Dealing with deceased BIL estate?

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Barkingsparrow
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Dealing with deceased BIL estate?

Post by Barkingsparrow » Tue Apr 07, 2020 5:12 pm

My wife's brother unexpectedly passed away this week. We are scrambling to figure things out. He had no insurance, no will, we have no idea as to what his finances were like, etc. It's a nightmare. We know he has a condo - not yet paid off; and that he has a least a 401K and maybe an IRA. Appreciate any advice in dealing with this situation. He was relatively young, 65; and I believe he had started social security and medicare.

123
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Re: Dealing with deceased BIL estate?

Post by 123 » Tue Apr 07, 2020 5:38 pm

If there is no surviving spouse in many states the "default" order of inheritance is children, parents, and siblings. If he left no surviving children or parents the siblings should get together and look into resolution of the estate. Nolo press has many good reference books https://www.nolo.com/legal-encyclopedia ... state.html.

Some assets like 401ks and IRA accounts can have beneficiary designations. Potential beneficiaries could contact the 401k and IRA custodians to determine if they were listed. They will need certified copies of the death certificate to proceed with that.

You may want to contact your local Registrar of Deeds to see how the property was held. Perhaps a joint tenant was named for convenience or a ladybird or beneficiary deed may have been filed.

You could contact a local estate attorney for guidance. Though many estates can be resolved without the involvement of an attorney in many states.
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prudent
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Re: Dealing with deceased BIL estate?

Post by prudent » Tue Apr 07, 2020 5:48 pm

I suspect the first step is to get someone promptly appointed by the court as his executor.

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Stinky
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Re: Dealing with deceased BIL estate?

Post by Stinky » Tue Apr 07, 2020 6:36 pm

So - no wife, no children, no surviving parents?

And is your wife the sole sibling?
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Barkingsparrow
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Re: Dealing with deceased BIL estate?

Post by Barkingsparrow » Tue Apr 07, 2020 8:00 pm

Stinky wrote:
Tue Apr 07, 2020 6:36 pm
So - no wife, no children, no surviving parents?

And is your wife the sole sibling?
No parents, never married and no children. Two other sisters. The other 2 living in the same city, we are are not.

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Barkingsparrow
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Re: Dealing with deceased BIL estate?

Post by Barkingsparrow » Tue Apr 07, 2020 8:01 pm

123 wrote:
Tue Apr 07, 2020 5:38 pm
If there is no surviving spouse in many states the "default" order of inheritance is children, parents, and siblings. If he left no surviving children or parents the siblings should get together and look into resolution of the estate. Nolo press has many good reference books https://www.nolo.com/legal-encyclopedia ... state.html.

Some assets like 401ks and IRA accounts can have beneficiary designations. Potential beneficiaries could contact the 401k and IRA custodians to determine if they were listed. They will need certified copies of the death certificate to proceed with that.

You may want to contact your local Registrar of Deeds to see how the property was held. Perhaps a joint tenant was named for convenience or a ladybird or beneficiary deed may have been filed.

You could contact a local estate attorney for guidance. Though many estates can be resolved without the involvement of an attorney in many states.
Thanks for the advice. The one sister living in the same city will take on the role of executor, and is looking for an attorney.

Newaygo
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Re: Dealing with deceased BIL estate?

Post by Newaygo » Tue Apr 07, 2020 8:29 pm

I have been in a similar situation except I was lucky and found a will. This saved a lot of time and money. The named executor transferred his duties to me.

To identify assets I searched through boxes of papers at the deceased person's home. I found old tax returns, brokerage, and bank statements. They all provided a good listing of assets and debts. I also contacted previous employers and discovered IRA accounts with named beneficiaries. I also dealt with outstanding bills and cleaning out the home. I suggest that you have the deceased's mail forwarded to you. I also found a real estate agent who quickly sold the home. I was also able to file the final 1040 and the 1041 statements and the associated state equivalents.

It was a thankless job and the deceased lived over a 3-hour plane ride from me. I had just retired so I could devote time to the duty.

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Stinky
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Re: Dealing with deceased BIL estate?

