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MOM AND DAD WERE products of the Great Depression. I feel like it affected every single day of their lives. Despite their difficult upbringing, they made good financial decisions that allowed them to live comfortably. Part of it was because Dad worked for the same company for almost 42 years. His pension paid him more than I earned in my first job as an engineer.
When Mom died in August 2004, she was almost 84. My dad passed away in 2009, almost exactly five years later. He was 91. Mom and Dad did a good job of telling my sister, brother and me what they wanted to happen when the time came to divide their assets. They asked that everything be split equally among us three children.
Mom and Dad each had a will, along with a trust that was supposed to make the distribution of their accumulated wealth as easy as possible. But that, alas, didn’t happen.
I’m the oldest of the three siblings and, when Dad died, I was trustee and executor, which meant I was responsible for settling his estate. Shortly after Dad’s funeral, I took a day off work to visit the clerk of court in Alamance County, North Carolina. I live in Raleigh, so this was about an hour’s drive away. I obtained the recommended number of copies of the death certificate and letters testamentary, so I could begin work on his estate.
My sister and brother were on board to help, but my sister lived in Tennessee. My brother still lived in our hometown. Our initial focus was on emptying my parents’ very full house, making home repairs so the place could be sold, and dealing with their finances.
My brother did the lion’s share of the work clearing out the house. Whenever my parents didn’t want something, they put it in the attic. It was packed with junk. The living area was full of furniture that, for the most part, no one wanted. We filled many dumpsters, held an auction, and gave away countless items.
For jewelry, Mom had a very specific list of who should get what. This list wasn’t part of any will or trust document, just a typewritten list, with items under each of our names.
The required home repairs were substantial, costly and time-consuming. But it was their finances that were the hardest part. My dad had made me a signatory on his bank accounts, so paying funeral costs, medical expenses, other bills and our out-of-pocket costs wasn’t a problem. Soon, however, issues emerged.
First, I discovered that my dad had never closed Mom’s estate. Until he died, he was receiving and cashing dividend checks sent to my mom, because the stocks were still in her name. I don’t know why the bank let him do that. I had to reopen her estate, and get death certificates and letters testamentary to notify banks and other companies of her passing.
The second problem arose when I needed access to their safe-deposit box. To get the box opened, I had to get a court order of instruction and then take it to the bank. Inside the safe-deposit box, I found all the missing paper stock certificates. The bad news: Mom and Dad had also used the safe-deposit box as a place for unimportant papers and documents, including empty envelopes and lists.
Under the court’s instruction, a bank official was required to itemize what we found. The employee was incredulous about the number of empty envelopes she had to catalog.
The third unpleasant discovery: Very few of their holdings were ever placed in the living trust my parents had created. The house was in the trust, probably courtesy of the lawyer who drew up the trust paperwork. But most of their stocks and mutual funds remained in either Mom’s or Dad’s name.
My parents used a financial advisory firm, but my dad was extremely distrustful of lawyers and other professionals, so he didn’t reveal all their holdings. Still, the financial advisor’s office was helpful in establishing stock and mutual fund ownership.
The office was overjoyed when I found the paper stock certificates, because it meant they didn’t have to initiate the lost certificate process for so many different stocks. Over time, we were able to transfer all holdings into three different accounts, one for each child.
I managed all the financial paperwork on my own, except for the estate tax returns. At times, it felt like a second full-time job, but I never engaged a lawyer to help. Perhaps I should have. The clerk of court was patient with me up to a point, but she wanted to close both estates, even though there were still many details requiring resolution.
For example, I found a life insurance policy that my dad had taken out in the 1940s. His mother, who died in the early 1960s, was the beneficiary. The policy’s proceeds had been turned over to the New Jersey Unclaimed Property Administration. It never earned a penny of interest during the decades it remained in the state’s possession.
My parents also owned two weeks of a timeshare on Hilton Head Island, South Carolina. Ever tried to sell a timeshare? Basically, I gave them away.
In addition, my parents owned two extra burial plots—don’t ask. No one would buy them. I finally gave them to my parents’ church for indigent burials. The church still requested prepayment of the grave preparation fees.
All these issues took me years to sort out. We had to have a tax preparer file estate tax returns for three years before I could close out everything.
