Helping mother-in-law after her husbands passing

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clicobb
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Helping mother-in-law after her husbands passing

Post by clicobb » Fri Aug 17, 2018 3:55 pm

My father-in-law just passed away unexpectedly over the past weekend. He was the breadwinner of their household, with an estimated salary of around 90k/year. My mother-in-law works as a state farm agent and brings in roughly $2100/month. They want me to help with the financial situation as I'm the most financial savvy person in the family. However, I'm still only 28 years old and have way too much still to learn. I have never dealt with a situation like this and I need help 1)figuring out all avenues of potential money for her 2) A strategy for her to manage her windfall responsibly.

So, I do not have a lot of details yet, and most of the info I have gathered is second hand and not totally for certain, but here is what I have.

$250k life insurance policy
$25k life insurance policy -9k towards funeral expenses.
$71k from 401k
$10k - 15k pto payout

50k life insurance policy (questionable, depending on cause of death ruling)
Also in question, She thinks he had a policy in place that will allow her to receive 2 years of his salary (not sure)

She will need to sell her house and downgrade as this is a double income home, as well as his vehicle (unsure of the equity in either right now). I do know the amount they paid for the house and roughly what it will sell for now and that equity alone should be about $85k - 100k.

I do not know her financial health as of this moment. I doubt she has much put back for her own retirement and she is 52. She has had things in her name and has a good credit score for herself.

***I need help finding other avenues to explore financially and otherwise.
***I also need help providing her a plan for managing this windfall and a plan for her retirement as well as a budget for the near future.


Any advice helps. I understand this is not the most detailed information, but I haven't pressed for specifics at this moment.

123
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Re: Helping mother-in-law after her husbands passing

Post by 123 » Fri Aug 17, 2018 4:40 pm

clicobb wrote:
Fri Aug 17, 2018 3:55 pm
...Also in question, She thinks he had a policy in place that will allow her to receive 2 years of his salary (not sure)...
Sorry for your loss.

FYI - It is not unusual for employers to provide group employee life insurance as a tax-free employee benefit. Typically the amount of the insurance is twice the employee's annual salary.

When she contacts the HR department of his employer they should be able to complete all the necessary paperwork for her to sign for life insurance, unpaid salary vacation, and pension plan and/or 401K issues. She may need to submit documents like a certified death certificate, her birth certificate, and a marriage certificate.

Edited to add:
She should not immediately decide to do anything about the house until she (and you likely you) have a clear picture of her financial situation. Many widows decide to remain in the same home and continue to pay the mortgage, others may downsize, some may decide to rent - everyone has to live someplace. It may depend on how much the monthly payments are, the balance on the loan, the current value of the home if it were sold, as well as where she would prefer to live.
Last edited by 123 on Fri Aug 17, 2018 4:52 pm, edited 2 times in total.
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Dottie57
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Re: Helping mother-in-law after her husbands passing

Post by Dottie57 » Fri Aug 17, 2018 4:48 pm

Check the rules about receiving SS. Survivors benefits.

And when the dust has settled, emphasize the need for retirement investibf for the next 10-15 years.

It looks like the known assets will give her at least 350k in investments plus insurance. If there is another policy of 2 times husbands salary that would be 180k plus 350k for total of 530k.

I am sure you will help with a nice easy 3 fund portfolio.

Make sure healthcare is covered. Make sure she gets a checkup (medical)to make sure all s well with her.

Wishing you and mother in law. Sunny days in the future. You and she + rest of family have my condolences.
Last edited by Dottie57 on Fri Aug 17, 2018 5:03 pm, edited 2 times in total.

bob60014
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Re: Helping mother-in-law after her husbands passing

Post by bob60014 » Fri Aug 17, 2018 4:53 pm

Do what's required to get the life insurance paid out, check on Soc Security benefits, and take a FULL accounting of what he and she have and park any funds. Then be patient! Let everything settle down, let her grieve and come back later, it could be months, to discuss the future, including the possible house sale, when everyone has a clear head! Rash decisions could affect things years in the future. Good luck, sorry for the loss.
Last edited by bob60014 on Fri Aug 17, 2018 4:58 pm, edited 5 times in total.