Post by Stinky » Wed Apr 08, 2020 9:13 am

Barkingsparrow wrote:
Tue Apr 07, 2020 8:01 pm
123 wrote:
Tue Apr 07, 2020 5:38 pm
If there is no surviving spouse in many states the "default" order of inheritance is children, parents, and siblings. If he left no surviving children or parents the siblings should get together and look into resolution of the estate. Nolo press has many good reference books https://www.nolo.com/legal-encyclopedia ... state.html.

Some assets like 401ks and IRA accounts can have beneficiary designations. Potential beneficiaries could contact the 401k and IRA custodians to determine if they were listed. They will need certified copies of the death certificate to proceed with that.

You may want to contact your local Registrar of Deeds to see how the property was held. Perhaps a joint tenant was named for convenience or a ladybird or beneficiary deed may have been filed.

You could contact a local estate attorney for guidance. Though many estates can be resolved without the involvement of an attorney in many states.
Thanks for the advice. The one sister living in the same city will take on the role of executor, and is looking for an attorney.
It sounds like your family may have this under control. I'm happy for you that one sister is willing to step up to be executor and take the lead.

Just remember - it would be "fair" to compensate that sister who is taking the lead for her time in working through the details.
It's a GREAT day to be alive - Travis Tritt

Newaygo
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Re: Dealing with deceased BIL estate?

Post by Newaygo » Wed Apr 08, 2020 10:39 am

I learned a lot from the experience. At the time I had three close relatives in their 90's who I was going to be asked to handle their estates. I met with each one and identified all assets and liabilities. I had each one provide physical copies of the wills. One had lost their will and we had to redraft it. I made sure that Powers of Attorney were set up and the people named were willing to act. I had beneficiaries updated on all accounts. In most cases, deceased spouses were named. This would have caused havoc in the probate process so the beneficiaries were updated to the children. Also, I discussed burial arrangements and contacted their preferred funeral home (I did not tell them this). I lined up probate attorneys. This made the eventual handling of the estate smooth, easy and less stressful.

csm
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Re: Dealing with deceased BIL estate?

Post by csm » Wed Apr 08, 2020 10:46 am

One tip is to set up a CreditKarma account with your BIL's social security number. This will allow you to see any credit cards or loans in his name. And it will allow you to keep an eye on potential identity theft (e.g. should someone get a hold of his SSN and try to set up new accounts).

trueblueky
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Re: Dealing with deceased BIL estate?

Post by trueblueky » Wed Apr 08, 2020 11:14 am

The executor should read IRS Pub 559 so they can file the final 1040 for BIL and 1041 for the estate.

She can get the past 3 years tax returns from the IRS thru Get Transcript. Once the estate has an EIN, she files Form 56 to notify IRS that she is executor. She should then be able to get the old returns. Those have information on sources of income that she might not otherwise know for months, when an annual statement of distribution arrives.

mouses
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Re: Dealing with deceased BIL estate?

Post by mouses » Wed Apr 08, 2020 6:30 pm

I am sorry for your loss.

I really suggest having a CPA experienced in estates do the taxes. I have done my taxes by hand for decades and I would not touch doing my late Mom's tax returns. There's just a lot of different stuff in those.

Also, the mail is important as stuff you don't know about may show up. Also take a look at his computer files, hopefully not password protected.

It is a lot of work, but just stay organized and it's not that bad.

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Re: Dealing with deceased BIL estate?

Post by Carefreeap » Wed Apr 08, 2020 7:24 pm

csm wrote:
Wed Apr 08, 2020 10:46 am
One tip is to set up a CreditKarma account with your BIL's social security number. This will allow you to see any credit cards or loans in his name. And it will allow you to keep an eye on potential identity theft (e.g. should someone get a hold of his SSN and try to set up new accounts).
+1

I'll add that scammers setting up accounts in a deceased person's name is very common. Happened when my mother died. Absolutely disgusting what some people will do.
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Re: Dealing with deceased BIL estate?

Post by CAsage » Wed Apr 08, 2020 7:50 pm

mouses wrote:
Wed Apr 08, 2020 6:30 pm
I really suggest having a CPA experienced in estates do the taxes. I have done my taxes by hand for decades and I would not touch doing my late Mom's tax returns. There's just a lot of different stuff in those.
Doing a "final" return for someone who is deceased is exactly as difficult as doing their return the prior year, it just ends a bit early. Note that I am not talking about doing an estate return, but a decedent return is nothing special. Of course, I did all my Mom's tax returns (and other family members... for free...) so I knew what was in it.
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Barkingsparrow
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Re: Dealing with deceased BIL estate?

