How Do I Cancel a Loved One’s Driver’s License?

In addition to canceling cards, insurance policies and automatic payments after a family member dies, it is important to cancel identification cards, like a loved one’s driver’s license. Bankrate’s recent article entitled “How to terminate a license after death” provides some valuable tips on closing out things for a loved one after they pass away.

Every state’s Department of Motor Vehicles (DMV) has rules about how it issues and cancels a driver’s license. In some states, you may not need to cancel a license because Vital Records will inform the DMV of the license holder’s death, and the license will be canceled automatically. If a state requires you to cancel the license, obtain the death certificate and contact the DMV for the specific procedure. Many states permit the canceling of a deceased’s driver’s license by mail. Typically, you need to send a letter saying you would like to cancel the deceased driver’s license; a notarized or certified copy of the death certificate; and the original driver’s license.

You can cancel a driver’s license to prevent identity theft. In addition, other items should be cancelled to make certain that personal information does not get into the wrong hands. Here are a few other vehicle-related items that should also be canceled or transferred.

Car title. Transfer the title, if you want to sell the car in the future or if you want to keep driving the vehicle. You will need to visit the DMV with the death certificate and the original title certificate to transfer the title. There may also be a state affidavit form certifying there is no probate before the vehicle title may be legally transferred.

Car registration. When the car title transfer is complete and the vehicle’s in your name, you can register it. Get car insurance before registering the vehicle.

License plates and handicap placards. The plates of the vehicle should be surrendered to the DMV with the driver’s license and a certified or notarized copy of the death certificate and a cover letter. If you return the deceased person’s driver’s license and the vehicle’s license plates, you could also send the handicap placard back to the DMV.

Car insurance. Call the insurance company to cancel auto insurance. The insurer may ask for a copy of the death certificate before canceling the policy.

Car loans or leases. A car loan is not forgiven upon death, and the balance will have to be settled from the estate’s funds. You might be able to take over the lease or loan, if you contact the lender with documentation showing you are the beneficiary, but this depends on the lender and state laws.

Reference: Bankrate (June 16, 2021) “How to terminate a license after death”

 

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Do You Have to Do Probate when Someone Dies?

Probate is a Latin term meaning “to prove.” Legally, a deceased person may not own property, so the moment a person dies, the property they owned while living is in a legal state of limbo. The rightful owners must prove their ownership in court, explains the article “Wills and Probate” from Southlake Style. Probate refers to the legal process that recognizes a person’s death, proves whether or not a valid last will exists and who is entitled to assets the decedent owned while they were living.

The probate court oversees the payment of the decedent’s debts, as well as the distribution of their assets. The court’s role is to facilitate this process and protect the interests of all creditors and beneficiaries of the estate. The process is known as “probate administration.”

Having a last will does not automatically transfer property. The last will must be properly probated first. If there is a last will, the estate is described as “testate.” The last will must contain certain language and have been properly executed by the testator (the decedent) and the witnesses. Every state has its own estate laws. Therefore, to be valid, the last will must follow the rules of the person’s state. A last will that is valid in one state may be invalid in another.

The court must give its approval that the last will is valid and confirm the executor is suited to perform their duties. Texas is one of a few states that allow for independent administration, where the court appoints an administrator who submits an inventory of assets and liabilities. The administration goes on with no need for probate judge’s approval, as long as the last will contains the specific language to qualify.

If there was no last will, the estate is considered to be “intestate” and the laws of the state determine who inherits what assets. The laws rely on the relationship between the decedent and the genetic or bloodline family members. An estranged relative could end up with everything. The estate distribution is more likely to be challenged if there is no last will, causing additional family grief, stress and expenses.

The last will should name an executor or administrator to carry out the terms of the last will. The executor can be a family member or a trusted friend, as long as they are known to be honest and able to manage financial and legal transactions. Administering an estate takes time, depending upon the complexity of the estate and how the person managed the business side of their lives. The executor pays bills, may need to sell a home and also deals with any creditors.

