How to Settle Your Parent’s Estate Video from Savant Wealth Management

Download our complimentary guide books, checklists, and other useful financial resources at savantwealth.com/guides. Welcome to today’s Savant live webinar. Thank you So, much for joining us today. We’re going to be discussing how to settle your parent’s estate, a step-by-step guide. My name is Elena Davalos and I’m a wealth transfer advisor here at Savant Wealth Management. Joining me today is financial advisor Andrew Demo. Good to see you all. Before we get started, I wanted to let you know that while we’ll not be sending out today’s PowerPoint slides, we will be taking some questions at the end. So, please feel free to submit those questions to the Q&A box. Now, let’s begin. Andrew, can you get us started? Absolutely. Thank you, Elena. Our agenda today is going to include immediate steps to take after the loss of a loved one, understanding the will and the legal documents, financial and property management, and long-term planning, and moving forward. So, let’s go ahead and get started. So, let’s talk about immediate steps to take right after the loss of a loved one.
So, we have all experienced grief or really will at some point in our life. It’s important to stop, take a breath and understand what has taken place in our life. First, acknowledge the grief and the grief of your family members. If you or your family members feel the need for professional help to get through this grieving process, there are a number of resources for grief counselors and support groups. understand the different expressions of grief because we all grieve differently and well that’s okay. It’s important that we support each other and that is usually with friends or family. If you don’t have a support system, you can build one through a network with your neighborhood, your church, friends, or even your job. People really do need people.
In the midst of grieving, you will need to notify relevant parties. And so, this can be daunting task but one that is extremely important. you will need to determine if your parent had a pre-arranged or prepaid memorial service. If not, you’ll need to make the funeral arrangements. In making funeral arrangements, you’ll want to focus on your parents’ wishes. What did your parents plan for? Did your parent purchase a plot in a cemetery? Did they want a funeral service or memorial service? If so, you will need to communicate with the cemetery or the mortuary where your parent will be laid to rest or the cremation handled. Of course, there are many fees and costs associated with the funeral service. There are the burial fees, the cremation fees, and death certificate fees. It’s important to gather certain documentation you will need to communicate or meet with a funeral home director with such as a birth certificate, death certificates, marriage certificate, or military records. And so, a DD form 214, which is a record of military service, may be used and is very important if your parent wishes to have military honors. You also will need to bring potentially property deeds for the plot that was purchased in advance of death. This information will also be helpful in administering their estate, which we’ll discuss later. Writing your parents’ obituary may be a collective effort by you, your siblings, or even your parents’ siblings and friends who had full knowledge of who your parents were during different stages of their life, what they accomplished in their lifetime, your parents’ career, and who their relatives are. To determine where to look for certain documentation and information, start with your parents’ home. Perhaps looking in file cabinets, boxes, or nightstands in the home. Maybe a safe deposit box at the bank where your parents maintain a bank account would be a good place to look. Your parent may also have had a financial adviser or other professionals who help them organize this information.
Now, here’s a quick checklist that will guide you as you settle your parents estate. To highlight a few, it’s important to contact family members and close friends to notify them of the passing of your parent. You will need to contact your parent’s employer, school, and maybe some other institutions your parent was associated with. If your parent has a pet, speak with your family members to arrange for the continued care of that pet. Decide amongst you who will take care of the pet and for how long. If your parent was a veteran, notify the veterans association of your parents passing, especially if your parent was receiving veteran benefits. If your parent wants military honors or acknowledgement as a veteran, you will also need to contact the Social Security Administration office to inform them of your parents passing and to stop payments of Social Security to your parent. If your parent receives a social security payment after they have passed, you will need to return that payment to social security. However, most often the Social Security Administration will take that payment back directly from the account that received the payment. There are also some important documents highlighted on this checklist that you will need to gather. Some of them include the will or a trust which were prepared to carry out your parents wishes, the names of the executives, trustees and beneficiaries of their estate. You want to also locate bank and retirement statements, a birth certificate, a marriage certificate, and life insurance policies, outstanding bills, and the deed to the burial property. The checklist is extensive, So, you will receive a copy of this checklist via email with the replay link. If you need more in-depth guidance, please give us a call or set up a time to talk. We’re putting a link in the chat for you to schedule some time and you can do that on our website as well. We can walk you through our trusted administrator’s guide and answer your questions.
