What happens to a bank account when someone dies?

By

The old saying goes “you can’t take it with you,” but that leaves the question: What happens to the bank accounts that you leave behind? While the departed aren’t concerned, their heirs are affected by how the deceased set up their bank accounts.

What happens if the sole owner of an account dies?

If someone is the sole owner of a bank account, what happens next depends on a few factors.

Many banks allow their customers to name a beneficiary or set the account as Payable on Death (POD) or Transferable on Death (TOD) to another person. If the account holder established someone as a beneficiary or POD, the bank will release the funds to the named person once it learns of the account holder’s death. After that, the financial institution typically closes the account.

If the owner of the account didn’t name a beneficiary or a POD, the process can get more complicated. The executor, or person who administers a person’s estate when he or she dies, will become responsible for using the money to repay creditors and dividing the remaining funds according to the deceased’s will.

What happens to joint accounts when someone dies?

Most joint bank accounts include automatic rights of survivorship. In short, if one of the signers on the account passes away, the remaining signer (or signers) on the account retain ownership of the money in the account. That means that the surviving account owner can continue using the account, and the money in it, without any interruptions.

It’s worth noting that the death of an account holder can impact the insurance on an account. The Federal Deposit Insurance Corp. will continue to insure an account as if the decedent is alive for six months after his or her death. Once that time passes, the FDIC coverage stops. Joint accounts can receive up to $500,000 in protection; however, that amount will revert to the $250,000 in protection applicable to individual accounts if one of the joint account holders dies.

Still, if you’re a signer on a joint account, it’s worth checking with your bank to make sure that the account has automatic rights of survivorship. Some banks will freeze joint accounts if one of the signers dies, which could be a problem if you rely on the account for regular spending.

What happens to a bank account when someone dies without a will?

If someone dies without a will, the money in his or her bank account will still pass to the named beneficiary or POD for the account. If someone dies without a will and without naming a beneficiary or POD, things get more complicated.

In general, the executor of the state is responsible for handling any assets the deceased owned, including money in bank accounts. If there is no will to name an executor, the state will appoint one based on local law. The executor has to use the funds in the account to pay any of the estate’s creditors and then distributes the money according to local inheritance laws.

In most states, most or all of the money will go to the deceased’s spouse and children.

How do banks discover someone died?

Banks can discover the death of an account holder in a few ways.

Family member

One of the most common ways for a bank to discover that an account holder has died is for the family to inform the bank.

If a loved one has passed away, inform the deceased’s bank by bringing a copy of his or her death certificate, Social Security number, and any other documents provided by the court, such as letters testamentary (a court document giving someone legal power to act on behalf of a deceased person’s estate) provided to the executor.

Informing the bank lets it begin the process of distributing the deceased’s funds and closing the account.

Social Security

Often, funeral directors will take on the task of informing Social Security of a person’s death on behalf of the family. This saves the family the effort of telling Social Security about their loved one’s passing and makes sure that the heirs don’t have to deal with returning Social Security checks that shouldn’t have been issued.

If Social Security sent a payment for a month after the deceased’s death, the payment must be returned. Social Security will contact the bank that received the payment to ask for the return of funds. If the bank didn’t already know about the account holder’s death, receiving that request will inform it that the account holder died.

How to avoid complications

The last thing that people want to think about while grieving the loss of a loved one is money. There are some proactive steps that you can take to help your loved ones avoid complications if you die.

“Always have a will drawn up by an estate attorney and set up beneficiary designations or TOD, but the easiest way to deal with bank accounts is to simply have an authorized signer on the account so they don’t have to wait,” says accountant Eric Nisall, who has recent experience with handling the accounts of a deceased loved one advises. “They can just go in and take the money or wait and remove the decedent at a later time.”

If you have power of attorney for a loved one who is in poor health, you can add a joint account holder or a TOD to their accounts in preparation for the future.

Another important thing to do is to make sure that your family knows about all of your financial accounts. With the rise of online banking, it’s much easier for accounts to get lost in the shuffle.

“I think a common mistake is not knowing about all of the accounts,” says Nicole Rosen, a registered agent. “When my mom passed away, there was one account that didn’t have a POD. I couldn’t access this single bank account and it laid dormant. The bank charged enough fees to drain and overdraw the account.”

So, a good strategy is to consolidate your accounts as much as possible, leaving fewer accounts for your heirs to track down.

If you’re trying to find accounts left behind by a loved one, try checking your state’s unclaimed money database. Banks have to surrender unused accounts to the state after a period of time set by local law. The state then lists that unclaimed money for the original owners to find before escheating it for public use. You might be able to use these databases to find money that you or your loved one forgot about.

