the EIN account and I am keeping precise records, but there is no one who could remotely challenge my admin.

 

[pb4uski]

^^° unless you had one of those bizarre split personality episodes where Jekyll sues Hyde for mismanaging the estate.

 

[SJhawkins]

As others have noted, being co owner of one checking account is helpful, if family dynamics is not an issue.

The last two estates I was involved with each had one child as co owner of a checking account that carried a ballance of $20k give or take. It worked out well in both cases. One needed help for a good 5 years prior to passing, was nice to just step in and start paying the bills etc, it's was a memory care end of life situation.

 

[SecondCor521]

It is nice to be able to step in and be able to pay bills expeditiously. There are several methods that work for this. My family is using one such method.

It is also an option to take a bit of time. It is my understanding that funeral homes and credit cards and doctors' offices are gracious in these times and are willing to wait to be paid or work something out with the family.

 

[SecondCor521]

I'm sorry for your loss, Midpack.

...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.

I think the executor is only personally responsible if they do not pay the debts of the deceased in proper order, and proper order varies by state law. Idaho code 15-3-805 is the law that governs in my state.

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.

I figured out that it's actually good in our situation to wait for the SS death registry notification process to work out rather than proactively notifying them.

Waiting means that some valid final transactions (last credit card bill, last SS deposit, a couple of final medical bills) can just happen automatically because they were set up on autopay / automatic deposit.

It also means that I can still log in and keep an eye on things for a little bit longer.

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.

This has been a surprise to me. One thinks it will be easy - just call the cemetery where he is pre-registered. Yes, but you filled out last year's form, not this year's form (which was identical to last year's form except for the date). Just call and cancel the renter's policy, but they need that from the executor (my sister), not me, and they need the death certificate uploaded to a special portal and then they'll consider our request.

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...

Blech. Saddened that you have to deal with this.

 

[AudiDudi]

<snip>

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...

One of the 1st things I did was to get a local PO Box for DM's estate and to have the Post Office forward all mail to that. When things were done, I just closed the PO Box thereby cutting off any link to our address.

 

[pb4uski]

One of the 1st things I did was to get a local PO Box for DM's estate and to have the Post Office forward all mail to that. When things were done, I just closed the PO Box thereby cutting off any link to our address.

Great idea.

 

[SJhawkins]

One of the 1st things I did was to get a local PO Box for DM's estate and to have the Post Office forward all mail to that. When things were done, I just closed the PO Box thereby cutting off any link to our address.

I really like this idea, this is worth adding to the letter to my kids. Simple and elegant, thanks.

 

[caninelover]

I completely understand and appreciate your summary. My Dad passed last year and everything was 'correct' in terms of joint accounts with Mom. Except...all utilities were in Dad's name. Which wasn't an issue as both were on the house deed. But some of these companies are quite ridiculous to make a simple request to transfer an account to a spouse upon death.

Credit cards - Dad was primary in both their cards with Mom as an additional card holder. Once we reported his death the accounts were closed. Had to scramble to get Mom a new credit card and once I did it had a pretty low limit because her individual credit score was low. It's now improved and she finally has a decent credit limit.

Banks - so slow even in an obvious case of joint accounts. Dad was the primary SS number all was reported under so most created new accounts for Mom only. Which required some electronic and sometimes paper mail gymnastics of the death certificate and an obscure NJ state form L8 that annoyingly required notarization.

The DMV is well, the DMV. It took my sister 2 trips as they wanted the original purchase agreement (on a 2011 Accord for heavens sake).

We powered through most of it within a couple of months but it was quite a process when it seemed to be straightforward.

Fortunately we had transferred a large sum of cash in a checking account and could pay Mom's modest bills until the funds were in her name.

 

[audreyh1]

Here and in GA “joint with rights of survivorship” make the transition seamless for banking and brokerage accounts so I’m surprised to read about new bank accounts being opened.

So is our house deed and car title.

 

[Slim11]

It's very odd to me, I am successor trustee, executor and sole beneficiary. So having an intermediate EIN trust account seems unnecessary but that's how I am handling it. I'm told I could run afoul of the IRS if I don't, not sure I understand. Most of the funds once released to me (that takes time), are then going into the EIN trust account and into my personal accounts within days. I am keeping 10-20% in reserve in the EIN account and I am keeping precise records, but there is no one who could remotely challenge my admin.

But was it always that way? They could have changed or amended the trust, and just left it in force. So it could have been diffrent in the past.

 

[pb4uski]

It's very odd to me, I am successor trustee, executor and sole beneficiary. So having an intermediate EIN trust account seems unnecessary but that's how I am handling it. I'm told I could run afoul of the IRS if I don't, not sure I understand. Most of the funds once released to me (that takes time), are then going into the EIN trust account and into my personal accounts within days. I am keeping 10-20% in reserve in the EIN account and I am keeping precise records, but there is no one who could remotely challenge my admin.

As long as all income ends up being reported on someone's return, I'm not sure the IRS cares very much. In your case, the income would either be on the trust K-1 or on a 1099 and taxed the same at th end of the day.

When my Mom died, I didn't bother with a EIN for her trust as there was less than 30 days between her death and the distribution of her assets to the trust's beneficiaries. While all trust income for the year was reported, income until the distribution was reported on her decedent return and income post distribution was reported on each beneficiary's return. Actually, "we" may have paid a smidgeon more tax because DM was in a slightly higher tax bracket than the beneficiaries are, but that small amount more was worth not having to obtain and EIN and file a trust tax return, distribute K-1's, etc.

If the time between her passing and the distribution of the trust's assets was longer I might have reconsidered it.

 

[SecondCor521]

Trusts and estates have a small exemption ($100 or $600 depending), so if there's less than that amount of income a trust / estate filing is not required.

