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How Do I Find Estate Assets?

  • Overview: Identifying your loved one’s assets is one of the most time consuming and difficult aspects of handling his/her affairs. The following information will help you to identify the assets by giving you an idea of where to look. 
  • Key Documents that should be reviewed:
    • Bank and Credit Card statements: Look for large purchases, reoccurring payments, or withdraws that may be for things like life insurance, retirement accounts, investment accounts, storage units, safe deposit boxes, etc. Also, look for reoccurring deposits that may be for things like investment dividends or interest.
    • Financial Account statements/Investment Records/Insurance Records: You will need to contact the institutions to find out balance information, beneficiaries listed, and other title information (i.e. if there are rights of survivorship, transfer on death, payable on death, etc.). Once you have identified where your loved one may hold accounts, you will want to contact these institutions to get further account details. Within your custom executor guide included with the Auto-Executor Package for details on contacting financial institutions and insurance agencies, as well as examples of templates/letters to be sent.
    • Credit Reports: Credit reports can help you understand what open accounts your loved one may have with creditors and lenders. We recommend requesting copies of credit reports from each of the three main credit bureaus, since not all lenders and creditors report to all three. In your custom executor guide included with the Auto-Executor Package we provide step by step instructions for requesting a credit report 
    • Tax Returns: Recent returns will show information on interest, dividends, and employment income. In your custom executor guide included with the Auto-Executor Package, we provide step by step instructions for requesting tax returns. 
  • Insurance Asset Locator Services:: Consider using the MIB Life Insurance Policy Locator. The Policy Locator Service may be able to identify application activity on underwritten life insurance policies taken by MIB’s 420 U.S. and Canadian member companies. To submit a Policy Locator Service request, you will need to mail the following to MIB Solutions, Inc.:
    • A completed application form including notary verification. 
    • An original death certificate (they will return the death certificate to you with your report). – A money order or bank certified check for $75 U.S. (non-refundable).
  • Other Asset Identification Sources:
    • Former Employers/Current Employers– See the Auto-Executor Guide  for step by step instructions for notifying the current employer as well as a notification letter template. 
    • Email: while you may not have his/her password, if you are able to log on to his/her computer or phone, you may be able to access the email account, which may give you access to bank and other account statements or invoices. Many times, people remain auto-logged into their email account such as Gmail or Hotmail on their computer. Your loved one’s email may provide valuable information on assets owed, debts due, and other critical financial information.
    • Safe Deposit Boxes: It may be difficult to get access to a safe deposit box unless you are the co-owner or spouse of the deceased. However, they often include key financial details such as property deeds/titles, bonds, jewelry, etc. Also, check with state laws to find out if any formal notices are required prior to performing an inventory of the safe deposit box (this is only applicable if the safe deposit box is considered an estate asset). For example, in Pennsylvania, the Department of Revenue requires written notice at least one week prior to the inventory of the safe deposit box content and a formal inventory of the box may need to get filed with the department within a certain timeframe.
    • Storage Units: If you know that your loved one has/had a storage unit but you do not have the key/ability to access it, you will most likely need to show that you are the estate administrator or executor in order for the storage unit owner to give you access. You will want to contact the storage unit company to ask what their process is if you have not been granted formal/court authority to administer the estate. Often, they will accept a copy of the will, a copy of the death certificate, and an affidavit that states you are the sole beneficiary of the estate assets or the surviving spouse. If you end up needing to file a request for administration, you can easily upgrade your package and we will auto-fill the forms for you and provide instructions for how to file it.

Asset Types Defined

Retirement, Investment, & Insurance Accounts Defined

    • Retirement Accounts: This asset type should include assets such as pension plans, IRAs, Roth IRAs, 401k, 403, etc. 
    • Investment Accounts: This asset type should include assets such as stocks, stock options, bonds, mutual funds, etc. They are typically managed by brokers/companies such as Ameritrade, Fidelity, E*TRADE, Robinhood, Charles Schwab, and others but sometimes they can be purchased directly from banks.
      • Stock: A stock (also known as equity) is a security that represents the ownership of a fraction of a corporation. This entitles the owner of the stock to a proportion of the corporation’s assets and profits equal to how much stock they own. Units of stock are called “shares.” Source
      • Stock Option: An Option gives you the right to purchase stock at a set price. 
      • Bond: A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Source
      • Mutual Fund: A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. Source
        “A money market fund is a kind of mutual fund that invests only in highly liquid near-term instruments such as cash, cash equivalent securities, and high credit rating debt-based securities with a short-term, maturity—less than 13 months, such as U.S. Treasuries.” Source
    • Life Insurance: People will often have life insurance that was purchased through an independent broker but if your loved one was employed at the time of death, there is a chance that his/ her contract included life insurance coverage as well. You may also want to look into some credit card’s coverage, especially if your loved one passed away while on a vacation and the trip was booked using a travel credit card.
    • Health Savings Account: “A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses.” Source

Real Estate

    • This asset type should include assets such as rental properties, rental income, main home (typically called the mansion home by probate courts), secondary and vacation homes, deeded timeshares, and property. Note that any personal content of a home should be valued separately, likely as household goods. 

Vehicles/Farm Equipment

    • This asset type should include assets such as a boat, plane, motorcycle, car, recreational vehicle, SUV, motor home etc.

