When Someone You Love Dies - 7 Legal Steps to Take to Make Things Easier

Hi, my name is Mark Kohler. I'm a CPA attorney, author, blogger, all that stuff. But when it comes right down to it, I help clients in difficult situations and a lot of clients that are planning exciting things for the future. But I want to talk about what to do when a loved one passes away and some of the legal issues. Now this is a huge topic. Of course, many of you in this situation are going to be doing a lot of research, but hopefully this short video will help point you in the right direction and we can cover some important points that could be really, really help. Now, even before I get into my list of 7 items I want to cover, first I want to express my heartfelt condolences. Going through the passing of a loved one is difficult enough. And then you've got to deal with the legal and tax issues and sometimes the family politics. Now, hopefully your family member left and detailed estate plan, some instructions. If not, it's going to make things more challenging. But that brings me to topic number one, which is gathering all the documents you can. The first thing I want you to do is just gather everything that might relate to the estate. Bank statements, will, a trust, any writings of your family member that might indicate their list of assets. You're going to want to track down tax returns and, and in this process, I want you to not just gather documents, but gather assets. Just lock the house down. It is so common to hear of family members rushing to the house and starting to take mom's china or dad's guns. Beg the family members to back off. Just give it some time. Lock up the house, Gather documents, gather information. Now, you may not be the executor of the trustee or the leader designated in writing, but at least you can be an emotional leader, hopefully at the very least and ask everybody to just take a breath. Let's gather all the information and see where we go next. Number two is time to designate right off the bat the leader or leaders. Now, keep in mind, there's going to be a lot of parties involved in a lot of cases. There could be a guardian for the children, a guardian for pets, designated an executor, someone that's going to be handling going to court and some of the probate matters if that's going to be the case. And maybe there's a trustee that's already been appointed or a group of trustees, usually three to five at the most. But there could be a lot of people already in the kitchen. Now this is important. If there's too many cooks in the kitchen, try to get together and decide who the chief is going to be. And so there's not a lot of fights over, again, a lot of decisions. If there's a quarterback, it's going to help a lot and be realistic about the skills of this person. You may have someone that's got all the love in the world and the best of intentions, but they don't have the financial or the emotional or fortitude to be the leader. And again, you could have someone that's a great leader, but they don't care or they're not sensitive to the needs of others. Try to get together and even watch this video as a group if needs be, so that everybody can be realistic about who the best quarterback is to push a lot of this down the field and get the things taken care of. Number three, be a support, not a hindrance. Now, you may be appointed to be key person in the handling of the estate. You might not be, but try not to be a fly in the ointment. You might be mad about this. You may not be thrilled about who's the leader, but one way this can spiral out of control quickly is if you're upset and you want to fight about it, argue about it and cause problems. It only makes things worse. Now, in some instances, you might need to get legal representation or stand up for what's fair or right. I get that, and I would recommend you get legal support to do that very thing. But you also don't want to just be stirring the pot emotionally. Please take the high road and it's going to make the process a lot easier on everyone. Number four, communication. That's right. I'm relaxing for this point because I want you to be relaxed about this. It's okay to share information if you're the one in charge and you're going to be the trustee or the executor, share the documents. They're all going to come out anyway. If this is going to go to court. Everybody's going to see the trust, everybody's going to see the will. There's no benefit in hiding information or hiding the documents. Get them out there. If you can communicate and everybody knows what's going on, a lot of the fights and battles are going to dissipate and people's emotions will come down a notch if they don't feel like something's being hidden from them. So if you're the one in charge, let everybody know what's going on. Give regular reports, hold weekly teleconferences, or send out a weekly email with updates. It'll go a long way to help the estate wrap up without drama. Number five, and this is not a self serving comment, I'm being completely honest and transparent. But get a lawyer involved, get an accountant involved. You want to get professionals that are going to help you through this. I've had a lot of clients over the years come through on occasion that just, you know, Google Google, you know, and I hope, I'm glad you're watching this video. You want to be up to speed on everything. I think that's great. But there's a lot of tricks to managing an estate and keeping it out of court. Saving taxes, keeping the drama to a minimum, keeping it out of court with a family battle. Get a lawyer that you trust, get if you need to represent yourself in the estate, then we've already got a problem. Right? But if you're the leader of this estate as a trustee or an executor, get some legal support. Don't try to cut a corner and step