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The immediate, practical concerns that you have to deal with right after someone dies are generally the most upsetting since they must be dealt with right after the person dies. Once the funeral and burial or cremation have taken place, most people just want to be left alone with their grief and not have to deal with more details and decisions.
Unfortunately, the immediate concerns are just the beginning of an ongoing legal, financial, and tax process that might take a year or more to complete. While there is some overlap among these concerns (certain financial concerns affect tax matters, and so forth) it is probably best to discuss these issues one at a time. For that reason I have grouped these matters into the three large categories of legal, financial and tax concerns.
Most people are probably vaguely aware that when a person dies the decedent's property passes to someone. Most people know at least something about wills. Many people have heard of probate and know that it is a lengthy and costly legal procedure. However, there are other legal concerns of which you should be aware. Many of these have time limits. Laws and time limits vary from state to state, but they typically concern actions which must be taken or documents which must be filed within so many days of the decedent's death.
Many people are hesitant to contact attorneys since they feel that most attorneys are dishonest and will charge them exorbitant bills. While many concerns regarding attorneys and their billing practices are justified, it will generally save you money in the long run to get competent legal advice when someone dies rather than try to do it all yourself and later find out that you have done something wrong and created problems and complications.
One way to keep the attorney’s bill down is to have as much of the necessary information beforehand as possible. This section discusses the sort of information you will need regarding the decedent’s assets which you can bring to the attorney. With that information in hand, you and the attorney can then discuss the best way to transfer the decedent’s assets to whoever inherits it with the least amount of time and cost. If the decedent has planned his or her estate carefully, this might involve no more than signing a few documents. If, on the other hand, the decedent’s financial affairs are complicated and if the decedent hasn’t planned his or her estate well, the legal issues might take many months or even years to sort out.
Another point is that what people think are the important legal issues and what the important legal issues actually are often are two very different things. Families and others do, of course, sometimes fight over the decedent’s money. A far more common occurrence though, is for family members to fight bitterly over personal items which have little if any financial value but which have emotional connotations. You need to be able to differentiate between the genuine legal issues involved and family disagreements, and make an effort to keep the latter from escalating into legal conflict. I have personally seen more time and money wasted on family disagreements than on anything else in the years I have been practicing law.
This section should give you a rough idea of what general legal issues you need to consider and the information which an attorney or other professional will need to help you. Again, laws and regulations vary from state to state, so this is not a definitive checklist. Nevertheless, it will give you an idea of most of the issues involved for most situations.
If the decedent was very poor, it's quite possible that you don't need an attorney. On the other hand, the decedent might have been quite wealthy with complicated financial affairs. But if he or she planned very carefully for death, you might only need an attorney to check over a few documents at a small cost. However, these are the extremes. In most cases you will need an attorney to deal with these legal concerns.
You should probably contact an attorney within a few days of the decedent's death. Just as important as finding an attorney is finding one that you trust. Another important issue is finding an attorney who is knowledgeable about estate planning. 'Estate planning' is the general term for the area of law involving death-related legal issues.
If the decedent had an attorney who had drafted his or her will and helped with other estate planning issues, you should contact him or her. This attorney should be familiar with the specific details and circumstances of the decedent's estate and what legal concerns are relevant. However, if for some reason you find that you are not comfortable with the decedent's attorney or you don't entirely trust him or her, you can always go to another attorney. An attorney does not own a client's files. In most states, an attorney is obligated by law to hand over any relevant files.
While you can look for an attorney in the yellow pages it is probably better to ask around and find one recommended by someone you know. You can ask your accountant, financial planner, or any other financial professional you know. If asked, banks and savings and loans will often recommend an estate planning attorney. If you have an attorney, but one who specializes in an area other than estate planning, he or she probably knows an estate planning specialist whom he or she can recommend.
An estate planning attorney will advise you regarding all of the legal concerns listed here as well as many of the financial and tax concerns. The legal concern which many people worry about the most after someone's death is the question of whether there is going to be a probate or not. Generally speaking, assets in the decedent's name alone go through probate. Probate is necessary when the decedent had more than a certain amount of assets in his or her name alone and does not have a surviving spouse or does not leave the assets to the surviving spouse. The amount that the decedent can have in his or her name alone varies from state to state. The attorney can advise you on the limit. Assets held in joint tenancy, assets with a named beneficiary, and assets in a living trust do not go through probate.