Bank Accounts, Bonds, or Safe Deposit Boxes (not yet inventoried)

    • Safe deposit boxes are typically held at a banking institution. Note that the individual Safe Deposit box does not have a value. Only the goods in the box have value. Once the contents of a safe deposit box has been inventoried, the individual contents of significant value should be listed as separate assets and the remaining items should be categorized as “Other Tangible Goods” .

      It may be difficult to access the safety deposit box unless you were named as a joint holder, you have the key, or you have been named an administrator by a probate court. In some circumstances, such as you are the surviving spouse or if you are a named executor in the will, the bank may allow you to access the box only to perform an inventory. Be aware that if you are filing for probate in court, you may be required to provide formal notice to heirs and beneficiaries prior to performing an inventory of the content of the box.

    • Bank Accounts: Typically includes Checking and Savings Accounts; however, there are other types such as Money Market Accounts, and CDs (Certificate of deposits).
    • Bonds: In general this is referring to US Treasury Bonds. These can be paper certificates or electronic certificates.  They earn interest every year, similar to a savings account. If you want to get access to the funds, you will need to cash in the bond, usually by taking the bond certificate to the bank. 

Money Owed to Deceased

    • This includes pay checks from employer. Usually employers pay these amount directly to the spouse or children. Call employer to get an estimate of wages due (this include accrued PTO, commissions, etc.). In most cases, all that is needed to request the funds is a signed affidavit signed in front of a notary public). “There are however, state limits up to a couple thousand dollars that can be collected in this informal way. The employer may be familiar with the law and know how much can be released to you.”

Unusual/Rare Assets (e.g. IP, Royalties, Precious Metals)

    • Intellectual Property: This could be a copywrite on a song or book or a patent on an invention. Trademark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others. These are difficult to value and you will most likely need to involve a lawyer and accountant to help perform the valuation and provide guidance on asset transfer procedures. 

    • Precious Metals: Includes things like gold, silver, etc. This asset is referring to precious metals as an investment vs. jewelry. 

    • Royalty: “A royalty is a legally-binding payment made to an individual, for the ongoing use of his or her originally-created assets, including copyrighted works, franchises, and natural resources.” Source These are uncommon assets, if you believe your loved one has royalties, you will most likely need to involve a lawyer and accountant to help perform the valuation and determine how the asset can be transferred to the heir/ beneficiary. 

Business Interests/Assets

    • This includes ownership of the tangible and intangible assets of LLCs, S-Corp., C-corp., Partnerships, small business ownership interests, shareholder agreements, contracts or franchise agreements, etc. We do NOT recommend including sole proprietorship assets in this category as whatever was owned by a sole proprietorship should be viewed as individual asset of the person who passed away and should be categorized in the respective categories. For example, if your loved one owned a landscaping business as a sole proprietorship and that business had a truck and 2 lawnmowers, we recommend categorizing the van in the Vehicle category and the lawnmowers in the Household Belongings category. 

Household Belongings

    • Cash: This includes cash, CDs, travelers checks
    • Jewelry: In order to simplify the inventory, it is recommended you only categorize and include high value items like an engagement ring in the asset inventory, using this asset type vs. sentimental items with low dollar value. Another option would be to group all the jewelry together and use this asset type.
    • Other Tangible Property: This asset type should include assets such as animals, antiques, appliances, art, computers and related equipment, cameras, exercise equipment, furniture, jewelry, musical instruments, sports equipment, tools.

      Note- There are state laws about legally transferring firearms. Be sure to look up the requirements in order to in compliance with firearm ownership.

Asset Titles/Ownership Details

General Info: 

    • Real Estate Titles: Do not rely on the county auditor site. You should contact the local county recorder.
    • Car Titles: Search online here  or here (Ohio BMV) 
    • Accounts– You will need to call the financial institution as this information is not typically available on statements. You will either need the account information or if that isn’t available, you’ll likely need to provide the death certificate and proof of your relationship to your loved one who passed away.  Once the bank confirms the information, you should ask for the following:
      • names of joint or co-owners on the accounts and whether those owners have payable on death (POD) or rights of survivorship (ROS)
      • if no joint/co owners and/or no POD/ROS, then find out if there are beneficiaries listed on the account.

Note: For retirement and life insurance accounts there will not be joint/co-owners but there will be beneficiaries listed on the account.

Retirement, Investment or Insurance Accounts:

    • A beneficiary was almost certainly named when the account was set up. You will need to call the custodian/trustee of the account to get this information/notify them of the death. The custodian will likely require a copy of the death certificate and proof of your relationship to the decedent before giving you any information about the account. Our Executor Guide, included with any package (including the FREE Basic Executor Package), provides a letter template with all the questions/details you will need to gather about the account.

