Estate Planning

When a Loved One Dies

Loved_OneAfter a loved one dies, there are many issues which need to be addressed to wrap up the person’s legal and financial affairs. The following is a checklist of issues to consider:

The funeral home should take care of providing you with certified copies of the death certificate. The number of death certificates you need will depend on the assets remaining at the time of death.

The funeral home should contact the Social Security Administration to report the death. If there is a surviving spouse, the spouse will be entitled to a one-time death benefit of approximately $250. In addition, the surviving spouse may begin receiving the deceased spouse’s monthly social security payment if it was higher than their own.

Regarding any life insurance, you will need to call the insurance company to report the death. The company will send you a claim form to complete and will request a certified copy of the death certificate. The death benefit proceeds will then be issued to the beneficiaries. (Retirement plans, such as IRA’s and annuities, work much the same way. You must contact the appropriate company to report the death, complete the necessary claim forms and submit a death certificate before the proceeds will be distributed to the beneficiaries.)

If your loved one was receiving a pension from the VA or a former employer, you should contact the institution and report the death. If there is a surviving spouse, it is possible that the spouse may receive a death benefit or may begin receiving a monthly pension check.

If your loved one owned real estate in joint tenancy with another individual, a certified copy of the death certificate should be filed with the county registry of deeds office. The same is true if they owned the real estate alone but had designated a beneficiary. (Keep in mind, if the home is now vacant, there will most likely be a limit on how long the home will continue to be insured—you should check with the insurance company.)

If your loved one owned a car, a death certificate should be presented to the local Secretary of State office.

Any other assets remaining, like bank accounts, CD’s, stocks and bonds should be handled similarly to the real estate and car. Those assets with Payable on Death (POD) or Transfer on Death (TOD) beneficiary designations will require that a death certificate be provided to the appropriate financial institution or company.

Finally, you may be wondering if anything will have to go through probate. Those assets that were titled in your loved one’s name alone with no beneficiary designation at the time of death will need to be probated. If there was such an asset, then your loved one’s Last Will and Testament will need to be filed with the probate court. If there was no Last Will and Testament in place, a probate estate will need to be opened and state law will determine the distribution of the assets. (There are exceptions to this procedure which may simplify the process if the assets remaining in the deceased person’s name at the time of death are relatively minimal.) If, on the other hand, some of the deceased person’s assets were held in Trust, a trust administration will have to be conducted.

Regardless of the amount of assets and how they are titled, it is always wise to contact an elder law attorney for guidance after the loss of a loved one. The Wall Law Group offers a free initial consultation. For your appointment please call 888-829-0894 or click here.

Frequently Asked Questions

Is It A Good Idea To Have My Son Or Daughter On My Bank Account?

joint-credit-accountsI often meet with clients who want their adult children to be able to access their accounts to help out with writing checks or paying bills on their behalf. However, this good intention can create a very serious risk of liability if carried out incorrectly.

Often, a parent goes to the bank and asks the teller to add the child onto the account. In doing so, the adult child is now a co-owner of this account. This action may create problems for the parent. For example, if the child has creditors, later files for divorce, has a failed business or files for bankruptcy, then the jointly owned asset may be vulnerable to claims. This could force the parent to lose some or all of that account to pay the child’s debt.

Instead of adding the child as a co-owner on bank accounts, your child could use a properly drafted Durable Power of Attorney (DPOA) to help you deal with your finances should the circumstance arise. A Durable Power of Attorney is a legal document in which you designate who you want to make legal and financial decisions for you if you cannot make them for yourself. I recommend an extremely comprehensive DPOA that allows your agent to handle virtually all legal and financial matters for you. I also usually recommend a DPOA that goes into effect the moment it is signed (rather than one that “springs” into effect upon the principal’s incapacity–called a “springing power”). This means your agent can use it even if you are not disabled. This is often necessary for the DPOA to be accepted at many financial institutions. Therefore, it is very important that you pick only people whom you trust to be your agent on your Durable Power of Attorney. Every Durable Power of Attorney should have a primary agent and an alternate agent who would act only if the primary agent is unable to act for you.

Designating the adult child as a Power of Attorney allows the child to access the account, write checks, pay bills and do everything the parent needs without connecting them personally to the account or exposing assets to the child’s creditors, predators, or divorcing spouses.

Real Life Lessons

Video on the Drawbacks of D-I-Y Estate Planning

Do you have estate-planning documents that were drafted using an online service? In a 2013 Northwestern Mutual webcast, 30% of those watching reported they have—or know someone who has—estate planning documents that were hand written or created using an online service.