The smart estate plan includes assets that are not transferrable by the last will. These are known as “non-probate” assets and go directly to the heirs, if the beneficiary designation is properly done. They can include life insurance proceeds, pensions, 401(k)s, bank accounts and any asset with a beneficiary designation. If all of the assets in an estate are non-probate assets, assets of the estate are easily and usually quickly distributed. Many people accomplish this through the use of a Living Trust.

Every person’s life is different, and so is their estate plan. Family dynamics, the amount of assets owned and how they are owned will impact how the estate is distributed. Start by meeting with an experienced estate planning attorney to prepare for the future.

Reference: Southlake Style (May 17, 2021) “Wills and Probate”

 

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Personal Property – How to Prevent Fighting over Baseball Cards?

Estate plans often don’t include personal property or sentimental items. These day-to-day objects can cause some of the worst arguments among survivors, says The Wall Street Journal’s recent article entitled “You Don’t Want Your Heirs to Fight Over Your Assets? Here’s What to Do Now.”

A photograph, dads’ baseball mitt, or mom’s Bible can sometimes have greater sentimental value than we realize. In addition, it can be tricky to determine what is fair, when dividing personal items. So, how do you assign a value to a banged-up saxophone that several family members might want or your collection of baseball cards?

The wisest path on such decisions about personal property is to talk with heirs, while you are still alive and in good health.

Ask your adult children what they might want and why and ask what other family members should have and why.

You might discover, for instance, that your adult daughter thinks her brother should inherit their dad’s baseball glove because they were the ones who played catch. You might be left with the CDs because you are the music aficionado.

The other big plus for discussing personal property is that the would-be beneficiaries can have the opportunity to hear stories and memories that are connected to these gifts. You can even write the stories down. Here are some other questions to consider:

  • Do you want to include in-laws in the decision-making?
  • What happens to personal items, if a parent remarries?
  • When is the best time to begin the actual transfer (the worst time is right after a funeral when family members are not at their best)?

You can also ask an experienced estate planning attorney to draft what is known as a “ personal property memorandum.” It is a list of items and the people selected to inherit them. You should mention the existence of the document in your will, but the memo can be changed as often as you want without having to update your will.

Reference: Wall Street Journal (May 3, 2021) “You Don’t Want Your Heirs to Fight Over Your Assets? Here’s What to Do Now”

 

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Administrator – What Happens when Homeowner Dies without Will?

Administrato – When parents die suddenly, in this case due to COVID-19, and there is no will and no discussions have taken place, siblings are placed in an awkward, expensive and emotionally fraught situation. The article titled “My parents died of COVID-19 and left no will. My brother lives rent-free in their home and borrowed $35,000. What now?” from MarketWatch sums up the situation, but the answer is complicated.

When there is no will, or “intestacy,” there aren’t a lot of choices.

These parents had a few bank accounts, owned their home outright and left no debts. They had six adult children, including one that died and is survived by two living sons. None of the siblings agrees upon anything, so nothing has been done.

One of the siblings lives in the house rent free. Another brother was loaned $35,000 for a down payment on a mobile home. He now claims that the loan was a gift and does not have to pay it back. There are receipts, but the money was paid directly to the escrow company from the mother’s bank account.

How do you determine if this brother received a loan or a gift? What do you do about the brother who lives rent-free in the family home? How does the family now move the estate into probate without losing the house and the bank accounts, while maintaining a sense of family?

For starters, an administrator needs to be appointed to begin the probate process and act as a mediator among the siblings. In some states, the administrator also requires a family tree, so they can know who the descendants are. Barring some huge change of heart among the siblings, this is the only option.

If the parents failed to name a personal representative and the siblings cannot agree on who should serve, an estate administration lawyer is the sensible choice. The court may name someone, if there is concern about possible conflicts of interests or the rights of creditors or other beneficiaries.

A warning to all concerned about how the appointment of an administrator works, or sometimes, does not work. Working with an estate planning attorney that the siblings can agree upon is better, as the attorney has a fiduciary and ethical obligation to the estate. While state laws usually hold the administrator responsible to the standard of care of a “reasonable, prudent” individual, not all will agree what is reasonable and prudent.

One note about the loan/gift: if the mother helped a brother to qualify for a mortgage, it is possible that a “Gift Letter” was created to satisfy the bank or the resident’s association. Assuming this was not a notarized loan agreement, the administrator may rule that the $35,000 was a gift. Personal loans should always be recorded in a notarized agreement.