over a dollar to pick up a nickel. I'm sick and tired of calls where, you know, what do we need to do? Okay, we're going to just go do it and then it turns into a mess six months later. There's lawyers for a reason. And I know there's some bad lawyers out there that stir the pot so they can make a dime. Don't use those type and get away from them right away. But there's a lot of lawyers that have a good heart and an intention to help the family in a good way and not just make a buck off this. So get legal and accounting support right away. It's going to help you do it right and avoid a lot of problems. Number six, gather financial data and tax data. Now I know the number one item I gave beginning was gathering information and gathering assets, but now it's time to get values. There may be the need to get an appraisal on a lot of different assets, whether it's rental property, the home, certain assets, art, guns, collectibles, the piano. Because you're going to have to divide this up and there are going to be situations where one family member says, I want the piano and it's going to have a significant value. Well, that value needs to come out of their share. And if you don't have a reasonable value for certain assets, it's going to get ugly because certain assets are going to go specifically and then dollar amounts are just going to be easy to divide up. You know, if, especially if it's cash, but you might have to File a tax return for the estate. Now, the estate federal tax return limit is now well over $10 million. So you're going to be, you know, in 99% of our cases, you're not filing a federal estate tax return. And it changes every year. But it's some states levels you're going to owe estate tax. I know that's a tongue twister. State estate tax. Washington state's a big one. Their threshold for owing state estate tax is very low. They don't have a state income tax, so they make up for it with estate tax. So you want to know the rules in the state where your loved one passed away, the deceased state. And know what the income tax rules are going to be for estate tax. Now, also, keep in mind, everybody, even you, when you die, have to file a final tax return. But you're not here to do it, so the family has to do it for you. Everybody files a final tax return and that's going to mean pulling again, financial data and Social Security checks or sorry statements. And if there was rental property involved and all sorts of things, it's going to be a little more complicated tax return because some family members don't even share that data to begin with. So you got to track it down. So there's a lot to do on the numerical side of things. And again, why hiring an accountant or a lawyer in the process can really help with this step of the process. Finally, number seven. And maybe this goes without saying, but I'm going to do it anyway. Be fair and be honest. You can't imagine how many experiences I've had in my young career. I think I'm young, but maybe not. But I've had 20 years of being a lawyer. I still feel young. I've seen so many heartbreaking situations where there's a fight between siblings and they haven't spoken for years. Very harsh words are said and people hold grudges because someone had to have their way. Now, I'm not asking everybody out there to roll over and give everything to a sibling that doesn't deserve it. And there's some that out there, they're going to take advantage. I get it. You've got to stand up yourself at some point. But folks, it's okay to err a little bit on feeling giving. Everybody's gonna feel like they're giving. No one's gonna feel like they got everything. If someone feels like they got everything, then something was wrong because everybody's got a compromise. Everybody's got to give a little. And that's being fair and being honest. Try not to sneak away again. I've said so many stories of family members that have ran into the property or the home and taken things and they just end up missing and come to find out, you know, sister or brother had it years later. It's sad. And so you're going to have to answer to a higher law someday. I believe that. Sorry for some of you that may not be too religious. When you go through the pearly gates, you might get the question, were you fair and honest when mom and dad died? Did you treat your brother or sister honestly? You want to answer in the affirmative. So it's not worth it, losing relationships over money. It really isn't. So do your best to be fair and honest. And when I talk about those spreadsheets and gathering data and reporting, those are really helpful because a paper trail is going to help you get the best information out to everybody and do it fairly rather than just kind of guessing. So you're gonna have to have a fair commitment to paperwork here. But hopefully your estate goes well, it wraps up quickly and you've got a process that wasn't too fun, but it didn't break up the family and it didn't throw you into depression. And I hope it doesn't. And so continue to do your research, please. If you're in this situation and this video was helpful to you, share it with the other family members in the same situation with you so that hopefully everybody can sign a declaration together that you're going to do these things. Kind of a little affirmation statement that everybody's going to work together and stay true to some common principles. Come up with your own. I think it'll help out a lot, so good luck. Hey, finally, if you found this video helpful, please click on the right there and sign up for my weekly newsletter, tax and legal tips that are going to help you in a lot of other ways to build wealth and live your American dream. Also, subscribe to my channel here. Lots of videos. Post one every week, if not more than that. 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