What to do when a loved one passes?

Steps to take when a loved one passes on

Steps to take when a loved one passes on

Regardless of how much advanced notice we may have had, the loss of a loved one is never easy. The responsibility or planning their funeral arrangements or handling the needs of their estate only make the situation more challenging, especially when you don’t know where to begin. So what do you do when a loved one passes away? This EstatePlanningGuide.org article will help you answer that question.

What should I do when a loved one passes away?

The following provides advice on what to do when a loved one dies. This step by step guide will help you with this challenging time and hopefully remove some of the stress.

Steps to take immediately after the passing of a loved one

1 – Obtain a Legal Pronouncement of Death: A legal pronouncement of death is a declaration of the time and date when a person was pronounced dead. The pronouncement of death is typically recorded in the patient’s medical record by the attending provider of health care if one was present. If your loved one passed away at a hospital or nursing home, the staff will handle this. If your relative passed away at home, you will require the assistance of a medical professional to declare their death. You should call 911 and inform them of the situation. They will transport your loved one to the hospital where a legal pronouncement of death can be made and you can request the document at that time. If your loved one passed away at home under hospice care, the hospice nurse can declare them dead and assist you with obtaining the legal pronouncement of death. The official declaration of death or legal pronouncement of death is the first step to obtaining a death certificate. The legal pronouncement of death is important for a variety of tasks involved with the handling of their estate. Without a legal pronouncement of death or death certificate you will not be able to access their bank accounts, filing life insurance claims or beginning their estate and probate process.

2 – Notify family members and close friends: Begin by notifying family members and close friends of the deceased. You may not have contact information for all of them or even know everyone who was important to them. Start with the person who you know that was closest to them. You may want to ask them for their assistance in notifying others, or at least ask them for a list of people who should be notified, along with their relationship to the deceased and their contact information so that you can make the notifications.

3 – Notify their employer and coworkers: If your loved one was employed at the time of their passing you should inform their employer as well as any close friends they worked with. For some our coworkers can be like a second family and they will likely be grieving the loss along with you.

4 – Assist with the needs of any dependents: If the person who passed away had dependents such as children, a person with special needs or an elderly person who is reliant upon them for their survival, make sure their immediate needs are addressed until long term care can be assessed and carried out.

5 – Make sure any pets are cared for: If the person who passed had pets, find them a proper caretakers until permanent arrangements can be made for them. Sometimes people will include requests for the care of their pets in their estate planning documents. The Executor of the decedent’s estate (if it is someone other than you) should be able to assist you with this. A dog or cat can die within just a few does of going without water.

Steps to take a few days after the passing of a loved one

6 – Secure the person home / property: As soon as possible, you should secure the person’s home. Make sure that all doors and windows are locked. Notify any trusted neighbors and ask them to contact you if they notice anything unusual. You should discard and perishable food and remove any trash from the home. You should water plants and tend to any immediate need for the care of the home. You should collect the decedent’s mail and if mail forwarding is needed you should contact the United State Postal Service here.

7 – Contact important organizations: If the person was in the military or had a close connection to a religious organization you should inform them of the passing of your loved one. The Veterans Administration may be able to offers burial benefits or conducts funeral services if requested. You can find out additional information regarding the US Department of Veteran Affairs Burial Benefits here. Additional information on applying for the VA Burial Benefits can be found here on their website. They can also be reached by phone at (800)827-1000.

8 – Employer assistance: If your loved one was employed at the time of their passing you can reach out to the employer to make arrangements for their estate to receive any outstanding compensation that is due and to see if the decedent was eligible for any company sponsored life insurance.

9 – Begin making funeral arrangements: Examine any estate planning documents such as a will or trust that was left by your loved one. In some cases they may have provided information on their funeral wishes or made plans in advance. If none exist, speak with other family members or close friends. Begin making arrangements for funeral, memorial service, cremation or burial. An obituary is a notice of a death, typically including a brief biography of the deceased person and published in a newspaper. You may want to consider writing one for your loved one. If you need assistance on writing an obituary, you can view this article on the NBC News Website located here. You will need to inform people about the service and invite the attendees. You should coordinate tasks like flower arrangements, food and refreshments.

