Category Archives: Estate Representative

Estate Representative. Personal representative. Family representative Person in charge of settling an estate

Isn’t identity theft just by strangers?

Identity theft of the deceased is a huge problem today. You may think that it is just strangers preying on the families of deceased loved ones. However, it is sometimes those loved ones who perpetrate the fraud.

Last week in New Jersey, Jocelyn Russo, 36, pleaded guilty to using her dead aunt’s identity to gain access to credit card and bank savings accounts. Pretending to be her aunt, Jocelyn used her aunt’s Social Security number and other identifying data to authorize the addition of her name to her aunt’s accounts at Bank of America and JP Morgan Chase.

As her aunt, she added herself to credit card accounts as an authorized signer. She then made large purchases with those credit cards and didn’t pay them off. She also withdrew all of her aunt’s funds from a bank account at Provident Bank.

The three banks involved lost more than $30,000 because of the fraud and, of course, any other immediate family of the deceased suffered emotional as well as financial damage.

Russo is charged with bank fraud and can face a possible penalty of 30 years in jail and a fine of $1 million. She will be sentenced in February, 2013.

If you are the executor of someone’s estate, you should work quickly to notify the three credit bureaus about the death and to ask them to place a death flag on the accounts. You should also contact any financial institutions with which the deceased did business. Once the accounts have been flagged as belonging to someone who is deceased, fraud like the one the Jocelyn Russo perpetrated cannot happen.

For more information, go to www.diesmart.com or look for our book, GRAVE ROBBERS…HOW TO PREVENT IDENTITY THEFT OF THE DECEASED.

25 Documents You Need Before You Die

Recently, the Wall Street Journal weekend edition had a very interesting article titled “25 Documents You Need Before You Die.”

Basically, it says that you should make sure that the originals of all of your valuable papers are put somewhere safe and that a loved one knows where that safe place is. Otherwise, when you become incapacitated or after you die there may be a great deal of frustration and unnecessary work as your heir or estate representative tries to figure out what you’ve done and how to prove it.

Check out this article and also check out Die Smart for more information on what to do.

Estate Tax: Senate Bill 722

The 2010 Congressional Budget Resolution recommends a personal estate tax exemption allowance of $3.5 million. The value of estates above that would be taxed at 45%. However, the language in the Budget Resolution does not provide for the “portability” of the $3.5 million allowance to a surviving spouse. Without “portability”, the proposed estate tax laws extend the existing married couple estate tax trap.

Existing estate tax rules

What is the existing married couple estate tax trap? Assume a husband and a wife each have property worth $2.5 million. The wife dies first and her will leaves $2.5 million of her assets to her surviving husband. When the husband dies, his estate now includes assets he owns and assets given him when his wife died. The estate tax value of the second spouse to die is $5 million. However, under existing tax laws, the second spouse to die can only claim his $3.5 million exemption. The estate would owe taxes on $1.5 million.

To avoid the married couple estate tax trap, many married couples spend time and money establishing an AB trust. The AB trust enables both couples to claim their $3.5 million tax exemption allowance, and exempts a total of $7 million from estate taxes.

Senate Bill 722

On March 26, 2009, Senator Max Baucus introduced the Taxpayer Certainty and Relief Act of 2009 (S. 722).

Senate Bill 722 provides “portability” of the estate-tax exemption allowance to the surviving spouse. Let’s take the same example. Assume a husband and a wife each have property worth $2.5 million. The wife dies first and her will leaves $2.5 million of assets to the surviving husband. When the husband dies, his estate now includes assets he owns and assets given him when his wife died. The estate tax value of the second spouse to die is $5 million. The “portability” of the estate tax exemption allowance would allow the surviving spouse to claim the $3.5 million exemption allowance available to the first spouse to die and his own $3.5 million exemption allowance.

The “portability” clause would exempt $7 million of the estate of a married couple from any taxation. The value of estates above $7 million would be taxed at 45%. This portability would eliminate the need for married couples to set up an AB trust in order for each couple to claim their individual estate tax exemption allowance.