The dissolution of a marriage frequently requires the division and disposition of real estate. Whenever that real estate is investment or business property, rather than solely a principal residence with no business or substantial amount of land, both parties and their advisors should give serious early attention to Section 1031 of the Internal Revenue Code. The stakes are high, and the window of opportunity is narrow.

A properly structured 1031 exchange gives both parties powerful options:

– Defer taxes interest-free, preserving capital that would otherwise be lost to immediate taxation.

– Use leverage to acquire more or more suitable real estate.

– Diversify into different property types aligned with each party’s post-divorce goals.

– Increase cash flow through income-producing replacement property.

– Reduce management burden by converting active investment property into passive income vehicles.

Preserve more wealth for future investment and potentially leaving a greater legacy to the heirs, an objective that parties on both sides of a marriage dissolution normally continue to share.

Consider a common scenario: one spouse receives, as part of an equitable distribution, a commercial building or ranch that neither spouse wants to manage. Without a 1031 exchange, that spouse faces an unappealing choice, manage an unsuitable asset or sell it and absorb a significant tax hit. A properly structured exchange resolves that dilemma, the spouse can exit the unwanted property and acquire replacement property suited to their goals, whether that’s a passive net-lease investment, a smaller rental property, or a diversified portfolio. That outcome benefits not only that spouse but the couple’s heirs as well.

A successful exchange depends on strict compliance with timing, ownership, and control-of-proceeds requirements.  These are not technicalities, they are absolute conditions.  Both parties, their attorneys, any mediators involved, and judges presiding over contested proceedings all need to understand that compliance with these requirements is not optional if the tax benefits are to be preserved.

Decisions made during divorce negotiations or court proceedings can inadvertently destroy an otherwise valid exchange. Common pitfalls include settlement agreements that transfer title prematurely, distributions that give a party constructive receipt of sale proceeds, and court orders entered without awareness of pending exchange deadlines. By the time these errors are recognized, it is often too late to correct them. What could have been a tax-free transaction becomes a fully taxable one that neither party intended.

In divorce cases involving investment or business real estate, a 1031 exchange can be a powerful wealth-preservation tool, but only if it is addressed before key decisions are made. Once a settlement agreement is signed, proceeds are distributed, or a court order is entered, the opportunity may be gone permanently.

The more civil the parties can be and the  earlier the issue is raised, the more options remain available to both parties, the marital estate overall, and the children.  Early coordination among the divorcing parties, their attorneys, tax advisors, and a qualified intermediary can mean the difference between preserving valuable tax benefits for the family and forfeiting them entirely through an avoidable oversight.

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Many folks I have counseled tell me they have added a trusted adult child to their financial accounts.  Their reasoning is that it gives the child access to help them. That is a perfectly reasonable step to take, but it is important to consider the ramifications, especially as it may affect federal deposit insurance for accounts insured by the Federal Deposit Insurance Corporation (FDIC). Of course, another overriding consideration having more to do with human nature than federal regulations is whether there is a trusting relationship between or among everyone whose name is on an account.

Joint Bank Accounts

Under FDIC rules, a joint account is a deposit account owned by two or more people who have equal rights to withdraw all of the deposits and to close an account. Married couples, assuming they want to share the funds in the account, like the convenience of such a joint account so that either person can write checks on the account and pay bills from it. At an FDIC-insured institution, each co-owner is insured for up to $250,000 for his or her share in all joint accounts in that institution. But if all persons on the account do not have equal withdrawal rights, the account will not necessarily be FDIC insured up to the same amount as for a true joint account under FDIC rules.

A significant risk exist when you add another to your account, it puts your assets at risk.  I often consult with clients who have added a child to their account.  While they may have complete trust in that child, there are factors that should be considered.  If you have added a child to your bank account and that child is sued as the result of an accident, divorce or contract dispute, those attorneys do not care that the account is yours.  Likewise, if your child is audited, the Internal Revenue Service will not care that it is your account.  Another example is if that child is hospitalized and can’t pay their bill.  If they are on your accounts, the attorneys for the hospital can place a lien against your account with the child’s name on it.  These are all real life experiences I have dealt with.

If the goal is to give someone limited access to a bank account when needed but not to grant ownership rights to the account, an alternative is to grant that person a power of attorney. Powers of attorney, which typically authorize someone to represent or act on another’s behalf in financial matters, can be crafted to permit the desired amount of access to bank accounts.