I get anxious just thinking about the stress that my time as executor caused me. Want to make life easier for those settling your estate? From my hard-won experience, here are six lessons:
Jeff Bond moved to Raleigh in 1971 to attend North Carolina State University and never left. He retired in 2020 after 43 years in various engineering roles. Jeff’s the proud father of two sons and, in 2013, expanded his family with a new wife and two stepdaughters. Today, he’s “Grandpa” three times over. In retirement, Jeff works on home projects, volunteers, reads, gardens, and rides his bike or goes to the gym almost every day. His previous article was They Pitched We Swung.
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Whew…. I have a little PTSD reading this but I totally get it. I was very involved, if not a lead, on 3 estates, none of which I was the actual executor, but I was the more financially savvy person around to help push along the paper.
It really boils down to parents making a decision to leave a well-prepared situation and not a mess for their children and heirs. I think most people have a hard time understanding the difference or what constitutes a mess. We have no children, so I think about this some and I expect I’ll try to keep it really clean for whoever has to deal with our stuff. These are the tough conversations that families mostly avoid.
As my wife and I plan for our own inevitable shuffles off the mortal coil, a key focus is on leaving our kids as little mess to deal with as possible. When I began reading your post, I expected the difficulties to come from contention between siblings. In every regard of your descriptive tale, we have all bases covered but one.*
In particular, we have completed and funded a trust, with every non-financial asset, and all financial assets are properly styled with beneficiaries.*
Thanks for sharing your personal history, and for having it not point to that dread of dissension among the remaining heirs.
Regards,
(($; -)}™
Gozo
—
*Our least-sentimental child, eventually tasked with disposing of the masses of old writing & other documents that will be of no value once I’m gone, has promised to go out to our storage barn in the back of our property, and strike a match. Yes, there’s a bit of humor to the statement. But we can trust her to get everything into the hands of the nearest disposal service, and let her and her siblings go merrily on their ways.
I inherited my parent’s “paperwork” and wasn’t able to let it go so I scanned it all. It’s available and can be passed on via a USB stick if anyone wants it or if multiple copies are wanted. If not, someone can hit the “delete key” and that will be that.
this is a great article and the reason we all love humble dollar
Good article and, undoubtedly, the Great Depression influenced how your parents lived. It is quite clear that “the child is the father of the man”. At 82 with my wife having pre-deceased me in 2020, my approach has been to get rid of all non-liquid assets and to indicate beneficiaries for all liquid assets. In this way, I do not have to be concerned about probate, wills and trusts. My liquid assets will cover me for as long as I live, and if I become mentally or physically disabled, my children have the power of attorney to pay for my care with my funds.
How do you avoid probate if you own a home and own vehicles?
If you want to avoid probate — which, despite all the fear-mongering, isn’t a big hassle in many states — you can always put the car and house in a revocable living trust.
That’s true in our state: probate is usually pretty quick and not costly. Attorneys here cannot charge a percentage of estate value. I was shocked when I saw this happen with an estate in NJ.
At least in Ohio you can file a transfer on death affidavit for the house. It also seems to me the state allowed the transfer of a car without needing probate.
You should consult an attorney in your state. You may be able to add your heir to the home deed, so that when you pass your heir could automatically inherit it. A vehicle is a depreciating item and should not pose much problems– it may depend on the value of the vehicles, and you may be able to add to the ownership. At my age, with my children having their own homes, and my grandchildren already adults, the funds I have is for me. Moreover, all my liquid assets are in the stock market or no-penalty CDs and whatever is left will be inherited without taxes since my beneficiaries will inherit them on a step-up basis. I have also written instructions about what to do when I pass, and how to manage the funds that they may inherit. But it is up to them, for when I pass I will return to the time before I was born.
There are serious consequences, tax and otherwise, to adding anyone to the deed. If it is sold while you live, it reduces the amount of capital gain that will avoid tax. It puts it at risk if there is ever a judgment against the co-owner. It is the worst thing to do if there are multiple heirs since they might not agree on a plan. No doubt there are other issues, so be sure to research and discuss with an attorney in your state before doing it.
No more safe deposit boxes for me. I bought a big-ass safe and all our papers are in there.
You probably won’t live long enough for box rental fees to exceed the safe cost. Unless your home is sprinklered, you are also giving up fire protection since paper can be destroyed by heat not just burning. You are also less safe than if in a bank.
I’ll play the fire precentages, safe deposit boxes proved to be a real hassle during the pandemic.
I have several homes, all owned by a trust, even my personal home. I am the executor of the trust with both my grown sons listed as the next executors. BUT, I do have some paper stock I will get taken care of as to your great advice.
