Frank and Mary Aust seminar

001hi I'm art Bergeron in the presentation you're about to see is scheduled for showing in Ashland in August this is all about uh dealing with what happens after you die uh from dealing with your remains which is what your body becomes after you die to dealing with your car the stuff in the house the house itself the bank accounts the U.S savings bonds your coin collection everything so I try to deal with all these issues um and so if you've have an interest if you're planning on dying or you know anybody who is um then then you should watch this uh and if you've got any questions please give me a call 508-860-1470 thank you hi I'm art Bergeron and welcome to the next episode of elder law 101 uh the 12 episode series that

002I'm doing uh this year that really ideally deals with all issues that you would ever want to know about if you're talking about elder law So today we're going to be talking about the post-mortem to-do list that is what are you supposed to do after your day dead you may recall that we have been doing this series now for quite a while uh in the first we and we're all always following my friends Frank and Mary and their kids Peter Paul and Mary Jr uh in the initial episode uh we talked about um dealing with issues that they might have dealt with when they were been before they were 60. in the next episode we dealt with we dealt with issues during their 60s uh we then we talked about Frank and Mary in their

00370s in the fourth episode which actually happened during tax season we talked about tax tax income tax issues uh next we talked about Frankie Mary in their 80s then we'd had a separate episode that talked about qualifying for Mass Health which tends to be an extremely important issue if you're in your 80s and your 90s because you you folks are worried about being frail needing Care at home needing nursing home care um then we talked about in the last episode we talked about Frankie Mary during the last year of their lives today in this episode Frank and Mary are dead so we're trying to figure route what to do at that point and in the remaining episodes we're going to talk about other issues now today we're not going to talk about what would have

004to be done if any of the assets of Frank and Mary were in trust that's what we're going to talk about next month we're going to talk about all the basically all all not all the three major kinds of trusts that that Frank and Mary may have had an interest in doing while they were alive and how each one of those would get handled after they die then later we're going to talk about issues with their kids and their grandkids and we're going to talk about looking at Medicare which is always an important issue and which we're going to talk about in November when it's etiquette Medicare open enrollment time and then finally in Christmas time we're going to talk about tax planning and uh giving So today we're talking about Frank and Mary my

005old friends and their kids Peter Paul and Mary Jr I always tell people if you're old enough to get the joke you're old enough to be my client um and but today but today we're talking um not about Frank and Mary themselves but about what happens after they're dead because you know when when Mary died or excuse me in with the example we always give is that Frank died first and when Frank died we don't know exactly what happens to Frank's after he dies we don't know if he goes to heaven we don't know if he goes to the other place we don't know if he gets reincarnated as an elephant or something but the point is for for purposes of this life he's gone uh and the question is always how to deal with

006the things now typically uh when Frank died like in in this case if Frank died then there would have been no need for probate because assets typically would have been owned by Frank and Mary jointly the legal rule is that if you own something jointly with someone and you die your interest evaporates at that moment the Survivor becomes the sole owner so there's no need for going through the probate process things that get very simple um the question though is what happens then when Mary dies once again we're not exactly sure what happened as far as her spirit is concerned as far as her stuff though we need to deal with it so the question is um how do we deal with Mary's Earthly goods and of course the first thing that we need to

007deal with the moment that Mary dies uh is her remains because when Mary dies her body is she's no longer married three at that point um legally there are there is this body and it is the remains and the question is then who's in charge of dealing with the remains and how do the remains get dealt with well if Mary died leaving a will uh and and her will said named a personal representative and said that she wanted that personal representative to be in charge of those remains then that actually qualifies that person to take care of everything even though the will of course at that point has not been probated uh it's a way that the legislation legislature had of handling that issue so if she's done that that takes care of everything if

008she hasn't done that but she's left some set of personal instructions then chances are that's going to be uh adequate what I always suggest to clients is before they die you may want to talk to someone at a funeral home do a set of instructions regarding how things are going to be how you remains are going to be treated after you die you if you're if you're dealing with the funeral home you can at that point prepay for whatever what however the the uh for for all of those Services if you do that then there's a state law that says that that payment ends up getting held in escrow until you die um and then following your death then the funeral director of the funeral home uh will Implement those plans and at that point

009can pay themselves the money that is being held together with interest the point is you can do that set of plans um before you die if you don't though um then the question is who has control of your remains and the answer is uh your heirs first your spouse and then the kids I've had the situ unfortunate situation where someone had died um and the person who had died there had been a second marriage uh and so there ended up being a a disagreement between the children um of from her first marriage and the the the surviving spouse uh the children wanted the surviving spouse to not be able to go to the funeral right and I had to go talk to the funeral director and explain to him that actually legally because there were