 

[badatmath]

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).

Why did you have to do anything with LTC? Was she using it or you just cancelled? Asking cause I was wondering if you should could have ignored the next bill and let i self-cancel . . . I think that would be one that would drop away pretty fast unlike a utility where they don't cut you off (at least in some months due to the fact the weather can kill you).

A friend tried to use his JHLTC policy on his wife with stage 4 brain cancer they said she didn't qualify. . . .not sure

 

[Midpack]

Why did you have to do anything with LTC? Was she using it or you just cancelled? Asking cause I was wondering if you should could have ignored the next bill and let i self-cancel . . . I think that would be one that would drop away pretty fast unlike a utility where they don't cut you off (at least in some months due to the fact the weather can kill you).

A friend tried to use his JHLTC policy on his wife with stage 4 brain cancer they said she didn't qualify. . . .not sure

Sister paid JHLTC policy premiums for decades. She was in in-home hospice care 6/5 through 12/10, and assisted living 11/10 through 12/10. Medicare paid all the hospice expenses, so no claim there but JH has conceded hospice counts toward the policy 90 day qualification period. She was entitled to be reimbursed $100/day for her time in assisted living which cost approximately $8600. I’ll spare you the details, but they’ve yet to pay anything. I’m on my last campaign to get them to pay, I am absolutely convinced their MO is to stall until the beneficiary gives up. They ask for a document, tell you to wait 15 business days, then ask for something else, wait, over and over. They’ve yet to contact me once, I have to contact them. Every time I call I get a different CS Rep and have to start from square one…

 

[badatmath]

Sister paid JHLTC policy premiums for decades. She was in in-home hospice care 6/5 through 12/10, and assisted living 11/10 through 12/10. Medicare paid all the hospice expenses, so no claim there but JH has conceded hospice counts toward the policy 90 day qualification period. She was entitled to be reimbursed $100/day for her time in assisted living which cost approximately $8600. I’ll spare you the details, but they’ve yet to pay anything. I’m on my last campaign to get them to pay, I am absolutely convinced their MO is to stall until the beneficiary gives up. They ask for a document, tell you to wait 15 business days, then ask for something else, wait, over and over. They’ve yet to contact me once, I have to contact them. Every time I call I get a different CS Rep and have to start from square one…

Thanks for the reply. I've heard they are dreadful. Good luck.

 

[joesxm3]

Sister paid JHLTC policy premiums for decades. She was in in-home hospice care 6/5 through 12/10, and assisted living 11/10 through 12/10. Medicare paid all the hospice expenses, so no claim there but JH has conceded hospice counts toward the policy 90 day qualification period. She was entitled to be reimbursed $100/day for her time in assisted living which cost approximately $8600. I’ll spare you the details, but they’ve yet to pay anything. I’m on my last campaign to get them to pay, I am absolutely convinced their MO is to stall until the beneficiary gives up. They ask for a document, tell you to wait 15 business days, then ask for something else, wait, over and over. They’ve yet to contact me once, I have to contact them. Every time I call I get a different CS Rep and have to start from square one…

Long ago I was doing a contract programming assignment at a large insurance company. They had a talk explaining the "rules" for the rule-based production system (ancient AI) that we were coding.

1. Calculate the true value of the auto claim.
2. Offer half.
3. Wait one month.
4. Estimate the likelihood that the claimant would take it to court.
5. If court likely, pay the amount from step 1, else stall another month.

They were proud of this and told us that this system was really helping them.

 

[nwsteve]

Sister paid JHLTC policy premiums for decades. She was in in-home hospice care 6/5 through 12/10, and assisted living 11/10 through 12/10. Medicare paid all the hospice expenses, so no claim there but JH has conceded hospice counts toward the policy 90 day qualification period. She was entitled to be reimbursed $100/day for her time in assisted living which cost approximately $8600. I’ll spare you the details, but they’ve yet to pay anything. I’m on my last campaign to get them to pay, I am absolutely convinced their MO is to stall until the beneficiary gives up. They ask for a document, tell you to wait 15 business days, then ask for something else, wait, over and over. They’ve yet to contact me once, I have to contact them. Every time I call I get a different CS Rep and have to start from square one…

Maybe consider requesting your state's insurance commissioner give them a call?

 

[Midpack]

Maybe consider requesting your state's insurance commissioner give them a call?

I think they owe $3000, but I've given up on that as two reps said I'm entitled to $1,000 - not sure it's worth it. Sister was in TX, I'm in NC, JH is in MA. Bottom line, she paid for decades only to be stiffed most likely. I wasn't considering LTC myself, but this experience tells me I'll die broke before buying LTC, especially from John Hancock.

The amusing side note. After stonewalling me for months, about two weeks ago they sent me a customer survey, which I ignored since my claim is still active. A few days ago they sent me a reminder that they'd like me to complete the survey...

 

[SecondCor521]

Having been down similar roads in the past, for me the best approach has been to be mad about it for a little while, then cool off and let it go. All the usual suggestions of calling the local news station, complaining to the state agencies, filing letters with the federal folks, etc. has ended up being a waste of time and energy (other than helping me vent, I suppose).

 

[Lewis Clark]

Long ago I was doing a contract programming assignment at a large insurance company. They had a talk explaining the "rules" for the rule-based production system (ancient AI) that we were coding.

1. Calculate the true value of the auto claim.
2. Offer half.
3. Wait one month.
4. Estimate the likelihood that the claimant would take it to court.
5. If court likely, pay the amount from step 1, else stall another month.

They were proud of this and told us that this system was really helping them.

What a garbage way to operate. Screw the customer as much as possible.

I've long thought that the best way to deal with an insurance company is to own it. Thanks for the confirmation.