Bottom line

No one likes to contemplate their mortality but making basic preparations with your finances can save your loved ones from financial stress while grieving your loss. Make sure to use beneficiary and POD designations whenever possible and have a will drawn up by an attorney to outline your final wishes.

Complete Article HERE!

5 Considerations For Managing an Inheritance

Integrating new money into a financial plan while navigating the loss of a loved one is often a complicated process.

by Sam Swenson, CFA, CPA

The period leading up to and shortly after losing a close relative is often one of the most emotionally demanding times we, as humans, experience. The crippling grief of loss, coupled with the toll of anticipatory grief, can make it difficult to think clearly and function effectively. When an inheritance is involved, it is especially important to be a responsible steward of the money you’ve received and do your best to integrate new funds into your broader financial plan. Below, you’ll find four considerations for managing inherited money.

1. Pause to organize your thoughts and future actions

Aside from attending immediate events such as a funeral or memorial service, it’s important and necessary to take time to grieve and reflect on the loss of your loved one. It’s also important to avoid the urge to make any sudden, large changes to your life if you’ve inherited a windfall. Once a bit of time has passed, you should have a candid discussion with other heirs to determine the full list of responsibilities at hand and who will manage each one. The pre-appointed executor, or court-appointed administrator, should spearhead this process.

2. Create a plan (and don’t forget to act)

While this can be done as a team, take a full and complete inventory of the assets in your loved one’s estate — both probate (assets without a named beneficiary) and non-probate (assets with a named beneficiary). Remember to discontinue any of your loved one’s subscription services and recurring household expenses (i.e., cable and electric) when the executor has deemed it appropriate to do so. Once you’ve paid final expenses, created an action plan, and assigned responsibilities, it’s time to act on distributing assets to heirs.

3. Integrate to avoid mental accounting

It might seem convenient to keep your inheritance separate from your existing portfolio, but new money should be integrated into your own financial plan as if it were earned income. According to a variety of behavioral finance studies, we tend to view inherited money as eligible to be spent on discretionary items — we consider this money to be “found money.” We also tend to mentally view inheritances as “separate” from previously earned money. The truth is, although it was not earned at a job or side gig, this money is very much yours and should be integrated into your existing financial plan — if you have one! If you don’t yet have a written financial plan, it’s best to meet with a fee-only financial planner who charges by the hour or on a fixed-fee basis.

4. Ensure your financial priorities are met

Consider your inheritance an important opportunity to change the trajectory of your net worth. Use it to pay off or reduce long-standing debts, such as credit cards or student loans. Work on building an emergency fund — at least six months’ worth of living expenses — that will cushion you from unforeseen circumstances, including a pandemic-era-like job loss. Ensure that Roth (or Backdoor Roth for those who exceed income limits for Roth) contributions are made for this year and last year, if you’re still within the previous year’s tax filing deadline. Investing in a taxable brokerage account is a great idea if any money remains after priorities have been addressed. Bigger goals, like paying off an entire mortgage, can be deferred if you’re young and have locked in a favorable interest rate.

5. Be creative

It may be the case that you’ve inherited non-financial assets, like a car, artwork, or antiques. Strive to be open and honest with fellow heirs — if you can truly use one of the items, say so. Separately, if you aren’t ready to part with some of the items, offer them to extended family or friends. It can be comforting to know that otherwise unused belongings are put to good use by people you know. Alternatively, inherited artwork or antiques can often be repurposed or sold, and if you can afford to insure and maintain an additional vehicle — and you want one — inheriting one is a fortunate outcome. Try to avoid storing inherited items unless there is a plan to remove them within a specified timeframe, as storage charges can add up quickly over long periods of time.

Losing a close relative is difficult enough, but the need to prudently manage any inheritance will nonetheless loom large. In a perfect world, every family would have updated estate planning documents in place, with every family member agreeing as to the contents of said documents. This is rarely how it works out in practice, and it’s important to take a deep breath, take your time, and do your best to be realistic, practical, and a bit creative in absorbing inherited assets into your own life.

Complete Article HERE!

7 Items Your Estate Plan May Have Left Out

If your goal is to look out for your loved ones, consider tackling these estate-planning additional jobs.

By

Estate planning is the easiest financial-planning to-do to put off. It’s certainly not fun to ponder your own mortality, and yet that’s the very nature of estate planning. Lawyers are often involved, so it can be hard to get it done on the cheap. And while most financial-planning jobs provide at least some payoff during your lifetime, estate planning isn’t as much for you as it is for your loved ones.

