When a person close to you dies, there are several issues that need to be attended to. Sometimes there might not be any tax or probate requirements, but nevertheless, it is important to review the situation to ensure that all matters are being handled properly. The following is a relatively short checklist that is not inclusive of all matters to take care of, but certainly, should be on the top of your list:
- Obtain a certified copy of the death certificate and request an extra one. Although these documents are not difficult to obtain from town hall or the city clerks office, it is easier to get an extra one now that may be used in the future, which will save time.
- Check benefits with Social Security. If a person who dies has a spouse, minor children, or was already receiving benefits or possibly had filed for benefits but not yet received them, it is important to notify Social Security to determine what the new benefit will be for the spouse or children or possibly a disabled child.
- Life insurance must be claimed, which in most cases is not income taxable to the recipient. Be sure to check with the decedents employer to determine whether there may have been any term life insurance death benefit. All prior employers should also be contacted even if there is no obvious benefit, to verify that a death benefit is not missed.
- Review the income tax return of the decedent to determine where all assets listed on the return may have been owned, such as income, gains or potential losses. Be sure to check 1099s for other income which may not be listed specifically on a tax return such as dividends from reinvestment shares, life insurance dividends and municipal bonds.
- Take charge of the Real Estate to secure it and be sure that no one has access to the property. Inventory the contents of this property and if necessary, change the locks and alarm code of the residence.
- Take charge of the vehicle and determine whether it is insured for others to drive if other family members continue to use it. If not, inform the drivers of the situation, secure the car and possibly take away all keys.
- Verify ownership of bank accounts, stock, bonds, etc. If they are held jointly, determine if that is for convenience of if they are to be held truly for joint ownership and that the surviving joint owner or beneficiary of the account is entitled to retain ownership of the asset.
- Determine if any assets are in the decedents name alone which require a probate proceeding. This may also include a cause of action against a company or individual for causing the death or potentially to pursue a continuing action that may have been filed by the decedent prior to his/her death. If the will needs to be probated, be sure to obtain good legal advice as well as tax advice when proceeding.
- When distributing any tangible property to any individuals or charities, be sure to obtain a receipt in case there is any opportunity to obtain a charitable deduction. Possibly, the person receiving the property or their family may not be aware of the terms of the distribution, and in the absence of a memorandum signed by the decedent, some family members may be in disharmony about the ultimate distribution.
Before proceeding hastily, always obtain good advice to determine whether or not the estate must be probated, whether a tax return must be filed for the decedentâs final year of receiving income and whether an estate tax return needs to be completed and filed. Without obtaining advice, a person serving in the capacity of the named executor and person in possession may find himself answering to other beneficiaries in a court later if the settlement was not attended to properly.
By: Hyman G. Darling, Esq.