My sister died last Friday. My brother had been designated POA for her medical and financial needs. She had more than enough money in her checking account, which he could sign for as POA, to pay for her funeral expenses. BUT, the funeral home director told us that POA ends at the death of the person. Unless the checking account has a co-signature for the POA person, you cannot write any checks to pay for anything. Since we made her funeral arrangements on the day she died, he said they would probably honor the check for her funeral expenses, but if we had come the next day, we would have had to come up with the money. My brother and I had no idea that this happened, we thought he would continue with the POA after her death, until we could settle all her unpaid expenses that occurred during her illness. She was only ill for two and a half months, and it never occurred to us that we needed him to be added to her checking account. Maybe everyone knows this already, I am just thinking we were not the only ones caught off guard. Now we have to figure out how he becomes her executor and can use her money to pay for other leftover expenses. This was in Ohio, other states may not have the same thing. Just trying to give a head's up to others regarding this.
Honestly this is what I understood had to be done, based on finishing off handling my mother's cousin's estate (her sister was first exec, but passed a year and a day later, leaving a HUGE mess!) However, as an update to my original post:
1) Getting the EIN online, once they finished their updates and the online tool stabilized, was simple and quick. You don't need an attorney to get an EIN. Yes, by mail takes time, online it was minutes for me.
2) NONE of the checks sent were made out "to the estate of...", not even the $600 stimulus from the IRS! It was clear they knew she passed as normally this would have been electronic deposit. I was concerned these checks would be an issue, but I was finally approved to be exec, opened an account (estate, using EIN for tax ID) at a local bank and deposited them, no problem. I have done NO business with this bank before. Not sure why MJ1929 was refused. Was the account to deposit into an estate account? We're not talking pocket money here - the biggest check was refund** of the MC deposit, fairly big dollar amount!
**Funny note on that - because I had to wait for court approval, I couldn't open the account or deposit the checks. I don't know why it would take so long to process once I did deposit them, but the person handling this at the facility called me maybe 2 weeks after I deposited everything, asking if I received the check. The bank that issued the refund was questioning it.
3) Once approved, I used the online tool at the CU where mom's SS Rep Payee funds were deposited to send a copy of the DC and the appointment as exec, and requested the remaining funds to be sent "to the estate of..." and close the account. All that was left was the required amount to originally open it, which wasn't even SS money, and a bit of interest. Check was sent and deposited, CU account was closed.
4) I'm at the point where the court email says I owe them an accounting of what assets there are (basically only these refunds and interest, still waiting for potential tax refund before submitting that) and an accounting of any debts, bills, etc. The only owed funds are to me, for the court filing fee and the postage to mail the will and DC. It is a pain in the butt to resubmit if it changes, so I'm waiting this time until the tax refund is done!
As others have said, it is good to have the following:
1) POA for financial and medical - secondary for backup is good idea too.
2) If not joint on primary account (there are reasons for not doing this), at least have another account that IS joint, with enough funds for emergencies, like paying for a burial.
3) A pre-paid burial/funeral plan would be awesome to have!
4) A will naming executors and priorities (ours was joint so I had ping bro to get him to sign a declination form and submit that document, resulting in delay - it's better if only one is named primary, but good to have a backup, just in case.)
5) If there are substantial assets (liquid, not property per se), it would be a good idea to set up an irrevocable trust. It protects those assets from unscrupulous people and the LO if they have dementia or try to spend it on stupid things! Makes like easier at TOD - no probate required for that!
Once the trust and mom's taxes are done, hopefully this week, I need to ask him about the estate account tax filing. The original paperwork I was presented with mentioned filing by April 15, 2021... I know the date moved, but we're filing the 2020 taxes NOW. The funds in the estate account only just went in last month and per court information I saw, the funds have to sit there for at least 6 months. I would expect this all to be filed in 2022.
Sorry for the loss of your sister.
One legal provision that exists in most states and might help your brother (or other readers), but is often overlooked, is what's known as the "Small Estate" probate shortcuts. Under this provision, estates under a specified dollar limit ($100,000 in Idaho) an heir can bypass the requirement for formal probate filings. Although my guardianship/conservatorship ended upon my dad's death, just like a DPOA would have, using Idaho's "small estate affidavit" allowed me to pay his outstanding bills after his death and then simply transfer his remaining non-trust assets directly into his trust, but I also could have distributed those funds directly to his other heirs if I had wanted to do that. I did not hire an attorney to help me with this as there was no need for one because the "small estate affidavit" standard form was simple and quickly accepted at my dad's financial institutions. Note that assets in my dad's trust did not count toward Idaho's $100,000 "small estate" limit and neither did his life insurances or any other assets with designated beneficiaries. Hope this information is helpful.