Now, it is extremely important to make sure that your parents’ home is secure and their belongings in the home are safeguarded. Ways that you can secure the home would be well to visit it daily to make sure that the mail is taken out of the mailbox, the newspaper and other deliveries are removed from the front door to give the appearance that someone lives there. Also, hire a lawn service to take care of the lawn. The biggest indication that a house is vacant is an uncut lawn, weeds growing to the top of the windows, no lights on in the house. The appearance of an unkempt home breeds crime. Pay the utility bill So, that the lights can remain on and that water is still available. Change all the locks to enter the house and locate the appraisal of the house and place it in a safe location that is outside of the home. Recode the security systems and determine if the property has a tax obligation or mortgage payment. Have a conversation with your family members to inform them of your authority to act as a personal representative of your parent’s estate. This will help to minimize confusion they may have about why you are performing certain duties. So, keep in mind that any estate expenses that you personally pay or incur for associated with securing the home and property can be reimbursed to you from the state.
Open and honest communication is going to be key both before you have legal authority to administer your parent’s estate and after. Keep the lines of communication open and honest with family members, especially if your relationship with them is already strained or difficult. Be willing to be transparent about your parent’s estate in whole family meetings So, that your family members are aware of the steps that you are required to take when administering the estate.
A major step in setting your parents’ estate is to marshal the assets, which simply means to take an inventory of all your parents’ things. This may not be possible before you have legal authority. However, once you do have that authority and if a readily completed net worth statement is not available, search around the house for a stack of mail. Maybe it’s on the kitchen table or on a desk in the home office or in a file cabinet. you’re going to be looking for bank statements and mortgage statements. Reach out to the custodian of your parent’s brokerage accounts to obtain a current statement. Make a list of all bank accounts, big and small, checking, savings, brokerage accounts, and securities. Search for property deeds because your parents may own property in another city or state. You want to look for qualified accounts such as IRA, Roth IAS, TSPs, 401ks, and annuities. Did your parent have significant personal property such as artwork, a coin collection, classic cars, expensive jewelry, a gun collection? Did your parent have life insurance, term or permanent? This is important because this will help you determine which sort of legal estate your parents will have, which Elena will go over in more detail with understanding the will and legal documents.
Thanks, Andrew, for explaining those immediate steps to take after a loss. I’m going to go ahead and switch things up and discuss with you all the different types of legal processes that you may have to go through to access your parents’ estate. And just to clarify, we’ve used the word estate pretty generically throughout our conversation today, but as you’ll see on the screen in a minute, we do have three different types of legal estates. So, the first estate that we have is the probate estate. Your parent’s estate will go through probate if they had one probate assets and two a last will and testament. The second type of estate that we have is the trust estate. Your parent’s estate will consist of a trust estate, also called a trust administration. If they had a revocable living trust and that revocable living trust was funded either during their lifetime or via a transfer from their probate estate at their death. So, that’s right. You can have both a probate estate and a trust estate with poor planning. We’ll get to that more in a minute. Lastly, we have the most unfortunate type of estate, which is the intestate estate. Intestate means you have died with no last will and testament. If your parent was in testate, it means that the state law of the state that they were domiciled in at the time of their death will control where, how, and to whom their assets will pass. This does not mean that your parent’s assets will estate to the state, meaning the state doesn’t get them but the state law will control who receives those assets. Also, for our conversation today when I’m talking about your parent’s estate generally no matter what type of estate it is I’m going to refer to the personal representative as the person taking care of business. That’s the personal representative.
