Keeper

When Your Parent Passes – by Bob Bekins – March 2022

If you have recently lost a parent

OR if you are a parent

OR if you need to plan for a loss

THIS article is for you. 

It is a long piece and has been in development for 20 years.  Many people have contributed to it.  I am not an attorney, or a CPA, or a psychologist and you may need the help of professionals like these.

I can tell you that one of the kindest things you can do for your children is to read this and start the process of making your estate easy to manage.  The reality of this day and age is that life can change quite suddenly.  If you have been a fiduciary for an estate, or a successor trustee, or the executor of a will (I have been all three); you will appreciate the thoroughness of this article. 

Because of its depth, take things a little at a time to accomplish the goal of simplifying your estate or handling the estate of a loved one.

One of the hardest things to do in life is to deal concurrently with grief and managing the dissolution of an estate.  The closer the heirs are to the deceased, the deeper each realm will strike.  Usually, there is no need to rush the process.

If you are a surviving resident of a home that needs to be sold it is best to wait a year to do so.  Dealing with the grief can cloud your thinking until you have worked out the best new solution for where you will live.  Too many times in my business I have seen people rushed by others to make decisions regarding a home.  The rush usually comes from someone trying to get their hands on the money involved.

Know the requirements for record retention, then get rid of everything else.  If you haven’t used an object in a year, time to donate it to the many charities that can find a good home for it.  If you have given someone the chance to take something for free and they haven’t accepted your offer, donate it.  They are not going to take it.  That broken item that you are going to fix, gathering dust, dump it or sell it.

Read the article for the rest. 

WHEN YOUR PARENT PASSES

by Bob Bekins

This is a practical guide for the work and events that occur after your parent passes away.  There are many emotional needs which you will have but this guide is more about the physical needs than those of the heart.   I began writing this when I was just getting through the August 2000 passing of my mother who had remarried six years after the death of my father in 1991.  Because she passed away after my father did, there are things that my father would have cared for were he still with us.  My stepfather, George, is 89 years old and he took organizing the medicare bills from my list of tasks and probably saved thirty percent of my time.  But sometimes even a surviving spouse is incapable, or becomes so from grief, and you must take care of more than you expected.  My heart goes out to you during this time of hurting.  If one parent or both parents are still with you follow the instructions in the next paragraph.  Remember: it is rarely convenient to be helpful but sometimes you are the only who can.

If you have advance notice

First, tell them you love them.  Go see them as often as you can.  You don’t need to talk, just listening and holding their hand will make a huge difference to them.  My Mom asked me to massage her feet one day, the first time in her life to ask that.

For as long as practical before passing, ask lots of questions, take lots of notes,  write everything down because you will not remember later or may be confused.  Date everything that you note because there will be substitutions and changes that will be date sensitive.

You will need to know the location of checkbooks, passbooks, insurance policy binders, safe deposit box keys, bank statements, wills, trusts, personal notes on bequests and burial, items to be bequeathed such as jewelry.  You must have access to previous years tax records.  You should become a co-signer on safe deposit boxes and banking accounts.  (NOTE:  I had a power of attorney for a friend’s bank accounts but after he passed away, I was locked out for six weeks.  That is because a power of attorney is for a person, not for an account.  When the person passes away, the POA designation is no longer effective.  I should have been registered with the bank as a co- or successor-trustee.) 

As well you will need account numbers, drivers license numbers, social security numbers, dates of marriages, dates of predeceased spouses’ deaths, birth dates and birth places of your parent and spouses, and the parent’s parents’ dates and places of birth and death.  Did they serve in the military?

Items of value such as real estate, bank and credit union accounts, securities accounts and bonds can be put into a trust.  A trust can be named the payee on insurance policies.  More on this later.

You will need the names and phone numbers of accountants, attorneys who drew wills and trusts, bankers, club presidents and beneficiaries of wills and trusts.

You need to know if your parent has a pacemaker or other implants if they desire cremation.

Last, tell them you love them and spend as much time as you can with them.  When they are gone it will be the only thing you regret not doing.  You will have everything else to handle and time to do that but you can’t go back for the warmth.

After Passing

You will be reading a lot of forms.  Do so carefully because you may not be able to alter the decisions you make and sign for.  If your mind starts wandering, put that task down and wait to pick it up at another time.  Some things you will not be able to do right away.  It is now November and I just found six e.mails that were sent to me the week my Mom passed away in August.  Your routine will be interrupted so let your employer know what you are going through.  Keep them well informed on the dates of events and about how you are feeling.  You may need to take time off, and maybe more than once.  Some vacation time after the first month is very smart as you will need it. Count on your organizational skills going bad just when you need them, it is a sign of grief.  Realize you are least equipped emotionally to do business and this is when you must do it.

