Navigating an Estate

Please pardon the significant gap between posts.


Last month, after years of more good cheer and grace than anyone could have asked for given her circumstances, my mom passed away. She has been significantly diminished for several years and my brother and I have long missed the mother we grew up knowing. What has surprised me is how much I miss spending snippets of time with even the shadow of her that I've grown used to seeing on a regular basis in recent years. Biology is a powerful force, and losing a parent under any circumstances is a major life event.


As we sort through our emotions, my brother and I are also getting a first-hand lesson in funerals and estate administration from the state of Maryland and the custodians of my mother's last few accounts. Here are a few tidbits and tips we can share for anyone who finds himself in our shoes:

• Find out, far in advance, what your parents' wishes are so that you can honor them to the extent it is possible. Our mother executed a complete set of documents -- a will, medical power of attorney, durable power of attorney, and living will-- several years ago when she was first admitted to the nursing home. This allowed us to instruct the staff to move into hospice mode, according to her wishes, when she was obviously terminal. She had also purchased a plot in the cemetary where her parents are buried. It was not the resting place we might have selected for her, but it was her choice and we were happy to be able to grant her one last wish.


• Make sure you have access to any safe deposit boxes, know where tax returns are stored and have the addresses and social security numbers of all beneficiaries.


• The staff at the funeral home can be extremely helpful when you are really in need. They are experts in planning funeral logistics and can tend to many details that you may not have considered or be prepared to handle in the midst of your grief. In addition to all of the funeral details, the funeral home also took care of applying for death certificates and sending a death notice to our local newspaper.


• Request plenty of originals of the death certificate. The funeral home we used recommended a minimum of twelve. If you know your parent's financial life was fairly complex -- he or she owns multiple homes, has accounts with multiple custodians , banks or fund companies, or has multiple life insurance policies -- twelve may not even be enough. Many of these account holders may accept a copy rather than an original, but it's better to be safe and order extra.


• The personal representative, or executor named in the will is responsible for estate administration. This involves gathering all relevant documents, filing paperwork with the state to register the estate and obtain a tax id number, and eventually distributing the assets. How long this takes and how much it will cost depend upon many factors including what state the deceased lived in, the complexity of his or her financial life, and whether there are trusts in place. If you are serving as a personal representative for an estate be prepared to be very patient and to wade through a tremendous amount of bureacracy. You can also engage an estate attorney to handle much of this process.


• Life insurance, IRAs, pensions and trusts contain named beneficiaries and pass directly to them when the proper paperwork has been completed and filed. Expect to provide each company involved with a copy of the death certificate along with whatever paperwork and additional documents they require.


• Contact Social Security to notify them of the death. Payments received after the month of death will be reversed and must be returned if they were not paid electronically. If there is a surviving spouse who was also receiving Social Security, he or she will receive the higher amount of the two individual payments in the future.


• Small estates qualify for a simplified probate process in most states. Larger estates, $1 million and over may require appraisals of real property and personal property and a Federal estate tax return that is due nine months after the date of death.


• Joint accounts must be retitled in the name of the survivor. Notify the bank or brokerage firm and expect to provide them with a death certificate.


• Retain cancelled checks and bank statements for five years prior to death for your records. Estates can be audited by the IRS.