10 Key Tips for a Smooth Settlement

When a loved one passes away, family members can often feel overwhelmed by the seemingly endless list of things to take care of.  An up-to-date estate plan and an educated family can help ease this feeling.  Unfortunately, if the family was not prepared, there can be significant confusion over who is in charge and what needs to be done.

If you find yourself in this position, here are some tips to help you get started:

  1. Take care of the final arrangements.  Even more important initially than the estate planning documents is to locate any funeral or burial instructions.  Your loved one may have written out his or her preferences, obtained a funeral insurance policy, or purchased a burial plot. The funeral director will ask how many copies of the death certificate you would like.  We recommend requesting at least 10 to 15 death certificates.
  2. Locate the decedent’s important paperwork.  This can require investigation by several members of the family.  Try to determine whether the decedent had a trust and/or will.  These documents will name the executor or trustee.  If there are no estate planning documents, the court will appoint an executor during the probate process.
  3. Obtain the appropriate professional help.  Depending on the estate, the settlement process could be complex.  Finding a knowledgeable attorney, CPA, and financial advisor can put your mind at ease.  They can advise you on the requirements to properly handle the settlement.
  4. Keep good records of time you spend and any expenses you pay personally.  Both time spent and expenses can be reimbursable by the estate, but only if you can provide the proper documentation.
  5. Locate and secure the assets of the decedent.  If a list of assets is not readily available, try to find bank statements or a checkbook to track down bills and deposits.  Life insurance contracts, deeds, and other financial statements are often kept together in a home office or filing cabinet.  You should notify the financial institutions of the death and secure the house if nobody is living in it.
  6. Don’t use any Powers of Attorney.  These are no longer valid after death.
  7. Don’t let family members or friends start taking items out of the house.  Valuable items can suddenly disappear or specific bequests can end up in the wrong hands.  Once you do start distributing personal effects, it is a good idea to have each individual sign a receipt of items received.
  8. Don’t drive the car.  Until the title and insurance are brought up to date, driving the car can unnecessarily expose the entire estate to creditors.
  9. Don’t use the decedent’s credit cards.  You could be liable for fraudulent charges if you use the card after the date of death.
  10. Don’t start closing or moving financial accounts until you have obtained the advice of an attorney or have a good understanding of the decedent’s estate.   Creditors will need to be paid before the funds are distributed to beneficiaries.

The most important thing to remember is that the settlement process takes time to complete and is an emotional time. We recommend obtaining the appropriate professional help to guide you through the process, put your mind at ease, and help you deal with the complexities of an estate settlement.

 

Wine Collector? Protect Your Investment

If you purchase fine wine as an investment, here is a red alert – your homeowners’ policy probably does not cover your wine collection. In fact, the vast majority of homeowners’ policies exclude coverage for perishable goods like wine.

Ensuring you have adequate insurance coverage on your wine collection is absolutely critical. Some individuals have spent thousands of dollars to accrue an impressive wine collection or wine cellar.

Getting the Right Insurance Policy for Your Collection

When shopping for an insurance policy to protect your investment, consider an agreed upon insurance value and to keep records of the collection purchases, sales, and consumption to avoid insurance disputes in the event of a loss.

Setting a reasonable deductible with your insurance agent is a good way to manage the cost of insurance keeping it reasonable and coordinated with your risk aversion.

Getting a quality insurance policy should not be terrible difficult since the value of wine is fairly transparent. Web sites like vinfolio.com and cellartracker.com enable wine collectors to check and verify the retail value of their wine collection. In addition, major wine auction houses such as Zachy’s, Acker Merrall & Condit and Hart Davis Hart release their results. Access to this information makes it much easier for wine collectors to know and track the value of their investments.

Should My Wine Collection Be Owned and Managed by an LLC?

Probably not, but it depends on your circumstances and what exactly you collection is used for. Typically, most investors are simply wine connoisseurs and develop their collection for personal enjoyment and use. In that case, there probably isn’t a need to set up a wine-specific LLC. However, if your ownership and sale is solely for investment purposes and the wine is not used for personal enjoyment, having the collection managed by an entity like an LLC may be worth considering, especially for tax purposes. It is best to sit down with an experienced attorney to discuss these important issues.

Wine Collection and Your Estate Plan

If your wine collection has become a substantial asset, treat it like one. Be sure your collection is properly mentioned in your estate plan. This is important because numerous questions and issues arise with an asset like a wine collection when someone passes on. For example, do you want your wine collection to be sold? If so, who should your representative consult to complete the sale and to whom would the proceeds go to? If your wine collection is being divided among multiple beneficiaries, are the recipients able to afford to properly store and deal with the collection? You do not want to leave these issues unaddressed and subject to the whims of your executor, or a beneficiary.

In addition to a wine collection, you need to be sure all of your valuable assets and investments are properly managed in your estate plan. To accomplish this, you should sit down and speak with an experienced estate planning attorney in your area.

Don’t Wreck Your Loved One’s Estate – Decedent Vehicle Titling and Insurance

When a loved one passes away, many family members do not think twice about driving the decedent’s vehicle.  With relatives and friends coming in from out of town, the vehicle is convenient to use and cheaper than a rental car.  However, if an accident occurs, the entire estate of the decedent could be exposed to creditors. Both the titling of the vehicle and the car insurance policy need to be reviewed before any person drives the car anywhere. 

Change the Title to the Vehicle

First, the title of the car should be located to determine the ownership of the car.  If the decedent owned the car jointly with another person, the car ownership automatically passes to the joint owner on the title at the time of death.  The joint owner will still need to notify the Department of Motor Vehicles of the death, but the joint owner can treat the car as his or her own.

