This appears to be a very common question and a very common concern of many individuals and families that have aging parents.
The death of a loved one can be very a stressful process. There are usually many things that are going through your head including:
- How are we going to pay for the funeral costs?
- Did mom or dad have a last will and testament, and if so, where is it?
- Did mom or dad have a lawyer?
- What bills need to be paid?
- How are we going to divide all the furniture and belongings in mom or dad’s house?
- What do we do with their home? should we sell it?
- Are there taxes that are going to be due? if so, when?
These are just a handful of questions that may be going through the minds of an adult child or children after the death of one of their parents. However, there is a process that you should go through to make things easier following the death of a loved one.
1. Attempt to Gather All of Your Loved One’s Personal Papers
This is a good first step. This would include gathering all of your loved one’s bank statements, investment accounts, retirement accounts, and other financial accounts. It would also include all of your loved one’s final bills, life insurance policies, and last will and testament (if your loved one died with a valid will at the time of their death). Hopefully, you will also have the name of your loved one’s estate planning attorney who prepared the final will.
2. Schedule an Appointment with Your Loved One’s Estate Planning Attorney
The next step should be to gather the entire family who are set to inherit under your loved one’s will and schedule an appointment with the estate planning attorney who prepared the last will and testament. The attorney will be able to explain the process moving forward which will include opening a probate estate with the probate court, admitting the last will and testament to the probate court, confirming the executor of the will, and filing a detailed accounting and inventory with the court outlining all of the assets and debts that are part of your loved one’s probate estate. In addition, the attorney will likely inform you that all valid claims and debts will need to be paid out of the proceeds of the estate prior to distributing the remaining assets to the family members. Depending upon how certain bank accounts were titled, the bank accounts may be frozen and unable to be accessed until the executor has been confirmed by the probate court, and the frozen accounts transferred into new estate accounts. If your loved one died without a will, or if the attorney is no longer practicing, the family will need to hire their own lawyer to start the probate court process.
3. The Funeral Bill Will Need to Be Paid For
One of the aspects of probate is that the court will need to see proof that the funeral bill has been paid prior to the probate proceeding moving forward. Therefore, you will need to pay the funeral bill. This may need to come out of pocket if the executor cannot be confirmed prior to the funeral. In this case, this is a claim that can be submitted to the probate court for reimbursement.
4. Life Insurance Claims Will Need to Be Filed
If your loved one had life insurance policies, then claims will need to be filed with the life insurance companies. This will include contacting the life insurance company, obtaining their claim form, completing and submitting the claim form to the insurance company, as well as sending them a copy of the death certificate of your loved one.
5. A Medicaid Affidavit Will Need to Be Filed with the Probate Court
If an individual incurs Medicaid benefits during their lifetime, then after that person’s death, Medicaid is entitled to receive reimbursement for all the benefits that were paid out during that individual’s lifetime. Therefore, regardless of whether or not a person has incurred Medicaid benefits during their lifetime, a release will need to be obtained from Medicaid and an affidavit will need to be filed with the probate court. In addition, nearly every title company will require to see a copy of this Medicaid affidavit and/or Medicaid release before proceeding with the sale of any real estate.
6. An Estate Sale May Need to Take Place
The next step may include holding an estate sale. This is a process where an auction takes place auctioning off all of the personal property (cars, furniture, firearms, jewelry, electronics, TVs, etc.) in your loved one’s home and then depositing the proceeds into an estate account and informing the court of the property that has been liquidated.
7. The Sale of Real Estate
When it comes to selling the real estate of your loved one, this may take over a year to complete. First, as stated above, you will need to obtain a Medicaid release before a title company will agree to proceed with the closing of any sale of that real estate. In addition, from a practical standpoint, you will not be able to sell the real estate until the creditor notice period has expired. This could be four months, six months, or even one year. Anyone who purchases a piece of real estate within this creditor notice period is taking that real estate subject to any valid creditor claims. Realistically, no one would purchase a piece of real estate under those terms. Therefore, it may take a year or more to sell the real estate.
For More Information
As you can see, the process after a loved one dies can be very stressful and full of laws and rules that can trap you if you are not careful and do not have the assistance of a knowledgeable and experienced estate planning and probate attorney. If you have questions about what to do after a loved one passes away and how to plan your estate so the entire probate process is avoided, then please contact our office for a visit so that we can discuss your estate planning needs.
We look forward to hearing from you!