Time is ticking
Death isn’t simple. The period prior to one’s passing may involve a great deal of prolonged, complicated preparation for the event, and once one dies, a series of legal issues need to be addressed and resolved to settle even the simplest of estates. The death of almost every adult in the United States will generate the need for someone to take care of the decedent’s personal finances, handle asset and, possibly, probate issues in addition to burial arrangements.
The executor of an estate may need to work closely with insurance agents, bankers, employers, stockbrokers, accountants, lawyers, funeral directors and government agencies such as Social Security. In some cases, the list of parties with which to deal will prove even more extensive.
Death, Taxes and Personal Finances
Dealing with the death of a family member is emotionally difficult. Unfortunately, someone has to untangle the sometimes-thorny issues of the decedent’s financial affairs. The process is often stressful and sometimes confusing, but must be completed in compliance with all applicable laws.
Bank accounts are frozen when the owner dies, but those considered qualified under the law, such as a spouse or executor, can be granted access. Survivors may need to request that the courts issue a Letter of Administration or Letter of Testamentary to empower a spouse or executor to control financial accounts, including checking, savings, mutual funds and retirement accounts.
Estate taxes may need to be paid. Creditors need to be notified that the borrower is deceased to prevent identity theft and, perhaps, to recast the accounts as joint accounts, allowing the survivor leeway to pay the debt over time.
Asset Transfer is Not Automatic
The transfer of assets is not necessarily automatic, depending on the legal status of the estate. Having a will in place prior to passing is the best means by which to assure smooth asset transfers and avoid probate, but complex estates may yet raise significant legal issues.
A spouse or executor will require numerous copies of death certificates, valid wills, trust fund records, deeds, rental agreements, a marriage certificate, several years of tax returns, vehicle titles and insurance policies, among other documents.
Assets owned jointly, especially those designated as joint with rights of survivorship, usually pass smoothly to the survivor, bypassing probate. However, assets solely belonging to the decedent may be subject to probate, the stipulations of a valid will, or the state laws of intestacy, in the absence of a will. In such cases, the due transfer of assets can take months, if not years, to settle.
Resting Places and Burial Issues
The issue of what becomes of one’s body after death is best handled during one’s lifetime. Ideally, one specifies one’s own funeral arrangements; he decides whether to have his body cremated, selects burial grounds or opts for a final rest in a mausoleum. The postmortem treatment of one’s remains should be clearly stipulated in writing to assure compliance with one’s wishes. Most often, one’s final wishes are documented in a will.
Meeting with a funeral planner during one’s lifetime is a prudent addition to thorough estate planning. If one prefers that his body rest in a mausoleum, the funeral planner can help coordinate the mausoleum construction.
Legal issues raised by death are legion, and best dealt with prior to one’s passing. The survivors will appreciate the forethought.