010no written instructions the surviving spouse was in control of the remains and actually had the ability to exclude the children from the funeral so the point is um the the as in so much of estate planning the goal is to have a plan and to make it as clear as possible what to do then it's all about whatever you wanted to do and believe me the best thing you can do for your kids is to get all this stuff in writing before you die to make sure that the kids know what you want so that they're not arguing about it remember the moment of your death will be a very very uh emotionally charged moment and dealing with your death is always hard for children it makes it even harder if their trying to figure

011out what you wanted after you're dead it's very much like the health care proxy problem where you try to give instructions so that anyone who is handling your medical Affairs um when you're incapacitated knows ahead of time what you want so um you know there are any number of things that can happen regarding your remains you can be buried there may be a burial plot you may have purchased a plot you may have inherited a plot the rules regarding those burial services are all controlled by the cemetery commission where that wherever that cemetery is what you own when you own a burial plot is not the actual land what you own is the right to have your remains put into a piece of that land as to the rules of the control of that plot

012it's almost totally in the discretion of the cemetery commission and of course you can always have your body cremated you probably want to tell folks ahead of time if you want to if you want to have that done so but the point is you want to be dealing with these issues before you die so it'll be clear for your kids after you die then of course there's the question of what to deal with how to deal with everything else and we're assuming here that Mary had a house she may have had an IRA or other tax deferred funds she may have had a bank account that was in her name um remember in this case if she had been if these assets had been joined with Frank then at the moment of his death she

013would have become the sole owner then of course there's the stuff the personal property the car which is a special case we're going to talk about the car U.S savings bonds various other issues so the question is how to deal with all of that stuff after Mary dies so dealing with the stuff when I talk about the stuff I'm talking about the tangible personal property which means anything that you can touch but that isn't real estate so we're not talking about stocks bonds things that things are that are intangible uh but just the but just the stuff so the ideal if there are particular items that you want to have given to particular people is that you do a list and that you actually in that list name who was going to be getting what

014and then if you have a will in your will you say specifically that it is your intention um um through the um through the will that if you've left that kind of a list typically called a memorandum that that's going to be legally binding right that's probably the best way that you can that you can uh handle that the one question that often comes up especially if um if you'd if Mary died in an apartment is how can people get access to all of that so one of the things that you can really help your children with especially if you're living in senior housing or any kind of any kind of housing where there may be a question following your death of people getting access in order to deal with this stuff is talk to

015the management talk to the folks there find out if there's a form you can need to fill out if there's anything that you need to do in order to assure that after you've died people are gonna your folks are going to get access to all of that and then then of course there's the question of what if there is a fight now I have been doing this work for about 45 years I have yet to have a case where there was such a fight over the tangible personal property that anything needed to be argued out in court right so usually there isn't people just divide things up and if the question is do you need to go through the probate process to deal with the tangible personal property typically the answer is no and the

016reason is if there is tangible personal property and then it's going to get and it's going to get sold and I'm going to buy some of it if there's going to be a yard sale I'm not going to really care if somebody can show me a will and show me that you know the right person owns it I'm just going to say here's my money give me the item right so so typically these those issues don't don't arise so if you're worried about that if you're in a situation where you've got tangible personal property but everything else that you own is in joint names with other people chances are there's never going to be a probate on any of this you may not even need a will um the car the car on the other

017hand is the most common car you common cause of the base what I call an accidental probate because a car has a title and if you die um with that title the only way that anybody can transfer that car to anyone is by going through some form of the probate process getting appointed as your representative and then being able to sell the car now people folks will tell me well you know but if the car's not worth anything it's a junk that's even worse because you have to go through that process whether it's a fifty thousand dollar Mercedes or whether it's a you know one thousand dollar junk so um the question is how to deal with that so uh the the best way to deal with it is to make sure that the car

018gets transferred before you die what I typically tell people is you know what you really want to do is whoever you've named as your power of attorney agent tell that person look if I'm if I'm getting sick it looks like it may die soon go to the registry take my power of attorney take the the title to the car and of course you have to tell them where the title to the car is and transfer the car to yourself uh and you'll which you'll be able to do right there because you're going to be at the registry you can just fill in all the forms um and then um take the car and do with it what I tell you so of course in order to do this you need to trust the power of