Social Security and other retirement programs:

Return un-cashed checks, they may ask to be refunded for the entire month of passing. 

Wills and trusts:

Consult an attorney and your parent’s accountant

Take your time disbursing funds/assets as there may be bills that show up months later

If you are the executor of the will, you are in charge.  Don’t let anyone rush you.

If you are the trustee of a trust, same thing

Plan on spending a lot of time getting things done

Life Insurance:

Check with each lending institute, banking service and organization to determine if there was life insurance.  My Mom had five policies but only one was in effect.  Some policies cancel at a certain age, some are only good for a specific period of time, some are only effective with certain types of death such as accidental.  Dying of a disease is not accidental.  It will take some time to collect on an insurance policy. 

Dividing up stuff:

It is best to do as much by yourself as possible.

Try to go through things just once.

Have a box with the name of the person to receive the items on it and toss stuff in as you go.

Prepare to negotiate.

Prepare for some people to be selfish, often the ones with the least interest.

Rely on what is in writing and your notes.

It is easy to give your cousin the ring your mother wanted her to have but very hard to sell a house that belongs in thirds to three siblings, and no one wants to sell.  Take time and consult with professionals to learn all the different ways that you can divide things.  For instance, you may take a note out on a house and use the cash to pay off a sibling that needs cash.  Someone may need an income and a rental house would serve that well.  Remember the value of things is reappraised upon the date of death and in most cases all capital gains are forgiven which occurred prior to the date of decease.  Knowing this may effect how you decide to divide things up.

Hospice:

This fine organization helps people who are terminally ill

They pay certain hospitalization and medical costs

They pay some in-home care costs

If your parent was in hospice care, before you pay a medical bill find out if it was covered

Things you must cancel, close or change:

Credit Cards

Gas Cards

Group Memberships

Club Memberships

Registrar of Voters, County

Drivers License

Annuity payments

Pension payments

Social Security survivor benefits

Medicare

Cell phone contracts

Cable TV services

Utilities – (best to have two people on the billing,  With one, service can be cut & must be reapplied by the survivor.)

Homeowner Association dues on sale of home

Credit Union memberships

Bank accounts

Newspaper and magazine subscriptions

Long-distance calling cards

Internet service providers

Mail must be forwarded and if there is a new occupant introduce yourself to enlist their help

Auto registration

Auto insurance (there may be a refund)

Property or Renters Insurance (there may be a refund)

Real Estate tax basis, address to send tax bills to

Notification to tenants of property about new ownership and where rents are to be sent

Obituaries:

Some are free ,some aren’t.  The better you write them the freer they are in most cases

If your parent did some good things for their society, the papers would print that

The church, and organizations to which your parent belonged will want one

Funeral arrangements:

Casket or urn, costs to mortuary

Flowers, guest book, music, table of memorabilia, dates for the church, for the graveside

Payments to the servers: pastors, musicians, sound/light tech, videographer

Photo of your parent for the memorial service bulletin

Food and beverages for a reception or wake

Neptune Society, a non-profit, can be very helpful

Get 10-15 CERTIFIED copies of the death certificate

If you are holding ashes, decide where you are going to store them before you pick them up.

Everything is expensive except cremation, but it still costs.

If they were in the military, you will need information about their service dates, rank, etc to

take advantage of all that the Veterans Administration offers from a flag ceremony to burial in a national cemetery.  These are expensive items, and they are free to the family of all veterans on behalf of the deceased service member.  (NOTE: we could find no records of my friend’s military service, but we found photographs of him in uniform and that sufficed to get a flag ceremony at the dock the day his ashes were scattered at sea.)   

Inventory:

You must inventory everything of value in the estate of the deceased.  It is usual to write down specific items that have substantial value and then to generalize the value of things like ordinary furniture and clothing.  Vehicles, real estate, securities like stocks and bonds, savings and checking accounts, jewelry and other most valuable items should be listed very specifically with their value or balances at the date of decease.  A Realtor can give you a market analysis, see below.  Bank statements will show balances near the date, jewelry may have been appraised for insurance purposes so look around first and ask for help on the rest.  If the value of the estate is over a certain amount (in 2000 in California it is $60,000) then the estate may have to be probated.  A trust can protect this by reducing the amount of the estate, other than the trust, below that limit.  For instance, if a home is owned outright and is held in trust, and the balance of the inventory is less than $60,000 (as noted above) then probate is far less likely.  Probate can be called out if a dispute arises between heirs so keep things friendly and settle matters outside of court.  Probate can eat up huge amounts of a bequest and draw things out over years.  I am not an attorney; you should consult one.