Steps to take a couple of weeks after the passing of a loved one

10 – Obtain the death certificate and make copies: A death certificate is a legal document issued by a medical practitioner which states when a person died. A death certificate may also be issued by a government civil registration office that declares the date, location and cause of a person’s death. Death certificates are important when handling aspects of the decedent’s estate such as probate as well as obtaining government benefits. The death certificate is usually provided by the funeral home. You will want to create multiple copies.

11 – Locate your loved ones estate planning documents: If you have not done so already, you will want to locate your loved ones will or any estate planning documents and notify the declared estate Executor or Trustee of they are declared in the documents and that person differs from yourself. If you are unsure where these documents are located, you may want to search for them in a desk, filing cabinet or lock box. If you are unable to find them, ask family members, close friends or the attorney of your loved one if they are aware of the existence and location of them. If you are unable to locate any, the court will assist you with the handling of the estate during probate.

12 – Speak to an attorney or begin the probate process: If your loved one had a living trust, reach out to a trust and estate or estate planning attorney and review the trust documents for advice on how to proceed. You may be able to avoid the probate process. If there was not a living trust in your loved ones estate planning documents, contact your local county court office about beginning the probate process. Probate is a court administered process that transfers the estate of a deceased individual to named or remaining heirs. An estate is made up of the decedent’s real estate, personal property, life insurance, bank accounts, investments and personal belongings. The court will either approve the designated estate Executor or appoint one at the beginning of the probate process. The Executor will carry out the duties of the estate.

13 – Speak with your loved ones accountant or hire one for assistance if needed: If your loved one had been working with a CPA, you should reach out to them. Inform them of the passing of your loved one and ask for their advice on how to proceed. The estate may have to file a tax return, as well as a tax return on the decedent’s behalf as well.

14 – Complete the probate process if needed: If the probate process is required there are several steps involved that will need to be completed by the executor. Here is what you can expect during a typical probate process:

  • Stage 1 – Filing a petition in probate court and having probate initiated
  • Stage 2 – Issuing notices to heirs and creditors
  • Stage 3 – First probate hearing occurs and the proving of the will
  • Stage 4 – Collection of the decedents assets / estate assets
  • Stage 5 – Paying of creditor claims
  • Stage 6 – The filing of taxes for the estate
  • Stage 7 – Probate court closes the estate and any remaining assets are distributed to the heirs of the estate

Additional information and on the probate process can be found here.

15 – Cancel any services that are no longer needed by your loved one: You should close or cancel and service that are no longer needed by your loved one. Examples of services include health insurance, cellphone service, internet service, newspapers, magazines, streaming services, cable TV service and automobile insurance.

16 – Notify the Social Security Administration of your loved ones passing: If your loved one was receiving Social Security benefits, you must notify the Social Security Administration as soon as possible. You can view information on how to notify Social Security about the passing of a loved one here.  Family members of the decedent may be eligible for death benefits from the Social Security Administration. We suggest asking them for information on benefits when you call them to inform them of the passing of your loved one. The Social Security Administration can be reached at (800)772-1213.

17 – Consider closing your loved ones social media and email accounts: You can choose to have your loved ones social media accounts removed or left up as a memorial to them. If you choose to have the accounts removed, you will likely need to provide them with a copy of your loved ones death certificate. Many of the larger social media companies such as Facebook and Instagram will also allow a deceased person’s profile to remain online, marked as a memorial account. You can click here if you are interested in removing a loved ones profile from Facebook.

We hope that this checklist on what to do when a loved one passes is helpful. If we can provide you with any other information, please leave us a comment or contact us here.