Given all of those reasons, it’s no wonder that so many individuals put off creating or updating on an estate plan. But anecdotally, at least, the pandemic seems to be lighting a fire under some people to get serious about creating or updating their estate plans once and for all. It could be that they’ve been spurred on by the health crisis, which has already claimed too many lives, or they may finally have a bit of free time. A single friend had been lobbing questions at me about executorships and charitable bequests for several years now, but she recently texted me that she’s finally doing an estate plan. Another friend and her husband are updating their documents to reflect what has changed in their lives since they last prepared them. Among other adjustments, they’ve granted powers of attorney and executorship to their now-adult children rather than their siblings, who are aging.

Making sure you have the key estate planning documents in place is important; that means a will, an advance directive (or living will), powers of attorney for healthcare and financial matters, and guardianships for minor children, first and foremost. Trusts may also make sense in certain situations. But there are other add-ons that you can think about in the context of your estate plan, especially if your goal is to make life as easy for your loved ones as possible and to ensure that your wishes are carried out after your death. In contrast with a traditional estate plan, you can craft at least some of these documents on your own, without the aid of an attorney.

In my parents’ later years, I was intimately involved and eventually in charge of their finances, managing their investments, paying their bills from their bank account, and so on. When they eventually passed away, I didn’t have to hunt around for key documents or climb a learning curve about their finances.

But many of us don’t have or want that kind of backup in place, which is why I think it can be helpful to create a financial overview and master directory for your loved ones. (These documents can also come in handy if you’re the main financial decision-maker in your household and your spouse doesn’t pay too much attention.) A financial overview and master directory (the latter of which I’ve detailed below) go hand in hand.

A financial overview lays out the basics of your finances in a straightforward narrative. I think it can be especially helpful if your loved ones aren’t especially conversant in financial matters, or if they’re “words” people rather than numbers-oriented. (One way to think of it is that the financial overview is a Word document, whereas the master directory is Excel.)

I recently created such a financial overview for our household and included the following headings:

  • Our estate plan (in very broad outlines: where to find the documents and who the key agents are–POAs and executors).
  • Our key financial assets (no dollar amounts or account numbers; just where we hold the accounts and who owns them).
  • Our insurance coverage (property/casualty, health, life).
  • Our house (property ID number, whether there’s a mortgage).
  • Cars (VIN numbers, whether there are car payments).
  • Regular household bills that we pay.

2. A Master Directory
Think of a master directory as a detailed version of your financial overview. Whereas the financial overview is a Microsoft Word document, this is the Excel version. For example, your financial overview might say, “We each have 401(k)s through our employers: Emily’s is with Charles Schwab and Jake’s is with Fidelity.” But the master directory would include the actual account numbers for those accounts, the URLs, and the names of any individuals you deal with at those institutions. Because the master directory includes sensitive information, it’s crucial to encrypt it or, if it’s a physical document, to keep it under lock and key.

3. A Plan for Your Personal Property
Most wills will state that any tangible personal property, like furniture, should be sold and the proceeds added to your estate. But if you have sentimental or valuable items that you’d like to earmark for specific individuals, such as jewelry, artwork, or special home items, you can also create a memorandum of tangible personal property that specifies who you would like to inherit those items. For your own sanity, don’t go overboard in earmarking every little thing for specific individuals; focus on those items you treasure that will also have meaning for the recipients. I found that creating such a memorandum–and matching my favorite possessions to the loved ones in my life who I thought would appreciate them the most–to be one of the most enjoyable and cathartic aspects of the whole planning process. In addition, because the memorandum isn’t technically part of your will, you can update it as you obtain or shed possessions (or loved ones!). Such a memorandum is legally binding in most states, as long as it’s mentioned in your will. But even if the memorandum isn’t legally binding, it’s probably still worth doing and assuming that your loved ones will honor it.

4. A Plan for Your Pets
If you’re an animal lover, you know that pets aren’t possessions; they’re part of the family. Thus, more and more estate plans include provisions for pets. There are a few ways to incorporate pets into an estate plan, and they’re a gradation. The gold standard, albeit one that entails costs to set up, is a pet trust. Through such a trust, you detail which pets are covered, who you’d like to care for them and how, and leave an amount of money to cover the pet’s ongoing care. Alternatively, you can use a will to specify a caretaker for your pet and leave additional assets to that person to care for the pet; the downside of this arrangement is that the person who inherits those assets isn’t legally bound to use the money for the pet’s care. At a minimum, develop at least a verbally communicated plan for caretaking for your pet if you’re unable to do so–either on a short- or long-term basis.

