Tag Archives: Probate

The “Aid in Dying” movement – is it a good idea?

According to an article that appeared a few days ago in the New York Times,  there is a new movement in the United States called “Aid in Dying”.  It’s supporters try to avoid calling it what it really is – assisted suicide – but, whatever they call it, it’s gaining traction.   

Until 2008, assisted suicide was legal in just one state: Oregon.  Today, it’s legal in five states: Montana, Oregon, Washington, Vermont and New Mexico.  Supporters of the right for a terminally ill patient to choose aid in dying are supporting “death with dignity” bills in Connecticut and other states. 

Lawsuits in New Mexico and Montana related to this topic have resulted in a differentiation between aid in dying, which is now legal, and assisted suicide, which is still considered a crime in both of those states. 

Church groups have weighed in on the topic and claim that aid in dying is morally wrong.  However, more and more people are asking for the right to die on their own terms according to Barbara Coombs Lee, president of Compassion & Choices.  

In May 2013, a Gallup Poll was conducted.  It asked whether doctors should be allowed to “end the patient’s life by some painless means” when patients and their families want it.  70% said yes.  However, when asked whether doctors should be allowed to help a dying patient “commit suicide”, only 51% said they should.  It’s clear that the exact wording is critically important in assessing how people really feel about the issue and on what is actually legal. 

What do you think?  Should aid in dying be made legal in your state?

To learn more about other topics related to death, go to www.diesmart.com.

Another actor did it wrong. Do you have your plans in place?

Julie Garber, in her weekly blog, wrote about another person who did it wrong.  When actor Paul Walker died in a terrible car crash on November 30th, 2013, he left an estate estimated to be worth at least $45 million.  However, he had done no estate planning and left no will.  He was only 40 years old and probably thought he had plenty of time to get his affairs in order.  His parents, ex-wife and girl friend of seven years are now fighting over who should inherit.

According to California intestate laws, the entire estate should be inherited by his daughter, Meadow.  Since she is only 15, someone needs to be responsible for managing to estate until she turns 18.  Her mother is her guardian but is not necessarily the one who will control the money on her behalf.  Since her parents believe they should manage the estate, the case will have to go to probate court.

And what about his long term girlfriend, Jasmine?  She won’t see a penny.

Have you done estate planning?  Is all of your paperwork in order?  Or are you, like Paul Walker, leaving a mess for  your loved ones?

For more information about estate planning, go to www.diesmart.com.

Estate Inventory

WHAT IS THE PROBATE AND ESTATE TAX VALUE OF THE ESTATE?

The person in charge will need to make an inventory of the estate.   This inventory is critical to the entire estate settlement process.  The inventory will:

  • Identify whether a Last Will and Testament, Codicil, Living Trust or other legal documents exist.
  • Capture basic information about the deceased, a surviving spouse and other relatives of the deceased.
  • List what property the deceased owned, how the property is titled, what percentage the decedent owned, the fair market value of the asset, and any debts the decedent owes.
  • Identify what assets are probate assets, what assets have automatic inheritance rights, and what assets are trust assets.
  • Identify the  location of the tax returns and other documents.
  • List any income the decedent receives, including social security benefits

The following questions and answers can help a family member or estate representative prepare the estate inventory.

Q. Where can an executor or family member get the information required to complete the inventory?

A. Hopefully the deceased prepared a Family Treasure Map before he died.   If not, the executor or family member will need to search for information and documents to help them create the inventory worksheets.

  • The checkbook and prior cancelled checks
  • The mailbox
  • Paper files
  • Conversations with professional advisors:  tax preparers, lawyers, doctors
  • A safe deposit box
  • Conversations with business partners
  • E-records

Q. What assets are included in the inventory?

A. Everything the decedent owned, or had an interest in, including:

  • real estate deeds, insurance, condominium bylaws, and property taxes
  • checking and savings accounts and any checkbook
  • cash, including coin collections
  • annuities
  • brokerage accounts
  • savings bonds
  • life insurance policies
  • certificates of deposit
  • vehicles
  • jewelry
  • art
  • other collectibles
  • household inventory
  • accrued wages, unpaid vacation and sick pay
  • retirement plans, including 401(k)s, IRAs, 403(b), even though a beneficiary is named
  • benefits, including social security and VA benefits
  • property in another state or country
  • anything in a safe deposit box
  • health savings account
  • debts owed the deceased

Everything the decedent owes:

  • credit cards
  • student loans
  • medical bills
  • child support
  • alimony
  • mortgages
  • car Loans

Include any gifts the decedent made in the two years before his death.  This information is needed to calculate the federal estate tax value of the estate.