Trust Loans and Avoiding Property Tax Reassessment

Loans to Irrevocable Trusts

Trust Loans and Loans to Irrevocable Trusts in California

Property Taxes in California and Proposition 13

Each state in the US has their own individual laws, rules and regulations that govern estate planning, inheritance and taxation. California for instance has several property tax laws that control how much a persons property tax can increase each year and how you can avoid property tax reassessment on an inherited home.

The primary legislation that stabilizes property taxes in California is know as Proposition 13. Proposition 13 provides three functions in property tax assessment.

  • All real estate has an established base year value
  • A homes assessment can not increase by more than 2% a year
  • A homes property tax base can not exceed 1% of the assessed value (plus additional voter-approved taxes)

Additional information on California Proposition 13 can be found on the Santa Clara Assessors Office website located here.

California Proposition 19 and the Exclusion from Reassessment on an Inherited Home

California Proposition 19 went into effect on April 1st, 2021 and replaced the existing legislation that controlled how a person inheriting a home from a parent could avoid property tax reassessment. The previous legislation was known as Proposition 58. With Proposition 19, a few of the rules for obtaining an exclusion from reassessment on an inherited home changed. Previously under California Prop 58, a child inheriting a home from a parent could apply for an exclusion from property tax reassessment with no value limitation, providing that the home they were inheriting was the parents primary residence. Under Proposition 58 you could also transfer the property tax base from a parent to child on an investment property or second home with a 1 million dollar property tax exclusion limit (per parent). Under Proposition 19, there is now a limit of the current taxable value plus $1,000,000 on a home you will use as your primary residence. Prop 19 also eliminated the ability to avoid reassessment on an inherited home that will not be used as your primary residence. You can view addition information on California Proposition 19, on the California Board of Equalization website located here.

In addition to the Proposition 19 and Proposition 58 property tax transfer rules listed above, there are additional requirements when it comes to receiving an exclusion from reassessment on an inherited home in California. For instance, the California Board of Equalization requires that all trust beneficiaries receive an equal share of assets, if language requiring an equal distribution exists in the trust, which it often does. If an equal distribution is required, a loan cannot be made to the trust by any of the beneficiaries who intend on keeping the home. Doing so would be considered a sibling to sibling buyout by the Board of Equalization and result in a disqualification from a full exclusion from reassessment. They view this as a transfer between beneficiaries rather than a transfer from parent to child.

The following is a simplified example of how an equal distribution of trust assets works when a trust loan is involved. Lets assume the only asset in the trust is a home worth $300,000. One of three child beneficiaries wants to keep the home, and the other two would like to receive cash. A loan would need to be made to the trust for $200,000. In this situation the two beneficiaries who did not want the home would each receive their $100,000 as cash and the other child receives the home with $100,000 equity in it. Since each child received a distribution of $100,000 in trust assets, an equal distribution was made. Detailed information on the California Board of Equalizations requirements for equal distributions and other parent to transfer requirements can be found here on the BOE Website.

Trust Loans and Lending to an Irrevocable Trust

Trust Loans and Loans to Irrevocable Trusts

Trust Loans and Loans to Irrevocable Trusts

A trust loan in a loan to an irrevocable trust that provides enough so that an equal distribution of assets can be made to all beneficiaries. When an irrevocable trust contains insufficient cash assets for an equal distribution to be made, a person will often require the assistance of a specialized lender known as a Trust & Estate Lender. Trust and Estate lenders specialize in making loans to irrevocable trusts and estates that are involved in probate. As documented by the California Board of Equalization, the acquiring beneficiary may not utilize their own funds or make a personal guarantee on the loan. Doing so would create a sibling to sibling buyout, disqualifying them for the full parent to child transfer exclusion. The loan will need to be made directly to the trust (which is usually an irrevocable trust), without first removing the property from the trust or requiring a personal guarantee from the acquiring beneficiary. A conventional lender will almost never lend to an irrevocable trust, and will instead first require that the home is removed from the trust before they will lend to it. Conventional lenders also typically require a personal guarantee from the person taking the loan. An experienced Trust and Estate lender will make a loan directly to the trust, providing enough cash for the equalized distribution to be made with no personal guarantee from the acquiring beneficiary.