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Stinky
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Re: Helping mother-in-law after her husbands passing

Post by Stinky » Fri Aug 17, 2018 4:54 pm

Only making $2,100 per month as a State Farm insurance agent? Is she part-time? Can she increase hours to make more money?

One of the biggest assets she has is the ability to earn money from her work in the future. If she could increase that, she will have a lot more flexibility in the future.
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Dottie57
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Re: Helping mother-in-law after her husbands passing

Post by Dottie57 » Fri Aug 17, 2018 5:01 pm

Stinky wrote:
Fri Aug 17, 2018 4:54 pm
Only making $2,100 per month as a State Farm insurance agent? Is she part-time? Can she increase hours to make more money?

One of the biggest assets she has is the ability to earn money from her work in the future. If she could increase that, she will have a lot more flexibility in the future.
We don’t know if net or gross pay

delamer
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Re: Helping mother-in-law after her husbands passing

Post by delamer » Fri Aug 17, 2018 5:05 pm

I am sorry about your FIL.

The first issue that your MIL needs to address with his company is the status of her health insurance coverage.

I assume they were covered through his company given that she was self-employed. Hopefully she can stay on that policy for some time, but she needs details so she can plan. Here is a link to COBRA coverage: https://www.dol.gov/sites/default/files ... nsumer.pdf

Her housing situation is the second thing she needs to deal with.

Does she have any other liquid assets other than those you listed? If she has a several months of expenses in a savings or checking accounts, that will allow her to take her time about making any decisions about the current house.

It is a difficult — you don’t want to push her to move while she is so vulnerable but you if it is really unaffordable then she can’t postpone making the move too long.

While there does need to be a plan for managing her assets, I’d backburner until the housing is resolved.

Good luck.

clicobb
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Re: Helping mother-in-law after her husbands passing

Post by clicobb » Fri Aug 17, 2018 5:05 pm

Dottie57 wrote:
Fri Aug 17, 2018 5:01 pm
Stinky wrote:
Fri Aug 17, 2018 4:54 pm
Only making $2,100 per month as a State Farm insurance agent? Is she part-time? Can she increase hours to make more money?

One of the biggest assets she has is the ability to earn money from her work in the future. If she could increase that, she will have a lot more flexibility in the future.
We don’t know if net or gross pay
Again, second hand information at a sensitive time right now but I believe that is her net.

clicobb
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Re: Helping mother-in-law after her husbands passing

Post by clicobb » Fri Aug 17, 2018 5:12 pm

delamer wrote:
Fri Aug 17, 2018 5:05 pm
I am sorry about your FIL.

The first issue that your MIL needs to address with his company is the status of her health insurance coverage.

I assume they were covered through his company given that she was self-employed. Hopefully she can stay on that policy for some time, but she needs details so she can plan. Here is a link to COBRA coverage: https://www.dol.gov/sites/default/files ... nsumer.pdf

Her housing situation is the second thing she needs to deal with.

Does she have any other liquid assets other than those you listed? If she has a several months of expenses in a savings or checking accounts, that will allow her to take her time about making any decisions about the current house.

It is a difficult — you don’t want to push her to move while she is so vulnerable but you if it is really unaffordable then she can’t postpone making the move too long.

While there does need to be a plan for managing her assets, I’d backburner until the housing is resolved.