Here's a link to one of many descriptions of "small estate" probate shortcuts:
https://www.nolo.com/legal-encyclopedia/free-books/avoid-probate-book/chapter8-2.html
A will is a GOOD document to have done, by anyone at any age. If you have minor children, you'd likely want to assign guardian for them. If you have assets, you'd want to specify what is done with them, who gets what, etc. If you have a trusted person, family or not, assign them as executor of the will. I would imagine passing without a will can be a real nightmare, if there are enough assets and people crawling out of the woodwork with their hands out!
If possible, esp if getting up in years or have a terminal condition, set up the bulk of assets in an irrevocable trust. A primary account to pay regular bills would be best to have at least one additional "owner", as when the primary account holder passes, the remaining funds can be used by the secondary "owners." If naming more than one exec or trustee, perhaps best to make one the alternate. There should be one, in the event that the primary passes or doesn't want the duty. Otherwise, the courts have to name someone.
I would only recommend a Life Estate for property (house, condo, etc) IF the person has a terminal condition (yes, we are all terminal) and can remain living at the property to the end or close to it. The EC atty set up mom's condo as a Life Estate. Unfortunately, thanks to her, we couldn't keep her in the condo, so it made selling it and dealing with the distribution of funds more difficult (we put all of it into the trust, for her care.)
Regardless of whether you have a will or not, in order to be the exec/admin, it will have to go through probate. A family member's sister was named exec for her will. She lived over 1000 miles away and tried using the attorney who had written the will. He was less than efficient and very difficult to contact (he also, I discovered, was almost disbarred for using other's escrow money!!) The sister passed a year later, and it was difficult getting info from the atty. Turns out she had named me alternate exec, but neither told me. Because of the bad atty, the sister took all the Estate account money! In error, the CD that was maturing was directed to the original account and they missed it! Thankfully it was there and I could then distribute what the person had requested in the will. I was new to all this, so I hired my own atty and we had to go through probate to get me named.
Dealing with it now, mom had a will, with two of us named and wishes for distribution. However, I still need to go through the court to be officially named as exec/admin. If not for the MC refund and stimulus, this might not have been necessary. The newest stimulus (clarification: valid for anyone alive Jan 1, 2020!!), refund of the previous stimulus she didn't get but was entitled to, deposit refund, interest on that deposit, the $25 required to open the SS rep payee account, NH refund/credit on taxes due to the virus, are all going to have to go through probate.
The bulk of mom's assets were in the trust, which WE can deal with, no court or lawyers needed, unless brothers decide to be PITAS! So, I highly recommend setting up a trust if there are a lot of assets. Any money received after death will likely require probate, but if nothing anticipated, the trust becomes the beneficiaries (cap gains may apply - recommendation I got was to open a brokerage acct, where most if not all assets can move without sale, skipping cap gains, then I plan to open my own trust and transfer it all back, with minimal or no cap gains!)
Also sorry that those who *COULD* inform us don't. It's hard enough dealing with the loss, and then having to scramble because they didn't inform us (our atty could have been much more helpful, but I've done most of the work needed myself!!! It's not like I didn't ask...)
Read through all the responses. We aren't from Ohio, so don't know the process there, but if she had limited assets, you may be able to do the E-file for probate to be named executor/administrator. NOTE: probate required for whether there is a will or not. Easier, I would think, for a will, but still required. I'm not a legal person, but I've been able, so far, to get all this done myself. Getting the Statement of Counsel I needed (will written out of state) was a pain, but only because of that atty.
If either or both of you feel you can do this, you could proceed without legal fees (other than court fee.) I called the court first and was emailed instructions. I got through that okay, but called again about needing to submit this ASAP based on reading online that our state requires submitting the will within 30 days. She told me to submit, I could attach later. The final call was the worst (35 min on hold!), but she walked me through the steps needed to attach, but I had to wait as the case # hadn't been assigned yet! Once the # was available, piece of cake to attach!