5. A Digital Estate Plan
Even people who think they’ve ticked off all of the usual boxes on their estate-planning to-do lists may have overlooked an increasingly important component of the process: ensuring the proper management and orderly transfer of their digital assets after they die or become disabled. Just as traditional estate planning relates to the management and transfer of financial accounts and hard assets, digital estate-planning encompasses your digital possessions, including the tangible digital devices (computers and smartphones), stored data (either on your devices or in the cloud), and online accounts such as Facebook and LinkedIn. The laws around digital assets are changing quickly, and different providers have different policies/level of access. But a key first step is taking an inventory of all of your digital accounts and storing it in a secure but accessible location. You can include it as a separate sheet on your master directory, discussed above. Discuss the existence of this document with your executor, and if you have valuable digital assets (cryptocurrency, for example) you’ll want to be sure to discuss them with your attorney and incorporate them into your formal estate plan.

6. A Plan for the End of Life
If you have an advance directive, you know that it articulates your attitudes toward life-extending care. But these documents are typically boilerplate; they don’t go into great detail on these matters. If you’d like to add additional background for your spouse, children, or other loved ones who might be making healthcare decisions on your behalf, check out “The Conversation Project.” It offers a starter kit to help you clarify your thinking and discuss these matters with your loved ones.

It’s also worthwhile to spell out your wishes and any plans you’ve made for funerals, memorials, and the disposition of your body, either verbally, in writing, or both. Maybe your wishes are simply to have your loved ones say goodbye in whatever way gives them the most peace at that time; in that case, tell them that or write that down.

7. An Ethical Will
Last but not least, consider writing or recording an ethical will that spells out your beliefs and values. In contrast with a conventional will, which lays out how you’d like your financial and physical property to be distributed, an ethical will is a way to “hand down” your belief system to your loved ones. The tradition of ethical wills began in the Jewish community, but it has gained more interest across cultures over the past decade. This is a heavy assignment, so don’t too much pressure on yourself to be profound or to write an ethical will all at once. Instead, consider starting your ethical will by jotting down your beliefs as they occur to you. To help remove some of the pressure, balance light bits of wisdom (“always keep a bottle of champagne in the refrigerator so that you can celebrate happy events big and small”) with the deeper life lessons that you’ve learned.

Complete Article HERE!

A will doesn’t cover all your bases when it comes to end-of-life decisions.

Here’s what else you need

By Sarah O’Brien

  • A will is just one of several legal documents that help your loved ones know your end-of-life wishes.
  • If a person passes away without a will, a court may decide who gets their assets and who would care for any surviving children.
  • However, some assets pass outside of the will, including retirement accounts and life insurance.

As the coronavirus continues sweeping through U.S. communities and the death toll keeps rising, you might be considering your own mortality.

Regardless of the pandemic, experts say it’s important to plan for when you’re not here — that is, give thought to what would happen to your bank accounts, your home and your belongings, as well as, perhaps, your dependents.

That planning should start with a will. And apparently people know they need to take action, based on Google trends showing a jump in searches for information about creating one. 

“In every jurisdiction, if there isn’t a valid will, assets will pass on to your heirs by law, who may or may not be who you would have provided for in a will,” said Samantha Weyrauch Davis, an estate planning attorney and director with the law firm Hall Estill in Tulsa, Oklahoma. “It also lets you name a guardian for children.”

If you pass away with no will — called dying intestate — a state court decides who gets your assets and, if you have children, who will care for them.

This means that if you have an unmarried partner or a favorite charity but no will, your assets may not end up with them. Typically, the courts will pass on assets to your closest blood relatives, even if that wouldn’t have been your first choice.

However, a will is just one piece of an “estate plan.” An estate just refers to what you own — your financial accounts, possessions and any real estate. Putting a plan in place for those assets helps ensure that upon your death, your wishes are carried out and that family squabbles don’t evolve into destroyed relationships.

In other words, it’s partly about making things easier for your loved ones during an already-difficult time.

Here’s what else you should consider if you want to prepare.

What a will can and can’t do

A will is a document that lets you relay who gets what when you pass away. You can get as specific as you want (you leave a certain family heirloom to a particular person) or keep it more general (you want your surviving spouse to get everything).

However, there are some assets that pass outside of the will, including retirement accounts such as 401(k) plans and individual retirement accounts, as well as life insurance policies.

