When a loved one dies, you must contact the Social Security office and inform them of the death so that payments stop at that point. If not, they will bill you for anything they pay after death. The Social Security Administration will require the decedent’s date of death and his or her Social Security number when you make the call. They may also request a copy of the Death Certificate be faxed or emailed.

Additionally, someone needs to have access to the decedent’s records. We recommend that people make a list of all their monthly bills and when they are due. It is very beneficial for the person who takes over as the executor to have that information because he/she is responsible for the payments. If the location where the decedent conducted his or her banking is known, it may be a good idea to stop by the local branch to inquire whether any accounts of the decedent were held jointly, and to whom they may be payable upon death. To accomplish this, make certain you have at least one certified copy of the Death Certificate and your valid identification. Direct and immediate access to these funds may help relieve stress when dealing with funeral expenses, burial costs and any last illness expenses. The executor will then have the responsibility to figure out what the assets of the estate are and what has to be administered.

If there is insurance involved, the insurance company has to be advised. We recommend that you get at least 10 certified copies of the death certificate in order to transfer property, notify the insurance company, and take care of several administrative matters. Some people who have a trust don’t realize that even if they have a trust, the trust has to be properly administered and there are certain compliance requirements that have to be addressed.

Typically, retirement accounts and life insurance are two types of investments which name a beneficiary. Complicated forms may need to be completed along with supplying a copy of the certified Death Certificate, before access to cash and benefits can be payable to the named beneficiary. It is essential to contact a qualified tax advisor prior to making any decisions with respect to the payment of funds from retirement accounts. If appropriate and beneficial alternatives are not properly considered, mistakes may be made, resulting in significant and costly tax consequences.

Regarding taxes, upon the death of the decedent, all of his or her property gets stepped-up in tax basis to the value at date of death. If you bought a property for $500,000 as a personal residence and made $100,000 in capital improvements, your tax basis in the property would then be the price you paid plus the improvements, so it now has a tax basis of $600,000. If the property is sold for one million dollars, the tax basis is the number that you subtract from the sales proceeds to give you any gain. In this instance, we have a sale price value of one million dollars but the basis is $600,000. A $400,000 capital gain (reduced by selling expenses) then results.

Upon death, however, that $400,000 gain disappears because your estate or trust gets a new tax basis, which is equal to the value of the property at the date of death. When you sell the property, you don’t have any capital gain that you would have otherwise had if you had sold it during your lifetime. If it’s sold by the decedent’s heirs, then there is no capital gain to them because of the step-up in tax basis is at death. You have to think of what the income tax consequences are because of the stepped-up basis and other factors. There is a credit of $250,000 for a single person and $500,000 for a married couple on the sale of a residence.

Probate

When there is a situation where a probate is necessary, there is a petition that you must file to appoint an administrator or an executor. This is the person in charge, who has a court order giving them the authority to manage the estate and act on the assets in the estate. In a probate, that’s part of the process.

During the probate process, all of the assets have to be valued by an estate inheritance tax appraiser, who appraises the property, and you must then provide an accounting of what goes on. This is a process that can take over six months, even for the simplest estate. The courts are so backed up that it takes almost a year just to obtain a hearing date to finalize the probate. That’s why your living trust is so important. Probate is complicated, very time consuming, and expensive. The only good thing about probate is that it gives creditors only four months to assert a claim. This can be beneficial in certain circumstances, because there may be some contingent claims against the decedent. In a probate, they will be extinguished if they haven’t been filed on time.

Probate is, in a sense, managing the estate that doesn’t have a trust. It’s administration of an estate with respect to the assets that are in it. The executor is under the duty to deal with the assets and make an effort to do the same things that the decedent would have done if they had been alive.

Under California Law, a probate of estate is generally necessary when a person passes away leaving assets in excess of $150,000, which do not pass by beneficiary designation, joint tenancy and were not held in Trust. If real property is worth $50,000 or more a special petition must be filed with the court. The probate process involves the supervision of the court. Probate ensures that decedent’s last wishes or instructions are carried out upon death as long as the decedent has a Will so specifying such instructions.

Probate is managed by the Court. Probate reviews the decedent’s wishes and makes sure that they are followed. There is a probate judge who oversees everything and monitors the proceedings. Generally, the wishes are demonstrated by a written Will which is called the Last Will and Testament.

