When Will Beneficiaries Receive the Decedent’s Property?

19 Monday Dec 2016

Posted by Robert Dowling in Beneficiaries

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Abatement, Assets, Beneficiaries, Common Estates, Decedent's Property, Designated Beneficiary, Estate Expenses, Estate Law, Estate Taxes, Estates, Executor, Formal Probate Process, Inventory of Assets, Probate Court, Small Estate, Well-Funded Estate, Will

When beneficiaries named in an estate know they will receive part of the decedent’s property, they get anxious. In most common estates, beneficiaries are unaware that there are factors involved when distributing the decedent’s property. The following factors determine the length of time it will take the executor to distribute property:

Executor responsibility – The priority for any executor is to pay the expenses and the taxes of the estate. Also, the executor must provide the probate court with an Inventory of Assets as depicted in the article Understand the Task in Front of You. The inventory must include the values of all property owned by the decedent, including assets with designated beneficiaries. The inventory will then determine if the gross value of the estate meets the threshold for filing estate taxes.

How the beneficiaries are to receive property – The beneficiaries, named in a will, can receive property through the will. Also, beneficiaries can receive property directly from the decedent’s assets as a designated beneficiary.

Estate Law is state specific – Estate law is different in most states. Therefore, how long it takes to administer an estate will depend on the location of the estate and the estate laws of that specific state.

So, the beneficiaries need to know that the location of the estate and how they receive property of the estate affects when the executor can distribute the decedent’s property.

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The Implications of Redeeming Savings Bonds that are the Property of the Estate

12 Monday Dec 2016

Posted by Robert Dowling in Taxes

≈ 16 Comments

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1099-INT, Beneficiary, decedent, estate, Executor, Expenses, Final Return, Formal Probate Process, Interest Income, IRS, IRS Publication 550, Redeem Savings Bonds, Savings Bond Registration, Savings Bonds, Series E Savings Bonds, Series EE Savings Bonds, Series I Savings Bonds

When redeeming savings bonds that are the property of the estate, reporting rules from the IRS can make the transaction a little complicated. As depicted in the article Redeeming Series E Savings Bonds of the Decedent, redeeming savings bonds isn’t a difficult process. However, reporting the interest income on the savings bonds are where the complexities exist. Moreover, since most common executors are unaware of these IRS reporting rules, implications may result.

Note: Savings bonds in this article refer to series E, series EE, and series I savings bonds. Reporting rules from the IRS for these three series of savings bonds are similar. Also, savings bonds become property of the estate in one of the following ways:

The savings bonds registration is only in the name of the decedent.

The co-owner or beneficiary pre-deceased the owner.

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Redeeming Series E Savings Bonds of the Decedent

05 Monday Dec 2016

Posted by Robert Dowling in Estate

≈ 6 Comments

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Death Certificate, decedent, estate account, Executor, Letter of Authority, Redeem Savings Bonds, Redemption, Request for Payment Form, Savings Bonds, Series E Savings Bonds

As executor, redeeming the series E savings bonds of the decedent involved a little effort. As noted in the article In the Interim, I created a task list to organize the estate. One such task was finding the savings bonds the decedent listed in the will. So, in early December 2012, while cleaning out the decedent’s office, I found an envelope that contained thirteen series E savings bonds; exactly the amount of savings bonds the decedent listed.

After finding the savings bonds, I immediately called the attorney and asked, “Does the probate court have any rules on redeeming series E savings bonds; I found thirteen of them?”

The attorney replied, “No, you can redeem the savings bonds when you want. However, make sure you copy each savings bond before you redeem them. This way, if anyone asks about them, you can refer to your copies.”

So, that night, I made a copy of each savings bond because I planned on redeeming them the next day.

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Closing the Decedent’s Business Accounts: An Easy Thanksgiving Task

28 Monday Nov 2016

Posted by Robert Dowling in Estate

≈ 2 Comments

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Business Accounts, Death Certificate, decedent, estate, Estate Adminstration, Executor, Letter of Authority

Closing the decedent’s business accounts was an easy task. During life, the decedent had a business that was active up until the spouse died six years earlier. Since then, the business languished. So, while putting together the inventory of assets, I found two accounts related to the decedent’s business that were still active. The business accounts, consisting of a savings account and a checking account, had little money. Therefore, since there wasn’t enough money in the business accounts to fund the estate account, I put them aside for a later date.

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Finding Forgotten Assets in an Open Estate

21 Monday Nov 2016

Posted by Robert Dowling in Estate

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Affidavit of Residence Form, Charitable Solicitations, Direct Registration, Final Taxes, Forgotten Assets, Inventory of Assets, Mail, Medallion Signature Guarantee, Rental Property, Tramsfer Package, Transfer Agent

For an executor, finding forgotten assets while the estate is open requires diligence and luck. In early January 2013, while keeping up with the mail for reasons mentioned in the article Keep up with the Mail and Charitable Solicitations, a letter arrived from an investment firm. While curious, I quickly opened the letter and began scanning over it. The letter was to inform the account holder (the decedent) that the account number changed because the firm changed transfer agents. In addition, the letter revealed that the decedent had seven shares of stock held in direct registration. After reading the letter, knowing exactly what to do, I immediately called shareholder services and asked for the transfer package.