This means the person named as a beneficiary on those accounts will generally receive the money no matter what your will says. (Be aware that 401[k] plans require your current spouse to be the beneficiary unless they legally agree otherwise).

Those [online] forms or software may not be compliant with your local law, so look at the fine print.

Samantha Weyrauch Davis
Director with Hall Estill

Regular bank accounts, too, can have beneficiaries listed on a payable-on-death form, also known as a POD, which your bank can supply.

If no beneficiary is listed on those non-will items or the beneficiary has already passed away, the assets automatically go into probate. That’s the process by which all of your debt is paid off and then the remaining assets are distributed to heirs. The process can last several months to a year or more, depending on state laws and what’s involved in handling your estate.

If you own a home, be sure to find out how it should be titled to ensure it ends up with the person (or people) you want it to, because the laws can vary from state to state. Moreover, there can be other considerations when it comes to how a house is titled, including protection from potential creditors or for tax reasons later when the home is sold.

Another big decision

As part of the will-making process, you’ll need to pick an executor of your will (sometimes called a personal representative).

This can be a big job, experts say. Things such as liquidating accounts, ensuring your assets go to the proper beneficiaries, paying any debts not discharged (i.e., taxes owed to the IRS), and even selling your home could be among the duties undertaken by the executor.

In other words, just because you’ve known your best friend since elementary school doesn’t mean handling the challenge of being an executor is up their alley.

Where to get a will

To prepare a will, you can turn to an estate planning attorney in your local area — to ensure familiarity with state laws — or use an online option. However, be aware that not all of the web-based alternatives will necessarily reflect the specifics of your state’s law.

“There’s risk in doing it that way,” Davis said. “Those forms or software may not be compliant with your local law, so look at the fine print.”

If an online option ends up being appropriate for your situation, you may be able to find a form to download for free. Software will-making options can run about $60 or more, depending on what else is included. To set up an estate plan with an attorney could run several hundred dollars to more than $1,000, depending on the complexity of your situation.

Also, you’ll need to have a witness and/or notary sign it and make the document official, depending on the state where you live. The American College of Trust and Estate Counsel’s website offers a guide to laws and accommodations in every state if in-person meetings are not permitted due to the pandemic.

Other documents

Typically, estate planning also includes preparing a few other legal documents. This includes an advance health-care directive, also known as a living will.

This document outlines your wishes if you become incapacitated due to illness or injury.

Say you are on life support. Instead of a loved one making the agonizing decision whether to end all life-saving measures, your wishes would be specified in a legal record.

It’s also worth assigning powers of attorney. If you become incapacitated, the people to whom you grant powers of attorney will handle your medical and financial affairs if you cannot.

Often, the person who is given this responsibility when it comes to your health care is different from whom you would name to handle your financial affairs.

As with choosing an executor, make sure whoever you hand the financial reins to is trustworthy and smart.

“I tell my clients it’s really important to carefully consider the individuals you name,” Davis said. “You want to make sure they have the ability, skill set, time and desire to make such decisions and do these sorts of things.”

Make a list of critical documents

While it can be hard to imagine your own death, picture your family having to search through drawers for your original will, documents regarding your bank accounts and other assets, and maybe even your Social Security number.

The best way to avoid forcing them to deal with that task on top of mourning is to leave an organized list of information that the will’s executor will need to settle your estate, experts say. Be sure this includes passwords so your online accounts can be accessed.

Consider a trust

If you want your kids to receive money but don’t want to give a young adult — or one prone to poor money management — unfettered access to a sudden windfall, you can consider creating a trust to be the beneficiary of a particular asset.

A trust holds assets on behalf of your beneficiary or beneficiaries, and is a legal entity dictated by the documents creating it. If you go that route, the assets go into the trust instead of directly to your heirs. They can only receive money according to how (or when) you’ve stipulated in the trust documents.

The average cost to set up a trust using an attorney ranges from $1,000 to $1,500 for an individual and $1,200 to $1,500 for a couple, according to LegalZoom.com. Doing it yourself with online software could run several hundreds of dollars or more.

Complete Article HERE!

End-of-life planning during the coronavirus pandemic, in 8 steps

How to make crucial financial and health care decisions for you and your loved ones.

By

Surely you’ve heard it’s a good idea to have a will, just in case anything should happen. Yet we tend to put off completing the paperwork — the documents are confusing and it can be distressing to think about our own mortality. A 2017 study found that only about a third of Americans have completed the necessary end-of-life forms.

The Covid-19 pandemic now has many scrambling to figure out how to get wishes into writing. The coronavirus has reminded us that mortality is unpredictable and so it’s a good time to get our medical and financial matters in order.