EIN (tax ID) for estate will be needed, but you can get that online. That will be needed to set up the estate account, but you'll need to be appointed exec/admin by the court first.
Once you have been assigned exec/admin and have the EIN, you can open an Estate Account and move all remaining funds to that account and the exec/admin can access them (you can both req being named exec/admin.)
Mushroom here (in the dark, but learning!)
Two of us had POAs (I was the only one to ever use it, but that's a different story!) Two of us (same 2) are executors of the will. When dementia came into play, we set up an irrevocable trust to keep most of her assets and condo - life estate, which was a BAD idea! We managed to sell the condo in 2018, with ALL assets put back into the trust to cover her care (the bulk went to the 3 of us, minimal to her.)
So, as trustees, the trust is for us to deal with - no legal required. HOWEVER, the refund and interest on the deposit for MC is in my possession, as well as the last stimulus check (despite doing taxes electronic, they mailed a check.) There will likely be a refund on the final tax return, because they processed the first stimulus before/just as the 2019 taxes were done, used the 2018 return and dinged her big time! We can get the rest, but it will, along with the above, require an estate account.
The EC atty has been LESS THAN helpful. He was notified the day before and the day of her passing. NOTHING useful, if at all, provided.
I managed to get the EIN online (it was under maintenance, so I had to wait, then it was iffy for a couple of days, but I got through and got the EIN myself, right away - PRINT everything!)
The checks are NOT made out to "Estate of", so it will be interesting to see if once we have an estate account they can be deposited (as noted in another comment, that EC atty suggested I just deposit them and don't tell the bank she's passed!!! NO NO NO NO!!! A small check, maybe, just maybe, but not the amounts I am dealing with!)
I applied for E-file probate in the current state (will was another state) and he was a REAL PITA about getting the Statement of Counsel I needed. There are, at least in this state, multiple levels for estate filing, depending on the size of the estate.
Finally they have assigned a case #, but waiting for update for appointment(s) to be assigned executor before I can actually open the estate account. Two of us are named, but the court has to give blessings.
Things to note that attorneys, EVEN EC attys, don't tell you:
** Federal entities (SS, Medicare, IRS, VA, fed'l pensions) do NOT accept POA.
** POAs end at death (they are granted by the person, so they won't be valid when the person passed.)
** ANY funds not jointly owned or under a trust require probate, will or no will.
** EIN for estate can be requested online (fastest method, no legal fees!)
** E-file for probate required some of their help, but can be done by YOU
** SS rep payee isn't difficult to get (PITA about my reporting usage!)
** SS and pension funds for the month of death are denied or taken back.
WARNING! Despite SS being paid in arrears (like you work a week, then get paid next week), they DON'T pay for the month of death, whether they pass on the 1st day or the last - not a dime. IF they deposit it, they WILL come back for it, so don't spend it!
** Having funeral expenses prepaid is a boon! Thankfully mom was covered!
If I think of more, I will add them later. If any questions about what's listed, ask away! As noted, I have not been officially appointed executor/administrator of the will yet, so the account isn't opened and the checks sit here, but if there are issues with not being "to the Estate of", I'll also update. In the case of the deposit refund, most likely the facility just approved the refund and didn't make mention that mom passed (as if she moved away and got the refund), otherwise I should think the bank would know better. I did when handling my mother's cousin's estate. The final check was to her estate - the legal team in charge of the guardian for her husband said there was no estate, make it out to them. Nope. This is it, deal with it!
If she did not (that is called "dying intestate") you will need to go to court to have someone appointed administrator of her estate."
****Even if one has a will, if there are non-jointly owned funds or property, one still needs to go through probate to be appointed executor/administrator.
Most of mom's funds were in a trust, being used to cover the cost of MC not covered by SS and pension, plus any other needs. THOSE we can handle without court intervention.
The deposit and interest for MC were sent in checks in HER name. The latest stimulus ($600) was sent in a check (although we used electronic filing and refunds, this one came as a check.) She will likely have a refund on the 2020 filing, to recoup what they erroneously stripped from the first stimulus. FWIW, I KNEW we would have to do probate to handle these, through an Estate account. Her main checking is okay, as 2 of us were on the account already. POA is a power of authority granted by the person, so if the person passes on, then that power goes away.
"I am surprised that the lawyer who prepared the Power of Attorney did not explain that it ended at death."