Before we delve into the details about the different types of estates and how they transfer assets, we need to figure out which type of asset, which type of estate your parent had. And the way that you’re going to determine what type of estate your parent has is both by their estate planning documents, or lack thereof, and by their assets. The best piece of advice I have for you today is to try to compile a net war statement for your parent. That can be really hard to do if you don’t have legal access to their accounts, you know, to their home. When Andrew was talking about going through their personal effects, going through the house, that’s a lot of work, especially when you don’t have that legal access yet. It is one reason why we recommend working with a financial advisor who can have that compiled list, that net worth statement ready to go and point you in the right direction. Some assets, however, will not be a part of their legal estate, your parent’s legal estate, because some assets will pass automatically, meaning the personal representative will have no legal authority over them. It’s important to understand these differences because misunderstandings can lead to conflict between the personal representative and other beneficiaries of the estate. So, the first is something that we deal with every day here at Savant. Beneficiary designations. You’ll usually see these on retirement accounts and life insurance policies. Some states allow designations to be put on business interests such as LLC’s and corporations, but it varies state by state. The way these assets work is that they usually transfer automatically to the named beneficiary once the death certificate has been provided to the account holder. It’s important to consider who those beneficiaries are. First, there can be a person named as a beneficiary. In that case, that person is free to use or transfer the assets as they desire, subject to any applicable tax laws. I do want to point out that qualified retirement accounts, specifically 401ks, have specific rules for naming beneficiaries, for example, the surviving spouse has the right by federal law to be the beneficiary of the decedent’s qualified retirement account unless that right has been waved in writing. And this is where if you are a part of a blended family or a second marriage, there can be a lot of complications caused by having that spouse as the named beneficiary. Sometimes too, you can have trusts named as the beneficiary on those accounts and typically there’s not a problem with this, but there are different tax ramifications for naming the estate or a trust as a beneficiary in a qualified account. So, if you do see that on your parent’s designation, make sure you work with a qualified CPA to understand the tax ramifications.
Other types of assets will pass via joint ownership. So, we’ve got assets that pass via beneficiary designation, and we can have assets that pass via joint ownership. If you are a joint owner on a bank account with your parent, you may have immediate access to that account at their death. Sometimes you’ll see little letters on those accounts or typically on real estate deeds that are another type of commonly held joint property. JT WRs, joint tenants with rights of survivorship. Sometimes there’s an O in there, too. And that usually means that the survivor of that jointly held asset inherits the property at the death of the first joint owner automatically. No probate needed. Sometimes you may also see just joint tenants. In some states, that’s the same as joint tenants with rights of survivorship. In others, it’s not. Again, important check with your legal counsel to see how that asset is going to pass. Lastly, there’s one more little designation and it works similar to a beneficiary designation, POD or POD, transfer on death, payable on death. These are most often seen on bank accounts or brokerage accounts. And again, they transfer that asset automatically to whoever is named as the TOD or POD beneficiary. I will say a lot of what we do here on the wealth transfer team at Savant is making sure that all of these different ways of transferring assets align with our client’s estate plan because it is a lot and we want to make sure that the plan they intended to have happen comes to fruition.
So, after you’ve determined your parent’s assets as best as you can, you may then need to find the estate planning documents. Either a will, which will cover assets owned by your parent in their name alone with no beneficiary designation or POD, or a revocable living trust. This is usually when it’s best to consult an attorney who specializes in this area. I might be a little bit biased, having been a probate attorney in a previous life, but I do think that you’ll get what you pay for. Probate is very state specific, meaning that what we do in Georgia is very different from what we do in California. So, you do need to work with someone who is competent. The attorney will also be able to guide you on whether probate is actually necessary. You know, some states offer what’s called a small estate affidavit or something similar to that. So, if your parents bank account, which they owned in their name alone, typically would be a probate asset, but it only has $10,000 in it under state law, you may not need to do a formal probate with the small state affidavit. The last thing that you’ll want to do, and your attorney should lay this out, is who is the attorney representing? The estate, the executive, you, someone else. Ask this question and make sure it’s written down in your engagement letter.
