How should the ongoing living expenses of those who were dependent on the decedent be paid?
If there is adequate cash available in a joint checking account or a trust account to meet the family’s immediate living expenses and other needs, then the immediate short term financial needs of the family can be met by using these accounts. However, long-term financial concerns should be discussed with your financial/legal advisor as part of the overall estate administration process.
How should funeral expenses and valid debts of the decedent be paid?
The personal representative or the surviving trustee should pay these from the decedent's assets before such assets are distributed to the beneficiaries.
What if there is not enough money to pay for the funeral expenses?
Special care should be taken by the personal representative to seek legal advice prior to incurring any funeral expenses. Virginia , Maryland and the District of Columbia have different limitations regarding the payment of funeral expenses in situations where there are not adequate funds or the estate is otherwise insolvent.
How many death certificates do I need?
Usually the funeral director will ask the family how many death certificates they would like and will take care of ordering them for the family. You will need death certificates for the social security administration, civil service, and each life insurance policy, retirement account, brokerage account, and individually held asset the decedent owned at death. Also, you will need a death certificate if you have to probate the will or have real estate in states other than the decedent's domicile at death and if you have to file estate tax returns. In addition, copies of the death certificate should be kept with other family records for future use if the need arises. Although you can always order more copies, it is easier to get a few more than you think you might need from the beginning.
What is probate?
Put very simply and generally, probate is the court-supervised administration and distribution of the assets you own in your own name (with no designated beneficiary or joint account holder with right of survivorship) upon your death. The person named in your will, or a person appointed by the court, must take steps to qualify as the person who will either carry out the terms of your will, or who will distribute the assets as the law directs if you have no will.
Do all estates go through probate after a person dies?
If there are no assets registered in the decedent's sole name, then state law generally does not require the qualification of the personal representative of the estate.
If there is a will, does it have to be probated?
Whether the will has to be probated depends on the legal requirements of the state in which the decedent died. Each state has its own unique requirements that our professionals can help you understand. Generally, as indicated above, the will is only required to be probated when there is property in the decedent's sole name at the time of death. However, some jurisdictions do require the will to be recorded in the clerk's office even when there are no probate assets.
What are non-probate assets?
Non-probate assets include assets that are not registered in the decedent's name alone, such as assets registered jointly with right of survivorship or assets transferred to a trust account during lifetime. Also, assets that have beneficiary designations, such as life insurance, retirement accounts, IRA's, or “payable on death” accounts are considered non-probate assets as long as a beneficiary other than the estate is designated to receive the account or proceeds. This is because these assets are not controlled by your will and consequently do not require someone to qualify before the court as an executor or administrator in order to transfer the assets to the beneficiary. Your will can only control assets that are registered in your name alone at the time of your death.
What happens to joint accounts at the death of one of the owners?
If the account is joint with right of survivorship, the asset passes automatically to the surviving joint owner(s) and is not part of the probate estate. However, although joint accounts with right of survivorship are not required to be included in the probate estate, the value of such accounts, and any contributions made to such accounts by the survivors, must be determined when calculating the total value of the estate assets for estate tax purposes.
Who can get into the safe deposit box?
Any surviving joint owner can access the safe deposit box. However, if the safe deposit box was registered in the name of the decedent alone, then someone will have to qualify as executor or administrator in order to access the contents of the box. If the original will is located in the safe deposit box special arrangements will have to be made with the probate clerk and the bank to remove the will from the box so it can be probated and someone can qualify as executor. Consequently, it is not a good idea to keep your original will in your safe deposit box if you do not have another person named on that box.
Is a Power of Attorney effective after death?
No, a Power of Attorney, even a Durable Power of Attorney, can only be used during the lifetime of the person who created the document.
Do the beneficiaries have to pay taxes on what they inherit?
Generally this depends on the total value of the assets owned by the decedent at the time of his or her death. For example, if the assets of a person who dies in 2018 are valued under $11,200,000, then there will be no federal estate or “death” tax. However, there may be a state estate tax, depending upon where the decedent lived, and there is an income tax on the income earned by those assets, whether held in the estate or distributed to the beneficiaries. Furthermore, there may be state inheritance taxes to pay, depending on the state in which the decedent dies or the state in which the decedent's real estate is located.
What assets are subject to the estate tax?
Everything the decedent owned! This includes tangible personal property, real estate, jointly held property, assets held in trust or partnerships, life insurance, retirement accounts, IRA's – everything! If the total value of everything the decedent owned is more than the federal estate tax exemption ($11,200,000 in 2018), then the estate will be subject to federal estate tax. In addition to the federal estate tax, the state in which the decedent lived may have a separate state estate tax governed by separate rules.