Credit Card Accounts

There are two different ways to give a second person the ability to use a credit card. Making that person a co-owner means that he or she will be financially responsible for all of the debt incurred with the credit card, regardless of which co-owner authorized a particular charge. In the alternative, an authorized user of the card may or may not be financially responsible for the debt, depending on the cardholder agreement. The card owner can put restrictions on authorized users, such as how much debt the authorized user can incur with the card.

Cosigning Loans

Succinctly put, a cosignor on a loan has agreed that the creditor can look to him or her for satisfaction of the debt if the debtor does not pay the debt. This obligation may well extend to any late fees and collection costs made necessary by the debtor’s delinquency. On top of that, the cosignor’s own credit rating could take a hit if the debtor doesn’t pay the debt or pays it late. All in all, the watchwords for cosigning on a loan are “proceed with caution.”

If you want someone to assist you with paying bills or managing your accounts, then you should consider talking to an attorney about the benefits of a Durable Power of Attorney.  Additionally, seeking legal advice before you cosign on a loan, would be a wise decision.

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If you’re planning a vacation, sending kids off to camp, or just enjoying a slower season at work, now is the perfect time to get your legal and financial life in order. There are a few reasons why summer estate planning makes sense.

You’re Already in Planning Mode for Summer Activities.  Whether you’re organizing a family road trip or coordinating childcare while school is out, summer naturally puts you in the mindset of preparation.

That makes it easier to shift gears and think about your estate planning checklist:

            – Who would care for your children in an emergency?

            – Who would make decisions if you became seriously ill or injured?

            – What happens to your assets if something unexpected occurs?

Estate planning answers all of these questions, so your loved ones aren’t left guessing during a crisis.

Travel Season Highlights the Need to Update Your Estate Plan.  Before you pack your bags and board that flight, take a moment to ask: If something happened to me while I was away, would my family know what to do?

We all hope nothing ever happens, of course, but travel brings a natural reminder that life is unpredictable. Putting basic documents in place can offer huge peace of mind while you’re away:

–  Will: Directs distribution of your assets

– Power of Attorney: Authorizes someone to handle financial matters

–  Healthcare directives: Ensures your medical wishes are followed

Summer Is Ideal for Estate Planning Updates and Reviews.  Already have an estate plan? Summer estate planning season is perfect for essential updates:

–  Review your beneficiaries after major life changes

–  Check your guardianship designations as children grow older

–  Make updates after marriage, divorce, a new child, or a move

–  Verify account information and contact details

Your estate plan should grow with your life. Regular reviews ensure it still reflects your current wishes and circumstances.  A good rule of thumb is review these plans every 5 to 10 years.

Flexible Summer Schedules Make Estate Planning Easier.  Many people find it easier to attend meetings or complete paperwork during summer’s slower pace—especially if you work in education, have summer Fridays, or are taking some time off.

Creating or updating your estate plan doesn’t take as long as you might think. Most estate planning checklists can be completed in a meeting with your attorney, making summer the perfect time to tackle this important task.

Complete Your Estate Planning Before Fall Gets Busy.  We all know how fast the fall can fill up, back-to-school preparations, sports seasons, and holiday planning. Taking care of your summer estate planning now means you can step into the busy season with one major task already accomplished.

Don’t let another year pass without proper estate planning protection for your family.  ©

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Probate may not be necessary when the decedent’s estate is so small that no action is necessary to distribute the property to the beneficiaries or heirs.  However, probate is required in most other circumstances.

Estate administration involves the following steps:

1. Collection of the decedent’s assets;
2. Payment of debts and claims against the estate;
3. Payment of estate taxes, if any;
4. Determination of heirs, if the decedent died without a Will; and
5. Distribution of the remainder of the estate to those entitled to it.

In Texas, there are several different methods of administering an estate, some of the more common of which are discussed below.

Dying without a Will:

Many people may assume that if they are married and die without a Will in Texas, their surviving spouse will inherit their entire estate. This is not always the case. How their property is divided depends on whether it is characterized as community property or separate property.  Whether the children of the deceased person are also children of their spouse comes into the distribution as well.  This often results in a lawsuit to determine heirship and appointment of an Administrator.  Dying without a Will is the least desired result.

Standard Probate of Wills:

Whether you have a handwritten or typewritten Will, its validity must be proved in court.  This procedure is known as probate, and it generally must take place within four years after death.

A Will that is not proved in court is denied probate.  In this event, the decedent’s property passes to his or her heirs as if he or she died without a Will.  Again, this further emphasizes how important it is to execute a Will which meets all legal requirements so that property will pass as the decedent wished.  After proving the validity of a Will, the next step in the probate process is the administration of the estate.

