Column: Legal issues following a death
–Generally, the days following a family member’s death are spent with funeral arrangements, notifying friends and family, and handling the care of the decedent’s pets, dependents and home. But there will be certain legal matters that will need tending to as well.
Immediate Legal Issues following death
A legal pronouncement of death is required. If there was no doctor or hospice nurse present, you will need to call 911. A death at home, if not under hospice supervision, may require a coroner to determine the cause of death.
The person named in the decedent’s Health Care Directive is the party who has the authority to decide whether an autopsy is performed (if the law does not require one), which mortuary should receive the body is sent to, and whether the decedent will be cremated. If there is no Health Care Directive, the decision is made by the next of kin. If there are two persons with equal consanguinity (say, siblings) and they do not agree, a court order may be required.
Organ donations are not possible following a death, but tissue donations might be. If the decedent wished to donate tissues, contact their doctor or hospice immediately.
Order several death certificates—you will need them for insurance claims, the filing of the will, affidavits pertaining to real property, and government agencies.
Actions to Take Within a Week to 10 days
Locate the deceased’s will or trust, if any. In California, a will must be filed with the probate court within 30 days of death, even if no probate is anticipated.
Contact an attorney to review the steps necessary to transfer the decedent’s estate to the rightful parties. Do this before accessing any of the deceased party’s bank or investment accounts.
Make a list of the decedent’s assets, how title is held, and dollar amount (if known). Make a list of creditors and amounts owed as well.
Accessing Non-real estate Assets In the First Month
A power of attorney is not valid after a death. Thus, it cannot be used to access the decedent’s accounts.
Some of the decedent’s assets may pass by beneficiary designation, including life insurance, annuities, and retirement plans. The parties named as beneficiaries will provide the death certificate and file a claim to obtain the asset. The beneficiary designation will control the distribution despite a will or trust that may say something different.
If a decedent had a bank or investment account with another person (spouse, child, friend) on title, that account will now belong to the other person on title. This is true regardless of anything stated in a will or trust. Even if the account was supposed to be shared with, for example, the other children, only the person named on the account has a legal right to the account.
As a named party on the account, they are treated as the owner and will not even need a death certificate to access the funds.
Accounts held in a trust can be accessed by the successor trustee. If there is already a co-trustee, for example the surviving spouse, the co-trustee can continue accessing the account, but must review the trust (and should consult an attorney) to determine what the trust requires following a death. Some joint trusts created by married couples may require that upon the death of one spouse the trust splits into two trusts—one for the decedent’s share of assets and one for the surviving spouse’s share. If there is not already a co-trustee on the account, the named successor trustee will need a death certificate and a “certificate of trust” verifying that they are the successor trustee in order to take control of the accounts. Again, the successor trustee must review the trust and carry out its terms and should consult an attorney to do so.
If the decedent was the only party named on an account, a probate will be required if total assets in the estate (i.e. assets that do not have beneficiary designations and are not in a trust) have a value in excess of $166,250 (as of January 1, 2020). This is true whether the decedent had a will or not. If the total assets are less than $166,250, a “small estate affidavit” may be used by the executor of the will (or the legal heir if there is no will) 40 days after the date of death. In both circumstances, an attorney should be consulted.
Transferring Real Property
If the decedent owned real property as a joint tenant, an affidavit of death of joint tenant must be filed to transfer title to the surviving joint tenant. If instead title is held as a tenant in common, or in decedent’s name alone, a probate will likely be needed.
Real property held in a trust will require an “Affidavit of Death of Trustee” in order to clear the decedent’s name from title. The successor trustee is then the legal party who can make transfers of the property in accordance with the terms of the trust. Transfers between spouses and from parent to child can be exempt from property tax reassessment as long as the claim for exemption is made.
Transfers to Spouses
When the decedent had a surviving spouse but no will or trust, a probate may be necessary depending on the type of assets and whether they were community or separate property. But there is also a Spousal Property petition, which can be used to transfer community property outright to the spouse in certain circumstances.
Long-term Estate and Trust Administration
The executor of an estate is responsible for the payment of the decedent’s creditors (up to the value of the assets in the estate), distribution of assets, whether through probate or other methods described herein, as well as the decedent’s last income tax return. This process can take as long as a year, and sometimes more.
Even when there is a trust in place, there is a process that must be followed. Initially, this requires heirs (the people who would inherit were there no will or trust) and beneficiaries (the people or charities named in the trust) to receive specific notice from the Trustee and a copy of the trust. They are then given 120 days in which to contest the trust. During this time, the Trustee is gathering assets, determining creditors, and preparing to distribute assets according to the trust.
The time following the death of a loved one is an unfortunate time to have to deal with legal matters but waiting too long can cause significant confusion and expense in the future. Handling issues early and with the help of a knowledgeable attorney can help ease some of your pain.
Teresa J. Rhyne is an attorney practicing in estate planning and trust administration in Riverside and Paso Robles, CA. She is also the #1 New York Times bestselling author of “The Dog Lived (and So Will I)” and “Poppy in The Wild.” You can reach her at Teresa@trlawgroup.net.