      Key information you should ask about when contacting the custodian/trustee:

      1. any named joint account holders / co-account holders and the % of ownership of the asset (most likely it is 50% if there is 1 joint holder)

      2. whether the account will automatically transfer to a person or trust due to the death of the account holder. In other words, find out if there is transfer on death, payable on death, or rights of survivorship on the account

      3. any named beneficiaries

      4. value as of date of death

      5. Ask for a statement/document, which includes this information, to keep for your records.

Real Estate

    • The only way to know for sure how the real estate is titled and who is on the title, is by looking at the actual deed. The county recorder is the only reliable source to obtain this information. Do not rely on the county auditor website to get the details of the deed.
    • Note that while it is not common for real estate to have more than two owners, it is important to make no assumptions when it comes to confirming this information. 
    • This asset has four main types of co-ownership, which include: 
    1. tenancy in common 
    2. joint tenancy with or without right of survivorship, 
    3. tenancy by the entirety: Tenancy by entirety (TBE) is a way for married couples to hold equal interest in a property as well as survivorship rights, which keep their property out of probate. It’s not 50/50 ownership. With TBE, each spouse owns 100% of the property. (source)
    4. community property. 
    • If there are other people/companies/etc. listed on the title/deed, it will be especially important to pay attention to how the title is held.
    • Most county recorded offices have electronic records available to view online. See below for the links to records by state:
    • Florida: Palm Beach County, 
    • Maryland you will need to create an account to view the records online  

Vehicles/Farm Equipment (including Mobile Homes)

    • You will need the title and or VIN number to look up the title information. This info will be needed to 1) determine whose names are on the title and 2) if a transfer is needed, the title/vin info will be needed to fill out probate forms or motor vehicle transfer paperwork. Most states allow you to search online for this information. We have provided the links below. Otherwise, you will need to call the county registrar office where you think the vehicle was registered
    • Ohio  
    • Florida 

Bank Accounts, Savings Bonds, and Un-opened Safe Deposit Boxes

    • Bank account ownership details are generally not available on the bank statements. Likely, you will need to call the bank to get this information/notify them of the death. The bank will likely require a copy of the death certificate and proof of your relationship to the decedent before giving you any information about the account. Our Executor Guide, included with any package (including the FREE Basic Executor Package), provides a letter template with all the questions/details you will need to gather about the account.
      Key information you should ask about when contacting the bank:
      1. any named joint account holders / co-account holders and the % of ownership of the asset (most likely it is 50% if there is 1 joint holder)
      2. whether the account will automatically transfer to a person or trust due to the death of the account holder. In other words, find out if there is transfer on death, payable on death, or rights of survivorship on the account
      3. any named beneficiaries
      4. value as of date of death
      5. Ask for a statement/document, which includes this information, to keep for your records.
    • Safe Deposit Boxes– Joint/co-owners and beneficiaries can be on a safe deposit box; however, you will need to contact the bank to get this information. 
    • Paper Savings Bonds: Bonds can have joint/co-owners or beneficiaries; however, this is not common and generally, the joint/co-owners or beneficiaries will be listed on the paper bond. The good news is that government savings bonds likely can avoid probate if they are under $100k and you are an immediate family member. Source xxx
    • Electronic Savings bonds or Treasury Accounts: It is a bit more cumbersome to find out ownership details on these accounts. You will likely need to contact the Treasury via email or phone to get these details. 

Date of Death Value of Assets

If you simply want to understand which assets need court approval to be transferred and/or whether you qualify for simplified estate procedures, just enter your best guess for the values. However, you will need to update the amounts once you are able to get the supporting documentation.

For any assets that need court approval in order to be transferred, you will need to provide documentation that supports the value of the asset (bank statements, appraisal, etc.).

Retirement, Investment, & Insurance Accounts 

    • You will need to call the custodian/trustee of the account to get this information/notify them of the death. The custodian will likely require a copy of the death certificate and proof of your relationship to the decedent before giving you any information about the account. Our Executor Guide, included with any package (including the FREE Basic Executor Package), provides a letter template with all the questions/details you will need to gather about the account.
      Key information you should ask about when contacting the custodian/trustee:
      1. any named joint account holders / co-account holders and the % of ownership of the asset (most likely it is 50% if there is 1 joint holder)
      2. whether the account will automatically transfer to a person or trust due to the death of the account holder. In other words, find out if there is transfer on death, payable on death, or rights of survivorship on the account
      3. any named beneficiaries
      4. value as of date of death
      5. Ask for a statement/document, which includes this information, to keep for your records.

Business Interests/Assets

    • If you believe your loved one has business interests, businesses and/or related business assets, you will most likely need to involve a lawyer and accountant to help perform the valuation and provide guidance on asset transfer procedures.  
    • Note: Typically sole proprietorship assets are not treated any differently than regular assets and do not require special valuations or attorney guidance on transfer procedures. For example, if the decedent owned a sole proprietorship landscaping business with a van, trailer, and a lawnmowers, you would classify the van and trailer as vehicles, and the lawn mowers as other tangible assets. 

Real Estate

    • To get an initial estimate of the value of the real estate you could start with the county’s auditor’s site. It is important to note that the value used on any probate forms/applications will be the new tax basis of the house. County’s auditor’s sites often have lower values of homes/real estate versus what the true value would be if you were to hire an appraiser.  Often those who intend on selling the home after it is transferred, prefer to get an appraisal of their homes in order to reduce the amount of income they are taxed on. 
    • Let’s look at a simplified example:

Value on the auditor site: $100k 

Value by the appraiser: $130k 

Sale Amount: $150k

Income tax rate 10%:

Tax amount if you used the appraised value of the home: $2k (150-130=20 * 10%) 

Tax amount if you used the auditor’s value of the home: $5k ($150- $100= 50 *10%) 

Most probate courts have an approved set of appraisers, which you should use if the house needs to go to probate court in order to be transferred. 

Vehicles, Farm Equipment, and Boats

    • It would be very difficult to get the exact value as of the date of death; however, you can get an approximate value, which is all that the court would require, by  any of the following: whichever method you choose, you should print and save the value details for your records. They may need to be turned in with any court or BMV applications.  