Dozens of web sites now offer estate-planning document services for a fraction of what a lawyer might charge to develop a will, trust or power of attorney. While affordable, the trend toward do-it-yourself estate planning is fraught with risk, according to Ruthann Driscoll, director of advanced planning at Northwestern Mutual. “Estate planning documents are filled with legalese; terms that mean very specific things under the law,” says Driscoll. “A friend of mine mistakenly disinherited her sons because she didn’t understand one legal phrase that appeared in her will. That’s why do-it-yourself estate planning scares me.”

Hear more about D-I-Y estate planning from Driscoll and Northwestern Mutual’s Mark McLennon, vice president, investment advisory services, in this brief video excerpt from “Estate Planning: It’s Not Just for the Rich and Famous.”

News & Legislation, Useful Tips

Scam Involving Property Deeds

scam-300x169For the past several months, we have received several phone calls from frantic clients who have received an official-looking letter from a company called “Property Transfer Services” which contained language that indicated that some transfer of their property had taken place. The letter is not a bill – far from it, actually. It is a scam. These types of solicitations crop up every few years and often scare people into sending money to get copies of their deeds, which they can get for a nominal fee from their local county registrar.

The letter reads something similar to, “Property Transfer Services recommends that all Michigan homeowners obtain a copy of their current Deed.” The cost for the service, according to the letter, is $83.00, and the letter gives a due date.

In an attempt to get the word out to seniors in our community, please let loved ones know that they should not respond and definitely should not send payment.

As you may know, you can get information about your home or other real estate through your local county register of deeds. Most deeds are available online either for free or a nominal cost of $1.00 per page.

News & Legislation

California Widow’s $27-Million Estate Goes to Alzheimer’s Group

Downpayment-Gift-300x207Here’s a really cool story from the West Coast: A childless widow who lived privately and modestly in a small Southern California city has left her entire $27-million estate to the Alzheimer’s Association of Orange County.

The bequest from Helen Banas—who died in August at the age of 95, her wealth unknown to neighbors—is the largest ever for the charity. Ten million dollars will go to the national Alzheimer’s Association, with the rest to the Orange County chapter.

Ms. Banas inherited money from her husband, Alfons, a stockbroker who died in 1958, and built her assets through investing. Friends said she had determined to leave her money to an Alzheimer’s group 20 years ago after the death of her mother, who suffered from the disease. For more details, see the full article as printed in the Orange County Register.

Final Arrangements

10 Facts Funeral Directors Don’t Want You to Know

tombstoneFunerals are among the most expensive purchases many consumers will ever make, ranking only behind the purchase of a home and an automobile. A traditional funeral, including a casket and vault, costs about $6,000, although “extras” like flowers, obituary notices, acknowledgment cards or limousines can add thousands of dollars to the bottom line. Many funerals run well over $10,000.

But it’s possible to spend much less if you don’t let funeral directors pressure you into buying goods or services you don’t want or need. To help consumers resist such pressure and become more informed, the Web site has compiled a list of “10 facts funeral directors don’t want you to know.” The list is summarized below. For the full list with explanations, visit:

1. Shopping around for funeral services can save you thousands of dollars.
2. Funeral directors are not clergy. Although consumers tend to trust them implicitly and believe everything they say, it is well to remember that funeral homes are in business to make money.
3. Embalming is rarely required when the person will be buried within 24 to 48 hours.
4. Seeing your loved one prior to burial without the benefit of embalming will not leave you with unresolved grief issues. “If more people knew what embalming entailed, they would not choose to do it,” says Joshua Slocum, executive director of the Vermont-based Funeral Consumers Alliance, a not-for-profit consumer information and advocacy group.
5. Sealed caskets, which add considerable cost, cannot preserve a body.
6. A funeral provider may not refuse or charge a fee to handle a casket you bought elsewhere.
7. You don’t need to spend more than $400 to $600 for a modest casket.
8. You do not have to buy the funeral home’s entire package of services. You may pick and choose the services you want.
9. You can plan and carry out many things on your own to honor your loved one without paying for services from a funeral home.
10. Local funeral and memorial societies can help consumers find ethical establishments and often negotiate discounts for their members. For example, the Funeral Consumers Alliance has 115 chapters in 46 states around the country.

All funeral homes must comply with the Federal Trade Commission’s Funeral Rule. The Funeral Rule requires all funeral homes to supply customers with a general price list that details prices for all possible goods or services. The rule also stipulates what kinds of misrepresentations are prohibited and explains what items consumers cannot be required to purchase, among other things. Also, be careful when considering whether to purchase a pre-paid funeral plan.


Year-End Tax Planning Tips for Seniors

unnamedWith the holidays in full gear, it’s time to do some planning that can help reduce your tax bill this year. Recently, U.S. News & World Report published an article geared specifically to seniors. Always be mindful of both federal and state legislative changes when applying your traditional year-end tax planning techniques. It is not too late to take advantage of some tax-savings opportunities that may not be around next year and, as always, consult with your preferred professional tax advisor for advice tailored specifically to your situation.

