Other Financial Obligations

What do I do about unpaid bills and credit obligations of my loved one?

You will need to gather all of the bills together and make sure you are aware of all the credit card obligations of the deceased. Many installment loans, service contracts and credit card accounts are covered by credit life insurance, which pays off the account balance in the event of the death of a customer. 

How do I find out if a loan is covered by credit life?

You should contact any financial institution where the deceased had a loan, and inform them of the death. They will be able to inform you if the loan was covered by credit life.

Do I need to contact the credit card companies?

YES. You will need to contact the credit card companies to notify them of the death. If the card is held jointly, find out what documentation is required to change the card into the survivor’s name.

Do I need to contact the bank regarding jointly held accounts?

Make a prompt request for release from each bank in which the deceased and you held a joint account. This is necessary before you can withdraw funds from that account. A bank will usually stop payment on all checks as soon as a death notice is published. The bank must also have the account cleared by the state tax authorities.

Bank Accounts

What is to be done with bank accounts after a death varies regionally. In some regions, bank accounts are automatically frozen after a death. To avoid any complications, the bank should be notified immediately, and you should find out the procedures for releasing these funds, and how to set up a new account for funds received after the death. It’s recommended that a joint account stay open for at least six months to allow you to deposit any cheques that are made out to the deceased. To take a name off a joint bank account, banks require a Certified Copy of a Death Certificate. If the deceased had a safety deposit box in a bank, the contents can be sealed after death and a Certified Copy of a Death Certificate will be required to gain access to the contents.

The first thing you need to know is where your loved one did their banking. Some people will have one bank and others will have multiple Banks. When you go to the bank to close the account you will need a death certificate and a short certificate. These items are needed for any type of account you may close including Certificates of deposits. If you close a Certificate of Deposit the early withdraw fee is waived because you have the death certificate. The bank will then make you an official check that is payable to the estate.

Next thing you do is come to the bank to set-up an Estate Account.  Different types of accounts include: Checking accounts, Money Markets, Certificates of deposits and Savings accounts. All you would need when coming in to open the account again is that death certificate and a short certificate. The person listed on the short certificate would be the one that needs to come into the bank as they are the one that is listed as the executor of the account.

An EIN number is another thing that will need to be obtained. This is something that we can do the day you come into the bank to open the account. In some cases where an attorney is helping you handle an estate they might already have the EIN number established for you. If the Attorney already has an EIN number set up for you, just bring a copy of that number with you. 

Another question that some people have is regarding bonds. There are times you will find bonds as you go thru your loved ones home, if you do have bonds they are handled a little differently. There is special paperwork that needs to be completed and sent in to the US treasury. They then would cut those bonds back in the executor’s name. We at the bank can help you with that or you can go on the US treasury website to find it.

Executors

An executor is the personal representative of your estate. They are the person in charge of taking control of your assets, paying off any debts, and distributing assets to your beneficiaries per the terms and conditions of your will. You can choose anyone to be the executor of your will, but it is a good idea to choose someone who is both competent and trustworthy. The person you choose to be executor should be outlined in your will. Someone you appoint to be the executor of your will has the right to refuse, so you should have a backup executor in place just in case.

Probate

Probate is the legal process that transfers the legal title of property from the estate of the deceased to their beneficiaries.  During the probate process the executor of your will goes before the courts and indentifies and catalogs all the property you owned, appraises the property, and pays all debts and taxes, proves that the will is valid and legal, and distributes the property according to the instructions of the will. Probate can be a long, drawn-out legal process, and there are some probate-avoidance plans in place. Simply speak to your attorney to find out what you can do to avoid probate in your area.

Wills

Everyone knows they should have a will, but the vast majority – about 70% of us – do not. Writing a will is easy and inexpensive, and once you are done you can rest easy knowing your hard earned money and property will be distributed according to your wishes. As well, if you have children, you can leave instructions on who will be left in charge of them if you pass, leaving that decision out of the courts hands. Making a will is easy, you just need to be at least 18 years of age and must be of sound mind when the will is written. To make a will legal it must:

·        Expressly state that it is your will

·        Be computer generated or typewritten

·        Be signed and dated

·        Be signed by 2-3 witnesses, these witnesses must be people who don’t stand to inherit anything in the will.

Although you do not need a lawyer to complete a will, it is recommended to do one with a lawyer, as it will avoid any legal headaches after your passing. Once your will is complete, it’s recommended that it is kept somewhere safe and secure outside of your home. If you do your will through a lawyer, most law firms will store it for you free of charge. Many people keep their wills in a safety deposit box at a bank, but this is not recommended as the contents could be sealed at the time of death. The executor of your will should be aware of the location of it.

Estate Settlement

Wills, probate, joint property, estate taxes, selecting estate trustees/attorneys for property and personal care and other issues may appear somewhat intimidating at first.

Fortunately, with a little guidance and preparation, dealing with such matters does not have to be so overwhelming. Planning ahead and revising your plan often will help avoid unnecessary grief and confusion in the end. ‘Estate Planning’ includes all of the following issues and documents.

The following information is being provided as a general overview of some of the legal issues and areas you should consider. The information should not be considered legal advice nor is it intended to replace consultation with an attorney.

