Making things easy for personal representative/executor after death

[Mainiac207]

I'm trying to set up my accounts and finances to make things as easy as possible for my executor/personal representative after I die. I'm in my early 80s and in good health, but things can happen in an instant so I'm trying to be prepared. My total assets are well under the Federal estate tax limit and my state's limit. When my husband was alive, we had everything set up as joint or with named beneficiaries. This way, we avoided probate and distributing assets was very simple, including his tax-deferred account (the largest asset) which went 51% to me and 49% to adult kids. I was my husband's executor but never had to set up an estate account. My situation is more complicated because I'm now the sole owner of our home (condo). My tax-deferred account (TIAA) and taxable accounts (Schwab and Vanguard) are set up with my kids as named TOD beneficiaries. My personal representative (daughter, who's also a lawyer) will have to set up an estate account and expenses would have to be paid on the condo until it sells. My funeral expenses also would need to get paid. I have my checking and small bank savings accounts set up as TOD/POD to my kids, but I now think that's not a good idea because my personal representative will need to have cash available to pay for expenses. So, my first step is to take that off. My personal representative is also my POA and we have that filed at the bank so she can handle things for me while I'm alive if I'm unable to do so; she is also named as a user on my safety deposit box. I've got my kids as rep payee for social security should the need arise. And I have medical POA. I'm now getting concerned about there being enough cash to take care of expenses after I die. I'm thinking of a funeral trust, but am not sure I want to tie up $$ with a particular funeral home. Keeping $$ in a bank savings account with very low interest doesn't seem like a good idea either. I could change one of my brokerage accounts so it isn't TOD and could be part of my estate and so would be accessible for expenses. My checking account usually has enough in it to cover several months of usual housing expenses (condo fees, mortgage, utilities) and that would be moved to an estate account. Any other ideas or recommendations? What am I missing?

[stan1]

My in-laws had a Joint checking account with their two kids that had about $25K in it. Executor used that account to pay for their final expenses. Choose an amount that makes sense for your situation (insurance, property tax, ....). After expenses were paid the account was closed with the remaining amount split between the two kids.

In my moms case, my brother or I paid for the various expenses and used a simple spreadsheet to balance things out. Her home was sold and her remaining accounts were TOD/POD so we just made each other whole. That worked too.

Since your daughter is an attorney and the planned personal rep I would get her opinion on what she would like you to do. I would not do anything without talking to her (and bring in other children into discussion for transparency too if you want).

[bombcar]

Funeral expenses can be paid by credit card or setup via payment plan, so immediate access to cash isn't absolutely necessary.

You could gift some cash NOW below the yearly limit if you wanted.

Don't overthink the expenses part; pay attention to "what you want" - and trust me, it's much easier to have a written list of "what mom wanted" instead of saying "do whatever, I won't be there and won't care".

Nolo has a really good book to at least read through for ideas: https://store.nolo.com/products/get-it- ... r-get.html

[bsteiner]

It's generally not a good idea to name beneficiaries for assets other than life insurance and retirement benefits, for many reasons.

[HomeStretch]

As my parents’ POA and executor, the things I found helpful were:

1) simplified portfolio and credit cards - one bank checking account, one brokerage firm. Two credit cards max.

2) access to adequate cash to pay final expenses in the checking account that I was joint on.

3) prepaid burial trusts - their services were so easy on grieving family as all the decisions had been made.

4) parents left notes on who they wanted to have certain personal effects, some valuable and some highly sentimental. The recipients enjoyed reading the notes.

5) I was paying my parents’ bills and handling their investments, taxes and household needs due to incapacitation. They also had me meet with them and their estate attorney that drafted their POAs and Wills. Being very familiar with all this and having the expert help of the estate attorney made the executor duties easier.

The hard part was emptying their homes. My parents had accumulated a lot of stuff and were reluctant to part with anything in their later years. My siblings and I spent weeks cleaning out their places of items that had been stored for years.

[AllMostThere]

It's generally not a good idea to name beneficiaries for assets other than life insurance and retirement benefits, for many reasons.