Independent Administration:

Texas is one of the states that provides for independent administration – administration free of court supervision.  This means that after an independent executor or administrator is approved and an inventory of estate assets is filed with the court, the executor or administrator can simply take care of the administration of the estate without any further court involvement or supervision.  The independent executor or administrator is free to settle with creditors, set aside the homestead and other exempt property, manage the property of the estate, sell assets for payment of debts or taxes, and distribute the remaining estate to those entitled to it.  Thus, independent administration avoids the costs and delays associated with a court-supervised estate administration in which the executor or administrator must seek court approval before performing any of these acts.

Muniment of Title:

If there is no need for the appointment of an executor or administrator and the only reason for probating a Will is to clear title to property, a Will can be admitted to probate as a muniment of title.  Under this procedure, there is no executor or administrator appointed.  It is a somewhat more simplified method of probating a will than the traditional formal administration.  It is generally used only when there are no debts of the estate to be paid and no other actions that require the appointment of an executor or administrator.

Informal Family Settlements:

Informal family settlements are permissible where the estate is small and consists only of personal property, such as personal effects and household furnishings, but generally not where the estate includes real estate, bank accounts, stocks, and bonds.  If a motor vehicle is involved, a new certificate of title may be applied for by filing an affidavit of heirship with the Texas Department of Public Safety.

The transfer of property after a person’s death does not have to be scary or expensive.  However, the more organized information you have regarding the person’s estate the better.  Information on property, finances, family members, assets and key contacts are essential.  This information , together with cooperating with your attorney’s questions and providing information and answers, the quicker the process will be and it should help reduce the cost.

As always, check with your attorney to decide which method of estate administration is right in your particular circumstance.  Be sure to have gathered and organized information on the decedent’s estate and assets as well. It could save you time and money.  ©

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Most of us have adjusted to balancing children, work and finding some time for ourselves.  But when we add caring for aging parents, it often becomes too much.  And usually it’s the “me” part that is sacrificed…until you hit burn out.

Here are some ways to leverage your time and resources so you can also take care of yourself.

Enlist Your Kids

Even the smallest child can spend charming one-on-one time with a grandparent.  If your parent lives with or near you, they can spend time together in person.  If your parent is not near you, they can Skype on the computer, use FaceTime or play multi-player online games.  Your children, no matter what their ages, will benefit from spending time with Grandma or Grandpa, they will see how you value and care for aging family members—and you will get some extra time to return phone calls, make dinner, or even catch a quick nap!

Ask About Options at Work

Check with your employer’s human resources department about resources that might be available to you. Depending on how long you expect to be caring for your parent, there may be a multitude of options available to you, including elder care research and referral services, flex time, even working from home options.  The Family and Medical Leave Act (FMLA) calls for eligible employees to receive 12 weeks of unpaid job-protected leave. (Private employers with less than 50 employees are exempt.)

Seek Assistance

There are legal and community resources that can help you make the best care and financial decisions for your parent.  A local Elder Care attorney can prepare the necessary legal documents and help you maximize your parent’s income, long-term care insurance and retirement savings, and qualify for VA or Medicaid benefits, if applicable.  He or she will also be familiar with various living communities in the area and in-home care agencies. You can also hire someone to review and verify or dispute insurance claims and medical billing.

Find Your “Me” Time

Stress is your biggest enemy and you have to find ways to reduce it.  Joining a caregiver group, in person or online, will let you share your questions and frustrations, and learn how other caregivers are coping.  Don’t be afraid to ask favors of friends and relatives, such as picking up your kids while you go to the doctor with your parent.  You could also learn to order in dinner every now and then without feeling guilty. Learn what you need to maintain your stamina, energy and positive outlook. That may include regular exercise (a yoga class, walk or run), a weekly outing with friends, or time to read or simply watch TV.

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A comprehensive estate plan often includes writing a Last Will and Testament to transfer your assets to your beneficiaries.  Once you’ve passed away, the executor of your Will shepherds the Will through the probate process.  However, you may have things you’d like to communicate to your loved ones and beneficiaries that you don’t want to include in the Will itself. Often, these are informal instructions that will help your executor carry out your wishes. It might also include such informal elements as opinions about your funeral, the values you’d like to be remembered for or a list of personal items designated for individuals.