Financial Strategies

The Roth IRA “Back Door” Stategy

Roth IRAIf your income is too high, you can’t contribute directly to a Roth individual retirement account, but you can get one in a “backdoor” way.

Step 1: Open a traditional IRA (in your case, it’s nondeductible).

Step 2: Convert it to a Roth IRA. Is it worth it? “It’s a no-brainer if you have the cash to do it,” says Kevin Huston, an enrolled agent in Asheville, N.C. who has clients both young and old doing it to shore up their retirement savings. “It especially makes sense for people who are younger because they have all these years of tax-free growth,” he says.

Basically, you get an extra $5,000 (or $6,000 if you’re 50 or older) each year that grows in the Roth IRA income-tax free. That’s $10,000 (or $12,000) a year for a married couple. Repeat each year, and you can amass a nice retirement kitty. The audience for backdoor Roths is a niche, appealing to those earning too much to contribute to Roths directly but not so much that the extra tax savings doesn’t seem worth the effort. Vanguard says that “backdoor Roth” contributions represented about 2 percent of traditional IRA contributions in 2011. (Income restrictions on conversions were lifted starting Jan. 1, 2010, so anyone—regardless of income—can convert a traditional IRA to a Roth.)

Why go through the hoops of getting money into a Roth IRA? They are an amazing deal, especially for folks looking long-term and expecting higher tax rates in the future. With a Roth IRA you don’t ever have to take money out, and when you do start taking money out, it’s all income-tax-free, including the earnings. By contrast, with a traditional IRA, earnings grow tax-deferred, you have to start taking required mandatory distributions the year after you turn 70.5, and distributions count as income. A Roth can help keep your tax bite down in retirement. (Ideally you want a mix of taxable, tax-deferred and tax-free accounts to draw from in retirement.)

For an example of how one couple is using this strategy to build their nest egg and a more complete analysis, visit the link “The Serial Backdoor Roth, A Tax-Free Retirement Kitty” at

Financial Strategies

Social Security Super Secrets For Married Couples

imagesSocial Security may be broke and busted but it’s still writing checks; get all to which you are entitled before it changes. Here are three “super secrets” for married folks:

1. Pick which retirement you want; yours or your spouse’s. Obviously select the one that pays you the most. Often in a marriage there is a huge difference in wages. But even if the lower wage earner worked and has their own Social Security benefit, he or she may elect to receive an amount equal to half of their spouse’s instead. This is called your Spousal Benefit.

2. Double dip. A person who has reached full retirement age could elect to take his or her Spousal Benefit and delay taking their own Social Security benefit. Working or not, take your Spousal Benefit and delay your own and let it grow until you’re age 70. It doesn’t matter if your spouse is taking their Social Security benefit or not. Upon age 70, if your own benefit is higher than the Spousal Benefit you’ve been receiving, just swap and take your own. That’s more money for you now and potentially more money for you later.

3. Getting paid to wait. Typically, when one spouse hasn’t worked outside of the home as much as their mate, she won’t have much, if any, Social Security benefit and will default to receiving her payments when her higher earning spouse retires and decides to start taking Social Security payments. Do not wait. Once both spouses reach full retirement age, the higher earner (the husband in this example) should go ahead and file for his Social Security benefits. Then the lower earning wife files for her Spousal Benefit and, step three, the husband immediately suspends his Social Security benefit request. His benefit amount will continue to increase (by about 8 percent per year) and then when he reaches age 70, he can re-file to start taking his Social Security retirement benefit. This will give the wife free monthly money instead of thinking she must wait until hubby fully retires and takes a check from Social Security before she can…very cool idea.

News & Legislation

Inside Joe Paterno’s Estate Planning Ploy

joe-paternoJoe Paterno’s transfer of home ownership to his wife in July most likely was not an attempt to shield assets before a sexual-abuse scandal hit Pennsylvania State University’s football program. Instead, the move by the legendary coach more likely was made to take advantage of expiring estate tax rules, lawyers said. Mr. Paterno switched ownership of his ranch-style home in State College, PA from joint ownership with his wife, Susan, to her full ownership on July 21 in a $1 transaction, according to documents filed in Centre County, PA.

A New York Times story suggested that the move could have been an effort to shield the home from future lawsuits that may arise from the child abuse scandal that was first revealed early this month. But attorneys familiar with Pennsylvania law said that the property already was protected from creditors because it was jointly owned and therefore couldn’t be subject to creditors of only one of the spouses. The only way that the house, valued at $594,484, could be exposed to creditors is if both Mr. Paterno and his wife were targeted in a lawsuit, lawyers said.