An attorney will help you sort out how these different types of assets must be handled. If a probate is necessary, the attorney will guide you through it. If you are named as the executor or executrix of the will, the attorney will guide you through that as well.
What should you expect from an attorney? You should expect a clear explanation of who will inherit the decedent’s assets and whether probate is required or not. In order to discuss these matters with an attorney you should have a general idea of the decedent’s assets, their approximate value, and how title is held. Can you expect a free meeting with an attorney before committing yourself? That depends on the attorney. Some will meet prospective clients for an hour or so and then let the client decide whether or not to continue at billable hourly rates. However, many attorneys feel that their time is the prime commodity that they are selling and so charge for first meetings with clients. You shouldn’t necessarily be put off by an attorney who charges for a first meeting; most experienced attorneys do. But regardless of whether the attorney charges for a first meeting or not, you should expect the attorney to be absolutely clear regarding what his or her fees and costs will be.
One final issue to consider is the question of who should see the attorney. In many cases just the husband or wife of the deceased will want to deal with the legal issues. Sometimes the children get involved; sometimes they don’t. Sometimes the estate goes to the decedent’s domestic partner. Generally speaking, the attorney will only represent one person, such as the decedent’s spouse. If children or step-children are involved, there is no generally no problem as long as everyone agrees on the basic issues. Problems arise when family members (or friends, domestic partners, or others) are in conflict. One attorney cannot represent two or more persons who are in disagreement. In such cases the conflicting persons will have to get different attorneys who will then try to work out the disagreements. This obviously increases the time (and thus the costs) of everyone involved. It’s cheaper and easier for everyone to work out such disagreements without attorneys, if possible.
If you have used an attorney to plan your estate well, make sure that your family knows who the attorney is, so that they can contact him or her at the time of your death. Make sure that your family knows where your will and information regarding your assets are, so that they can have this information in hand when they meet with an attorney.
One of the first things which you must do is to determine what the decedent owned at the time of his or her death. Most people do not maintain any sort of list of their assets. It will probably be up to you to try to find what the person owned.
You will need to get or make up a list of all assets which the decedent owned, such as real estate, securities, bank and savings and loan accounts, brokerage accounts, mutual funds, life insurance, IRA and any other assets worth more than a few hundred dollars. These will be needed in valuing assets and for tax considerations. If no other information is available, you can review the decedent's last income tax. Schedule B of the tax return will list interest and dividends from brokerage accounts, stocks and bonds, and bank accounts.
Here is a list of the sorts of things you should know or have regarding the decedent’s assets:
2. Bank, Savings and Loan, Credit Union and Thrift Accounts
3. Stock Certificates
4. Bonds
5. Mutual Funds
6. Limited Partnership
7. Brokerage Accounts
8. Notes and Mortgages Due You
How do you value these assets? The Internal Revenue Service provides that for stocks and bonds you obtain the average between the high and low for the date of death. If the person died on the weekend, you can take the average between the high and low for Friday and the high and low for Monday.
For mutual funds, you take the bid price of the fund on the last trading day before the date of death.
For notes, and bank and savings and loan accounts, use the balance as of the date of death.
For limited partnerships, the general partner should be able to provide information on valuation.
Real estate values for a home and other properties can be obtained by a local real estate broker or agent. For some real estate, it may be necessary to get an appraisal by a qualified appraiser.
For other assets, the value is what you could sell the asset for as of the date of death.
You can save your loved ones a lot of time and stress after your death by compiling a list now of the assets that you own. A list such as this is only useful if it is up to date. It doesn't do anyone much good if you make up such a list and then leave it in a drawer for ten years. When someone then reviews it after your death, it will almost surely be out of date. People's financial situations change over time. Every time that yours changes, update the list.
Please click here to return to beginning.These excerpts from What to Do When Someone Dies © 2004 by Milton Berry Scott