The benefits to doing so are many: peace of mind knowing that you will get the medical treatment you want; that your possessions and assets, many or few, will be given to those you choose; that you are protecting your family and friends from having to guess what you would want; and preventing the squabbles that could erupt from family disagreements.

But how to complete the necessary paperwork while in social isolation? In some ways, self-isolation provides the perfect opportunity to get your documents together, but finalizing them can be difficult when a notary and witnesses can’t be in the same room with you.

Signing off, online

On March 20, Gov. Andrew Cuomo made New York one of the more than 20 US states to allow remote online notarization of documents — providing a solution to the challenge of self-isolation. It is a temporary law, and no one knows what it will mean once the pandemic has subsided. New York state also requires two witnesses (laws vary by state) to sign some of these documents, a problem that the temporary notarization law does not explicitly address.

Peter Strauss, a senior partner at Pierro, Connor & Strauss and a founding member of the National Academy of Elder Law Attorneys, has instituted a protocol that he and his firm believe will accommodate remote witnesses. Using a video chat program like Zoom, GoToMeeting, or FaceTime, witnesses show their ID and are recorded signing the document by the notary public. Still, Strauss recommends revisiting all documents once your state has safely reopened and completing them in person.

Fern Finkel, a Brooklyn elder care lawyer, said she was concerned that the online notarization process, depending on how the witnesses are involved, could leave documents open to contest. She, too, advised that any documents completed now with online notarization be revisited in the future.

But she and other experts said it is still very important to take steps now to account for medical and financial contingencies should you become ill. “The pandemic is a reason to act, not to delay necessary planning,” Strauss said.

As far as medical contingencies go, “it is really important for doctors to always be guided by the voice and values of the patient,” said Dr. VJ Periyakoil, associate professor of medicine at Stanford and director of the Stanford Palliative Care Education & Training Program. To preserve patients’ voices, Periyakoil and her team have worked with patients to create “The Letter Project,” free and simple forms that help patients communicate their wishes to their family and doctors.

The letters, which are not state-specific and come in eight languages, provide a structured way for each person to think through these important, timely, and emotionally charged issues. They can be printed, filled out, and attached to any state’s forms, also available online. “Our goal is to democratize health care,” Dr. Periyakoil told me, “If people have to choose between groceries or advance directives, groceries are always going to win.”

To get yourself and your loved ones (legally) prepared, here are eight important steps to take.

What you should be doing right now

1. Organize. “The first thing you have to do is understand what you have,” Finkel said. Pull out all your existing documents and organize them in one place. Do you have a health care proxy (designation of a person to make your medical decisions when you can’t), a HIPAA authorization (designation of a person to access your doctor and medical information), a living will (statement of what medical treatments you want in various situations), an intent to return home, a power of attorney, a trust, and/or a last will and testament (statement of how you would like your assets distributed)?

Collect these items in one place in your home — a desk drawer, say, or a file box. (If your documents are somewhere else in a safe deposit box, leave them there — just make sure your family members know where they are.)

Once you’ve done an audit of these documents, you can arrange an online consultation with a knowledgeable attorney to help guide you through what needs to be done. (Justia provides a list of elder law lawyers, for example, or ask your friends for a recommendation.)

To this file, add other essentials that your family members might need should you be incapacitated: checkbooks, insurance policies, safe deposit box keys, Social Security card, passport, birth certificate, and other identification, mortgage, deed or lease for your home, and vehicle titles.

2. Beneficiary designations. During this crisis (or at any time), it is advisable to designate beneficiaries on all of your accounts. Take a look at bank accounts, retirement accounts, and investment accounts to see if they have a beneficiary designation.

“People don’t understand that how accounts are titled is supreme to what’s in a will,” Finkel said. For instance, if your will divides your assets equally among your three children but your oldest daughter is the beneficiary on a bank account, she will receive the accounts’ balance upon your death.

Which means that much of your property designation can actually be done remotely by requesting the appropriate form from your bank or financial adviser and returning it by mail. “If these forms need to be notarized, you can do so remotely,” Finkel said.

3. Health care proxy. If you are in isolation with others you may be able to fill out a health care proxy. The document — which varies by state — often requires two witnesses, like your home health aide and your best friend (neither can be your assigned agent). The proxy allows you to appoint an agent who will make your medical decisions should you become incapacitated. You do not need a lawyer or a notary to complete this form. (AARP provides links to these forms for every state.)