A Trust & Estate Lender often works directly with your attorney. A trust loan is typically a short term loan with a term of 6-24 months and does not typically carry a pre-payment penalty. Trust loans usually have higher interest rates than conventional mortgages. Once the inherited home has been transferred from the trust to beneficiary, the loan can be paid off or refinanced into a conventional mortgage. You will want to review all aspects of the transfer with a qualified Trust & Estate Attorney to verify you are doing so in accordance with the California Board of Equalization requirements and that you will be eligible to receive a full exclusion from property tax reassessment on your inherited home. You can learn more about trusts, living trusts and irrevocable trusts here.

Proposition 19 Benefit Calculator for Inherited Properties

You can also use our online Proposition 19 Benefit Calculator to estimate how much you might be able to save by taking advantage of a Proposition 19 Parent-Child Transfer. You can access the Prop 19 Benefit Calculator here.

Free Estate Planning Guide

Free Estate Planning Guide

Free Estate Planning Guide

Free Estate Planning Guide Now Available Online

EstatePlanningGuide.org is pleased to announce that we have launched our free, downloadable and printable estate planning guide. This new estate planning guide will help educate you on some of the different estate planning options available to you. The complimentary guide on estate planning helps explain a variety of estate planning topics in a simple and easy to understand manner. This free estate planning guide is now available for download here.

What does the estate planning guide cover?

The estate planning guide covers topics such as wills, living trusts, probate, advance healthcare directives and power of attorney documents. The guide delves into what a will can accomplish and in what situation a living trust may be a better option for you. It provides you with a 10-part step by step guide on how to prepare your own estate plan. The estate planning guide also includes a comprehensive estate planning glossary to help ensure that your understand of all of the information included in the estate planning guide.

Who is the estate planning guide intended for?

If you are or have been considering creating a will, trust or estate plan, this is the guide for you. It begins by explaining what estate planning is and what can be accomplished with it. The guide also covers issues like probate, how long it can take and how it can potentially be avoided. The free estate planning guide even provides you with information on creating an inventory of your assets in preparation for drafting a will or creating a living trust. The estate planning guide also includes a section on how to find an experienced and capable estate planning professional in your area to assist you with your estate planning needs.

If you are ready to being you estate planning process, please visit the estate planning how to guide on our website located here. It is a condensed version of our free estate planning guide and will help you get started with your estate planning.

The Probate Process

The Probate Process

The Probate Process

Information About the 7 Step Probate Process

Probate is a court administered process that transfers the estate of a deceased individual to named or remaining heirs. An estate is made up of the decedents real estate, personal property, life insurance, bank accounts, investments and personal belongings. In probate court, an executor (if there is a will) or an administrator (if there is no will) is appointed by the court as a representative to collect the assets, settle any debts and then distribute any remaining assets to the beneficiaries. All matters of probate are reviewed by the court. Each state has their own probate laws. Depending on your state, area and the complexity of the estate; probate can take anywhere for seven months to two years to complete.

The Seven Standard Stages in the Probate Process:

  • Stage 1 – Filing a petition in probate court and having probate initiated
  • Stage 2 – Issuing notices to heirs and creditors
  • Stage 3 – First probate hearing occurs and the proving of the will
  • Stage 4 – Collection of the decedents assets / estate assets
  • Stage 5 – Paying of creditor claims
  • Stage 6 – The filing of taxes for the estate
  • Stage 7 – Probate court closes the estate and any remaining assets are distributed to the heirs of the estate

When a person passes away, their assets and property will be distributed to any named heirs. In order for these assets to be distributed fairly a state probate process takes place. The probate process helps to ensure that all heirs are located, all of the decedents assets are accounted for and the creditors and taxes are paid for the estate.

Click here for a detailed explanation of the 7 steps of probate.