Not sure I follow the thought process on this. Please, a little context as to why "It's generally not a good idea to name beneficiaries for assets other than life insurance and retirement benefits, for many reasons." From my perspective, I would want my heirs to avoid probate and gain access to funds without barriers.

[toddthebod]

she is also named as a user on my safety deposit box

Did you know that safe deposit boxes do not have right of survivorship, and on the death of a joint owner, the bank will refuse to allow the other party access? The other owner will require a probate court order to access the contents, so I hope you have a will.

[increment]

Did you know that safe deposit boxes do not have right of survivorship, and on the death of a joint owner, the bank will refuse to allow the other party access? The other owner will require a probate court order to access the contents, so I hope you have a will.

This varies (widely) by state.

[toddthebod]

It's generally not a good idea to name beneficiaries for assets other than life insurance and retirement benefits, for many reasons.

Not sure I follow the thought process on this. Please, a little context as to why "It's generally not a good idea to name beneficiaries for assets other than life insurance and retirement benefits, for many reasons." From my perspective, I would want my heirs to avoid probate and gain access to funds without barriers.

See here:
viewtopic.php?p=7982575#p7982575

Could you share some of the “many reasons” why “it’s generally not a good idea to name beneficiaries for taxable accounts”?

TOD is piecemeal (asset by asset) planning.

You have to remember to update the designations each time you update your estate plan.

It makes it more difficult to provide for contingencies (such as a beneficiary predeceasing you).

It makes it more difficult to provide for your beneficiaries in trust rather than outright, to keep their inheritances out of their estates for estate tax purposes, and to protect their inheritances from their creditors and spouses, and Medicaid. In this case, the original poster's mother receives Medicaid, so naming her as a TOD beneficiary would sacrifice her Medicaid benefits.

You have to make sure your designations are consistent with your estate plan.

In the case of real estate, it puts a portion of your estate plan on the public records during your lifetime. So if you change it, everyone will know what it had been.

There will be chaos if, as a result, your estate doesn't have enough money to pay your debts, expenses, taxes and preresiduary bequests, and one of the TOD beneficiaries balks at contributing his/her share.

We’ve had several well-designed estate plans defeated by probably unintended TOD designations.

In one case, a couple provided for their daughter in trust under their Wills, to keep her inheritance out of her estate for estate tax purposes, and to protect her inheritance from her spouses. After the wife died, the husband, then elderly, moved his brokerage account to the daughter’s broker. When he died, it turned out that the daughter was TOD beneficiary on the brokerage account, destroying the asset protection.

In another case, the decedent left cash bequests to various friends and family. When she died, it turned out that her residuary beneficiary was TOD beneficiary on her largest account, leaving her estate without enough money to pay the cash bequests. Fortunately the residuary beneficiary voluntarily made gifts to make up the shortfall.

In another case, the decedent left his residences and retirement benefits to his wife, half of his estate (less the assets passing to his wife outright) in trust for his wife, with remainder in trust for his children from a previous marriage, and half of his estate (less estate taxes) in trust for his children. He then sold a portion of his business and put the proceeds into a brokerage account. When he died, it turned out that his wife was TOD beneficiary on the brokerage account. That left very little for his children. Making it worse, his wife died within a year after he died, and she left everything to her daughter from her previous marriage.

It's often penny wise and pound foolish.

[Mainiac207]

Replying re: safety deposit box. I do have a will. And I'm not sure what you say about the access is true. My husband and I were joint on our safety deposit box and I had no access problem after he passed away. As someone above said, this must be state-specific and was no problem in our state.

[Mr. Rumples]

The Code of VA draws a distinction between the representative/executor and who has the authority to make arrangements for the funeral and disposition of the remains. § 54.1-2825. Person to make arrangements for funeral and disposition of remains.. Don't know about other states but it's prudent to specify who has this authority.

It sounds absurd looking back, but my mother's funeral was all arranged but somewhere along the line, she forgot to say whether she wanted to be buried with her wig. We decided no, she had cancer and hated it. Mine are intended to make it easy: a simple pine box, the least expensive without looking cheap; no cardboard casket, but a shroud is fine. I will pay extra for a Shomer (someone to watch over the body until burial). My family knows this and it's in writing. The more specific in writing the better.