Good luck.
Thank you! I will ask about her health insurance and guide her in the right direction. I believe they have around $10k in savings, and he had about 300 hours of PTO that will be released. We believe he was making around $50/hour. That should definitely help for the time being. She does understands she needs to move fairly quickly. She has no family ties to their current city and will have to relocate near other family members. I'm not sure about other liquid assets besides the one's listed. Not any substantial ones anyway.

clicobb
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Re: Helping mother-in-law after her husbands passing

Post by clicobb » Fri Aug 17, 2018 5:13 pm

bob60014 wrote:
Fri Aug 17, 2018 4:53 pm
Do what's required to get the life insurance paid out, check on Soc Security benefits, and take a FULL accounting of what he and she have and park any funds. Then be patient! Let everything settle down, let her grieve and come back later, it could be months, to discuss the future, including the possible house sale, when everyone has a clear head! Rash decisions could affect things years in the future. Good luck, sorry for the loss.
Yes, thank you! It's all a little crazy right now and everyone does need to let things settle. Just trying to brainstorm ideas right now.

clicobb
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Re: Helping mother-in-law after her husbands passing

Post by clicobb » Fri Aug 17, 2018 5:19 pm

123 wrote:
Fri Aug 17, 2018 4:40 pm
clicobb wrote:
Fri Aug 17, 2018 3:55 pm
...Also in question, She thinks he had a policy in place that will allow her to receive 2 years of his salary (not sure)...
Sorry for your loss.

FYI - It is not unusual for employers to provide group employee life insurance as a tax-free employee benefit. Typically the amount of the insurance is twice the employee's annual salary.

When she contacts the HR department of his employer they should be able to complete all the necessary paperwork for her to sign for life insurance, unpaid salary vacation, and pension plan and/or 401K issues. She may need to submit documents like a certified death certificate, her birth certificate, and a marriage certificate.

Edited to add:
She should not immediately decide to do anything about the house until she (and you likely you) have a clear picture of her financial situation. Many widows decide to remain in the same home and continue to pay the mortgage, others may downsize, some may decide to rent - everyone has to live someplace. It may depend on how much the monthly payments are, the balance on the loan, the current value of the home if it were sold, as well as where she would prefer to live.
Okay, I will make sure to have her ask about a group life insurance benefit. One issue is the detective on scene ruled his death as a suicide. His character as well as details we have found about his last day do not indicate a suicide and he was found next to his gun cleaning kit. So, it will be at least a month if not 90 days before we hear back from the medical examiner with a determination. If it is ruled a suicide I'm not sure how that would affect his employee benefits. She did check on the $250k policy and the $25k policy and those are both covered regardless. I am worried how that would affect something like a group life insurance benefit like you were mentioning.

HereToLearn
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Re: Helping mother-in-law after her husbands passing

Post by HereToLearn » Fri Aug 17, 2018 5:41 pm

I did not see mention of children. If there are children under age 18 (I think it's 18), they are eligible to receive SS Survivor Benefits.

If the house has appreciated significantly in value since purchase, you will want to obtain an appraisal so that half the basis can be stepped up to the value at time of FIL's death. The other half will remain the purchase price + any improvements. This may not be an issue, but I cannot tell from the information provided.

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dm200
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Re: Helping mother-in-law after her husbands passing

Post by dm200 » Fri Aug 17, 2018 6:56 pm

clicobb wrote:
Fri Aug 17, 2018 3:55 pm
My father-in-law just passed away unexpectedly over the past weekend. He was the breadwinner of their household, with an estimated salary of around 90k/year. My mother-in-law works as a state farm agent and brings in roughly $2100/month. They want me to help with the financial situation as I'm the most financial savvy person in the family. However, I'm still only 28 years old and have way too much still to learn. I have never dealt with a situation like this and I need help 1)figuring out all avenues of potential money for her 2) A strategy for her to manage her windfall responsibly.
So, I do not have a lot of details yet, and most of the info I have gathered is second hand and not totally for certain, but here is what I have.
$250k life insurance policy
$25k life insurance policy -9k towards funeral expenses.
$71k from 401k
$10k - 15k pto payout
50k life insurance policy (questionable, depending on cause of death ruling)
Also in question, She thinks he had a policy in place that will allow her to receive 2 years of his salary (not sure)
She will need to sell her house and downgrade as this is a double income home, as well as his vehicle (unsure of the equity in either right now). I do know the amount they paid for the house and roughly what it will sell for now and that equity alone should be about $85k - 100k.
I do not know her financial health as of this moment. I doubt she has much put back for her own retirement and she is 52. She has had things in her name and has a good credit score for herself.
***I need help finding other avenues to explore financially and otherwise.
***I also need help providing her a plan for managing this windfall and a plan for her retirement as well as a budget for the near future.
Any advice helps. I understand this is not the most detailed information, but I haven't pressed for specifics at this moment.
Some employers also provide a "death benefit" when a current employee dies - in addition to life insurance. Ask. Maybe this is the possible 2 year thing.