This family’s disaster serves as a good lesson for anyone who does not have an estate plan. Siblings rarely agree, and a properly prepared estate plan protects more than your assets. It also protects your children from losing each other in a fight over your property.

Reference: MarketWatch (April 4, 2021) “My parents died of COVID-19 and left no will. My brother lives rent-free in their home and borrowed $35,000. What now?”

 

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Why Is Family of a Texas Governor Fighting over His Estate?

Dolph Briscoe Jr. was a Texas rancher and businessman and was the 41st Governor of Texas between 1973 and 1979. His oldest child, Janey Briscoe Marmion, established the foundation with her father to honor her only child, Kate, who died in 2008 at the age of 20.

The Uvalde Leader-News’ recent article entitled “Briscoe family lawsuit targets Marmion’s will” reports that Marmion’s original will filed in 2011 directed her assets to be placed in a revocable trust.

The foundation was to have received income from half of her wealth for 22 years. The rest was directed to the children of her brother Chip Briscoe and those of her sister Cele Carpenter of Dallas.

However, a second will executed by Janey Briscoe Marmion in 2014 and admitted to probate in the County Court in December 2018— a month and a day after her death—calls for three trusts, including two child’s trusts created by her father and a generation-skipping trust (GST). A GST is a type of trust agreement in which the contributed assets are transferred to the grantor’s grandchildren, “skipping” the next generation (the grantor’s children).

Marmion created the Janey Marmion Briscoe GST Trust, dated November 1, 2012, in which she gave a third of her assets to the foundation and the other two-thirds to be divided equally between Chip Briscoe’s sons.

Carpenter’s three children filed suit in Dallas and in Uvalde County last year challenging the validity of the 2014 will and contesting the probate.

Their complaint alleges that Janey Briscoe Marmion intended to include the three as beneficiaries, in addition to Chip’s two sons, and that the situation creates a disproportionate inheritance in favor of the Briscoe men.

The amount in question is more than $500 million, since the former Texas governor’s estate was estimated by Forbes to be worth as much as $1.3 billion in 2015. Governor Briscoe died in Uvalde in 2010 at the age of 87.

Reference: Uvalde (TX) Leader-News (March 11, 2021) “Briscoe family lawsuit targets Marmion’s will”

 

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Larry King and his Holographic Will .

The dispute over Larry King’s estate shines a harsh spotlight on what happens when an elderly person makes major changes late in life to his or her estate plan, especially when the person has become physically weakened and possibly mentally affected, due to aging and illness. A recent article from The National Law Journal, “Larry King Will Contest—Key Takeaways,” examines lessons to be learned from the Larry King will contest.

A handwritten will is most likely to be probated. King’s handwritten will was witnessed by two individuals and may rise to the standards of California’s rules for probate. California was likely King’s residence at the time of his death. However, even if King’s won’t satisfy one section of California estate law referring to probate, it appears to satisfy another addressing requirements for a holographic will.

Holographic will requirements vary from state to state, but it is generally a will that is handwritten by the testator and may or may not need to be witnessed.

The battle over the will is just a starting point. Most of King’s assets were in revocable trusts and will be conveyed through the trusts. He did not seek to revoke or amend the trusts before he died. News reports claim that the probate estate to be conveyed by the will is only $2 million, compared to non-probate assets estimated at $50 million—$144 million, depending upon the source.

Passing assets through trusts has the advantage of keeping the assets out of probate and maintaining privacy for the family. The trust does not become a matter of public record and there is no inventory of assets to be filed with the court.

Any pre- or post-nuptial agreements will have an impact on how King’s assets will be distributed. This is an issue for anyone who marries as often as King did. Apparently, he did not have a prenuptial agreement with his 7th wife, Shawn Southwick King. They were married for 22 years and separated in 2019. While Larry had filed for divorce, the couple had not reached a financial settlement. California is a community property state, so Southwick will have a legal claim to 50% of the assets the couple acquired during their long marriage, regardless of the will.