019attorney agent but presumably that's why he's your power of attorney agent if you haven't done that then what someone is going to need to do unless there's a larger probate that is being filed because you have substantial assets is to file a so-called low-value probate the uh this uh process is available when when the total amount of the assets of the deceased not counting the car is less than twenty five thousand dollars so if if there's if whatever the car's value is you can use the low value probate option if it's a fifty thousand dollar car that's okay because the car the value of the car doesn't count and if that's the case then you file a special form with the registry of probate you fill in the form you show what the value of

020the other assets is you show that they don't add up to more than twenty five thousand dollars typically that low value estate will get approved almost immediately there's no need for for special notices in the paper and any of that jazz and then you can take that document with you to sell the car by the way that say you're going to use that same technique uh if if the your if your mother or father or whoever died leaving small bank accounts um you you're going to get approved you're going to list those small bank accounts including the account numbers on the uh on the probate form you're going to get approved you're going to then be able to go to the uh to the bank with that document and close out that account get a

021check payable to whoever is named as the personal representative so that's how you handle the car jointly owned property as I mentioned earlier journey home property is presumed to be owned by the survivors so if I own something so in Frank and Mary's case they own their house jointly they own bank accounts jointly the moment that Frank died his interests evaporated Mary became the sole owner in this case if Mary has put other names onto all of those accounts including the house then then at the moment of her death it is presumed that her interest evaporated and these other people the survivors became the owners of that property I should mention though um that that that up ownership that presumption of ownership is only a presumption which can be rebutted um the most common cause

022of what I'll call Family feuds disagreements among the family going through this probate process is a fight between the the person who was named as the personal representative under the will who then files the will and gets it approved and someone who is named as the surviving joint owner on a bank account or on the house especially with bank accounts um the the the the the folk the person then who has who has started the probate and is the personal representative will say at court oh you know my mother never put put my sister's name on that account as a joint owner meaning that she'd get all the money but only as a convenience because my sister was helping out with her financial matters Etc right and and that argument as I say that's the

023most common cause of of a fight so so it is not necessarily guaranteed that there'll be no probate but chances are that will avoid the probate process regarding other items life insurance policies IRAs investment accounts if you die um and you have specified that at the time of your death those assets are going to a particular person which always is the case with life insurance you can't buy a life insurance policy unless you've named the death beneficiary which should be the case regarding the IRA regarding your iris or 401ks any tax deferred funds typically you would have named a death beneficiary then in all of those cases when you die the death beneficiary will simply need to file a claim form with the insurance company or with the the bank or other entity that's holding

024the IRA and the bank will pay them directly and if you've named multiple people if you've named several of your children for example on the IRA then each of them will file their own claim form and each of them will get their own check for their portion of the proceeds regard investment accounts if you have investment accounts excuse me don't assume that you because you have the investment account that therefore upon your death your kids are going to get the money whatever make sure you check with the entity that is holding those funds to see and make sure that you file the death beneficiary forms this is especially important by the way regarding all of these issues when when Frank died and Mary became the Survivor it may very well have been that at that

025time she had a life insurance policy or other assets which named Frank as the death beneficiary if she doesn't change that death beneficiary to name her kids or whatever when she dies all of those assets they don't the money doesn't get kept by the insurance company but all of those assets now become a part of Mary's probate estate there's of course the house if the house was in was in joint tenancy with some of the kids then at the moment of Mary's death the kids would become the owners of the house in in in in the case of real estate there's a second alternative which I often recommend to folks who are trying to avoid probate which is that you give your children or whoever you want to leave the property to a so-called remainder

026interest in the property that is the interest that remains after you die you keep a life estate in the property so that you keep control of it while you're alive if you've structured things that way then upon upon your death your interest of rates the new owner the remainder man becomes the sole owner of the property and no probate is necessary finally what if you didn't do this what if you didn't do all of these things or any regarding some asset and and remember if if you're one of your goals is to avoid probate and that is a very common goal for a lot of folks then the way to figure out whether you're avoiding it is to look asset by asset and regarding each one of those assets take what I have just talked

027about and figure out if you've dealt with it if you've made all the accounts joint if you if regarding the house you've done a a deed out of a remainder interest but kept the life estate if you've made sure that you've got death beneficiaries on all the other assets look at each one of the assets that's the best way to avoid probate but what if you haven't done that here's what probate is about first of all the point of probate the point that probate has two points one to figure out who gets what if you have a will then all of your assets will be divided according to the terms of your will if you don't have a will the assets will be divided according to the rules of intestacy the rules that apply when

028there is no will oftentimes people will tell me I need a will otherwise my assets are going to go to the state trust me they will never go to the state if you die leaving assets there will always be a cousin there will always be a somebody who will show up to claim those assets the point is though that before those assets can get distributed to anyone creditors have to get paid and and and creditors will have one year from the day of your death to file a claim against your probate estate which is the reason why probate always takes at least a year because your assets can't be distributed whether you have a will or not can't be distributed to anyone in case until at least a year and a day following your death

