Previously, in the Tax Reduction Letter, we published the first two parts of a three-part series…
- Tax Considerations When a Loved One Passes Away (Part 1)
- Tax Considerations When a Loved One Passes Away (Part 2)
In this, the final article in the series, we’re cover
the most important non-tax financial issues.
Handling Key Non-Tax Financial Issues When a Loved
One Passes Away (Part 3)
PLEASE NOTE: This final article in our three-part series is extremely comprehensive and the topics we mention in this email can’t possibly tell the whole story. Please review the complete articles as soon as possible.
Here are answers to five important questions
decedents (the deceased’s loved ones) often ask.
- What are the responsibilities of the executor? When a loved one passes away, the executor is the person who handles the financial fallout. This includes tax issues and non-tax issues. An executor’s duties include planning how to avoid tax-rates that apply to a living trust, following filing-rules that the IRS requires, making Required Minimum Distributions (RMDs), and much more. MUCH more as we’ll explain when you read the full article.
- Should you have a professional executor? Perhaps. If the deceased was wealthy and had complicated financial affairs, hiring a professional executor might be a good idea. (It can take some heat off the decedent.) Another situation where a professional executor might be useful is when there are adversarial or just-plain-unreasonable heirs. This is not unusual by any means as you’ll learn when you read the full article.
- Must the estate go through probate? Hopefully not. Many well-off individuals and married couples put their most valuable assets into a revocable trust (aka family trust, living trust, or grantor trust). Once that trust no longer exists, the executor should make sure to get the income (and most likely the assets), out of the trust to avoid the onerous trust tax-rates. You’ll get the whole story when you read the full article.
- What should the decedent do about death certificates? For various reasons, a death certificate may be needed to prove that the deceased has indeed passed away. You may need originals (not copies) for some purposes. Get at least five originals from the legal source. Get even more if the deceased had many assets like real estate owned in several jurisdictions. If in doubt, get more originals than you think will be needed. In fact, get a lot more. All will be explained when you read the full article.
- Does a married couple’s revocable trust need updating? Probably. If the deceased was married, a revocable trust may have been set up to hold the couple’s most valuable assets and thus avoid probate. Both spouses are usually named as co-trustees. If that’s the case, the trust may have to be amended to eliminate the decedent as a co-trustee and add a new co-trustee (usually an adult child) to help the surviving spouse manage the trust’s assets.
All of this and a whole lot more will be explained when you…