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Keep up with the Mail and Charitable Solicitations

14 Monday Nov 2016

Posted by Robert Dowling in Record Keeping

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Charitable Solicitations, decedent, Dividends, estate, estate account, Estate Assets, Executor, Hidden Accounts, Mail, Transfer Agent

When administering an estate, it’s important for the executor to keep up with the mail and charitable solicitations. In the mail, letters may reveal hidden accounts not listed in the estate assets. Furthermore, if the decedent was a charitable person, piles of charitable solicitations probably exist. As a result, the executor needs to sort through the piles to make sure no other property exists.

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Closing the Annuity with the Estate as Beneficiary

07 Monday Nov 2016

Posted by Robert Dowling in Estate

≈ 5 Comments

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Annuity, Annuity Claim Statement, Beneficiary, Certified Death Certificate, Claims, decedent, Estate as Beneficiary, SEP-IRA, Traditional IRA

While wrapping up work on the traditional IRA, closing the annuity was next on the administration plan. The annuity was kind of mysterious because I never found the policy. Earlier in the administration, while in the interim, I did find distribution statements for the annuity, which described the annuity as a Flexible Premium Deferred Annuity – (SEP-IRA). So, I assumed the decedent – who was self-employed – used the annuity as a retirement plan, which would classify the annuity as a qualified annuity. However, since I had limited knowledge of annuities, a call to the insurance company was necessary.

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Selling Stocks of a Decedent Held in Direct Registration

31 Monday Oct 2016

Posted by Robert Dowling in Estate

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Brokerage Account, Brokerage Firm, Commissions, Direct Investments, Direct Registration, Direct Registration System, estate, Executor, Inventory of Assets, stepped-up basis, Stocks, Street Name Registration, Transfer Agent, Transfer Process

Selling stocks of a decedent is a straightforward process that I knew would be part of the estate administration. Early in the estate administration, there were four companies in which the decedent held stock. However, I didn’t know the registration. After looking through boxes of statements, I noticed all communications involving the stocks were from a transfer agent. This discovery confirmed that the stocks were held in direct registration since transfer agents usually handle direct investments for companies. So, after figuring out the stock registration, I put the process of selling stocks of a decedent aside until approved as executor.

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Closing the Traditional IRA: What Options?

24 Monday Oct 2016

Posted by Robert Dowling in Estate

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5-Year Rule, Beneficiaries, Beneficiary, Custodian, Executor, Inherited IRA, Inherited Traditional IRA, IRA, Lump-Sum Distribution, Stretch Rule, Traditional IRA

After closing the safe deposit box, closing the traditional IRA was the next task in the administrative plan. Earlier in the administration, while in the interim, I called the custodian of the traditional IRA to inform them of my Uncle’s death. The representative I talked to realized that accomplishing anything at this time wasn’t possible because I haven’t received approval to act as executor. So, at the end of the call, the representative said, “When you receive your approval letter call back and we’ll discuss the IRA.” After the call, I put aside the matter of closing the traditional IRA.

Setting the Meeting

After a few weeks passed and since been approved as executor, the bank sent me a letter in early December, 2012. In short, the letter served as a reminder that a meeting was necessary to discuss options regarding the IRA and to set a meeting as soon as possible. After I read the letter I asked myself, “What options? Are all the options to close a decedent’s IRA available even with no beneficiaries?” The only option I thought available at the time was to take a lump-sum distribution for an IRA with no beneficiaries. So, soon after I closed the safe deposit box, I called the representative to set the meeting.

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Inherited Traditional IRA | Distribution Rules for Estate as Beneficiary

17 Monday Oct 2016

Posted by Robert Dowling in Beneficiaries

≈ 28 Comments

Tags

5-Year Rule, Beneficiary, decedent, Distribution Rules, Early Withdrawal Penalty, Estate as Beneficiary, Executor, Inherited IRA, Inherited Traditional IRA, IRA Owner, Required Beginning Date, Required Minimum Distribution, Traditional IRA

When a traditional IRA owner dies, it’s not unusual for an executor to realize that the estate is the beneficiary of the inherited traditional IRA. Whether the traditional IRA owner forgot to complete the beneficiary form, forgot to replace a deceased beneficiary on the beneficiary form, or purposely named the estate as a beneficiary, the executor must handle the inherited traditional IRA for the estate. Unfortunately, most common executors, when the estate is the beneficiary, will assume that the only option to close the IRA account is to take a lump-sum distribution. This results in higher taxes on the distribution, and the estate beneficiaries lose years of growth opportunity for the account. Regardless, what many common executors don’t know is that there are other options in handling the inherited traditional IRA when the beneficiary is the estate.

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The Common Executor

~ A Journey into Estate Administration

When Will Beneficiaries Receive the Decedent’s Property?

The Implications of Redeeming Savings Bonds that are the Property of the Estate

Redeeming Series E Savings Bonds of the Decedent

Closing the Decedent’s Business Accounts: An Easy Thanksgiving Task

Finding Forgotten Assets in an Open Estate

Keep up with the Mail and Charitable Solicitations

Closing the Annuity with the Estate as Beneficiary

Selling Stocks of a Decedent Held in Direct Registration

Closing the Traditional IRA: What Options?

Setting the Meeting

Inherited Traditional IRA | Distribution Rules for Estate as Beneficiary