4. HIPAA. Everyone should complete a HIPAA form. “If you can’t get two witnesses [for a health care proxy] because you’re self-isolated,” Finkel says, “you can still do a simple authorization [the HIPAA form] to let your close people be able to speak to doctors.”

At a time when visitors are not allowed in hospitals or nursing homes, the HIPAA — an acronym for the law that protects patient privacy, Health Insurance Portability and Accountability Act — will allow your designated loved ones to talk to your doctors about your status. Also, Finkel says, you can name as many designees as you want, just fill out the form with their names and contact information

Once you have completed a health care proxy and/or a HIPAA form, take a photo of them and share it with your designee. “I have HIPAA authorizations for my dad and my husband on my phone,” Finkel told me. They’re at her fingertips should she need them in an emergency. (You can access the HIPAA form here.)

5. Financial institution power of attorney. You can also complete a basic power of attorney form with your bank that designates a person to make financial transactions in those corresponding accounts. You can request the form and, if the institution allows, notarize it remotely. Some banks may have their own procedure, so check with them first.

“Do whatever you can right now to set up a designee for each of the banks you use,” Finkel recommended.

6. Direct deposit and direct pay. Now that you’re at home, it’s the perfect time to put all your bills and monthly payments online. Have your income deposited into one account and your regular bills auto paid from the same account. Heat, electric, gas, cell phone, cable, wireless, water — and your monthly rent or maintenance fee if possible.

“Get everything online, electronically paid, so that all of these things are seamless,” Finkel told me. Should you have to be hospitalized (hospital stays for severe cases of Covid-19 last an average of 10-13 days, with some lasting much longer), when you come home all of your services will be in place.

7. Passwords. While you’re setting up your bills for auto pay, organize all your online passwords. Once you’ve recorded the username and password for all of your utilities, do the same for your online accounts like email, social media, entertainment services, and other online platforms. Share this document with your most trusted person so that they’ll have it in your absence.

8. Have the conversation. This is also the time to talk to your loved ones about your health care and financial decisions. This difficult time might actually make the conversation easier for you and your family. “People around me are dying,” Finkel said. “We’re in a pandemic, and everyone is starting to see their own mortality. Let your loved ones know your wishes.” Tell the people you love where your documents are, and give your health care proxy, power of attorney, and HIPAA to your trusted agents named within them.

And there is one more important thing: “We can take this time to talk to our loved ones,” Periyakoil told me. “If there is one thing even more important than advanced directives, it’s really telling our friends and family how much we love them.”

Complete Article HERE!

Planning For The End Of A Life

Talking about death makes many of us uncomfortable, so we don’t plan for it. NPR’s Life Kit offers tips for starting an advanced directive to prepare for a good death.

By Kavitha Cardoza 

MICHEL MARTIN, HOST:

Thinking about death makes most people uncomfortable, which means many of us end up not planning. But Betsy Simmons Hannibal, a legal editor, says it’s like wearing a seatbelt.

BETSY SIMMONS HANNIBAL: We all wear our seatbelts even though we don’t expect to get in an accident on the way to the store. It’s just, like, something that we know is possible.

MARTIN: So buckle up. NPR’s Life Kit looked into preparing for the end, and reporter Kavitha Cardoza is going to walk us through a simple document called an advance directive.

KAVITHA CARDOZA, BYLINE: You don’t need to have a medical background or a lawyer to fill out an advance directive. You don’t even need a lot of time. And I promise it’s not too morbid. You can easily find an advance directive form online. There are different versions, but basically, it has two sections. The first is the most important – the medical power of attorney. Choose a person who can legally make health care decisions for you if you can’t.

PALLAVI KUMAR: Think about the person in your life who understands you, your goals, your values, your priorities and then is able to set aside their own wishes for you and to be a voice for you.

CARDOZA: That’s Dr. Pallavi Kumar, a medical oncologist and palliative care physician at the University of Pennsylvania. She says your medical proxy should be someone you trust who can handle stress because your loved ones will disagree on what to do, and it can be emotional. So you want to name someone who will carry out your wishes. Kumar says research shows when a caregiver sees a loved one die in the hospital under circumstances they believe that person never would have wanted, they’re in emotional pain for a long time.

KUMAR: And at six months and a year after death, these bereaved caregivers are still suffering from pretty severe depression and anxiety. There’s even some data to show that the survival for those caregivers is shortened.