One other brief point that I want to touch on is your parent’s powers of attorney because you may find these documents as well mixed in with their other estate planning documents. So, there is a financial power of attorney and a healthcare power of attorney. Both are documents that come into effect while your parent was still living. The financial power of attorney gave someone else that your parent named called their agent access to their various assets. The healthcare power of attorney allowed someone to make health care decisions on your parents behalf if they could not communicate with their doctor. You may or may not have been your parent’s financial power of attorney. You may or may not have been their healthcare power of attorney. But typically, the financial power of attorney especially is generally ineffective after your parent has passed away. So, many many people believe that the financial power of attorney will still be in effect but that typically is not the case. The only person who would be able to access that account, even if you had been accessing it as power of attorney, would be the executive of the estate. Healthcare powers of attorney also typically terminate at death, but they may contain post-mortem disposition provisions that allow the named agent to make decisions after the grantor has died, for example, the healthcare power of attorney may state that your parent wanted to be buried, that they didn’t want their body given to a medical study program, but that they were okay donating their organs. The nominated person, the nominated agent under the healthcare power of attorney would still be able to legally implement those decisions even though your parent has now passed away.
So, the two big estate planning documents that are typically going to be the most relevant for your parent’s estate are going to be the last will and testament and or the revocable living trust. Again, it will depend on your parent’s assets to determine which of these documents is going to apply and which type of estate your parent will have. A last will in testament will generally need to go through the formal probate process to become effective. It may also nominate a guardian for minor or incapacitated children as well as name an executive to make decisions. A revocable living trust will be effective right away, will not need to go through probate, and will nominate a successor trustee who will be able to immediately access the trust’s assets. Unless the trust directs otherwise, the trustee does not need to involve the court in the trustees administration of the trust assets. The revocable trust will direct the trustee on how to make distributions of the trust assets. The same as the last will in testament would do. So, let’s do a deeper dive into these different types of estates.

So, you’ve met with your attorney and it’s been determined that your parent’s estate will need to go through that formal probate process. I have found through my time in private practice that most people’s perception of an executive and the probate process generally comes from TV. You know, on TV there’s usually a gathering of the family in the lawyer’s office, everyone waiting with bated breath to see what they’re going to inherit. The executive is announced, not who the family expected. It’s all very dramatic. You know, in reality, there’s usually not a spectacular event. A person who passes away is called a decedent. The decedent either had a last will in testament or they didn’t. If they had a will, it most likely named someone as the executive, hopefully that person is still alive. The will may refer to that person as the personal representative, as I said earlier, or the administrator. again, I’m just going to refer to them as the personal representative. For the family to first find that will, it’s usually going to be with your parents’ personal effects. You know, it may be in a safety deposit box, or it may be with their drafting attorney. Most wills today are written in modern English and are relatively easy to understand. Sometimes there is a lot of language in that document. You know, I will admit that I have been known to draft a 50-page will on occasion, but identifying the nominated executive is usually pretty easy. The executive, even though they’ve been nominated in the will, is not automatically in power. And let me repeat that. Just because someone is named in the will as the executive or the personal representative, that does not mean that they immediately have the authority to act on behalf of your parent’s estate. Why? Well, for starters, your parent may not have a probate estate, meaning there are no assets that the will controls. the will and hence the personal representative only have authority over assets that were in your parents’ name alone at their time of death or directed to the estate via beneficiary designation. Again, to reiterate, the will does not control assets that had a joint owner or a beneficiary designation.