I look at my house and imagine what my boys will have to do to all the stuff! I wonder, how can one guy have all the things I do? HA
Thanks Jeff, I also retired in 2020, I like it! 😉
Thanks for all the positive thoughts and supportive comments. I’m on vacation and won’t have time to respond individually – but please know I appreciate your input!
Terrific piece, Jeff. We’ve been responsible for winding down three estates now, including one hoarding situation (an uncle with no children). It can be exhausting. We’re doing a lot to make ours easier.
Closing the last parent’s estate is particularly thorny when the siblings don’t get along. Emotions are already high without that. Your experience sounded smooth on that front, fortunately.
Thank you for laying out your experience so clearly and compassionately. Your parents never intended to leave left the mess you faced, and you know it.
I hope you got an acknowledgement of your burial plot donation and your added donation of money for burial costs for tax purposes from the congregation. When I led congregations I coveted such donations and always gave a donation statement to the donor.
Great article, Jeff. I will add, not only fund the trust with the assets, but maintain the trust. If the trust still has an ex-spouse you create a new view of old issues. Also, ask your trust attorney about a pour over will to move untitled personal property to the trust upon death.
That all sounds grim. I hope I have simplified things enough. Aside from my checking accounts, all my financial assets are at Vanguard, with designated beneficiaries. The sole beneficiary of my will is my executor. Since I moved to a CCRC I no longer own a house, and any of the contents of my apartment she doesn’t want can be given to the CCRC’s yard sale. But it just occured to me I might need to set aside some money to pay funeral expenses…
Good idea to have ALL investments with one brokerage and all documents in one place as well as a book with other pertinent info like passwords and contacts of professionals’ lawyers, cpa, etc
If you create a trust you must fund the trust with brokerage acct, house, and bank acct
Many of us have read and contributed to conversations on this subject here on HumbleDollar. I wonder if anyone is aware of a concise guide to the minutiae of preparing an estate for one’s own passing to streamline this process for heirs. I’ve written up a long letter of instruction for my children but really have no idea what a living trust is or why I’d need one if I’ve dutifully detailed my assets, beneficiaries and property.
I like Mike Piper’s book After the Death of Your Spouse: Next Financial Steps for Surviving Spouses for the general guidance and helping those who are unfamiliar with estate topics to learn about the framework of the very convoluted process of settling an estate.
Before retirement from full time paid work, I was an active CPA in a local practice where I occasionally prepared the form 706 US Estate return and state estate returns and I think Jeff’s points are valid and useful. To the extent possible a team approach of the attorney, accountant, appraiser, banker, broker, insurance professional, personal representative(s), etc. working together best serve the family and beneficiaries for complex estates in my opinion. My thinking of who should lead the team would often be determined by the agreement or the animosity of the beneficiaries but the final decisions and responsibilities are made by who is named as personal representative.
To the extent possible our actions to simplify transfers wisely during our life or at our death are a great service to those we love and burden with the task of administrating our affairs, finances and estate when we are no longer able to do so and upon our death.
For at death transfers I favor using beneficiary designations and joint ownership vs. passing assets at my death via my will or under my state’s laws if I die without a valid will. Alternatively, a living trust can take the process of distributing your assets out of the probate court system by transferring your ownership of appropriately re-titled assets to the trust while you are alive. If you are thinking about using a trust you might consider reading the book by Harry S. Margolis, The Baby Boomers Guide to Trusts: Your All-Purpose Estate Planning Tool. What I favor for me may not be what works for you.
If you use a professional tax return preparer you may want to ask if they would give you a copy of the long form checklist they use for preparing the federal form 706 to get the flavor of the complexity of preparing estate tax returns. There is often other related estate checklists that professionals have that are useful planning tools. A checklist that details the obligations and actions required by the personal representative(s) I think can be very useful. Unfortunately, many of the most comprehensive checklists are locked behind paywalls and are copyrighted.
My sincere thanks to the family members who have stepped up and agreed to be the personal representative for a loved one.
Excellent list of estate planning suggestions. You really stepped up to this challenge.
The funeral home my parents used provided as many copies of the death certificates as I needed. Not sure if it’s that way everywhere but it did save me some time.
Your comments on the lockbox reminded me of getting into my Mother’s. I had her key but was not on the lockbox “list,” It was a small town and they recognized me and gave me access anyway.
I second the motion on making sure everything is retitled to the trust. Like your situation, my father just kept cashing one of Mom’s dividend checks but when he died, we had to decide on opening probate for one $10 a year dividend check or just letting it go. We let it go.