Sometimes known as a letter of intent, a list of personal items designated to certain individuals is a document that provides specific information regarding your preferences as to who gets certain personal items, family heirlooms, sports memorabilia, jewelry, guns or a clock.  The letter of intent should clearly identify the individual and accurately describe the item you wish for them to have.  Labeling the item(s) helps as well. The Will contains a paragraph that specifically references this letter of intent or list so that personal items do not have to be made public record, but the executor knows who gets what item.

Another similar item is a letter of instruction on anything from key contacts, account information, family information, medical care, or your funeral wishes.  A letter of instruction isn’t legally binding in any way, unlike a Will.  Rather, it’s meant to be something of a crib sheet for the executor of your Will or your loved ones. You can use plain English to communicate anything you want regarding your affairs as a reference once you are no longer able to communicate this information personally.

Because there is no legal aspect to this document, you are free to also include messages to your family if you wish, and you can touch on matters that you may not be able to include in something like a Will or an advance directive.

What Should You Include in Your Letter of Instruction?

What you decide to include in your letter of instruction is completely up to you.  There’s no one piece of information that will qualify or disqualify your letter.  Your attorney should provide you with guidance in this matter and may even have a form.  That said, there are a handful of things that will make your executor’s life easier when she’s working to probate your estate. This information includes:

• A list of all your assets;

• The location of any assets that may not be readily accessible;
• All of your account information, including passwords, PIN numbers and account numbers, for any bank accounts or retirement accounts you have;
• Contact information for anyone who helps you with your finances, including attorneys, brokers, bankers and financial advisors;
• Informal directions about how you would like the executor to disperse some of your assets, typically heirlooms or other sentimental possessions;
• If you’d prefer people to make donations in lieu of flowers at your funeral, information about which charities you prefer;
• Where your executor can find your most recent tax returns, Social Security statements, birth certificate and other important documents;
• Similarly, where your executor can find any real estate titles/deeds or oil and gas leases, etc.;
• Your Social Security number;
• Any divorce and/or citizenship papers, or applications thereof;
• Contact information of any creditors (mortgage, car, etc.) and any insurance companies, particularly if you have a life insurance policy;
• If you have pets who will need a home, where you would like your executor to send them.

From there, you can include any messages or additional preferences that come to you. Some people choose to include a preference for burial or cremation. You might even mention which songs you’d like played at the funeral.

Letter of Instruction vs. Last Will

Although a letter of instruction and a Last Will discuss similar topics, they are distinct documents with several differences. First and foremost, a letter of instruction isn’t a legal document, while a Will has legal force. State law requires that your executor or administrator follow the terms of your Will, whereas no one is required to follow your letter of instruction. In order to prevent any potential conflict as to whether your letter of instruction is a testamentary document or not, you should let you estate planning attorney provide guidance.

Because of this distinction, a letter of instruction can be much more flexible. You’re essentially just writing a message to an executor or a loved one with helpful information. This is why you can choose to include anything you want.

A letter of instruction can’t take the place of a Last Will.  If you pass away without a Will, a court-appointed administrator will distribute your possessions according to state and county law rather than your letter.

While it can’t serve as a substitute for a Last Will, a letter of instruction can be extremely helpful to your loved ones.  You can spell your wishes out in simple terms, and you can leave them a final message without the formality that comes with a legal document.

It is very important to have an estate planning attorney help draft your estate planning documents, and provide guidance with letters of instruction.  It is money well spent to avoid expensive conflicts later.

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What is a 1031 Tax-Deferred Exchange you may ask?  An IRC 1031 Exchange permits you to sell property without paying tax on the gain of the sale, if you replace the property by following the rules.  Simply, a 1031 Tax-Deferred Exchange is the process of deferring the payment of taxes when selling investment property to a later time by investing the proceeds from the sale of one investment property into the purchase of another.

Using exchange funds for the wrong type of expense can result in unintended taxable boot. Although the IRS has never issued a definitive list, the general rule is that costs directly tied to the sale or acquisition—and to the exchange itself—are more likely to be permissible.

Costs Generally Treated as Exchange Expenses.  These may often be paid from exchange proceeds:

–  Real estate commissions

–  Title insurance premiums

–  Closing or escrow fees

–  Legal fees

–  Transfer taxes and notary fees

–  Recording fees

–  Qualified intermediary fees

Costs Generally Not Treated as Exchange Expenses.  These should generally not be paid from exchange proceeds:

–  Loan fees, points, and application fees

–  Credit reports

–  Lender’s title insurance

–  Property taxes

–  Utility charges

–  Association fees

–  Hazard insurance

–  Rent prorations, security deposits, and lease deposits

Prior to closing, it is wise for investors to go line-by-line through the settlement statement with their tax advisor, closing agent, and qualified intermediary.  Clarifying which items qualify as exchange expenses—and which do not—can help avoid surprises.