So, let’s say that your parent had at least one of those probate assets in their name at their death. They also had a last will in testament. How does that personal representative gain their legal power? Now as I mentioned, this area of law is very state specific. So, each state has their own rules and regulations about going through the probate process. , typically the decedent’s heirs at law, possibly the beneficiaries under the will have to be notified and given an opportunity to object to the validity of the will. If there are no objections, everyone agrees. The court will issue the personal representative legal documents authorizing them to act. The court may also require the personal representative to postpone based on the projected value of the assets in the estate. file an initial inventory and provide an annual accounting every year that the state is open. So, do keep that in mind. Once the personal representative has those legal documents, you can see here on the screen the usual process. You know the executive or the personal representative has filed the will with the court. Now they’ve got to administer the estate, collect the bank accounts, get appraisals on real estate or list it. notify business partners of the death. The personal representative must also notify any of the decedent’s creditors of the decedents’ death and pay final expenses. So, that includes funeral bills, costs of administration such as legal and CPA fees and paying final taxes. They are also legally responsible for filing any final tax returns that are due, which I’m going to talk about more in a minute. once all the debts have been paid, the executive will distribute assets according to the terms of the will to the beneficiaries. Then once all that has been completed, the personal representative can formally close the estate. Closing the estate generally releases that personal representative from any further liability related to that role. You know, they’re hanging up their hat. They’re saying, “That’s it. I’m done. Don’t spend your inheritance all at once. I’m kidding, but you guys get the gist. So, while this sounds relatively simple, and it can be, there are also aspects of being a personal representative that make it an undesirable job. You know, family conflict especially can make this a very difficult job. Taxes and unusual assets like business interests, oil and mineral rights, and out-of-state real estate can also make this a very difficult job. Hopefully, with good planning though, you know, the personal representative, it can be a short-term role that keeps the family harmony and sufficiently and succinctly distributes your parents’ assets. On the flip side though, you know, a personal representative typically can get paid. Either the will or state law dictates what the personal representative is entitled to for doing all of this work. So, make sure either if you’re creating your own will or you are acting as your parent’s personal representative, you’re aware of what you are entitled to fee wise.
Let’s say though that your parent had the other sort of document that they had revocable living trust. Your parent called the grand tour would name someone usually themselves as the initial trustee to hold assets in trust for the benefit of someone again usually themselves. At their death, your parent then would name a successor trustee to manage and continue to hold the assets in trust for a new trust beneficiary or to distribute the trust assets outright to those new beneficiaries. Now, this revocable living trust can either be funded during your parent’s lifetime by them having moved assets into it or it could be funded at their death via probate assets. So, yes, even if your parent had a revocable living trust, you may still need to go through probate if that trust was not fully funded and did not hold all of their assets. So, when we work with a client who has a revocable trust, the wealth transfer team spends a lot of time on that case because we want to make sure that trust is fully funded. Again, meaning all of the client’s assets have been transferred to or connected somehow to their revocable trust. That way, the assets will pass according to the trust terms as opposed to under their last will and testament. While this process can be tedious to say the least, a revocable trust can have a lot of benefits other than just avoiding probate. For example, a trust can be very beneficial if your parents are trying to disinherit someone, a child for example, and they do not want to notify them of the existence of the will and give them an opportunity to contest it. Any time that a will contest can be avoided, the estate will benefit and assets will be protected because those will contest get very expensive and very time consuming. Another example is that you know the revocable trust provides substantial privacy from the public eye. Unlike a will, the revocable trust does not become public knowledge. meaning that your parents’ neighbors can find out who got a cash gift and how much and wannabe thieves won’t know who got all the jewelry. The privacy makes the trust very worthwhile to some people. And otherwise, you know, that revocable trust works the same as a will at death. It can create testamentary trusts called sub trust for minor beneficiaries, tax planning or asset protection planning. It can provide more privacy for the grand tour again because it doesn’t become public knowledge like the will does. But your parent has the same flexibility as a will without the administrative burden of probate. And one last thing to note about the revocable living trust is that it typically does become irrevocable at your parents’ death. This can be a scary term for some people because irrevocable