Updated: Dec 24, 2019
It's never easy to talk about estate planning and the financial matters around death. Whether these conversations are taking place among healthy loved ones, because someone is gravely ill or because a loved one has just passed away, they are some of the toughest discussions that families can face. This post is meant to simplify and explain what you need to know and what to take into consideration. My hope is that it can make things a little easier for you and your family.
After a funeral, some people feel anxious about the legal, financial and business affairs of their loved one. Others need a while to grieve before turning to practical matters. While it’s important to collect important papers and start this process in a timely way, you don’t need to feel rushed. Take a week or two, but then it’s a good idea to start putting your loved one’s affairs in order. Here are some guidelines on the next steps you can take after a family member passes away.
Gathering Important Papers
Start by figuring out if the deceased person had a Will. If there is one, it will name someone to be the “executor." This person is now responsible for collecting the deceased person’s debts and belongings, and sorting them out according to the instructions in the will. More on this in a bit.
But where might the Will be? Look wherever the person kept important papers: a desk, cabinet, or office. It might also be at the person’s lawyer’s office, in a safety deposit box, or held for safekeeping at the county Probate Court.
What if there is no Will? Unfortunately, this is a common problem. If you can’t find a Will, someone in the family will have to take on the responsibility for straightening out the legal and financial affairs of the person who died. This person is generally called the “administrator.”
The first thing the executor or administrator should do is collect all of the loved one’s legal and financial documents. In addition to the Will, look for bank statements, retirement account statements, trust documents, bills (including credit card bills), deeds to property and life insurance policies. Also obtain the death certificate from the funeral home.
Does the Family Need to Go to Court?
If there are assets in the estate (meaning the deceased person owned assets at the time of death), the family may need to open a case in Probate Court located in the county where the deceased lived. Only some assets are considered part of the estate. Generally, these include things that are owned by the deceased alone.
What Happens to Joint Assets?
Things that are owned jointly with someone else (such as a spouse or child) are not part of the estate. Common examples of jointly owned property are real estate, shared bank accounts, and accounts where the deceased person identified a beneficiary. Life insurance policies are also not part of the deceased person’s estate. These assets transfer automatically to the other owner or beneficiary as soon as one party dies. You will need to contact the institution where the account or policy is and give them a copy of the death certificate.
NOTE: While these assets are transferred without the need to go through probate court, the recipient should consult with an accountant about whether there are any tax consequences to the transfers.
Opening a Case in Probate Court
The Executor of the Will or a responsible family member will need to go to the Probate Court in the county where the deceased lived and fill out paperwork to open an estate. For the person who ends up with the job of Administrator (when there is no will) or Executor (when there is a will), the probate court has a booklet of instructions explaining how to serve in this important role. If that’s you, get a copy from the court. In many circumstances you will not need an attorney to file in Probate Court. However, if there are a lot of assets and/or a lot of debts, or there is a trust, it might be wise to hire an attorney.
If you have questions about whether you need to open an estate in Probate Court or whether you need an attorney, Meub Gallivan & Larson can help you figure this out.
Contact us with any questions about estate planning. We are here to help and the initial consultation is free. Phone: 802-747-0610