Post by Barkingsparrow » Wed Apr 08, 2020 8:14 pm

Thanks for all the advice. I've been collating and distributing it to the sisters. The sister acting as executor lived in the same city as her brother. We do are a little ways off. That said, we are collaborating and dividing up tasks.

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Re: Dealing with deceased BIL estate?

Post by Gill » Wed Apr 08, 2020 8:31 pm

CAsage wrote:
Wed Apr 08, 2020 7:50 pm
mouses wrote:
Wed Apr 08, 2020 6:30 pm
I really suggest having a CPA experienced in estates do the taxes. I have done my taxes by hand for decades and I would not touch doing my late Mom's tax returns. There's just a lot of different stuff in those.
Doing a "final" return for someone who is deceased is exactly as difficult as doing their return the prior year, it just ends a bit early. Note that I am not talking about doing an estate return, but a decedent return is nothing special. Of course, I did all my Mom's tax returns (and other family members... for free...) so I knew what was in it.
A decedent’s final return can be a little more complex. Usually the 1099’s don’t accurately report the decedent’s income and must be allocated. Also, there are elections to be made such as where to deduct medical expenses and how to treat accrued income on savings bonds. Decision must be made as to how to sign the return.
Gill
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CAsage
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Re: Dealing with deceased BIL estate?

Post by CAsage » Wed Apr 08, 2020 9:03 pm

Gill wrote:
Wed Apr 08, 2020 8:31 pm
CAsage wrote:
Wed Apr 08, 2020 7:50 pm
Doing a "final" return for someone who is deceased is exactly as difficult as doing their return the prior year, it just ends a bit early. Note that I am not talking about doing an estate return, but a decedent return is nothing special. Of course, I did all my Mom's tax returns (and other family members... for free...) so I knew what was in it.
A decedent’s final return can be a little more complex. Usually the 1099’s don’t accurately report the decedent’s income and must be allocated. Also, there are elections to be made such as where to deduct medical expenses and how to treat accrued income on savings bonds. Decision must be made as to how to sign the return.
Gill
Bow to your greater wisdom - the cases I've done did not have those complexities. But, Bogleheads are stalwart DIY who can get these problems resolved.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

trueblueky
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Re: Dealing with deceased BIL estate?

Post by trueblueky » Thu Apr 09, 2020 5:56 pm

CAsage wrote:
Wed Apr 08, 2020 9:03 pm
Gill wrote:
Wed Apr 08, 2020 8:31 pm
CAsage wrote:
Wed Apr 08, 2020 7:50 pm
Doing a "final" return for someone who is deceased is exactly as difficult as doing their return the prior year, it just ends a bit early. Note that I am not talking about doing an estate return, but a decedent return is nothing special. Of course, I did all my Mom's tax returns (and other family members... for free...) so I knew what was in it.
A decedent’s final return can be a little more complex. Usually the 1099’s don’t accurately report the decedent’s income and must be allocated. Also, there are elections to be made such as where to deduct medical expenses and how to treat accrued income on savings bonds. Decision must be made as to how to sign the return.
Gill
Bow to your greater wisdom - the cases I've done did not have those complexities. But, Bogleheads are stalwart DIY who can get these problems resolved.
One twist is that any medical expenses paid in the year after death can be used as deductions on the deceased's final return. This may mean amending the final return. Pub 559 covers this.

If BIL had a pension to which he contributed, (e.g., federal civil service pension) and did not recover the amount paid in, the remainder is a deduction.

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Barkingsparrow
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Re: Dealing with deceased BIL estate? Dealing with the debt.

Post by Barkingsparrow » Sat Aug 01, 2020 2:29 pm

We are still in the throes of dealing with the estate. My personal opinion is that the attorney recommended by one of the siblings does not have the right background (he is more of a personal injury/workers comp type whom the sibling used prior) and has not handled this very well.

The BIL owned a condo on which he had a 2nd mortgage (the 2nd mortgage owed is about 18% of the value of the condo). He also had significant credit card debt, a personal line of credit debt, and a loan on a 3-year old car.