sounds like unchangeable, sounds pretty set in stone. And while this may be true, I will say that today’s trust laws are generally becoming more flexible. And beneficiaries and trustees have a lot more options if they need to make changes to an irrevocable trust. Again though, you should always consult your attorney when you’re dealing with a revocable or irrevocable trust to see what your options are. So, let’s say though that you have been named as the successor trustee of your parents’ revocable trust. What are your duties? You’ll see them here on the screen. You will administer the trust according to the trust terms. You’ll collect all the trust assets either by gaining access to them as successor trustee or receiving them from the executive of your parents’ estate. You’ll pay your parents’ final taxes, any outstanding debts, and pay for any other administrative expenses that your executive didn’t cover. After that is where things get tricky, and you’ll need to look closely at the trust terms. If the trust distributes all of the trust’s assets outright to a beneficiary, let’s say to you and your siblings, you’ll make those transfers and close out the trust. That’s the easiest scenario. However, the trust may establish sub trust for beneficiaries. You’ll see on the example here, we’ve got that orange bucket for a child’s trust. If a sub trust is established, meaning a trust created under the revocable living trust, your duties as trustee may continue for many years. If that’s the case, you’ll be the one typically making determinations as to when to distribute principal and income to the trust beneficiary. You’ll continue to manage the trust assets, you know, whether that’s working with the financial manager for the liquid assets, managing a business, managing and selling real estate, whatever those trust assets are. You’ll also be responsible for filing the trust income tax returns each year. Yes, your revocable sub trusts do pay their own taxes now, unlike while your parent was alive. And yes, those taxes are typically higher than your ordinary American unless the income is distributed outright to a beneficiary. If you are the trustee of one of these irrevocable sub trusts, I highly recommend working with a qualified CPA who is familiar with trust returns. This again is why it’s very important to understand the trust terms and to see what your responsibilities will be long term before you accept the role of trustee. You can always decline to accept this role. Usually there will be a backup trustee named in the trust document but if not the beneficiaries of the trust can always petition the court to appoint another trustee. A trust will never fail or terminate because there is no name trustee in the trust document. So, don’t ever feel pressured to accept this role. But do know that the court appointed trustee may not be who the beneficiaries would have chosen for their first pick. You know it’s usually a county trustee or a corporate trustee both of whom have a tendency to take their trustees fees much to the beneficiary chagrin. More fees equals less trust funds for the beneficiary. So, that makes sense, but they are always available.
So, the last type of estate that your parent may have is an intestate estate. This can be the worst-case scenario. An intestate state means that your parent died without a last will in testament or typically any estate plan at all. So, the next time you hear about your buddy, you know, or your family member signing their estate planning documents, you can go ahead and congratulate them on becoming test. Because with an in test data estate, you will run into more problems, fewer powers, less options, and typically more fees. Becoming appointed even as the personal representative of your parent’s intestate estate may not be easy. You may need to get all of the heirs at law to agree to you being appointed. That can be really hard if not everyone gets along. If that’s the case and the heirs can agree on a personal representative, then the court still be can still be petitioned to appoint that personal representative. Again, it just might not be who you want. You know, think county administrator, corporate trustee, someone who is going to charge a fee to do this work. Not ideal. But let’s say you do get appointed as the personal representative. Often times, you will not have as many legal powers over the assets as you would have had if you had been appointed under last will investment. A common example is the ability to sell real estate. You know, you may not be able to sell your parents’ house without a court order. You may be able to deed it to yourself and the other heirs at law, you know, which creates problems in and of itself if you ever go to sell the property or if there’s disputes between the owners. Another issue, another big issue you run into with intestate estates is minors receiving an inheritance. You know, let’s say one of the beneficiaries of your parent’s estate is your 10-year-old niece because her father, your sibling, passed away before your parent. As a minor, she typically cannot inherit assets outright until she reaches the age of majority. So, what happens? Usually, the assets will be held in some sort of conservatorship until she reaches the age majority, which in most states is 18, or if you’re like Andrew in Alabama, 19. Then your niece would receive the full inheritance outright. Now, I don’t know about you, but I am pretty hesitant to give any 18-year-old a significant amount of money. Also, conservatorships before they reach 18 are heavily monitored by the court again, which means more fees and it can be very difficult for a conservator to spend any of the funds without prior court approval. This scenario could easily