Administration of a Will

A Will is an instrument by which a person (the ‘’testator”) makes a disposition of his/her property, to be performed or take effect after his or her death.

A well-drafted Will may provide for the welfare of the testator’s family, distribute the testator’s assets in accordance with his/her wishes and secure the efficient management of the testator’s property.

Handwritten Wills (“holographic Wills”) can be made by a testator without the services of a lawyer, but problems can arise if not done properly and/or in accordance with applicable legislation.

A properly drafted Will can be a simple, inexpensive way to address many estate-related matters and can make matters run much smoother upon death. While there are many benefits to having a Will in place, there are some things that may not be accomplished in a Will. It is important to keep in mind that some items may not flow through your estate and thus may not be distributed in accordance with your Will.

During the estate planning process, it is important to speak with a lawyer experienced in such matters and knowledgeable of your unique situation.

A well designed estate can help minimize probate costs and estate taxes and can alert you to any potential statutory claims that may impact your ability to deal with your assets as intended.

A lawyer can discuss any potential claims that a “dependant” may have under Law, and/or with respect to any potential claims or entitlements. An awareness of such responsibilities and rights can help prevent unintended consequences or surprises upon death.

In addition to certain statutory claims, there are other legal limitations that must be considered when drafting a Will.

Documents such as a marriage or cohabitation agreement, a separation agreement, or a shareholder’s agreement (with buy/sell provisions, or option agreements) may also affect your Will plan, and thus it is important that such information be shared with your representative(s) when designing an estate plan.

In addition to determining how your estate will be distributed, a lawyer can speak to you about choosing a Personal Representative (Executor), and the considerations involved in selecting an appropriate person (or professional) to administer your estate.

The potential responsibility and work involved in being a Personal Representative (Executor) can be significant, and thus appointing someone with the financial acumen and willingness to take on this responsibility is a must.

Often times, people assume they must appoint a relative or child to act as a Personal Representative (Executor) because it would be “an honor.” While it may be considered “an honor” for some, the primary considerations should be choosing someone with the patience, ability and willingness to carry out this responsibility.

Powers of Attorney

A power of attorney is an instrument by which a person (principal) authorizes another person (the “Agent”) to act on his or her behalf. It is quite common for people to execute a power of attorney for healthcare and a power of attorney for property and finance at the same time of drafting a Will.

In a power of attorney for property and finance the authority granted to an Agent may be general in nature and thus may authorize the Agent to act on the grantor’s behalf in conducting his or her financial affairs. 

Alternatively, the power of attorney may be quite narrow, authorizing the Agent to perform specific acts, such as the sale of specific assets (house, car etc.), the conduct of banking, or the transfer of securities.

Similarly, in a power of attorney for healthcare, the authority granted to an Agent is the authority to make, on his or her behalf, decisions concerning the grantor’s personal care, such as healthcare, shelter, nutrition, clothing, hygiene and safety.

While you can appoint more than one Agent, it is important to decide whether they are to act “jointly” or “jointly and severally.” Depending upon where your Agent resides, such a distinction may have significant practical onsiderations.

Information Gathering

Upon death, one of the first things to do is to gather as much information as possible. It is important to look for and gather any Wills, deeds, financial documents, notes and insurance policies, etc., that the deceased may have.

As a starting point, the testator should consult the testator’s lawyer as sometimes original Wills have been kept at the lawyer’s office.

Upon death, you may want to ask the lawyer to provide notarized copies of the deceased’s Will. Before estate matters can be pursued (i.e. transferring a house or automobile, other legal matters), a copy of the death certificate is also required.

Please speak to the funeral home about obtaining certified copies of the death certificate (as most agencies will not accept photocopies).

Probate

Common questions from a newly entrusted/appointed Personal Representative are “What is probate and why do we need it?” and “Do we have to probate?” Probate is a rather formal procedure, establishing the validity of the Will, and is the official “proving” of the Will. Fortunately, not all Wills need to go through probate; such a determination will be dependent upon a testator’s unique situation.

After a death, the nominated personal representative is responsible for retaining an attorney to assist in commencing the probate proceedings. Pursuant to Pennsylvania law, the person holding or locating the original Will must file it along with a copy of a certified death certificate to the Register of Wills in the County where the death occurred. 

The nominated personal representative then will petition the probate court for Letters of Administration appointing the individual as the Personal Representative (in some states the “personal representative” is called the “executor”). He or she then will have the authority to, and responsibility of, collecting all assets of the estate, paying all debts and legal obligations, having the assets appraised and distributing the estate assets to those beneficiaries designated in the Will.

If an individual dies without a Will, it still may be necessary to probate his or her estate. If a person dies owning real property and personal assets titled only in his/her individual name and without having a valid Will, it is the responsibility of the deceased individual’s heirs to retain an attorney to commence an intestate probate proceeding. Jointly titled assets, life insurance proceeds, and retirement funds are not assets which typically would require a probate administration. Instead, they pass to the named beneficiaries or joint titleholders either by contract law or operation of state law. The surviving individual only needs to obtain a certified copy of the death certificate and present it to the institution.

This guide is not intended to be a substitute for specific individual

tax, legal, or estate settlement advice, as certain of the described considerations will not be the same for every estate. Accordingly, where specific advice is necessary or appropriate, consultation with a competent professional is strongly recommended.