029by the way as a result of changes in the law that were made now actually almost 10 years ago you can also avoid those creditors if you want and chances are you will avoid them by simply waiting until a year and a day after you've died of course this won't be you but your family by having them wait until a year and a day after you've died to file those in the probate court because in order for a creditor to preserve their claim they need to have sued the estate and file the CL and notified the estate that they had that they had filed that suit if if no probate is filed right and they have ensued and haven't notified somebody then they're going to be wiped out a year and a day after you

030die um so so this this this may be a reason for delaying that probate even though of course it will end up delaying the distribution if you file the probate later after that one year then as soon as the person has the the personal representative has been appointed the personal representative can then turn around and distribute the assets right away because all the creditors are already been wiped out and once again the one of the one of the pieces of probate is you need to figure out who is going to be in charge that is now called the personal representative uh if you have a will it used to be called the executor if you have if there is no will it used to be called the administrator now it's all called the personal representative

031so now what uh how do you deal with probate before probate appointment well what you have to do is you have to file a petition uh the person who is named as the personal representative can file any beneficiary named in the Wilkin file if there is no will any of The Heirs can file um there are two probate processes one is called informal and one one is called formal formal requires that you jump through more Hoops before the personal representative is appointed however formal would be necessary if it looks like there were good there's going to be arguments or people can't assent to the the to the uh to the petition or if there's real estate involved if it is formal then the process is once you have filed the court issue a notice called

032the citation that notice will say to the to the people who would otherwise have had an interest in the absence of a will that is The Heirs and also to everybody else a will has been filed and by the way this is the notice that gets published in the paper a will has been filed um if you've got any objections to that will or to the the the approval of a of a petition by someone saying there was no will you have a given amount of time typically about 30 days from the date of the issuance of that citation to file an objection after that period has passed if there is an objection the court will hear the objection if there's no objection at that point the court will issue uh so-called letters testamentary the

033the the the documents signed by the probate judge um that that names that the personal representative as the person who can now handle all the assets once that has happened and once those letters testamentary have been issued by the court uh the person who has been named will typically get a go get a tax ID number from the IRS and then go to the various Banks where assets are located and and the base the banks will then give that personal representative a check payable to the estate 8 based on showing the showing of that that uh that certificate the the personal representative would then go about paying all the bills um and waiting waiting until the end of that one year creditor period which can seem like forever right but remember it is there as

034a short statute of limitation because it cuts off all creditors at the end of that one year uh personal Representatives can make early distributions the only problem with doing that with that if you're the personal representative is that if you do that and then a creditor shows up during that one year period and there isn't enough money left to pay the Creditor you're personally liable to the Creditor the personal representative would also be responsible for filing any any uh income taxes of the deceased that hadn't been filed as well as filing the estate tax and we're going to talk about the estate tax by the way in a separate Bridge Ron briefs episode I try to do Bridge Run briefs uh episodes which are 15-minute segments dealing with a particular issue we can't we're not

035going to deal with the specifics of the estate tax today because literally as we speak the legislature is debating whether to change a lot of those estate tax rules so once the year is up the personal representative would typically want to get and do an accounting and send that accounting to anybody who's going to be getting any assets until as part of that accounting say here's what I'm proposing to give you to each of those distributes and then get a sense or releases from each one of those distributes if the tip what are the typical causes of trouble well you know we I've we've had these cases occur we always call them family feuds where for example maybe Peter has been named as the personal representative but he hasn't been following through and nothing's been

036filed or you're concerned that Peter's taking money off the top any number of things if that is a concern to any one of The Heirs or the or the people who are named under the will they can always ask the court for a minute to require that Peter do an accounting ahead of time and if they if he's not doing any good job those people can also get Peter removed as the the named personal representative if there is a will the probate is exactly the same as the as intestate as intestacy often if there is if there is a will that will contain a so-called power of sale in it that in that power of say will typically give the personal representative the ability to sell the property without any getting any permission from the

037court I accept that the proceeds then would have to continue to be held in Probate until after that year had that year has gone up um what about trusts what about if assets had been put into Trust of various kinds in order to avoid probate well that's actually the topic for the next seminar so um I hope you found this helpful the point of all this is and I think you can you can tell the theme of this is if you're concerned about probate you need to know how it works um and you and if you want to avoid it there are ways to avoid it and I've given you some of those ways I hope you enjoyed the presentation and I look forward to seeing you um when I do the next seminar thank

038you very much