All such solid advice, Jeff, thank you. I admire that you did this all without legal help. Based on my experience as an executor of my father’s estate, I understand completely about the stress and expectations. The work truly becomes a second job if your six lessons were not heeded.
I also dealt with an unfunded trust, paper stock certificates, and three years of estate tax returns, all the while with somewhat questionable legal representation. To me, it was unconscionable that in 2008 a well-known financial firm refused to provide date-of-death valuations for the stocks and bonds in my father’s account. There was also the question of how to value the decades-old tax shelter/limited liability partnerships my father had held. Plus the estate included a significant amount of then-frozen auction-rate securities. Thus I would add to yours a seventh lesson: streamline one’s assets whenever possible by opting for fewer and simpler.
Thankfully, I had access to the safe-deposit box. Had I to itemize its contents, the list would have included plenty of rubber bands, writing materials, and several packs of sticky notes, albeit no empty envelopes.
Very good article, Jeff. I have had similar experience in trying to untangle the web we are often left with. People of our parents generation dont want to burden their children—they just thought perhaps that Estate Planning was something for “rich” people.
For others left behind, going through this tough chore, it’s important to give yourself time because it takes so much thought and energy and you have to be prepared for setbacks.
In your case, your engineer’s mind served you well in sorting everything out. You were more than equal to the task.
Great article, Jeff. My wife recently settled the estate of her brother. The process was relatively simple, but that’s because we had already done the preliminary work ahead of time as we cared for him during his slow decline from a long illness. And, we sought advice from the lawyer we shared with him. We are on a bit of a mission to educate our family and friends to do their own preparations.
I’m sorry you had such a hard task. My dad, in contrast, had everything documented and almost 100% of his assets payable on death to me and my brother, or appropriately in a trust. He had sold all the real estate so there was little that had to go through probate. If the amount of assets requiring probate is minimal (under 100K) then a special form of expedited probate is allowed that costs almost nothing. It was very easy to close the estate.
Jeff, thanks for a great article. This all sounds very familiar, except for the safe deposit box full of junk. When my wife’s widowed and childless aunt started showing signs of dementia, she readily agreed to make my wife her POA in all things. She moved in with my in-laws. We spent months cleaning out her house, including her attic which had unopened wedding presents form 30+ years previous. I picked up the financial duties. It took 2 years to get her finances in order. Finding the original stock certificates was one of the most frustrating tasks. We looked everywhere. We finally gave up and had the shares reissued at a significant cost. We then had them put in digital form. A few weeks later the original shares showed up in one of her drawers, a place we had looked dozens of times!. We had no idea where they had been hidden for years.
Good for you and your siblings for taking such good care of your parents. Your story shows how difficult it can be for your heirs if you don’t take the time to organize and simplify your estate.
Great article, very helpful. Well done. Gives me something to think about being in our 80s. I think (hope) we have checked the boxes.
We got rid of the pesky safe deposit box years ago. We live with no basement and no attic. Our largest single asset, our vacation home is owned by our family trust, all investments are owned jointly and thankfully they are digital in one place.
Our final instruction letter starts with “Don’t do anything until you contact a lawyer and tax advisor.”
The lead on your instruction letter is super critical. The attorney’s and tax advisor’s advice can be very, very helpful.
Good job, Dick!
This is a very helpful article — thank you for taking time to write this, Jeff. Having that bullet list from you of things to take care of to avoid unnecessary stress is appreciated. Also, your observations about the impact of the Great Depression on peoples’ thinking is true and, from my own observation, is repeated across the region around where your parents lived. Stories are still passed down in my family about experiences during the Great Depression, which had a lasting impact.
One note I would add to your article is for those of us who handle the financial matters in our marriages: be sure to have a detailed list for your spouse, updated monthly, that includes passwords and web site addresses for your financial accounts and monthly bills. I have two acquaintances who lost their spouses, and in each case the deceased spouse handled bills and financial accounts (that were joint between them). Both recounted deep woes of being the “left behind” spouse as they struggled with the grief of the loss of a beloved partner at the same time that they had to struggle to locate all the joint accounts at various institutions: what are the names of all the financial institutions? how many bills need to be paid monthly? how many different institutions/accounts are there? how can I access each account — what is the user id, password, PIN? All of this needs to be figured out to pay bills due each month and how to access savings and investments that are jointly held. Little things emerged … what is the password to log onto the deceased spouse’s laptop? What is the password to the financial spreadsheet the spouse apparently maintained? What is the password to the deceased spouse’s email? I just spoke with one of these acquaintances yesterday who said, “I have been sitting for three days at the kitchen table surrounded by piles of paperwork, and I still can’t figure out all of our accounts. I feel completely overwhelmed. “
My wife and I use a password manager to handle all of our passwords. In the one we use, Bitwarden, you can use folders to organize them and I would assume that most password managers allow you to do the same. We have a folder where we keep all the important financial accounts with their usernames and passwords. Each one also lists the URL to the login page for that account and also allows us to leave any notes that explain anything further that we might need to access that account such as security questions, account numbers, etc.
