Try to Have That Uncomfortable Talk

estateI understand how difficult it can be to bring up the subject of “when you die”, but if the topic can be broached it can make a huge difference in how quickly and easily an estate is handled.

My father-in-law was pretty receptive to talking about it. He was a no nonsense guy. And he was crazy about me. 😉 I can’t even remember how the discussion came about, but his health was really failing and it did indeed come up. As a result we were able to get all his affairs in order. He died less than a year later. So, while I got (and took) credit for preparing and handling his estate, I know we were pretty lucky with the timing.

It’s important to know that having a will doesn’t preclude an estate from having to go through probate, which can take months if not years. A will lays out the wishes of the deceased, but it doesn’t legally transfer assets. That happens by having the proper beneficiary instruments or documents in place or via probate. You actually don’t even need a will to make this happen. There’s always so much focus on having a will and, while it’s definitely good to have one, it’s the actual benefiary designations on the assets themselves that make the transfer occur without having to go through probate. If you don’t have the beneficiary designations in place NOR a will, then things get really messy!

(And, please remember, I’m not a lawyer. This is anecdotal; my experience. So make sure you either do your own due diligence or hire an actual professional. I was able to handle the estate without assistance, but I did a lot of research and I might have just gotten lucky, too.)

In some states you can record a Beneficiary Deed, which is an instrument documenting how title will transfer on a piece property (ie. real estate) upon the death of the grantee. It’s important for the asset owner to know that a Beneficiary Deed does not affect their ownership or control of the asset in any way. It’s revocable. It does not transfer title until the death certificate is recorded. The owner of the property can record another Beneficiary Deed which will supercede anything prior. Its great advantage, though, is that it avoids a piece of property from having to go through probate.

We drafted Beneficiary Deeds for my father-in-law’s properties in CO and AZ and recorded them in the appropriate counties while he was still alive. After he died and we recorded his death certificate in both counties the properties transferred, seamlessly, to his two sons, avoiding probate and months of having to pay mortgages, property taxes and utilities. Yes – all these have to be paid during the months it takes to get through probate, before title is transferred and you can actually sell the property. And where is that extra money going to come from if the deceased’s liquid assets haven’t been transferred yet?

We also came up with a list of all his assets – life insurance policy, bank accounts, mutual funds, investments, car – to make sure we knew what there was and also to make sure he had his beneficiaries set up properly. That’s when we discovered that Jay’s mom, who had died nine years earlier, was the beneficiary on almost everything. That would have been a pain to fix if we’d discovered it after his death. But it was relatively simple to fix while he was still alive. A phone call or two and a couple of forms to fill out was all it took to designate his two sons as the beneficiaries.

We made sure we had access to his bank account and checks to pay any outstanding  bills. I’m not actually sure this was kosher, but it’s what we did. I’m only speaking from personal experience, not as a professional. All in all, settling his estate was a lot of work. But we were able to do it all on our own and much more quickly than if we hadn’t prepared. And cheaper.

Free, in fact, if you don’t count all the hours I put into it.

One thought on “Try to Have That Uncomfortable Talk

  1. Pingback: Verify/Specify the Beneficiaries On Assets | How I Saved Money Today (and other stuff I think about)

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