Bank Accounts, Savings Bonds, and Un-opened Safe Deposit Boxes

    • The best route would be to get a copy of an account statement and use that information to calculate the value of the account as of the date of death. However, if you do not have access to account statements, you will need to call the bank to get this information/notify them of the death. The bank will likely require a copy of the death certificate and proof of your relationship to the decedent before giving you any information about the account. Our Executor Guide, included with any package (including the FREE Basic Executor Package), provides a letter template with all the questions/details you will need to gather about the account.
      Key information you should ask about when contacting the bank:
      1. any named joint account holders / co-account holders and the % of ownership of the asset (most likely it is 50% if there is 1 joint holder)
      2. whether the account will automatically transfer to a person or trust due to the death of the account holder. In other words, find out if there is transfer on death, payable on death, or rights of survivorship on the account
      3. any named beneficiaries
      4. value as of date of death
      5. Ask for a statement/document, which includes this information, to keep for your records.
    • For Safe Deposit Boxes- there is no way to determine the value without first inventorying the asset. Once it is inventories, the contents should be categorized into the appropriate asset types and tracked separately. For example, if the box had 1 diamond ring with $5k and a savings bond worth $1,000, the diamond ring should be categorized and tracked as household good and the bond should be categorized and tracked within this category- bank accounts, bonds, and Un-opened Safe Deposit Box.
    • Paper Savings Bonds
    • Electronic Savings bonds or Treasury Accounts: It is a bit more cumbersome to get the value of these if you don’t have access to the account online or the statements. You will likely need to contact the Treasury via email or phone to get these details. 

Household Belongings

    • Cash: Use current amount 
    • Jewelry: Use online marketplaces like craigslist, ebay, etsy, or facebook marketplace to find similar items and use those values or go to a jeweler to get an official appraisal.
    • Other Tangible Property: Use online marketplaces like craigslist, ebay, etsy, or facebook marketplace to find similar items and use those values. Most estates lump these items together instead of listing each separately and estimate a collective value of around $500-$1000.

       

Money Owed to Deceased

    • In most cases this is a last paycheck from an employer. Within our Custom Executor Guide we provide a template with all the information you should provide to and request from your loved one’s current employer. Mainly though, if you want to find out if any money is owed you will likely need to call the employer or send them a letter. 

Unusual/Rare Assets (e.g. IP, Royalties, Precious Metals)

    •  These are difficult to value and you will most likely need to involve a lawyer and accountant to help perform the valuation and provide guidance on asset transfer procedures. 

Asset Transfer Details and Tax Considerations

Retirement, Investment, & Insurance Accounts

    • Retirement and Investment Accounts: Generally these types of assets avoid going to court because there is a named beneficiary on the account title. Note that there are very specific guidelines for retirement account and whether or not they would transfer to the named beneficiary even if that beneficiary was not the surviving spouse. If situations arise where the surviving spouse or another heir wants to dispute the named beneficiary on the account, it would be prudent to consult with a lawyer. In some circumstances, federal law trumps state law and federal law may be that the asset is transferred to the surviving spouse regardless of the named beneficiary on the account.

In regard to tax considerations, for investment accounts, the beneficiary would generally report the sale of the stock within their Capital Gains and Losses, because inherited stock qualifies for long-term capital gain treatment. Source The good news is that the starting value of the stock (called the basis), will be the value of the stock on the date of death. Any gains you earn after the sale will likely be minimized because of this. For example, your dad bought stock at $100 in 2001, he passed away January 2010 and the stock was valued at $5000. You inherited the stock (you were named as a beneficiary on the account) and sold it in July 2010 for $5,500. You would only get taxed on the $500 gain ($5500-$5000).  

    • Life Insurance: The beneficiary will collect the proceeds but may need to be notified. The amount of proceeds will need to be tracked for estate tax purposes. Confirm the ownership of the policy by contacting the insurance company.
    • Health Savings Account: If the beneficiary is the spouse, then the HSA, upon death, becomes the spouse’s HSA and the surviving spouse can continue to access HSA funds, and distributions for qualified medical expenses will be tax free, the same way they would be if distributed to the deceased account owner. However, beneficiaries other than a surviving spouse or the estate must include the full value of the HSA as taxable income in the year in which the account owner dies. Source

Real Estate

    • “The TOD Designation Affidavit, when properly recorded, permits the direct transfer of the described real property to the designated beneficiary or beneficiaries upon the death of the owner, thus avoiding Probate administration. The recording of the transfer is accomplished by filing a death certificate and an affidavit signed by any person knowing the facts of the transfer, including possibly the designated beneficiary, in the Recorder’s office.  ”  Transfer-On-Death (“TOD”) Designation Affidavit. “Individuals who own real property titled as “joint and survivorship” can execute a TOD Designation Affidavit.  Upon the death of such an individual, the real property passes to the surviving owner and only upon the death of the last surviving joint and survivorship owner does the real property pass to the beneficiary or beneficiaries named in the TOD Designated Affidavit. The last joint and survivorship owner however must join in the TOD Designated Affidavit.”- Source
    • “Effective December 28, 2009, Ohio eliminated transfer on death deeds and replaced that deed with a TRANSFER ON DEATH DESIGNATION AFFIDAVIT. Beginning December 28, 2009 you must follow the new rules for transfer on death designations. ” Source 

Money Owed to Deceased

    • In most cases this is a last paycheck from an employer and all that is needed to request the funds is a signed affidavit signed in front of a notary public. There may be limits up to a couple thousand dollars that can be collected this way but the employer will likely know how much can be released to you.