[increment]

Don't know about other states but it's prudent to specify who has this authority.

In California, this authority may be given through the standard Advance Health Directive form.

[Jack FFR1846]

We've dealt with 3 relatives' probates in the last few years. Some things off the top of my head:

If you insist on having a safe deposit box, have the key and any paperwork, including the bank and the bank's address hanging next to your home thermostat with a tag on the key saying "safe deposit box at xyz bank at zzz location". DW's dad left a safe deposit box and left the key inside a random lockable small chest of drawers. This got sold at a yard sale and because it was locked and nobody had a key, we sold it for $2. The buyer came back an hour later with all the safe deposit paperwork and the key. We were ready to pay the bank $150 to drill the thing out. What was in it? Absolutely nothing. It took several hours even finding the correct location as no other branch could tell us where the safe deposit box was.

Sell your condo with an agreement to rent it going forward. Cleaning out a dwelling is the biggest pain. With a 1400 sq foot house, we've so far had 2 yard sales, selling things for a dollar or for free and the place is still full of crap. We have made trips to Goodwill and I sold a couple wood stoves on marketplace and piled all the tools together and sold to a used tool place. We will get to selling but have a good amount of work still to do. May will be 1 year. I'm sure we'll not sell before 1.5 years, maybe longer. Meanwhile, it's costing $1,000 a month just for expenses.

Hold one account for funeral and estate expenses without a beneficiary listed. Have a beneficiary on all other accounts.

Drain all pre-tax accounts. We found these to be the biggest pain. Not only on RMDs and getting access but the bank insisted on inherited accounts to be set up at their bank. Of course, there was a fee for the deceased account being closed. Going forward, 2 heirs would need to, of course withdraw from this inherited account. Both heirs were 2 tax brackets higher than the deceased.

Sell/give your car away. While not a huge issue, in our state, nobody could legally drive the car until title got transferred. If you still drive, think about transferring title to an heir who would be ok with you driving still.

If you are able, clean out clutter. This includes treasured collections of things nobody but you appreciates. Marketplace works well for this. Consider doing this with furniture. Houses and even condos can hold a tremendous amount of junk.

Combine your accounts. I don't care what the FDIC limit is. Holding accounts at 5 banks to stay under the limit means that heirs are going to have to take days off and maybe fly in to drive all over creation to find that the bank won't release the account for 30 days anyways. Or they'll make up rules to keep you from closing the account. We did find this. One bank. One. DW and I have done this ourselves now. It's a credit union but all our money is in one. Try to do the same for broker accounts. And that will be easier on heirs if it's a Fidelity or Schwab where they can drive to an office. I hear too many stories of Vanguard making it far more difficult for people and you can't talk with someone in person and of course, they hold bankers hours, so when the heirs have flown in and want to deal with this on Saturday, good luck.

[celia]

Your biggest expense when you die might be your income taxes and costs of settling your estate. Just because you die one day, that doesn't make the tax bill disappear. How will those bills be paid?

A will or trust is the way to go instead of beneficiaries on every account. One or more of your beneficiaries could die before you. (As you said, it could happen in an instant.) Then what?

[popoki]

My in-laws had a Joint checking account with their two kids that had about $25K in it. Executor used that account to pay for their final expenses.

Was that legal?

[Steelersfan]

Replying re: safety deposit box. I do have a will. And I'm not sure what you say about the access is true. My husband and I were joint on our safety deposit box and I had no access problem after he passed away. As someone above said, this must be state-specific and was no problem in our state.

I can't guarantee this list is 100% accurate, but there appears to be lots of variation by state in who and how access to a deceased's safe deposit box can be granted.

https://www.weareatticus.com/ultimate-g ... egulations

[bsteiner]

…

A will or trust is the way to go instead of beneficiaries on every account. One or more of your beneficiaries could die before you. (As you said, it could happen in an instant.) Then what?

Correct. That’s just one of many reasons. A Will in most cases in most states. A revocable trust in some cases and in some states where probating a Will and dealing with the court is difficult, notably California

[stan1]

:|

My in-laws had a Joint checking account with their two kids that had about $25K in it. Executor used that account to pay for their final expenses.