Because this password manager only requires us to remember one username and password to access and can be used as a plugin to browsers and phones, it handles all the filling in of credentials whenever we access these sites as well as provides the storage of all this important information in case one of us is not available or becomes incapacitated for any reason. In addition, the username and password for the password manager can be kept in a secure location for someone else to access in case both of us are gone.
I know there is concern for many people about storing this information where it can be hacked so it is important to do research and use a system that you are comfortable with. There are risks using any system to keep this type of information so you have to weigh the trade offs. I prefer this to a paper system because if I update a password on any site, it is automatically updated in my password manager and I don’t have to remember to update a paper copy somewhere and I know that my wife has immediate access to that updated password as well.
We run all of our finances through Quicken. My wife uses it for various transactions so she’s comfortable with it. Everything “in” and everything “out” is documented in Quicken for easy reference. With just a couple of reports you can get a detailed picture of what needs to be dealt with.
This situation always angers me, and it is 100% avoidable.
Very good advice!
Your experience has good lessons for us and I thank you for sharing. I will check them all to the extent I’m able to with my family.
I believe an executor of a will and a trustee of a trust is entitled to reasonable compensation in most states. Maybe being paid for some of your time would have relieved the stress. I can see where, practically, one might not want to do this.
I had many of the same troubles as Jeff when working on my uncle’s estate. I gladly would have returned the too-small fee and walked away from the process. It is stressful and frankly, awful, especially when things are screwed up. It is a nightmare to be avoided. However, I repeatedly told myself to view my helping as an act of love for the deceased.
For any one with family showing signs of dementia, the time to help them is now to (literally) get their house in order.
This is in large part why we have a local fiduciary named as the executor and trustee of our estate. It cost $200 to set up our account, and the estate will be billed hourly when the time comes. We didn’t want to ask any family to do it.
In contrast, my husband is executor and trustee of the estates of his mother and stepfather. They have a cluttered home full of 50+ years worth of stuff, and he doesn’t trust the Internet much so he has piles of paper everywhere.
She has Alzheimer’s and is moving into a memory care assisted living facility next week. Once she’s settled, we have a list of items that we hope to work through with his stepfather to get the finances more organized for when the time comes. Hopefully it will all get done, but he’s not that easy to work with. In the meantime, we take pictures with our phones of important information when we see it. (For example, they own a rental property, and the name and phone number of the property manager is on a list on the wall of their kitchen. I took a picture of that. That kind of thing.)
As a banker, I can’t tell you how many business customers have a trust set up and then tell us there is nothing in their trust (yet). These are smart people, many or most of them millionaires. But they don’t utilize their trusts the way it was intended by their legal counsel to handle their passing. I personally have a trust and everything except my retirement accounts are in the trust now, while I’m alive: my house, my checking account, CD’s for my grandkids, etc. The retirement accounts will go straight to the listed beneficiaries upon my death.
We got a new estate lawyer last year who helped us set up a new will and trust. We had paid an attorney in 2016 to set one up but never funded it, and when I tried to follow up in late 2022, he ghosted us, so I started over.
The new attorney had a detailed checklist of what we needed to do to fund our new trust, and we had a date on the calendar when she’d follow up to see if we had done everything. I thought it might take me a couple of hours to work through the list. It took weeks. It was a time-consuming process, but I’m glad we did it.
Excellent article Jeff! You’ve reminded me to again thank my sister for all she did settling my father’s estate and her many conversations with his small town lawyer. Fortunately he was on the board of directors of the bank holding his accounts and safe deposit box loaded with envelopes, military records and bonds. My sister and I re-bonded as siblings as we emptied his house, mostly to the front yard for our “take for free” yard sale. We’ll address your short list above to simplify our own estates including clearing out our basements! We talked the other day about what childhood stuff we wanted from each other’s houses.