Review the Vehicle’s Insurance Policy

When the car was jointly owned by spouses, many insurance companies extend the existing insurance coverage to the surviving spouse.  It is still a good idea to check with your insurance agent prior to driving to make sure you are covered.  If the joint owner was a non-spouse, it is imperative to update your insurance agent prior to driving, as a new policy may need to be issued in the surviving owner’s name.

Why It’s Risky to Use the Vehicle Until These Issues are Resolved

If the decedent owned the car individually, no other individuals should drive the vehicle until the title is transferred out of the decedent’s name to the new owner.  Why? Because the insurance company will most likely deny all claims in the event of an accident, especially if they were not notified of the death of the policyholder.

In most situations, even the named executor is only able to drive the car to obtain maintenance such as inspections or oil changes.  The executor should not drive the car for personal use.  Even if an accident does not occur, if another individual drives the car for an extended period of time, they may be liable to future owner for diminishing the value of the property.

Depending on the estate planning the decedent completed, it could take several months before title is transferred to the new owner.  Once the vehicle has been transferred to the new owner, the new owner can either add the vehicle to their existing insurance policy or obtain a new insurance policy.

The convenience of driving the car is seldom worth the trade-off of exposing the entire estate to creditors.  Make sure you contact the decedent’s insurance agent and estate planning attorney for assistance in reviewing the title and insurance policy before anyone drives the vehicle.

Should You Opt for a “Green Burial”?

When the word “burial” is mentioned, a common image conjured by most people is a coffin being lowered into a burial plot. However, you may not realize that many coffins are actually quite harmful to the environment. Why? Because coffins are often manufactured using chemicals and non-biodegradable material.

Roughly one million pounds of metal, wood and concrete are put into the ground each year to separate bodies from the surrounding earth. In addition, embalming fluid, made up of formaldehyde and rubbing alcohol, is considered a Class 1 carcinogen by the World Health Organization, and can seep into the ground and affect the surrounding ecosystems, according to Medford.com.

“There’s another option, and people need to know that it is an option,” said Judith Lorei, co-founder of the all-volunteer group called Green Burial Massachusetts. “Natural burial is much better for the environment than conventional burial or even cremation,” said Lorei.

 

There was a time when all burials were “green,” using no chemicals and only biodegradable materials. Then, in the mid-1940s, many cemeteries started requiring concrete liners on coffins as a method to prevent the caskets from sinking and the ground from caving in over time.

However, green burial advocates point to the fact that simply maintaining the top soil can address this issue. Another option is for “green graves” to not have an above-ground monumentation, instead being marked only by a small metal disc. They are geo-located, allowing loved ones to find the grave with a smartphone, according to the Medford.com article.

Another option is to be buried in a “mushroom suit.” A company called Coeio offers burying a loved one in a fungal shroud that transforms your loved one’s body into “vital nutrients that enrich the earth and foster new life,” according to the Huffington Post.

Is this the right option for you or your elderly loved one? Only you, or your loved one, know the answer. As an estate planning attorney, I can tell you the most important thing to do is take the time to have this important conversation – how do you want your remains to be handled? Where do you want to be buried? Do you want to be cremated? These are important questions that warrant thought and discussion. You do not want to leave all of these issues up in the air for someone else to decide when the time comes.

Sit down with your estate planning attorney and discuss all of your available options. Then, include a provision in your estate plan about how and where you want to be placed when the time comes.

Should You Opt for a “Green Burial”?

When the word “burial” is mentioned, a common image conjured by most people is a coffin being lowered into a burial plot. However, you may not realize that many coffins are actually quite harmful to the environment. Why? Because coffins are often manufactured using chemicals and non-biodegradable material.

Roughly one million pounds of metal, wood and concrete are put into the ground each year to separate bodies from the surrounding earth. In addition, embalming fluid, made up of formaldehyde and rubbing alcohol, is considered a Class 1 carcinogen by the World Health Organization, and can seep into the ground and affect the surrounding ecosystems, according to Medford.com.

“There’s another option, and people need to know that it is an option,” said Judith Lorei, co-founder of the all-volunteer group called Green Burial Massachusetts. “Natural burial is much better for the environment than conventional burial or even cremation,” said Lorei.

 

There was a time when all burials were “green,” using no chemicals and only biodegradable materials. Then, in the mid-1940s, many cemeteries started requiring concrete liners on coffins as a method to prevent the caskets from sinking and the ground from caving in over time.

However, green burial advocates point to the fact that simply maintaining the top soil can address this issue. Another option is for “green graves” to not have an above-ground monumentation, instead being marked only by a small metal disc. They are geo-located, allowing loved ones to find the grave with a smartphone, according to the Medford.com article.

Another option is to be buried in a “mushroom suit.” A company called Coeio offers burying a loved one in a fungal shroud that transforms your loved one’s body into “vital nutrients that enrich the earth and foster new life,” according to the Huffington Post.

Is this the right option for you or your elderly loved one? Only you, or your loved one, know the answer. As an estate planning attorney, I can tell you the most important thing to do is take the time to have this important conversation – how do you want your remains to be handled? Where do you want to be buried? Do you want to be cremated? These are important questions that warrant thought and discussion. You do not want to leave all of these issues up in the air for someone else to decide when the time comes.

Sit down with your estate planning attorney and discuss all of your available options. Then, include a provision in your estate plan about how and where you want to be placed when the time comes.