Was that legal?

What law might have been broken and in which state? We've done that in Indiana, Utah, and California. Recommended by experienced estate planning attorneys in Indiana and California. Maybe I need to add that the executor was one of the kids if that helps.

[Mr. Rumples]

In VA, paying for the funeral and related expenses can be paid from the estate. § 64.2-512. Funeral expenses. https://law.lis.virginia.gov/vacode/tit ... n64.2-512/
https://law.lis.virginia.gov/vacode/64.2-528/

Having been through the death of a brother, parents, cherished friends, it helps to have everything in writing. It's overwhelming and some folks just shut down. It is even worthwhile to figure out ahead of time who is going to respond to phone calls and condolences.

In the south, being Jewish, we have a few other things. An old tradition is to put a wreath on the door of a house in mourning (it represents the circle of life; Dolly Parton captures this in her song Let Her Fly). I want one for my death, some think it's not in the Jewish tradition. Putting that in writing helps.

[LilyFleur]

I have made arrangements with a local funeral home for cremation and with my church for the funeral and burial of my ashes in the church garden. It's a beautiful place and reasonably priced. I picked the funeral home that the church office said they work with most often, and because they regularly deliver ashes to the church office. (I don't want my kids to have to worry about that.) My kids know where this paperwork is. I've planned my funeral, and I have copies of the service in my file as well as at the church office. I have my son as joint owner on my checking account, and I keep enough money in there for the cremation and paying HOAs and utilities for my condo for a few months. He knows he will need to pay for my cremation and keep the condo going out of that account. (The HOAs and electric bill are paid by recurring check every month out of a dedicated checking account, so it's not difficult.) I do try to keep my home clean and well organized so that they won't be cleaning up a huge financial or physical mess when I die.

I'm in the process of working on a trust as well, as one of my children will need a professional fiduciary managing their inheritance.

[investuntilimrich]

Sit down with your tax professional and discuss the best way to leave your estate to the heirs. Most important is to have your wishes known, a legal and valid will, updated and correct beneficaries listed where possible. I know a family currently in court because there wasn't a proper will.

[FreddieFIRE]

Cleaning out a dwelling is the biggest pain. With a 1400 sq foot house, we've so far had 2 yard sales, selling things for a dollar or for free and the place is still full of crap. We have made trips to Goodwill and I sold a couple wood stoves on marketplace and piled all the tools together and sold to a used tool place. We will get to selling but have a good amount of work still to do. May will be 1 year. I'm sure we'll not sell before 1.5 years, maybe longer. Meanwhile, it's costing $1,000 a month just for expenses.

I had to deal with something like this recently. Just remove personal records (archive or shred) and items that can be easily converted to cash (gold jewelry, etc.) and then ask other family if they want anything now. Then call the junk removal place. They aren't cheap, but the place will be empty in a day (or less).

Drain all pre-tax accounts. We found these to be the biggest pain. Not only on RMDs and getting access but the bank insisted on inherited accounts to be set up at their bank. Of course, there was a fee for the deceased account being closed. Going forward, 2 heirs would need to, of course withdraw from this inherited account. Both heirs were 2 tax brackets higher than the deceased.

Good advice.

Sell/give your car away. While not a huge issue, in our state, nobody could legally drive the car until title got transferred. If you still drive, think about transferring title to an heir who would be ok with you driving still.

We have our car titled as FreddieFIRE OR DW OR joint living trust. That give a successor trustee an ownership interest and the ability to allow others to drive the car (most/all auto insurance covers somebody using another car with the owners permission) and also to sell the car. Folks here frown upon this but it works for me.

[popoki]

Was that legal?

What law might have been broken and in which state? We've done that in Indiana, Utah, and California. Recommended by experienced estate planning attorneys in Indiana and California. Maybe I need to add that the executor was one of the kids if that helps.

If the bank account was titled JTWROS then the account became the property of the children at death of the parent. You didn't mention earlier that the executor was one of the children. If the other child consented to this arrangement, then fine. If the executor was a third party that forged the decedent's name on a check from the bank account, then not fine. That would be theft, in all states.