CARDOZA: So think of an advance directive as a gift you’re giving your loved ones. The second section of the advanced directive document is called a living will. This part walks you through the general approach of how you want to die and what kind of care you want. Do you want to be resuscitated? Are you OK being hooked up to a ventilator? How do you feel about a feeding tube? Dr. Jessica Zitter is an ICU and palliative care physician in California. She says there’s no right or wrong decision. It’s personal.

JESSICA ZITTER: Someone once told me her father was – she says, he’s an old, crusty Italian man, and he said if someone else has to wipe my behind, I do not want to live. But there’s many, many others of us – if I was quadriplegic and still have an intellectual and emotional relationship with people, I don’t think I’d want to die.

CARDOZA: Even among patients who are very, very sick with cancer, less than half have had conversations about how they want to die. So it’s critical to share your wishes with your medical proxy and your loved ones as well as your doctor. Share a copy of the form with them.

Dr. Pallavi Kumar says the end of life is about more than just the medical aspect. When she knows a person’s priorities, that helps inform her treatment plan. For some patients, it might mean spending time at home with family. For others, it means trying every treatment possible for as long as possible.

KUMAR: They would say, if you’re telling me that a chemotherapy could give me another month, I want that month because that’s another month I have with my 6-year-old.

CARDOZA: While no one can predict when they’ll die, an advance directive can help you plan for how. It’s not a guarantee but a safety net for having what Doctor Zitter thinks of as a good death.

ZITTER: In order to figure out what a good death is, you have to figure out what a good life is and what living well means to you. That’s the only way to know how to die well because actually, they’re kind of reflections of each other.

Complete Article HERE!

Here’s how unpaid debt is handled when a person dies

By Sarah O’Brien

It’s not unusual for a person to pass away and leave behind some unpaid debt.

For the heirs — typically the surviving spouse or children — the question often is what, exactly, happens to those obligations. The answer: It depends on both the type of debt and the laws of the state.

A person’s assets — no matter how meager or massive — become their “estate” at death. That includes their financial accounts, possessions and real estate. And, generally speaking, it’s the estate that creditors go after when they try to collect money that they’re owed.

“Fortunately for surviving spouses or other beneficiaries, in most cases that debt isn’t something they’d be responsible for,” said certified financial planner Shon Anderson, president of Anderson Financial Strategies in Dayton, Ohio.

However, there are some exceptions.

First, though, some basics.

The process of paying off all your debt after your death and then distributing any remaining assets from your estate to heirs is called probate. Each state has its own laws governing how long creditors have to make a claim against the estate during that time. In some places it’s a few months. In other states, the process can last a couple of years.

Each state also has its own set of rules for prioritizing debt that should be paid from the estate, said Steven Mignogna, a fellow with the American College of Trust and Estate Counsel.

“In most states, funeral expenses take priority, then the cost of administering the estate, then taxes and then most states include hospital and medical bills,” Mignogna said.

However, he added, not all of a person’s assets necessarily are counted as part of an estate for probate purposes.

For instance, with life insurance policies and qualified retirement accounts (e.g., a 401(k) or individual retirement account), those assets go directly to the person named as the beneficiary and are not subject to probate. Additionally, assets placed in certain types of trusts also pass on outside of probate, as does jointly owned property (e.g., a house) as long as it is titled properly.

In fact, a person could pass away with an insolvent estate — that is, one lacking the means to pay off its liabilities — and yet have passed on assets that didn’t go through probate and generally can’t be touched by creditors.

However, a handful of states have “community property” laws, which make debt at death a bit more complex.

Generally, those states view both assets and certain debt that accumulated during the marriage as equally owned by each spouse — meaning a surviving spouse could be responsible for paying back the debt, even if it was only in the decedent’s name.

“Debt that couldn’t have been avoided during the marriage — like medical expenses or a mortgage — generally becomes the responsibility of the surviving spouse in community property states,” said CFP Bill Simonet, principal advisor at Simonet Financial Group in Kyle, Texas.

Yet that doesn’t mean you’d have to pay all of it, he said.

“A well-structured letter with a copy of the death certificate can lead to debt being discharged,” Simonet said. “In the probate process, you let the company know the estate has little to no assets to cover the debt and you ask that it be forgiven.”

Also, any time you jointly own debt — i.e., you cosigned a loan — you’re expected to continue paying if the other person passes away.

“You can ask for debt you cosigned to be forgiven, but don’t expect the request to work,” Simonet said.

It’s worth noting that federal student loans, unlike most forms of debt, are forgiven if the student dies. Parent PLUS loans — often held by parents to help pay for education expenses not covered by other forms of financial aid — are discharged if either the student or the parent who took out the loan passes away.

Complete Article HERE!