It is yet unclear whether there was a post-nuptial agreement. There are reports that the couple separated in 2010 after tabloid reports of a relationship between King and Southwick’s sister, and that there was a post-nuptial agreement declaring all of King’s $144 million assets to be community property. Southwick filed for divorce in 2010, and King sought to have the post-nup nullified. They reconciled for a few years and King was reported to have updated his estate plan in 2015.

The claim of undue influence on the will may not be easy to challenge. Southwick is claiming that Larry King Jr., King’s oldest son, exerted undue influence on his father to make a change using a Holographic will. They were not close for most of Larry Jr.’s life, but in the later years of his life, King made a transfer of $250,000 to his son. Southwick wishes to have those transfers set aside on the basis of undue influence. She claims that when King executed his handwritten will, he was highly susceptible to outside influences and had questionable mental capacity.

Expect this will contest to continue for a while, with the possibility that the probate court dispute extends to other litigation between King’s last wife and his oldest son.

Reference: The National Law Review (March 15, 2021) “Larry King Will Contest—Key Takeaways”

 

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How Do I Cancel a Loved One’s Credit Cards After They Die?

Insider’s recent article entitled “How to cancel a loved one’s credit cards and manage their points after they die” provides some general tips on the steps to take to cancel credit cards and manage loyalty points, after a family member or close friend passes away.

First, you should get legal advice before you start delving into the deceased person’s estate. Contact an experienced estate planning attorney. Typically, the executor of the deceased’s estate will be in charge of these tasks.

Review the situation and gather documents. After a death, there’s a lot to do. Once you receive a death certificate, the executor must begin managing the deceased’s finances.

First, you want the credit bureaus to note the death in the deceased’s credit report and to get a list of all credit cards they owned. You can contact one of the three nationwide credit bureaus (Equifax, Experian, or TransUnion) to tell them about the death and get a copy of their credit report. The Social Security Administration usually notifies the credit bureaus of the death. However, personally contacting them will make certain that a death notice is entered in their credit report. This will decrease the risk of identity theft. When noted, lenders will see that the individual is dead and won’t issue credit. You only need to contact one bureau because they will automatically notify the others.

How to close the deceased’s credit cards. After you get the credit report, identify all open credit cards and contact each one to notify them of the death. Each issuer will have a different procedure for closing the card, but most will ask you to send a copy of the death certificate. Lenders may also automatically close cards when they see the death notice on the credit bureau report.

Paying off credit card debt after death. The CARD Act of 2009 set the rules for credit card debt after death. Once the lender is notified, it will close the credit card and provide a final bill to the estate within 30 days. While the estate is being settled, they can’t impose additional late fees, annual fees, or over-limit fees. However, the interest on the debt continues to accrue. Note that if the estate pays the debt within 30 days of receiving the final bill, there’s no additional interest charged.

Credit card rewards after death. Every credit card has its own rules for managing points after death. For instance, American Express Membership Rewards has a process to take ownership of an account, and Chase Ultimate Rewards terms state that “If we’re notified of your death, your points will be automatically redeemed for cash in the form of an account statement credit.” The miles and points earned with an airline or hotel are subject to the terms of that program. Review the rules of each credit card, airline and hotel loyalty program to understand how points will be managed.

How to simplify life for your family. You can make things easier for your loved ones, if you make a plan to handle your points, miles and credit card rewards. Similar to other assets, you should explain how you want your points to be used in your will. Ask an experienced estate planning attorney to help you.

Reference: Insider (Feb. 1, 2021) “How to cancel a loved one’s credit cards and manage their points after they die”

 

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Can You Be Forced to Inherit a Timeshare ?

Ask anyone who ever purchased a timeshare and changed their mind about it. Getting rid of a timeshare can be problematic. However, imagine if your parents purchased a timeshare and left it to you, with all the financial obligations? Some timeshare companies are now trying to make people continue to pay after they have died, warns a cautionary article “How to Avoid Inheriting a TImeshare You Don’t Want” from KSL-TV

One woman’s parents loved their timeshare. They travelled to one for skiing, another to relax in the sun, and others according to availability and their travel plans. The entire family went on trips and all enjoyed the flexibility. However, when both parents passed away just a few months apart, the timeshare company started sending letters demanding payment. The siblings didn’t want any part of it.