A successful 1031 exchange involves more than meeting deadlines and acquiring replacement property. Careful attention to how closing costs are handled can make the difference between full tax deferral and an unexpected tax bill.  My friend and colleague,  Greg Lehrmann, owner of ExceLehrmann 1031 is an excellent source for guidance and information regarding 1031 exchanges.  Seeking advice Greg would be a great first step.

The post What Closing Costs Can Be Paid in a 1031 Exchange appeared first on Moak & Moak, P.C. -Attorneys At Law.

1. Make sure the EIN is being obtained directly from irs.gov.  This seems obvious, but it is helpful to those unfamiliar with the IRS website.  Be aware a Google search of “obtain EIN online” could lead to unwelcome results such as websites of companies that offer to collect your information (and sometimes a fee) to obtain an EIN for you.  An EIN can be obtained from irs.govinstantly and at no cost. There’s no need to pay a fee or disclose personal, identifying information through any other website.
2. Confirm that appropriate legal authority exists before obtaining the EIN. An EIN should not be obtained before an executor or trustee has legal authority with respect to the estate or trust; therefore, the application should be made once the executor has been appointed and qualified as such or once the trustee has formally accepted trusteeship.  To qualify, an executor must take a sworn oath for example.  While the IRS website does not ask for this proof, it is necessary if audited.
3. When applying for an EIN for a trust, note that the IRS currently provides 18 different types of trusts to choose from.  Choosing the right one matters.
4. You will be asked if the estate will use a fiscal or calendar year.  You should select the ending month that will give you the longer tax year.
5. Make sure the name of the decedent matches the probate records. When applying for the EIN of an estate, use the Decedent’s name exactly as stated in probate records. Doing otherwise could cause problems for the executor when the executor attempts to open a bank account in the name of the estate.
6. Make sure the name of a trust matches the name as indicated in the governing instrument.  As with an estate, you will want to make sure the name of the trust you list on the EIN application is consistent with the name of the trust as indicated in the governing document.
7. Be aware that the IRS typically will not give the same responsible party more than one EIN on the same day.  The IRS typically limits the number of EINs a responsible party can obtain on a given day, with the current cap understood to be one.
8. If wires got crossed and two EINs were obtained for the same trust or estate, you must contact the IRS right away.
9. Know when you might need an EIN for a grantor trust.  For many grantor trusts, an EIN will not be needed for the trust while the grantor is still living because the grantor’s social security number will effectively serve as the trust’s EIN, and the trust income will be reportable to the grantor.  This is also true when a grantor trust has two grantors who are married and file their income tax returns jointly, as the trust income is reportable on their joint return.  However, if the trust has two grantors who are not married to each other or who are married to each other but file separate income tax returns, the trust will need its own EIN.
10. Consider who the “responsible party” is. The EIN application will ask who the “responsible party” is for the trust or estate. The “responsible party” is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. For an estate, it follows that the responsible party is the executor or administrator.  For trusts, the responsible party is a grantor, owner, or trustor.

Most attorneys who are handling the estate or trust will obtain the EIN and take care of these matters.  However, I believe it is important to understand these points so that you and your etate attorney are on the same page.

While Texas has the best system for transferring your property through your estate planning, it is more than a document.  It is a process process with many moving parts to secure your legacy.

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Gather Important Records:

           Death Certificate (can be provided to probate attorney after initial meeting)

           Social Security Card

           Driver’s License

           Marriage Certificate

           Birth Certificate

           Birth Certificates of Children

           Insurance Policies

           Business Documents and Agreements (consider if the business had a succession     plan – this will be apart from the probate process)

           Auto Titles and Registration

           Deeds & Titles to other Property

           Bank Account Information

           Bank Safe Deposit Box Information (Who can access the box and where is the key?)

           Financial Account Information (stocks & bonds)

           Retirement Account Statements

           Tax Returns (last three years)

           Consider tax filing deadlines for the current year

                       Loan Documents & Debt Information

                      VA Information (discharge papers & VA claim number)

                      Digital Account Information (account information, passwords)

                      Information regarding Intellectual Property Rights

                      Social Media Account Information (access, information & legacy programs)

                      Estate Planning Documents (powers of attorney end upon death)

It is important to consider if any of  the above Assets have Beneficiary Designations.