Vehicles and Mobile Homes 

    • Ohio: 

    • Florida: If you are the spouse and the title includes the name of both spouses, the surviving spouse may choose to request a free title replacement removing the name of the deceased spouse. If a title is in the name of the deceased spouse, the surviving spouse may choose to request a free title replacement if the sole change is to change the ownership of the motor vehicle from the name of the deceased spouse to the surviving spouse. To obtain a replacement title, complete form Application for Surviving Spouse Transfer of Florida Certificate of Title for a Motor Vehicle (HSMV form 82152) and submit to a motor vehicle service center along with a certified copy of the death certificate and proof of identity (driver license/ID card/valid passport). A marriage certificate will also be required unless the name of the surviving spouse is shown on the death certificate. There is an expedited title fee of $10.00 to receive the title the same day.

Ex-Spouse Listed on an Account as a Beneficiary

Sometimes an ex-spouse may still be listed as a beneficiary on an account.  In general though, if it is an employee benefit plans such as 401(k) plans, 403(b) plans, defined benefit plans and defined contribution plans, the ex-spouse will likely receive the asset if he/she is listed as the beneficiary. If it is an IRA, there is a chance that the ex-spouse’s rights as a beneficiary were revoked upon finalization of the divorce. In these instances it is highly recommended you consult with a Probate Attorney to discuss options on recovering the asset from the ex-spouse.

Assets to Include/Exclude in Inventory

All significant estate assets should be listed as well as any assets of sentimental value that you want to track for distribution purposes. Try to find a balance between tracking every single asset vs. lumping assets together. 

Difference Between Authorized User, Beneficiary and Joint/Co-Owner

Authorized user (sometimes called a secondary signer) is a person/company that has no legal rights or obligations to the asset or debt they are listed on. (S)he simply has access to the asset (can sign checks, use the credit card, withdraw funds, etc.) while the owner of the asset is alive. Authorized user are most commonly used on credit cards and bank accounts. An authorized user will generally never have an account statement in her name. If you see a credit card or bank statement with someone’s name on it, this generally means (s)he is the account owner/co-owner and NOT an authorized user. 

Beneficiary on an account/title/deed: a person/company who has no legal rights until the asset holder passes away. Once the owner passes away, the named beneficiary on the account will have legal rights and obligations to the asset. Beneficiaries are only listed on assets, never on debts.  

Beneficiary in the will: a person/company who has no legal rights until the asset holder passes away. Once the owner passes away, if there are no joint/co-owners and/or beneficiaries named on the account/title/deed, then the asset will likely need to go to probate court. Depending on the debts owned and family rights, the asset may be distributed to the beneficiary named in the will; however, it is not guaranteed.

Joint-Co Owner is a person/company who has legal rights and/or obligations to the asset along with the other owner(s). If an owner passes away, the surviving joint/co-owner generally becomes the sole owner of the asset as long as this person had Rights of Survivorship . The new owners would now responsible for all payments (if it is a credit card) and they have the the ability to make any ownership changes to the asset (add authorized users, other owners, etc.). 

Rights of Survivorship

Rights of Survivorship: In general, if the account has a joint or co-owner, there may be what is termed as “rights of survivorship,” on the account. This means that upon death of the other owner, all the funds pass directly to the surviving owner. If there are no “rights of survivorship”, the share of the account belonging to the deceased owner may need to be distributed through his or her estate unless there was a named beneficiary on the account. You will likely need to request this information from the institution/bank that is the custodian of the asset if it is not already known. 

For some assets, such as a vehicle, if there is an OR in-between two names listing the two joint-owners (i.e. John Smith or Carole Smith), this would be joint owners who do not have right’s of survivorship. If there is an AND in-between the names (i.e. John Smith and Carole Smith) some states this would be recognize this as joint ownership with Rights of Survivorship.  For example in Florida, if a car registration lists two names with an AND in-between them then this asset would need a simple title transfer form to be filed with the DMV to transfer the vehicle to the surviving owner instead of needing to go through the probate court to transfer the title. 

On the Loan/Mortgage but not on the Title/Deed or Vice Versa

In general, if someone is on the debt (mortgage/loan), they will also be listed as an owner on the related asset (title/mortgage). However, it is not guaranteed.  It is highly recommended you confirm this information by examining the deed/title of the asset and the associated loan/mortgage. Need help finding this info? 

Why Should I Care About Who Is Listed On Assets?

Who is listed on an asset and how they are listed, is a key factor in whether an asset is required to get approval from a Probate Judge (court Magistrate) before the asset can get transferred/sold/distributed. The nuances in how they are listed are extremely important. If you want to learn more read our blog post – How Do I Know If I Need to File Probate?- The Will Doesn’t Matter!

Notifying IRS of a Change of Address

If you would like to be aware of any IRS notification and/or IRS refund checks due, it’s important that they have the most up to date address for where to send the checks and/or notices. If you request tax information/ prior year returns for your deceased loved one, they will also need an updated address.