be avoided if your parent had had a will or revocable trust that created a sub trust for your niece’s benefit until she turned age 25 or whatever age your parent chose. The last issue that you may run into with an interest data state is that the personal representative is much more likely to be monitored by the court. They most likely will need to file an inventory in an annual accounting of estate assets every year and provide a bond to the court that has to be renewed every year the estate is open. I would highly recommend if you feel comfortable approaching your parent now if they’re still with us to talk about their estate planning documents. Having that conversation can go a long way towards making this a much easier process for you and your family. And with that, I am going to turn it back over to Andrew to talk about financial and property management. Thanks, Elena. So, now we’re going to dive into some of the asset management and other steps that you’ll need to take. So, now that you’ve been appointed as the personal representative and letters of testamentary have been issued by the probate court appointing you, you’re required to then obtain an EIN or what’s called an entity identification number for your parents estate. The EIN can be easily obtained directly on the IRS website or a CPA can get one for you. The estate EIN is required to open an estate checking account or to transfer your parents’ existing checking or savings account into your name as the personal representative of the estate and this of the estate of your parents’ name. So, you’ll need to take the letters of testamentary and the death certificate with you to the bank to open that estate checking account. Now, this checking account will be used to receive post-mortem refund checks like an IRS refund that are made payable to your parent. So, you want to be sure to notify all banks and financial institutions of your parents passing. Provide them with that death certificate and the letters of testamentary So, that these accounts may be transferred into your name as the personal representative of the estate. Now, be sure to properly handle the personal belongings and heirlooms of your parent’s estate. Review the will and the trust to determine how your parent wishes for these personal belongings to be distributed. If the will and the trust do not provide distribution instructions, discuss these items with your family members So, that you can come up with an agreement that all family members can agree on. Make sure that all real estate is properly maintained in good repair and make any repairs needed to maintain the property. Determine how the real estate will be distributed in accordance with the terms of your parents’ will and trust.

Now, in conjunction with managing the assets of your parent’s estate, you are required to identify and then pay off debts in your parents’ name. Even though your parent is deceased, those bills just don’t disappear. So, from the new estate checking account, you will pay your parents outstanding bills, their utility bills, medical bills, last illness bills, final income tax, and estate tax owed if necessary. And then there are some certain administrative fees like a CPA or attorney’s fees. and you’ll pay those from this new checking account. You know, one of the things that we have in Georgia is a notice to debtors and creditors that’s required to be published in the local legal organ after a probate estate is open. And in all of my years of private practice, you know, we had lots of creditors come forward, make claims against the state, and never once did we have a debtor come forward and say, “Oh, I owed that person money.” So, usually the way it flows, usually the way it goes. So, you can see here though that the tax filing dates for the estate and trust fall on your normal filing dates. So, there won’t be any new dates that you really re that you will need to remember. Of note though is that while the form 706 is due 9 months after death, there is a possible six-month extension that you could file for. Now if you have a form 706 solely for portability, meaning no estate taxes due, then you have five years to file that form.
Thanks, Andrew, for that information about how to manage the property while the estate is ongoing. Before we wrap up today, you know, let’s just talk briefly about doing some long-term planning and moving forward. So, before you can move forward though, you will need to wrap up the legal estate. Once it seems like everything has been taken care of related to the estate, you know it’s time to wrap up and settle. If you have a probate or in test date estate, there can be a circular problem that arises when closing that estate, especially if you have to file a final accounting. , let’s say that you are the personal representative of your parents probate estate and you are ready to make the final distribution to the beneficiaries. However, you want to or you’re required to legally close the estate with the probate court. If you’ve been working with an attorney or a CPA, they may be charging you hourly for their work, which is pretty standard. If that’s the case, how do you know how much to reserve in the estate bank account to pay those final fees? What I would recommend you do here is try to negotiate a flat fee with your attorney or CPA So, you know that there will be no surprise debts that will come up after you file the final paperwork with the probate court. And you can try to do the same thing with your CPA as well. See if they’ll accept that flat fee for the tax work. Once that’s settled, you’ll petition the probate court to legally discharge you as the personal representative. Once that paperwork goes through, your parents legal estate is settled.
