HANDLING THE AFFAIRS OF AN ESTATE WHEN SOMEONE DIES

HANDLING THE AFFAIRS OF AN ESTATE WHEN SOMEONE DIES
by Roger V. McCaffrey-Boss
Copyright by Gay Chicago Magazine and Roger V. McCaffrey-Boss
April 30-May 5, 2009
http://www.gaychicagomagazine.com/advice/legallyspeaking.shtml



Q: My brother recently died due to liver cancer. No one in the family would take care of him except me. Now that he has passed away, what are my rights and responsibilities?
A: First, you need to determine what bills and debts your brother left that need to be paid. You then need to determine what property your brother owned in his name alone and what property your brother owned in joint tenancy with others. Also, did he have life insurance benefits, IRA and KEOGH accounts with named beneficiaries?

If your brother owned his house and his bank accounts in joint tenancy, that property would go to the surviving co-owner without deduction for payment of any of your brother’s bills. Creditors of a decedent may only go after property in a decedent’s estate, that means property your brother owned in his name alone, which does not include joint tenancy property.

Also benefits paid under a life insurance policy, IRA or KEOGH account with a named beneficiary are not considered part of someone’s estate and are not subject to claims of creditors. Accordingly, the life insurance, IRA and KEOGH funds with named beneficiaries would go to those named beneficiaries and would not have to be used to pay creditors or hospital bills.

Second, if there is any property in your brother’s name alone (no joint owner or named beneficiary) you may have to probate the will to transfer the estate’s assets. This means presenting it to the probate court, which declares it valid, appoints you as executor and declares the Heirship of the testator (a formal order stating who the testator’s heirs at law are).

Once appointed as executor you are authorized to administer the estate, which includes paying the debts, taxes and other expenses and distributing the estate according to the terms of the will. Your legal obligation as executor is to go out and marshal the assets of the estate.

Once you have found all the assets, including pension benefits and other employer related benefits, you may have to value the estate assets that don’t have a value. For example, you may need appraisals for a house and other real property and for valuable tangible property like art and jewelry.

Executors are also responsible for making investment decisions and if they are wrong they can be sued for their errors. Executors have been sued for everything from speculating estate money in risky securities to allowing funds to remain idle in a non-interest bearing checking account. Executors can also be held personally responsible for late tax returns, over distributing assets or distributing assets before reserving for taxes.

Finally, because of the enormous time involved in caring for someone who is dying you should be aware of the law titled the “Statutory Custodial Claim” which states that any spouse, parent, brother or sister of a disabled person who dedicates himself or herself to the care of a disabled person for at least three years shall be entitled to a claim against the estate upon the death of the disabled person.

The court will take into account the claimant’s lost employment opportunities, lost lifestyle opportunities and emotional distress experienced as a result of personally caring for the disabled person. The claim must be based upon the nature and extent of the person’s disability and, at a minimum but subject to the extent of the assets available, shall be in the following amounts:

1. 100 percent Disability, $100,000

2. 75 percent Disability, $75,000

3. 50 percent Disability, $50,000

4. 25 percent Disability, $25,000

This means that if your brother was 100 percent disabled and that you devoted at least three years caring for him, giving up employment and lifestyle opportunities and experienced emotional distress you will have a claim against your brother’s estate assets for your lost time and income opportunities.