Assets are the net proceeds that would result from selling the condo, a small HSA (not sure how that is handled?), some funds that were sent back from some credit service that was helping the BIL pay off his credit card debt, and I assume proceeds from selling the car.

I've already posited to the DW that the siblings are not obligated for any of the BIL's debts - the obligations are satisfied by the estate. The property taxes are due soon and the SIl who is executor is suggesting we split the cost of this. I feel bad for the SIL - she is overwhelmed and the attorney seems lacking in the advice department. Appreciate any thoughts on this - legally - what are the siblings obligations relative to the debt, if any?

FarmWife
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Re: Dealing with deceased BIL estate? Dealing with the debt.

Post by FarmWife » Sat Aug 01, 2020 2:56 pm

Get a new attorney, fast. You need one that handles estates on a regular basis. This can make or break the whole process, not negotiable.

trueblueky
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Re: Dealing with deceased BIL estate? Dealing with the debt.

Post by trueblueky » Sat Aug 01, 2020 2:58 pm

Barkingsparrow wrote:
Sat Aug 01, 2020 2:29 pm
We are still in the throes of dealing with the estate. My personal opinion is that the attorney recommended by one of the siblings does not have the right background (he is more of a personal injury/workers comp type whom the sibling used prior) and has not handled this very well.

The BIL owned a condo on which he had a 2nd mortgage (the 2nd mortgage owed is about 18% of the value of the condo). He also had significant credit card debt, a personal line of credit debt, and a loan on a 3-year old car.

Assets are the net proceeds that would result from selling the condo, a small HSA (not sure how that is handled?), some funds that were sent back from some credit service that was helping the BIL pay off his credit card debt, and I assume proceeds from selling the car.

I've already posited to the DW that the siblings are not obligated for any of the BIL's debts - the obligations are satisfied by the estate. The property taxes are due soon and the SIl who is executor is suggesting we split the cost of this. I feel bad for the SIL - she is overwhelmed and the attorney seems lacking in the advice department. Appreciate any thoughts on this - legally - what are the siblings obligations relative to the debt, if any?
Siblings are not obligated to pay his debts. However, you are obligated to pay off the car loan when you sell it. If the car is worth less than what is owed, the estate could owe the difference, but not the heirs. Maybe let the bank repossess the car?

You are obligated to pay off the first and second mortgages and any liens from the proceeds of selling the house.

Is there no cash? If you don't pay the property tax now, the city/county will place a tax lien on the property. To resolve that could cost more than just paying the tax now.

IANAL.

Freetime76
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Re: Dealing with deceased BIL estate?

Post by Freetime76 » Sat Aug 01, 2020 3:35 pm

I am sorry for your loss. It depends on how much of a hard line your spouse wants to take. This is very new, not months old, and unexpected.

None of the individuals must pay the debts or the property tax. The estate owes this money now, and the property tax is just one of the many expenses the estate will have to pay. If it’s paid by “the family”, then it could be a gift or just try to get reimbursed when the condo sells (assuming there is equity in this condo, after expenses to sell it?)

A couple of thoughts, based on experience:
1. Can the sister go to the court in her town and get herself appointed as the executor? Has this already happened? Until that happens, she can’t do anything at all. Other than look for a will…
1a. The court/register of wills often has a very helpful guidebook and plenty of advice with where to start in a step-by-step manner. It will depend on the town, but the Nola book or some other from the library can help with the nuts and bolts of executing the estate. It is going to take time.
2. See if she can find her brothers checkbook. This will show all incomes and outgoes or bills. If there’s no checkbook, then a simple bank statement will do.
3. Once the sister is executor, she probably can’t do anything until she gets an official death certificate along with a letter stating that she is the executor. Once she has that, she can start closing down accounts, clearing out the condo, and assessing deaths versus assets. I’m assuming the condominium needs to be sold, and if there isn’t a lot of money or it’s expensive to keep, this would be ASAP. If someone wants to live in the condo, a family member may be able to assume the mortgage, but it sounds like this probably isn’t the case?
4. Most reasonable expenses that your sister incurs can be paid by the estate with court approval. Just check with the register of wills for details first.

SuzBanyan
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Re: Dealing with deceased BIL estate?

Post by SuzBanyan » Sat Aug 01, 2020 3:44 pm

Regarding the property tax, check to see if the local government is giving any kind of extension to pay due to Covid-19.

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