Other than what really needs to be done quickly, I suggest she wait a number of months before selling the house, moving, etc. She might rush into something that she might change her mind about. It probably would make sense to sell one car.

Note that with the decrease in annual income - her tax burden will go down a lot.

mw1739
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Re: Helping mother-in-law after her husbands passing

Post by mw1739 » Fri Aug 17, 2018 7:01 pm

Stinky wrote:
Fri Aug 17, 2018 4:54 pm
Only making $2,100 per month as a State Farm insurance agent? Is she part-time? Can she increase hours to make more money?

One of the biggest assets she has is the ability to earn money from her work in the future. If she could increase that, she will have a lot more flexibility in the future.
+1. Every State Farm agent I’ve come across is making at least six figures. Why is she earning so little?

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dm200
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Re: Helping mother-in-law after her husbands passing

Post by dm200 » Fri Aug 17, 2018 7:39 pm

clicobb wrote:
Fri Aug 17, 2018 5:19 pm
123 wrote:
Fri Aug 17, 2018 4:40 pm
clicobb wrote:
Fri Aug 17, 2018 3:55 pm
...Also in question, She thinks he had a policy in place that will allow her to receive 2 years of his salary (not sure)...
Sorry for your loss.
FYI - It is not unusual for employers to provide group employee life insurance as a tax-free employee benefit. Typically the amount of the insurance is twice the employee's annual salary.
When she contacts the HR department of his employer they should be able to complete all the necessary paperwork for her to sign for life insurance, unpaid salary vacation, and pension plan and/or 401K issues. She may need to submit documents like a certified death certificate, her birth certificate, and a marriage certificate.
Edited to add:
She should not immediately decide to do anything about the house until she (and you likely you) have a clear picture of her financial situation. Many widows decide to remain in the same home and continue to pay the mortgage, others may downsize, some may decide to rent - everyone has to live someplace. It may depend on how much the monthly payments are, the balance on the loan, the current value of the home if it were sold, as well as where she would prefer to live.
Okay, I will make sure to have her ask about a group life insurance benefit. One issue is the detective on scene ruled his death as a suicide. His character as well as details we have found about his last day do not indicate a suicide and he was found next to his gun cleaning kit. So, it will be at least a month if not 90 days before we hear back from the medical examiner with a determination. If it is ruled a suicide I'm not sure how that would affect his employee benefits. She did check on the $250k policy and the $25k policy and those are both covered regardless. I am worried how that would affect something like a group life insurance benefit like you were mentioning.
I wish you all well in this very difficult situation. I wonder (don't know) if it might make sense to contact some sort of attorney if the circumstances of death so warrant.

mouses
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Re: Helping mother-in-law after her husbands passing

Post by mouses » Fri Aug 17, 2018 7:50 pm

I think that some life insurance policies that do not pay out in the event of suicide only have that restriction in place for the first year or two.

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dm200
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Re: Helping mother-in-law after her husbands passing

Post by dm200 » Fri Aug 17, 2018 7:55 pm

mouses wrote:
Fri Aug 17, 2018 7:50 pm
I think that some life insurance policies that do not pay out in the event of suicide only have that restriction in place for the first year or two.
Yes - that is my understanding. I think there may be some differences in this in different states.

delamer
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Re: Helping mother-in-law after her husbands passing

Post by delamer » Fri Aug 17, 2018 8:46 pm

clicobb wrote:
Fri Aug 17, 2018 5:12 pm
delamer wrote:
Fri Aug 17, 2018 5:05 pm
I am sorry about your FIL.