So, once the legal estate is settled and the inheritances have been distributed, you know what then? Now we’ve talked a lot today about the legal side of handling your parent’s estate, but of course there’s still So, much emotion to handle with the loss of a parent, especially around holidays, birthdays, family vacations. You know, one method to help you cope if you have received an inheritance from your parents is you can always consider using those funds to help create and honor your parents’ legacy. You know, throw that big memorial party for them or take your family on that trip to create those new memories. You know, you can and we sometimes recommend you use those inheritances for your own retirement, but there are also lots of ways for you to give back to the memory of your parent and the gift that they’ve given you. You know, a really good way to help you create your parents legacy and to help that legacy to live on is to give to their charity. you know, make a charitable donation to your parents’ church or an organization that was near and dear to them. Our Savant office here in Atlanta, we sponsor some local families around Christmas time. You know, we buy toys and clothes and all the things to help make these families Christmases special when maybe they wouldn’t be otherwise. Doing something like that in honor of your parent could be a wonderful way to celebrate their memory and have a real impact during the holidays. As always, you know your parents best and you’ll know how they would have wanted to be honored.
One of the best ways to honor your parents, especially if you’ve received that inheritance from them, is to make sure that it’s treated appropriately when it’s passed to the next generation. And you can do that by updating your own estate plan. I’ve got this list here of things to think about, you know, wills and executives, powers of attorney, coordinating beneficiaries. When I was in private practice, I had So, many clients walk in the door saying their parents had just passed away and they’d either had a horrible time and wanted to avoid that for their children or that the probate was super easy and they wanted to make sure that their child had the same experience. Estate planning is not really for your benefit. You know, it’s for those you leave behind. So, I do recommend not putting it off. get your documents done. And with those words of wisdom, we are done with our presentation today. We won’t have time to address everyone’s questions live today. So, if you’d like to discuss your unique situation, please schedule a complimentary 15-minute call by clicking on the link in the chat to schedule a time that works for you. And then I am going to unshare our screen here and Andrew and I are going to take some questions. Okay. I think there are a couple of questions that came through for us. I do and I’m going to choose some, you know, the ones that we hear most often just from general webinars and from clients. So, Andrew, let me toss you the first one. Sure. My parents have never talked to me about their estate planning. How do I approach them? How do I bring up this subject to them before it’s too late? H I love that question. That is a great question. and it’s understandable that you’re going to feel unsure about starting this conversation. And how do you broach it? I like to go with a gentle approach, especially at first. And so, you want to frame it around the care and planning rather than around money. So, many times we think about estate planning and your parents may think of their assets. And so, if you can frame it in a way that is talking about care and planning. So, maybe you say something like, “Hey, I want to make sure that I can honor your wishes and help avoid stress for the family in the future. Could we talk about what’s important to you and how you’d like things handled?” And then this keeps the focus on their values and peace of mind. So, it’s not just finances. And you can also mention that that planning ahead, you know, helps prevent confusion or conflict with the family. and that you’re asking because you care about them and you want to make things easier for everyone. For sure. I think that’s a great approach. One question. Okay. I covered this briefly, but I do want to reiterate it. The question is, I’ve been nominated as an executive in my parents’ will. Do I have to do it? So, no, it is not an appointment. It is a nomination. You know, as I mentioned, it is always something that, you know, you can take into you can start thinking about whether it’s a good idea for you and for your family to take on that role. Is it going to be too time-consuming? Is it going to be an emotional nightmare? You know, is this something that you are prepared for with your family dynamic and for the time that it does take to be the executive? So, if you don’t think it’s a good idea, you know, there are typically other options. A lot of times a will name successor executives; a trust will name a series of successor trustees. So, there’s usually someone behind you if you decline to act. But, you know, that really is a personal decision and no, you do not need to do it. I think that is it for today. Thanks, y’all So, much for joining us. We hope it was informational and have a good day. Thanks everyone. I appreciate your time. Download our complimentary guidebooks, checklists, and other useful financial resources at savantwealth.com/guides.