****I'm not surprised. Maybe they just ASSUME we know the details, but most of the time none of this gets explained. IMAGINE THIS: I secured an EIN online through the IRS for an estate account. I contacted the EC atty even before she passed, to get advice on how to proceed. Other than saying ensure nothing's in her name, he didn't follow up. When I asked about what court, he was still focused on MA, where mom lived when the will was done. She lived in NH for 4 years, so no, we CAN'T file in MA. HE should know that!. So, I figured out myself how to file online (courts are not allowing people in.) I have apparently the only "original" will and the DCs. These have to be mailed, so I asked if atty had a copy. He couldn't find one - seriously???? When I was ready to submit the E-file, it needed a Statement of Counsel, as the will was written out of state. I had to scan TEN pages of the will to email to him (my scanner is only one page at a time) so he could review something HE wrote up! When I asked about it, his excuse was 3 clients passed over the weekend, so he was busy!!! Dude - my mother passed almost a month ago (at that time) AND she was a client, but we don't deserve a minute? Then when he does get to filling out the one page form, he's telling me they have to call the court to find out how to submit it (and therefore charge more time.) I said NOPE, you send me the PDF and I attach it to my E-file, per online and phone instructions I already have!
Nasty mail pending for 2 bros and 1 useless atty (once paperwork is dry and all funds are distributed.) Then, move on without ANY of them.
And, get a will! When the POA ends the executor can deal with after death issues. Be specific that you want funeral/cremation or whatever paid before any other debts and distribution of what is left to heirs.
I was my mother's POA (and HCP, I might add). I am also listed as co-executor (along with my sister) of my mother's Last Will and Trust. What enabled me to pay her first bills immediately (funerary expenses, and regular expenses such as her condo fees, etc) was that she already had my name on her Bank account (a joint account even though the money was hers). When she died, I was still able to write checks on that account.
Any money that came to her after her death (checks or refunds) had to be handed over to the lawyers handling her estate where they set up a special estate bank account for the purpose of paying more bills as they came up. All paid expenses not from that account should be recorded and submitted to the legal team as those expenses are deducted from her estate tax liability (which means less estate taxes to pay). So keep good records of what you pay out after your LO dies.
My mother also had some retirement assets and mutual funds. The lawyer and her broker/financial advisor worked together to transfer all those assets to a trust account in the name of her estate (requires a different tax ID) from which I (the executor) will continue to write checks as needed for upcoming expenses as the year continues (legal fees, tax prep fees, state and federal taxes, estate taxes and condo fees until the title is transferred).
We would not know what to do in terms of estate tax returns, court filings, etc, without our lawyer. We'd be lost, frankly. I don't even know if it's possible for a non-lawyer to do it. The lawyer has to prepare the estate tax returns, file all appropriate court papers and get documentation from the court (that the bank required) for me to close her bank account (sometimes a death certificate is enough, but one special account required court papers). We will receive bills for all the legal assistance we are needing (which will be paid for out of her estate, as stated in her Last Will and Trust). We accept that resolving the legal matters around her death will be one of the major expenses that we will encounter. Whatever is left of my mother's estate will then be distributed according to her wishes.
So, yes ... so so important to get your affairs in order:
-- POA (a joint bank account is also very helpful)
-- Last Will and Trust
-- Assign executor of your will
-- Enlist the help of tax preparers and legal team (and broker, if need be)
-- Medical and health related matters (such as Health Care Proxy, Durable Health Power of Attorney, MOLST/POLST, Advance Directives, "5 wishes" ...). Have those difficult but important conversations early around your LO's wishes regarding end of life care and advance directives, then you won't be left agonizing what to do in a time of crisis where life and death choices must be made, and your LO cannot speak for him/herself.
My mother was great about covering all the bases. I am so grateful for how she planned everything, taught me how to do her taxes while she was still cognitively able to do so and got me on board with her financial management several years before she passed. She also was very direct and clear about her wishes regarding end of life care and interventions she did and did not want. When it came time to assist her in her dying process (hospice was a great support and helped my mother not suffer), I had no doubt about what she would have wanted when she was no longer able to communicate those things to me. Again, so grateful for her foresight and foreplanning!
Thank you OldAlto for the reminder to get our affairs in order. We never know what the future holds. It is a loving act towards those who survive us.
Bless you all.