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Subject:  Re: 401K/IRA in probate Date:  12/9/2018  2:26 PM
Author:  vkg Number:  128250 of 129521

Best wishes to you. Suggest you post back in a year or so and share some of your experience and some thoughts on what to do and what to avoid, for the benefit of others.


The first year anniversary of my sister's death is next week.

1.) Make certain that beneficiaries are current for all accounts that allow beneficiaries which includes all retirement accounts, pensions and life insurance.

2.) Consider a trust.

a.) Death isn't the worst situation. My MIL does have a trust and my husband is the successor trustee. She has severe dementia and hasn't been able to handle her affairs for several years. She resigned as trustee and signed a POA when she was still (barely) competent. It is easier to have a trustee resign than invoke the incompetency clause.

Establishing and maintaining a conservator-ship is extremely expensive and to be avoided if there are competent trustworthy family members.

b.) Probate in my area takes a minimum of a year. It took almost 3 months to obtain Letters of Administration. Fortunately, we have a family lawyer that is good and can be trusted.

c.) Probate is more expensive than a handling a trust.

d.) Probate may result in cleaner title than a trust. This statement was made by the retired financial adviser that leads a financial planning seminar for a local investment group to which I belong. I don't fully understand this statement but a probate judge would likely have authority to determine which claims are valid.

3.) Patience
It may take effort to track down administrators for accounts. Not immediately succeeding doesn't mean failure. Find out what is required for the next attempt and keep trying. Set a specific time limit for a response then follow up.

a.) The Administrator is not allowed to know who the beneficiaries are for retirement accounts. Providing the Letters of Administration and Death Certificate allowed one administrator to transfer the account to the estate but they would never make a statement to me that there was no beneficiary.

b.) 401K and IRAs are administered through separate organizations within the same brokerage.

i.) Provided Death Certificate and Letters of Administration to the retail broker. They said they would forward it to their 401K administrator.
ii.) After a week, I contacted the 401K administrator and ask if they had received the paperwork. The response was "We don't receive documents from the retail side."
iii.) Provided them with the documents.
iv.) Account was eventually moved to the estate EIN
v.) Ask the retail side if they had received information from the 401K side.
Their response was "We don't receive documents from the 401K side."

4.) Establish a relationship with a lawyer.
We have had a trust and wills. We been through handling my FIL's trust when he passed away. When events occur, it helps to have access to lawyer that you can trust.

When my FIL passed away, his lawyer had predeceased him. This was fortunate. I didn't like or trust his lawyer. My MIL didn't like the lawyer that took over. Not certain how the current lawyer was found. He handled my FIL's estate and has been handling stuff for my MIL and us since then. I had no hesitation to contact him when my sister unexpectedly passed away.

5.) Seek help from family and friends when overwhelmed. Hire help as needed.
My fractured elbow was indirectly a stress fracture. My sister was somewhere between a collector and a low level hoarder. I let the situation overwhelm me and took a hard fall on a tile floor (not at her house). My husband tore a muscle because he was frustrated at her stuff and tried to move something that was too heavy for him.

6.) NO DYI estate planning.
MIL's neighbor just passed away. There was an attempt at a trust but the signatures aren't correct. One of the son's is estranged from the family. One son is an alcoholic. They aren't friends. We are minimizing contact and don't ask questions. It is a mess.

A statement in the financial planning seminar my investment group hosts was "A bad will or trust is worse than none." Trying to avoid

7.) Auction houses
Mixed feeling regarding the success of sending stuff to auction. The fees are significant. It removed a room full of stuff from the house. The stuff was mostly low level collectibles. The stuff has sold but not at great prices. What it did give me was a good evaluation of what was worth selling and what can without guilt be donated.

The statement "What someone paid for an object has no relationship to its resale value." is mostly true. My sister bought art work from local artists. She liked the artwork and it was worth the price to her. It doesn't mean that there is a resale market for that art work. I sent email (through their website) to one of the artists explaining the situation and offering to give them the artwork. I never heard back from them.

8.) Social Security does not honor a POA or Trust
Making any changes for a family member who isn't competent is a problem. All we wanted to do was change my MIL's mailing address to ours. She is not able to appear at a Social Security office or sign if we arranged medical transport. We were told that my husband would have to take over essentially conservator-ship, establish a new and separate checking account for her, and be responsible for annual reports to Social Security.

The funny part is that we had put in a change of address for her. Social Security changed her mailing address based on the change of address with the Post Office.
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