There had not been any discussions with their parents about what would happen to the timeshare. One of the daughters decided to put the monthly fee onto her credit card to be paid automatically, thinking this would be a short-term issue. When the timeshare company did not respond to the children’s attempt to contact the company to shut down the account, she had the automatic payments stopped. A collection notice showed up and demanded payment immediately.

However, is the family legally obligated to pay for the parental timeshare?

If you die owning a timeshare, it does become part of your estate and obligations are indeed passed onto the next-of-kin or the estate’s beneficiaries. However, they do not have to accept it, in the same way that anyone has the right to refuse any part of an inheritance. No one is legally obligated to accept something just because it was bequeathed to them. This is known as the right to disclaim, but it’s not automatic.

A local estate planning attorney will know how your state governs the right to disclaim. Generally speaking, a disclaimer of interest must be filed with the probate court, stating that you reject the timeshare. There are time limits–in some states, you have only nine months after the death of a loved one to file.

When the next-of-kin rejects the timeshare, it may go to the next heir, and the next, and the next, etc. Every family member must file their own disclaimer. If the share is disclaimed by all heirs, it is likely that the timeshare company will foreclose on the it. There may be leftover debts for unpaid fees, and the estate may have to fork over those payments.

A few tips: if you are planning on refusing a timeshare, you cannot use it. Don’t try it out, let a friend use it or go one last time. If you wish to disclaim something, you cannot receive any benefit of the thing you are disclaiming. Once you receive a benefit, the opportunity to disclaim it is gone.

Unwanted timeshares usually sell for far less than the original purchase price. Selling a timeshare involves a market loaded with scammers who promise a quick sale, while charging thousands of dollars upfront.

If possible, speak with your parents and their estate planning attorney to head the problem off in advance.

Reference: KSL-TV (Jan. 25, 2021) “How to Avoid Inheriting a TImeshare You Don’t Want”

 

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Was the Rock Star Prince ’s Estate Undervalued?

The ongoing battle over the estate of Prince has been complicated because he died without a will. Now, the IRS says that executors of the rock star’s estate undervalued it by 50% or about $80 million.

NBC News’ recent article entitled “IRS says Prince’s estate was undervalued by $80 million” reports that the IRS determined that Prince’s estate is worth $163.2 million—nearly double the $82.3 million valuation submitted by Comerica Bank & Trust, the estate’s administrator.

The difference in numbers for the most part concerns Prince’s music publishing and recording interests, according to court documents. These documents show that the IRS contends Prince’s estate owes another $32.4 million in federal taxes—nearly doubling the tax bill based on Comerica’s valuation, according to a report in the Minneapolis Star Tribune.

The IRS also recently imposed a $6.4 million “accuracy-related penalty” on the Minneapolis native’s estate. Court documents say that the reason for the fine was a “substantial” undervaluation of assets.

Prince’s death of a fentanyl overdose on April 21, 2016, created one of the largest and most complicated probate court proceedings in Minnesota history. Estimates of his net worth have varied significantly, anywhere from $100 million to $300 million.

As Prince’s probate case continues in court, his six sibling heirs have grown increasingly grumpy. They are unhappy in part because the estate has written checks worth tens of millions of dollars to lawyers and consultants. However, nothing has gone to them.

Comerica and its lawyers at Fredrikson & Byron in Minneapolis hold that their estate valuations are solid.

Comerica sued the IRS this past summer in U.S. Tax Court in Washington, D.C., arguing that the agency’s calculations had numerous mistakes.

“What we have here is a classic battle of the experts — the estate’s experts and the IRS’ experts,” said Dennis Patrick, an estate planning attorney at DeWitt LLP in Minneapolis, who is not involved in the case. Valuing a large estate, Patrick added, “is way more of an art than a science.”

Comerica requested the tax court to hold a trial in St. Paul, which may significantly lengthen the settlement of Prince’s estate and generate more legal fees at the expense of Prince’s heirs.

Reference: NBC News (Jan. 3, 2021) “IRS says Prince’s estate was undervalued by $80 million”

 

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