Return

Q. How do you assign a value to each item?

A. Once a list of the assets is made, someone should assign a fair market value to the estate property.  The fair market value of the property is the price someone would pay to purchase a particular piece of property.  Different types of property have a different method for calculating the fair market value.  A family member or estate representative may determine the fair market value used in the inventory.  Or, the estate representative may hire someone to determine the fair market values to be used in the inventory.

If the estate has valuable personal property, such as antiques or jewelry, you may want an appraiser to complete an appraisal form.

The fair market value is used  to calculate the probate value and the estate tax value of the estate.

Each asset must be valued as of the date of death of the decedent.  For federal estate tax purposes, the estate may also be valued six months later and the lower value may be used to calculate the federal estate tax.

Return

Q. Who can access the safe deposit box?

A. It depends on how the safe deposit box is titled.

  • If the decedent owned the box as joint tenants with right of survivorship, a surviving joint tenant has the right to access the box.
  • In many states, the executor or other family members may need a document from the probate court authorizing the bank to give access to the executor or family member.
  • In some states, a bank representative must take an inventory of the box.
  • If a trustee owns the box, the successor trustee has the inherent legal right  to access the box.

Return

Q. How do you calculate the probate value of the estate?

A. Different states have different rules on how to calculate the probate value of the decedent’s property.

Some states use the fair market market value of the estate, which is sometimes described as the gross value of the estate.   Other statues use the net value of the asset as the probate value.  The net value of the property is the fair market value less secured liens..

For instance, John dies.   A real estate appraiser establishes a fair market value of $750,000 for his personal residence.   When John died, the mortgage secured by the personal residence was $400,000.

If the state probate rules use the net market value as the probate value of the estate, the probate value of John’s personal residence is $350,000 ($750,000 minus $400,000.

If the state probate rules use the gross value as the probate value, the probate value of John’s personal residence is $750,000.

Some states exempt personal residences considered as a homestead from the probate estate calculations.   Funeral expenses and family allowances may also be exempt from the probate calculations.

Return

Q. How do you calculate the estate tax value of the estate??

A. The federal estate tax value of the estate is calculated in the same manner in all states.   The estate tax page explains how to calculate the estate tax value of the estate and determine if the estate is subject to estate tax.

Fact:   Fair market value of stocks

Historical stock values are available at: http://finance.yahoo.com/

Return

Is there an unclaimed life insurance policy in your future?

I came across an old article in the New York Times about this topic and thought it worth reviewing. 

When someone who purchased a life insurance policy dies, the amount due to the beneficiary is set aside and the insurance company waits to be contacted by that person.  After a period of time from two to seven years (it varies by state) has passed with no one coming forward, the money is turned over to the unclaimed property division of the state in which the person died. 

Since many people do not know whether a family member who died purchased a life insurance policy in their name, hundreds of millions of dollars go unclaimed.  In fact, New York alone, in the period 2000 to a few years ago, received more than $400 million in unclaimed life insurance property and only paid out about $64 million.  That means the bulk of that property remains unclaimed and probably will never be claimed.

If a family member has died and you think he or she might have had a life insurance policy, the first thing to do is to check for any payment receipts or check stubs so you can identify the name of the insurance company.  Contact that company, ask what their procedure is for filing a claim and then follow their instructions. 

If a great deal of time has lapsed, two good places to start are unclaimed.org and MissingMoney.com.  If they have no record of any funds, check the website for the unclaimed property department of the state in which the person died. 

Don’t leave your money in the state’s coffers.  Claim the funds due to you today.

For information about estate planning and other relevant topics, go to www.diesmart.com.

Have you thought about an at-home funeral?

Until the end of the 19th century, when someone died, it was the norm to keep the body at home where the family would take care of the deceased loved one until his or her burial.  But as the funeral home industry grew, the number of at-home funerals declined and didn’t regain popularity until about ten years ago.

A story from WBUR, Boston’s NPR station, discusses the recent interest in this type of funeral and cites several examples of families who have chosen to have a more natural, custom ceremony conducted in their own home.

Some people with whom I spoke said they would like this type of treatment when they died but they didn’t think it was legal.  In fact, in all but nine states, it is definitely legal.  Massachusetts even offers clear instructions for home funerals on its website, including what you need for a death certificate, guidance on burials and preparing the body.

If this type of funeral is of interest to you, there are many sources for information.  One is the National Home Funeral Alliance, which has about 300 members around the country.  Another source is our website, www.diesmart.com.