The first issue that your MIL needs to address with his company is the status of her health insurance coverage.

I assume they were covered through his company given that she was self-employed. Hopefully she can stay on that policy for some time, but she needs details so she can plan. Here is a link to COBRA coverage: https://www.dol.gov/sites/default/files ... nsumer.pdf

Her housing situation is the second thing she needs to deal with.

Does she have any other liquid assets other than those you listed? If she has a several months of expenses in a savings or checking accounts, that will allow her to take her time about making any decisions about the current house.

It is a difficult — you don’t want to push her to move while she is so vulnerable but you if it is really unaffordable then she can’t postpone making the move too long.

While there does need to be a plan for managing her assets, I’d backburner until the housing is resolved.

Good luck.
Thank you! I will ask about her health insurance and guide her in the right direction. I believe they have around $10k in savings, and he had about 300 hours of PTO that will be released. We believe he was making around $50/hour. That should definitely help for the time being. She does understands she needs to move fairly quickly. She has no family ties to their current city and will have to relocate near other family members. I'm not sure about other liquid assets besides the one's listed. Not any substantial ones anyway.
Sounds like a very difficult situation, given what you said about the circumstances of his death.

Please don’t take this as a criticism of your in-laws, but it seems odd that a couple with an income north of $100,000 in their 50’s would have a net worth of only about $160,000 [401(k) plus home equity].

I say that mostly because there might be other savings, IRAs, or annuities that you (or even your MIL) aren’t aware of yet. A look at their 2017 tax return to see of there is any other income would be worthwhile.

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BL
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Re: Helping mother-in-law after her husbands passing

Post by BL » Fri Aug 17, 2018 10:31 pm

This sounds like a very stressful time for her and everybody. It is usually suggested that folks do not make major decisions for about a year after a death. That might be especially important here.

Do what must be done, gather info, try to delay other things. Selling is stressful, cleaning out a home would be difficult. Buying a home should wait if possible.

CurlyDave
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Re: Helping mother-in-law after her husbands passing

Post by CurlyDave » Fri Aug 17, 2018 10:46 pm

clicobb wrote:
Fri Aug 17, 2018 5:19 pm

...Okay, I will make sure to have her ask about a group life insurance benefit. One issue is the detective on scene ruled his death as a suicide. His character as well as details we have found about his last day do not indicate a suicide and he was found next to his gun cleaning kit. So, it will be at least a month if not 90 days before we hear back from the medical examiner with a determination. If it is ruled a suicide I'm not sure how that would affect his employee benefits. She did check on the $250k policy and the $25k policy and those are both covered regardless. I am worried how that would affect something like a group life insurance benefit like you were mentioning.
If all of the life insurance policies are going to pay it may not be worth getting a lawyer to fight a suicide determination. As much as the family would prefer for it to be an accident determination, and I certainly hope the medical examiner goes that way, if the insurance pays off, there is no real reason to fight it.

CurlyDave
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Re: Helping mother-in-law after her husbands passing

Post by CurlyDave » Fri Aug 17, 2018 10:55 pm

delamer wrote:
Fri Aug 17, 2018 8:46 pm

...Please don’t take this as a criticism of your in-laws, but it seems odd that a couple with an income north of $100,000 in their 50’s would have a net worth of only about $160,000 [401(k) plus home equity].

I say that mostly because there might be other savings, IRAs, or annuities that you (or even your MIL) aren’t aware of yet. A look at their 2017 tax return to see of there is any other income would be worthwhile.
OTOH, whatever the assets are, she has on the order of $500k right now, at age 52.

As emotionally upsetting as this is, she is financially in reasonable shape. A 5.5% annual return will bring her to $1M at age 65 if she can support herself until then.

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