When dealing with an estate, you really never know what you will find…and miss! It’s usually beneficial to bring in a professional to help you sort out all the ins and outs of the estate so nothing gets missed during the process.
Earlier this summer, my husband lost his grandfather. Pop, as I called him, had a great life and lived to the age of 90 despite his many health issues he encountered throughout his 80s. At times, it felt as if my husband was his uber driver going from one doctor to another nonstop. No one in the family would have guessed he’d live to 90, and always expected his wife to outlive him. Well did he prove us wrong!
He was a great man, had two sons, had three grandchildren, and a great granddaughter. He also got to hear the heartbeat of my little one, which made him very happy. Pop really was a man about his family, and because of that, he did a very good job planning for his loved ones. Therefore, it was no surprise to me when my father in law called me up to ask a few questions about his estate and the many life insurance policies he had. I’m a sucker for these types of policies, I know I’m a nerd, but I find them extremely interesting and cool!
The earliest policy we found was from the 1930s, and the death benefit was $500. Wow, I know that won’t get you much now a days, but that was a pretty penny back then. The policy was first bought by Pop’s parents, and they paid $0.15 a week for that type of coverage. And you may know the name of the insurance company, Metlife. Back then, parents bought life insurance coverage on their children to cover funeral costs in case anything terrible happened to their child. We found about 8 other insurance policies in his pile of documents and a few other items that added to his growing estate.
By tracking an old 1099 tax statement, we found out he also owned 101 shares of Prudential stock. No one would of known this if they didn’t do a little digging and found that 1099, and it would of costed them $10,000. Some other additions to his estate included additional life insurance from his old policies. You see whenever Pop took out a new life insurance policy, he was able to choose how he’d like to receive his dividends. Some people will take the dividends in cash, some will use the money to reduce their premiums or payments on their policies, and some will use the dividends to buy additional life insurance. Now remember, Pop was a family man and always put his family first, so guess which option he choose every time? He used the dividends to buy more and more life insurance for his family, and because of this, there was thousands of dollars of extra life insurance. You wouldn’t know this if you didn’t know how to read the original life insurance policy. From these additions, the estate grew by about $30,000, which may or may not seem like a lot to you. But hey, an extra $30,000 is still an extra $30,000, right?
What about if you’ve already settled an estate and now think you might of missed something? Well here is a great website to see if there is any money outstanding somewhere: missingmoney.com. You never know what might be lurking out there unless you search a little. The investment and insurance companies aren’t responsible to let you know if they have some of your decedent’s money, it’s up to you.
I remember one person saying if you don’t like someone, name them the executor of your will. Kind of a twisted sense of humor, but so many estates can be a complete and utter hot mess. The executor is the one who has to find all the inheritance, deposit it into the estate account, probate the will in court, and complete multiple tasks. It’s no wonder they can charge the estate for their time, estates can take 1 year to multiple years to settle. And don’t forget you have to deal not only with the money part of the estate but also the anxiously waiting family for their inheritance. We’ve heard one couple say at the funeral their sister-in-law was asking for money for her son’s college, AT THE FUNERAL! You can see why deaths cause so much friction between families. There are ways to make sure it doesn’t happen with your family, so you potentially leave your family in an even better place than before. Wouldn’t that be nice? If they can not only survive it, but thrive after, which is what Pop did with his estate. So here are my 3 recommendations when dealing with any estate:
Jessica Weaver, CFP®, CDFA™, CFS®
Any opinions are those of Jess Weaver and not necessarily those of RJFS or Raymond James. Raymond James does not provide legal or tax services. Please discuss these matters with the appropriate professionals.
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