Hidden Assets:

There may not be silver buried in the back yard as one of my friend’s informed his sisters, but there may be assets that are not carefully filed.  In settling another friend’s estate, we found three old stock certificates.  One was for a bankrupt company, one was worth $24 and one was worth $18,000!  It was just loose in a pile of papers.   Look through everything.

Real Estate:

Have a Realtor give you market comparables as of the date of your parent’s passing.  This is important because it eliminates the capital gains on the property (or if they are survived by a spouse, it eliminates the capital gains on the part of the property that your parent owned.)  Estates are taxed differently than regular capital gains, so get this done, print it and tuck it away in a file that can be found later.  You will need it.  I am not a CPA, and you should consult one.

Taxes:

Probate and its dollar limits are not the same as the tax limits.  They are two separate issues.  Again, a trust can help to protect from estate taxes at the state and federal levels.  I am not an attorney; you should consult one.

There is a difference between the tax laws for trusts and for individual taxes.  Just because you can do your own federal and state taxes doesn’t mean you can figure out the taxes on a trust.  There are trust tax specialists and if you are the trustee, you should at least consult with one.

The estate or the trust will have expenses.  They can be used as expenses against income for the year that the deceased passed away in some cases.  Keep track of everything you spend, and all funds received in a ledger including insurance company payments.  Costs to travel, burial costs, hotel bills and funeral expenses may be deductible if the will or trust specifically said to use the funds available for those items.  Attorney and Accounting fees also.  I am not an accountant; you should consult one.

For non-trust estates, and sometimes for trust estates, you will have to do a tax return for the person that passed away.  Sometimes you have to do one for the person and one for the trust.

Creditors:

If your parent owed someone for a good or service, it is your responsibility to pay that off from the estate’s assets.  This may require selling something to do so.  If the estate owes more than it has available if everything were sold, then the creditor may be out of luck.  They, however, cannot legally come after money or assets that were not part of the estate unless someone agreed to pay for those expenses out of other-than-estate funds.  There are legal ramifications for trying to skirt this which could include liens on real estate or throwing everything into probate.  Work carefully and cautiously around these issues and without making early agreements.  Meet with the creditor and ask for explanations and paperwork to show the amounts owed.  Often, they will work with you if the circumstances are difficult.  I was surprised that my Mom’s cell phone company agreed to end her multi-year contract without exercising the time limit cost paragraph in her agreement with them.

Your fee as Trustee:

Keep track of your time.  Log it on a daily basis in quarter hour increments with a description in your ledger.  In some states you can take a fee for being the executor of an estate even if you are a beneficiary.  In my case, my brother was too far away to assist in the matters of settling the estate.  We agreed that it was fair for me to be compensated for my time over and above the specific bequests of the will.  I am deciding whether to exercise this or not, but not until we are done.  It is hard enough to be the one who has to do it.  If things get ugly at least you will be financially compensated for the heat you will have to take.  (In 2018 I acted as an uncertified fiduciary for an estate and was compensated $75 per hour.  That is half of what a Certified Fiduciary would charge.)  An attorney can inform you about this.

Donations to charity:

Just like a person, an estate can make donations of clothing, household goods, vehicles, and valuables to a non-profit organization.  Sometimes these can be used as a tax write off against income for the calendar year in which your parent died. If not, they are considered an asset so the write offs can be distributed to the heirs to use against there ordinary income.   So, plan on donating.  It is a great way to clear things out without having to mull over the emotional side ten times.  Write out the details of what was donated, when, and to whom because you will not remember later.  Get receipts. Assigning values to the goods that match the values in the initial inventory, will allow an accounting of these paper assets in the final distribution to multiple heirs.

Very personal items:

Sometimes you want to thank someone during this process.  Giving a personal item, though it may not have much intrinsic value can be of great worth to the recipient.  My Mom had a young friend that considered her as her Grandma.  I gave her Mom’s watch which wasn’t of much value but will be a treasure to Jeannette for a lifetime.  Be fair about family photo albums and heirlooms, think about the future generations and who would benefit most from items that are antiques of the heart though maybe not to Sotheby’s.

Timing:

After you think you are just about done, new things will crop up.

A final note.  You may not be able to do everything your parent asked.  Sometimes it isn’t legal, sometimes you just can’t.  Do the best you can and go on with your life.  The funeral service is not for them, they are gone, it is for the survivors.  The tears are not for them but for ourselves because we feel alone now.  It is o.k. to cry and think about them, a lot.  You will always miss them, but it will get better.

If you need any services from house cleaners to painters to estate sale agents, I have hundreds of them with whom I have worked.  Just call me 760-505-9397.