If a person dies without a Will, the estate is administered by state law called intestate succession. These rules constitute the structure of state laws which provide for the passing of property upon death for people who die without a Will. Obviously, the state law may vary substantially from the wishes of the decedent. Although probate can be very complicated and take some time, an experienced probate attorney is able to most likely handle matters in an expeditious and time saving manner that relieves a lot of burden and strain on the loved ones of the decedent.

A loss of a loved one can be traumatic and arduous and is a difficult and confusing period which can last a long, long time. One does not need to go through the extra burden of filing in probate and the myriad of probate documents involving much time and effort and associated with financial matters, business and real estate dealings and transactions. An experienced lawyer dealing with estate planning and probate can assist greatly with respect to this process.

Trust Administration

When you set up a trust, even though you don’t have to go through probate, you do have some administrative responsibility. There are laws that have to be complied with, and beneficiaries have to be given proper notice.

An added benefit of trust administration is finding out exactly what the assets are and their value. If you know their value, you can use that as the new tax basis to reduce or eliminate any capital gain. In an estate of a few million dollars or more, it’s usually worth it to file an estate tax or death tax return, even though there is no death tax due, because it gives a lot of validity to the step-up in tax basis. The IRS isn’t necessarily bound by that but almost always will accept it. Then, you’ve got the values established and when the heirs sell the assets, they will have that step-up in basis and thus the gain may be reduced or eliminated.

A lot of married people think that once their spouse is deceased, they don’t need to worry about anything if they have a trust. That’s not true. Upon the death of a first spouse, the survivor spouse should seek professional help to make sure everything is put in order. One of the things you want to do is have the name of the decedent taken off the property in the trust. This gives you, the surviving trustor, the necessary power to carry on the administration of the trust. Trust administration and probate are important. If you have a proper setup, you can avoid the probate but you can’t avoid trust administration. Trust and estate administration are critical steps that have to be taken in order to make sure that a loved ones’ assets are protected and distributed in the manner in which the decedent wanted them to be.

Eight Important Actions To Take After A Death

Here are eight important steps you need to take upon the death of a loved one:

1. Social Security. Call the local Social Security office to report your loved one’s passing. If you were married to the individual who passed away, there may be benefits available to you and any minor children. The Social Security Administration will require the decedent’s date of death and his or her Social Security Number when you make the call. They will also request that a Death Certificate be faxed or mailed. They may not process your request without proper legal verification.
2. Mail. To protect against the possibility of identity theft, all mail should be forwarded to a family member or representative.
3. Bank Accounts and Bills. If you know the location where decedent conducted his or her banking, it would be a good idea to stop by the local branch to inquire whether any accounts were held jointly and to whom they may be payable upon death. To accomplish this, make sure you have at least a Certified copy of the decedent’s Death Certificate. It is recommended that before you take this step that you consult with your estate administration and probate lawyer.
4. Retirement Accounts, Life Insurance. If you determine that there is life insurance of value on the life of the decedent, care must be taken to examine each policy. There are two types of insurance, whole life and term, each of which name a beneficiary. Complicated forms may need to be completed along with supplying a copy of the certified death certificate before access to cash and benefits can be payable by the insurance company to the named beneficiary or beneficiaries. Again, consulting a professional in this area is absolutely essential.
5. Unfortunately, credit card or identity theft is running rampant. There are steps that you can take, notifying credit card companies of the decedent’s death. You need to request that they cease interest accruing on the card as of the date of death. You may need to fax or send a certified copy of the death certificate and provide formal notice of the administration to the creditor as required by law.
6. Work Benefits. In circumstances where the decedent was employed at the time of death there may be certain benefits of his or her employer. If the decedent was retired, many benefits can continue after employment has terminated or certain elections were made by the decedent prior to death.
7. Make a list of all assets of the decent at the time of death along with their approximate value. This includes bank and stock accounts, real property, business interests and investments. Debts, i.e., mortgage and loans, should also be spelled out. It is important to locate all of the decedent’s financial material and past income tax returns.
8. The best advice we can give you is for you to contact an experienced and reliable attorney in the field of estate planning and estate/trust administration. There is a vast amount of technical processing including changing title to joint assets, real property mortgages, property taxes, life insurance, income taxes, estate taxes, etc. Dealing with all these issues by yourself is not only stressful, but might prove costly for you and future generations if you don’t have the proper legal advice.

For more information on Aftermath Of A Loved One’s Death In CA, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (714) 384-6500 today.