Medicare vs. Medicaid

Medicare is like health insurance for the elderly. Medicaid is similar to Medicare but in order to be eligible, the recipient must meet certain low income levels. There is 1 key difference between Medicaid and Medicare:

  1. When a Medicaid recipient (and the surviving spouse or minor children) pass away, if there are any assets, these assets will be used to repay the state/federal government for the money spent on the recipient’s healthcare. In this sense, Medicaid is like a loan from the state/federal government. 

 

Why does this matter? In most cases, if an estate goes to probate court and meets certain criteria, the estate executor will have to notify the state Medicaid office in case the estate is subject to Medicaid asset recovery process. Want more info?

Debts & Expenses

Which Debts/Expenses Should I Add to the Inventory?

General Guidelines: These are examples and are not meant to be an exhaustive list

  • INCLUDE:
    • If you included the asset related to the debt, as a part of the asset inventory, it makes sense to include the related debt/loan. 
    • Any expenses that were paid after your loved one’s death and the invoices were addressed only to your loved one (example include Hospital/Doctor Bills, Cell Phone Bill)
    • Any funeral or burial expenses/invoices (as long as the funeral/burial was not pre-paid prior to your loved one’s death) 
    • Expenses/Invoices incurred by you that were needed to manage the estate (consultations with attorneys, accountants, some travel expenses, etc.) 
    • Professional Fees incurred to manage the estate (Attorney, Accountant, Financial Advisor, etc.)
    • Court application/filing fees related to probate or asset transfer
  • EXCLUDE:
    • If you know for sure there is another signer/owner on the debt (for example the surviving spouse is listed on the utilities bills), these debts will automatically transfer to the surviving account holder. 
    • Funeral or burial expenses that were paid prior to your loved one’s death  

Estate Debt vs. Non-Estate Debt

Debts that have co-signers (such as a mortgage) or joint account holders (such as a credit card) are not estate debts and instead, the debt will be automatically transferred to the co-signer/joint account holder upon notification of the death of your loved one. The notification to banks/financial institutions is typically done by the SSA or via credit bureaus. However, other companies, like cell phone provider or utilities companies will need to be notified by you, the estate administrator. 

Estate Debts are any debts that were owed entirely by your deceased loved one. There are no other persons/companies listed on the account/loan/mortgage. 

How Do I know if Other People are Listed on the Debt

Ownership details are generally not available on the lender/loan statements/invoices. Likely, you will need to call the mortgage company/lender to get this information/notify them of the death. Do not make assumptions, especially if you see invoices made out to one or more people.  The company will likely require a copy of the death certificate and proof of your relationship to the decedent before giving you any information about the account. Our Executor Guide, included with any package (including the FREE Basic Executor Package), provides a letter template with all the questions/details you will need to gather about the account.
Key information you should ask about when contacting the lender:

    1. Any named co-owners, co-borrowers, joint account holders, and co-signers  
    2. Whether the account will automatically transfer to a person or trust due to the death of the account holder. 
    3. If they offer any sort of debt or interest accrual breaks or benefits due to the death  
    4. Amount of loan as of date of death
    5. Ask for a statement/document, which includes this information, to keep for your records.

Note: For credit cards- do not confuse authorized users with joint/co-borrowers. Authorized users are not liable for the debt on the credit card; however, joint account holders are legally liable for the debt. 

Loans Defined

Loan or debt is created when you receive a service or goods and do not pay for the service or goods immediately.  Typically loans/debt are categorized as secured and unsecured. Secured Loans are where there is an asset associated with the debt. Unsecured loans are where there is no asset linked to the debt. Why this matters in terms of settling an estate is that for secured debt, the lender/creditor (person or business that lent the money) can foreclose or repossess the asset if the loan payments are not made (even after the death of your loved one). For unsecured debt/loans, the lender will likely file a claim against the estate in order to get payment on the outstanding balance. It is very important to understand the difference between debts that will become claims against the estate vs. debts that will be transferred to someone else. If you need a refresh, read Estate Debt vs. Non-Estate Debt. 

  • Credit Cards: This category is for any outstanding balances on credit cards that were only in the name of your deceased loved one. Do not include outstanding balance of credit cards if there was a joint/co-owner. Do select this type if there was only an authorized user, since authorized users are not personally liable for credit card debt after the death of the primary account holder. 
  • School: Student loans are used to pay for college and graduate school. There are generally 2 types: Federal Student Loans and Private Student Loans. Federal Student Loans may be forgiven upon the death of the account holder whereas private student loans generally become debts of the estate.
  • Other Personal Loans or Payday Loans: The category is reserved for loans such as credit builder loans, debt consolidation loans. and payday loans. 
  • Other Mortgage or Auto Loans NOT Entered with an Estate Asset: If your loved one was the primary holder of a mortgage and/or auto loan that is not associated with any estate asset previously entered, select this option. Otherwise, these loans should have been entered when you were adding the associated asset details. This is typically a rare occurrence where a decedent was the sole borrower/signer on this type of debt and he/she was not  

 

Debt/Expense Types Defined

  • House/Apartment & Related Bills: Examples include rental payments, mortgage or rental insurance, property taxes, lawn care, home utilities (water, trash, sewage, electric, etc.) 
  • Vehicles/ Farm Equipment/ Boats: car/vehicle loan payments, interest, docking fees. 
  • Bank/Credit Cards and Schooling: Bank fees, Credit card bills, school loan payments, etc.)
  • Taxes, Legal, and Professional Fees: 

    • Taxes: Expenses to include in this category include: Property Taxes (if paid separately and not included in home mortgage), Personal Income taxes of the deceased, Estate taxes, and taxes on sole proprietorship business of the deceased. Do not include your taxes owed on distributions of the estate assets. Different Type of taxes that may be owed:

      •  Personal Income Tax of the deceased – unless he/ she had no income it’s almost certain the personal income taxes will need to get filed. There aren’t any special rules, tax credits, or restrictions that need to be considered. Note that funeral expenses are not deductible on personal income tax returns, either your own income taxes or your deceased loved one’s personal income taxes. If you end up needing to file an estate tax return, they are an allowable tax deduction along with other executor expenses.