Locate the Will. There is no formal requirement to file a Will before death.  If you cannot locate the original Will, you should also check with the attorney who prepared the Will – sometimes Attorneys will maintain the original Will.  Other places to look for an original Will include the following: bank safe deposit boxes, safes, gun safes, safe rooms, fire proof boxes and the freezer.  A lot of estate planning & probate attorneys use blue ink to help us determine that the document is an original. Original documents also often have colored jackets.  You should also check with other advisors such as CPAs, tax preparers, financial advisors, and insurance agents.  As mentioned below, at times and in certain circumstances a copy of a Will may be admitted to probate. Consider that a few companies offer digital vaulting of important documents such as Wills.

Review the Will or Trust. In other words, read it.  In Texas, the Will needs to be signed by the testator and be witnessed by two individuals above the age of 14.  I have seen many documents that fail to have all these requirements.  Never assume the Will is valid or invalid, see an attorney.

Every state has their own estate code and tax system.  These systems vary greatly from state to state.  Generally, in Texas, the original Will is admitted to probate, meaning filed with the court and retained within the court files.  However, in certain circumstances, a copy of a Will can be probated. Note, Texas also recognizes the existence of a “Holographic Will,” this Will needs to be “entirely” in the handwriting of a testator and signed.  Just signing a typed document doesn’t count.  Once you locate the Will you should keep it safe because your probate attorney will need to review it at the initial meeting.  Again, never assume the Will is valid or invalid, see an attorney.  You will need an attorney familiar with the probate process to guide you through the best course of action.  You cannot represent yourself in a Texas probate.

Another tip is to keep beneficiaries informed. There is no formal requirement to make a Will public to the beneficiaries by “reading” a Will in Texas.  However, there is a requirement that the beneficiaries be furnished with a copy of the Will.  Your probate attorney will take care of that and other legal requirements.

As always, check with your attorney to decide which method of estate administration is right in your particular circumstance.  It could save you time and money.

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Once the immediate shock begins to settle, there are important steps to take in the first few days after someone dies. This is when funeral planning begins in earnest, and when you’ll start navigating the practical and legal side of loss.

Schedule a meeting with the funeral home to discuss arrangements. They will walk you through your options, including burial versus cremation, type of service, casket or urn selection, and timing. Bring a trusted friend or family member for support — and to help you remember details later. Don’t hesitate to ask about pricing for every item; funeral homes are required by law (the FTC Funeral Rule) to provide itemized price lists.

Decide on the type of service that best honors your loved one. Will it be a traditional funeral, a celebration of life, a graveside service, or something else entirely?  Consider their wishes, religious or cultural traditions, and what feels right for your family.

Select songs, hymns, poems, or readings that reflect the personality and life of the person you’ve lost. Music can be one of the most powerful and healing parts of a service.

You will need multiple certified copies of the death certificate, typically 10 to 15. The funeral home handles ordering these from the vital records office. Banks, insurance companies, the Social Security Administration, and many other institutions require original certified copies, not photocopies.

Draft an obituary for your local newspaper and any online platforms. Include the person’s full name, age, date of death, surviving family members, and details about the funeral or memorial service. Many funeral homes will help you write and place the obituary.

If the deceased had a life insurance policy, call the insurance company to begin the claims process. You’ll need the policy number and a certified copy of the death certificate. Life insurance claims can take several weeks to process, so starting early helps ensure funds are available when you need them for funeral costs and other expenses.

The funeral home usually reports the death on your behalf to Social Security. If the deceased was receiving Social Security benefits, those payments must stop. A surviving spouse or dependent children may be eligible for survivor benefits, so ask about this during your call.

Contact the deceased’s bank to report the death and inquire about joint accounts, beneficiary designations, and the process for accessing funds. You may need to present a death certificate. Do not withdraw money from individual accounts before the estate is properly handled, this will create legal complications.

Collect recent bank statements, tax returns, investment account information, mortgage documents, and records of debts or recurring payments.  This will be critical for the executor of the estate and for ensuring bills continue to be paid during the transition period. Check email and physical mail for statements and bills. Redirect the mail to an address that is checked regularly.

If the deceased had a Will, the named executor should begin the probate process. Contact an estate attorney to assist you in making sure all of the legal formalities are followed and addressed. The executor has a legal duty to manage the estate, pay debts, and distribute assets according to the Will, but they don’t have the authority to do so until the Will is reviewed and approved by the court.  If there was no Will, then the process can be much more complicated and an estate attorney can help you negotiate this process much easier because that is what they do.  To see this column and many more on this subject, go to www.moakandmoak.com.

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