Parting gift

Financial caregiving eases pain of closing estate

Your Money

May 02, 2004|By Lorene Yue

Joyce Moore has seen it all too often. Family members who should be focused on grieving are instead frantically rooting through paperwork to unravel financial mysteries left by their recently departed loved one.

The deceased's will details how assets should be distributed, but it doesn't help find those items, said Moore, president of Joyce Moore Financial Services in Macungie, Pa.

Moore has seen situations in which the executor of a will doesn't know he or she has been assigned the task until it's too late to ask questions.

"A list of assets should be provided to the executor at the time of the drafting of the will," she said. Financial care giving -- helping an older relative round up details of monetary assets, insurance policies and retirement funds -- is necessary, but it's a tough subject to broach.

"None of this is an easy conversation, and your parents don't have a [legal] duty to tell you," said Sally Hurme, an attorney with AARP in Washington. But when "mom or dad dies, someone is going to have to close the estate, sell the real estate and pay the final debts."

If your first attempt to bring up the subject is met with, "It's none of your business," come back with a less threatening approach. Explain that you're not interested in how much is in those accounts; you just want to know where the records are kept so that you're not scrambling through an unfamiliar filing system in a crisis.

"The most important thing is to know that it exists," Moore said. "Otherwise, the only way people find anything out is by watching the mail, and that can take six months to a year. Some statements, such as pensions and annuities, are sent out once a year."

If the older relatives are still skittish about divulging the details, recommend that they compile all of the information and put it in an easily accessible spot or hand it to the family attorney or clergyman for safekeeping.

But don't have your parents or relatives stash that information in a safe deposit box unless you have a key to the box. And in the case of a long and debilitating illness, it might be wisest for the sick person to grant a trusted relative or friend power of attorney to handle financial affairs.

Lorene Yue is a Your Money staff writer.

Checklist of information you'll need to gather

Here are the basics you'll want to know about the financial affairs of your parents or an older relative:

Social Security number.

Safe deposit box number, its location and the whereabouts of the key.

Where tax records are kept.

Where you can find homeownership papers, such as mortgage and title.

Wills and estate-planning paperwork.

Name of accountant, attorney, stockbroker or financial adviser.

Investments such as mutual funds, certificates of deposit or bonds.

Contact name and account numbers for pensions and 401(k)s.

Account information for utilities or any bills on automatic payment plans.

Details of additional real estate holdings or business ownership interests.

Bank account numbers.

Auto and other vehicle titles.

Details of outstanding debts.

Funeral and burial wishes.

Insurance policy numbers.

How to create a secure future for children with disabilities

When you are collecting information on your parent's assets, make sure you compile the same details for yourself, especially if you have a child with a disability. Then make sure that a trusted individual, most likely an attorney or executor of a will, has access to that paperwork when needed.

"You always want someone to be in charge," said Kurt Kidder, senior adviser at the Estate Strategies Group in Chicago.

Rounding up the financial information is just part of the equation when dealing with children with special needs.

Kidder suggests setting up a special-needs trust or private supplemental needs trust that specifically provides funds to pay for all the extras in your child's life such as vacations, clothes or recreational activities. Kidder also suggests checking with state laws to see what could disqualify your child from getting federal assistance.

"If you leave your money directly to your child, then the state will use that money up," he said. Government programs typically provide a certain level of benefits and services for those with disabilities.

If your assets are left to your child, the state could seek reimbursement, leaving your child with little money for things such as going to the movies or buying books.

-- Lorene Yue

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