      • Property: Regardless of whether the property/real estate is an estate or non-estate asset, property taxes will need to get paid. In the case that the property is a non-estate asset, the person whom the property will be transferred to will be responsible for the property taxes on a go-forward basis. If the real estate is an estate asset and/or there are past due property taxes, the payment need only be made from probate/estate assets. If you are unsure if there are taxes owed and/or how much property taxes will cost, check to see if there are any property tax bills or if there are details on the mortgage. Another way is to look up property tax records by going to the county assessor’s office or using the assessor’s online portal using the property address or a parcel number. Property taxes are public record and available to anyone. You may also obtain the property tax information from the assessor’s office.
      • State and Federal Estate Taxes: Many states do not have estate taxes but it is important to check. Ohio, for example, eliminated their state estate taxes. Federal Estate: Most estates do not need to file federal estate tax returns. As of 2020, only estates valued at $11.58 million or more are subject to federal estate tax.
      • Trust: As successor trustee, you should report any income the trust’s investments earn — rent checks, stock dividends, capital gains — using IRS Form 1041. You should file form 1041 if the trust has any taxable income or a gross income greater than $600, even if it is not taxable. If the trust does not already have a taxpayer identification number, you will need to apply to the IRS to receive one. within our Executor Guide we provide details on these tasks and more including how and when to apply for an EIN.
    • Legal and Professional Fees: This could include Attorney fees, Accountant Fees, Investment Advisory Fees (to help determine best strategy for distribution of assets), etc. Do not include fees for your own personal consultations with these professionals. Meetings should be about the estate and how to transfer/distribute assets etc. 
  • Medical, Nursing Home, Hospital: Should include any expenses paid to nursing home, hospital, in-home nursing care, hospice, prescription medications, ambulance services, etc. TIP- If you are dealing with an estate that has more estate debts vs estate assets (i.e. an insolvent estate), you may need to separate out expenses paid as a part of your loved one’s last illness vs. previously owed expenses. 
  • Fiduciary Fee, Executor Expenses and/or Probate Bond
    • Fiduciary Fee is a sum of money the executor/administrator/fiduciary of the estate can charge the estate for the work he/she performs in order to close out the deceased person’s affairs. Many executors choose not to receive compensation for their work to avoid complicating family relationships and also because executor compensation is taxable as ordinary income, whereas if you are inheriting estate assets, you may not have to pay income taxes on the assets received.
      • If you need guidance on what amount of compensation you may be due, first check the will for any details as to how much the personal representative should be paid. Instead of authorizing an executor fee, the will may specify a dollar amount or leave a bequest of a certain assets. If the decedent died without leaving a will or if the will does not mention anything about payment, state law takes over and governs the fee that the personal representative is entitled to receive.  
      • The calculation of the fee can be quite complex and it comes down to 1) how assets are categorized and 2) how they are titled and 3) the value of the assets. The fee is calculated based on these three criteria and is a percentage of each. 
      • We highly recommend discussing the executor compensation with heirs and beneficiaries BEFORE reimbursing yourself or submitting a bill to the estate for your time and effort.
    • Executor Expenses: These expenses are reserved for things such as travel required to manage the estate, supplies, mailing costs, meals, mileage and possily hotels needed if you live far from where the estate is located and need to travel there to manage assets. If you as the executor, live in a different location than where your loved one passed away, it’s not uncommon for you to need to travel to and from your loved one’s place of death multiple times to close out his/ her affairs.
      These travel expenses should be tracked and are reimbursable to you from the estate. We do not recommend including your travel to the funeral as part of these expenses.
    • Probate Bond: A probate bond is an insurance policy that may be required by the court, which insures that the estate representative properly distributes the assets of the estate to creditors and beneficiaries according to the will and/or court direction. The amount of the bond is determined by the value of personal assets owned by the deceased.

      A probate bond is typically required when either of the following situations occur:
      1) There was no will and the applicant is not the sole beneficiary of the estate assets
      2) There was a will; however, the will did not waive bond and the applicant was not named as the sole beneficiary of the estate assets within the will
      3) The estate administrator lives outside of the state where probate is being filed

  • Asset Sales and/or Appraisal Expenses: You may require an appraiser if you plan on selling your loved one’s real estate to an independent third party. Also, if there or other types of rare or unusual assets and the values are not readily obtainable, it may make sense to get appraisals prior to sale or distribution. For most assets though, including real estate, cars , musical instruments, even jewelry, we recommend saving on the appraisal fees and using online, second hand markets to get an idea of the value.

    County Auditor website for real estate – whichever county your loved one’s real estate is located should have a website in which you can look up the auditor assessed value (this is how the property taxes are determined)
    Kelly Blue Book (automobiles): https://www.kbb.com/
    Facebook marketplace, craigslist, eBay- all other asset types
    Also, you may be able to get free appraisals from experts by taking in the assets to places like car dealerships or Vintage / Pawn shops.

    TIP if you are filing for Probate with the Court: If you decide to get an appraisal for assets that are going through probate court, you will most likely need to use one of the court approved appraisers and you will need to get approval from the court on the appraisal fees prior to payment.

  • Family Allowance or Child Support:
    • Family Allowance: This is a special type of estate debt that can only be approved by the probate judge. If you are filing for full probate, this allowance will typically be one of the first that the estate pays to the surviving spouse. If you don’t need to file for probate, this debt type won’t be applicable. 
    • Child Support: In most states child support continues even after the death of a parent. There is certainly complexity in these circumstances and if the deceased was paying child support prior to his/her death you will likely want to discuss the next steps and impact on the estate with an attorney. The following article by verywellfamily.com also provides great details on what happens with this type of debt/expenses after the death. 
  • Business or Employee Expenses: This category should be used if your loved one owned their own business and there are debts/expenses directly related to that business. For example, if your loved one owned an LLC and that LLC had vehicles that had loans. You would categorize the vehicles as business assets and the loans as business expenses. If his/her business had employees and there is payments owed to the employees for work performed, this is where you would document those expenses.
    • TIP: If your loved one was the sole owner of an LLC or had a sole proprietorship all assets and the related debts are considered personal and do not need to be categorized separately as business expenses. 
  • Cell Phone & Other Bills: Expenses that do not fit into any of the other categories- we recommend using this debt/expense type sparingly in order to help with organization and transparency in reporting

How long after a death do creditors have to make a claim?

  • Creditors have six months from the date of death to make a claim. ORC 2117.06. The main exception is related to Medicare claims. Also, if the bill/expense is related to payment of a secured loan/debt, such as a loan on a house or a car, even if the invoice/bill isn’t presented within 6 months, if the loan payments are not paid for a certain period of time, the creditor may have the ability to repossess the asset associated with the loan. 

Which bills/expenses should I add?

  • Per Ohio Code: Add any debts or expenses that meet the following criteria:
    • The loan did not have any co-borrowers or co-signers and
    • was not forgiven/cancelled upon death (i.e. federal student loan) and
    • The invoice/bill/statement was received within six months from the date of death and 
      • It was sent to you (the executor or administrator) in writing OR 
      • It was sent to the decedent and it was actually received by you (the executor or administrator) within the appropriate time 
    • Any Medicare claims

Note– if the bill is related to payment of a secured loan/debt, such as a loan on a house or a car, regardless of whether the invoice/bill/statement  isn’t sent to you/received by you within 6 months, if the loan payments are not made for a certain period of time, the creditor may have the ability to repossess the asset associated with the loan. 

Which bills/expenses do I have to pay?

  • If you are someone else is a joint/co signer or co-borrower on the debt, it will need to be paid otherwise your credit score will get negatively impacted. Also, if you are or there is a surviving spouse, most likely he/she will be liable for the bills/expenses of his/her deceased spouse. There are some exceptions though and if this is a concern, this is a good time to speak with a lawyer to talk about options. 
  • Otherwise, if the debt was only in the name of the decedent, it is part of the estate and should not be paid until 1)you determine whether or not you need to go to probate court 2) you determine whether or not the estate is insolvent (there are more estate debts then estate assets). You will be able to determine this after you complete the probate assessment. 

Are there any debts/expenses that are forgiven upon death?

  • In short, no– however, if you do receive an invoice/bill, it is worth calling the creditor to notify them of the death and ask if they offer any sort of loan/debt forgiveness options. There is a very good chance small bills, such as cell phone bills, will be written off/forgiven by the creditor once they are notified of the death.
  • The main exception is that almost all federal student loans and some private student loans are forgiven upon death or either the primary or secondary borrower or co-signer. You should contact the lender if any of these types of loans exist. If they are forgiven, make sure to get a copy of this in writing for your records. 

What is the Family Allowance?

  • The Family Allowance is a sum of money ($40,000) that is paid to the surviving spouse and minor children of the person who passed away. The money comes from estate assets (assets that do not have beneficiaries or owners on the title/deed/account). In order to claim the allowance the following should be true:
    • There are estate assets 
    • You are filing for Full Estate Administration (the most lengthy type of probate reserved for estates with larger dollar value) 
    • There is a surviving spouse and/or minor children of the person who passed away 

Other considerations: 

If you are not worried about the estate being insolvent it may make sense to waive the allowance– This is worth discussing with a Probate Attorney 

What is the Fiduciary Fee

  • The Fiduciary Fee is a sum of money the executor/administrator/fiduciary of the estate can charge the estate for the work he/she performs in order to close out the deceased person’s affairs. The following should be true if you are considering accepting payment for the work you are performing:
    • You are NOT the sole heir/beneficiary of the estate – otherwise you are causing more tax complications by accepting payment and receiving inheritance
    • You are aware that income earned as a fiduciary is taxable as ordinary income and must be reported as a part of your gross income (this is different than receiving income/assets as an inheritance- those have much different tax implications) 
  • The calculation of the fee can be quite complex and it comes down to 1) how assets are categorized and 2) how they are titled and 3) the value of the assets. The fee is calculated based on these three criteria and is a percentage of each. 

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