I have recently discovered that my FIL used to keep vast amounts (in the thousands) of cash hidden in the house (for tax evasion purposes) and how I found out was that they have just moved and MIL showed me over $1000 which she had hidden in the house for when FIL dies - he has had lung cancer for over 2 years now. Her reasoning is because when a spouse dies, all joint bank accounts are frozen for 2 or 3 months.
I guess my question is twofold:
Are the accounts frozen when a spouse dies and if so, how does the recently widowed spouse eat and pay bills?
How wide spread is hiding money in the house (other than for chemically inbalanced mattress stuffers) - it is not something that my family have ever done, other than keep money boxes, maximum $100 or so.
#2 depends on the age of the person. I have known of people in their late 50’s and up who do this, but, other than just not trusting banks, I don’t know why.
If the accounts are truly joint, then they are NOT frozen in any way. That’s the main attraction of joint ownership, to prevent any hangups when somebody dies. Your MIL can continue to access the money just as if FIL was still around. The banks neither knows, nor cares, if FIL is still around. It was her (and his) money before, and it’s still her money afterwards.
Conversely, accounts which are NOT joint are immediately wrapped up in probate, with the details depending on the state law. The instant the bank learns of the death, the accounts go on freeze. They have employees that monitor the death notices and coroners office for just this eventuality. They’ll know long before your distant relatives get the word.
Spouses and other connected parties can get at that froozen money only through the court system. The court controls distributions to ensure nobody robs the estate, but at the same time they know that former dependents, as presumptive heirs, still need to eat.
Finally, accounts can be set up as “pay on death”, or “transfer on death.” If set up that way, the money legally becomes the property of the payee before the body has cooled. The only administrative process is to provide the bank or whoever with a certificate of death, which usually takes a couple of days to get from the coroner. At that time the bank changes the ownership on the account and the payee is in business.
I’m not sure that you’re gonna get factual answers to this part of your question, but probably not worth making you send it to another forum.
Because I’m in the biz of buying coin collections(for 35 years), I’ve experienced quite a few incidences of heirs/loved ones finding cash/coins hidden in the house. They always make for a good story while I’m working on buying the coins/paper money.
I’d have to say that it’s a dying thing. I believe that when the generation born during and after WWII dies, I won’t see even 1/10 th of the hidden stashes of cash that we do today. It was no doubt a depression/bank failure mentality.
We foumd several thousand dollars my dad squirreled around the house. There is no special reason that the money is in any way illicit – some kind of off-the-books tax avoidance scheme. There is no reason she can’t ise it for whatever she needs to.
My father was a working stiff, and it’s pretty hard to hide your income when tax is being reported and withheld by your employer. So if your FIL was on a payroll or pension for all his income, odds are very good that tax already been paid before your FIL ever got it.
But, IANALawyer, and IANANZ resident, I only have dead parents.
My mom and grandma found much money hidden around the house when my grandfather died. I’m not sure how much. Given his age and history, it could have been because the Depression made him mistrust banks. I suspect it’s also because he didn’t want my grandmother to know how much money he had on hand.
My mom used to have cash in a can in her closet. She wanted ready cash in case of an emergency. When she was dying, she told my dad to be sure to take my sister and me out to lunch with the money in the can.
There was a couple grand in the can! So we’ve been having some very nice lunches.
It’s a dying thing with most Americans, but there is a subset for whom this is not unusual at all. I know that farming families in southern Delaware often receive cash for their chickens or corn. Because paydays like this are much less frequent, Dad will usually have a bankroll of hundreds that he keeps somewhere. “Savings” can be done through a bank, or by peeling a few hundreds off the top of each payday and stashing them somewhere. All other expenses are paid in cash, where possible, and most major purchases are accompanied by a trip to the bank.
Likewise, many of the businesses operating in a tourist town are cash-only. I worked for a business that probably took in between $1,000 and $10,000 per day each day of the summer (a 90 day stretch) and had fewer than 20 employees. I was paid and tipped in cash; my official pay was noted in a log-book so that Social Security payments and taxes were taken out. I have no evidence to suggest that this is the case, but I imagine it would be trivial for the owner to ignore a certain amount of his earnings on paper, keep them stashed in cash, and use that as his slush fund for the winter. If that were the case, he could certainly have tens of thousands of dollars tucked away.
I work in a combination retirement community/nursing home where the average age of a resident is 84. We have found that we must always advise family members to look in everything when they clear out the personal effects of their deceased family member. These people squirrel money away everywhere. They hid $5.00, $10,00, $100.00 bills all over the place. If you do that now and then, over the years, it adds up. It is not a tax evasion scheme, just cash for emergencies. Unfortunately, they forget where money is hidden and don’t tell anyone. Every book, magazine, old newspaper, food containers, etc. often has a few dollars hidden away. I agree, it is their experiences with the bank failures of the past and distrust of government in general that contributes to this. Also, they don’t know about the bank account options available to them. Many times, in this WWII generation, only one spouse knows anything about money or banking. Surviving spouses (the wives) are clueless about their assets, but that is another issue. The other contributing factor to this is the paranoia that is common to older folks. Even when the family tries to help, they can’t because their parents have waited too long are no longer rational about the management of their assets. Very old men are the worst, because they can’t believe they are no longer capable of taking care of their finances, therefore, they don’t accept help and make huge mistakes.
So if you are clearing out property of an elderly family member, watch out for the “emergency money” that could be hidden anywhere.
I understand the depression years resulting in mistrust of banks, but my in laws are only 60. For my generation in NZ and Australia, hardly anyone around me seems to carry cash, let alone stash it but I wonder if there is a difference between rural and urban in cash using and hence the need to stash somewhere.
When I went to Broken Hill in outback Australia about 3 years ago, they had only just installed Eftpos machines in the supermarket.
If they’re 60 then they were born and raised pretty much on the tail end of the depression, so they undoubtedly grew up hearing stories of hardship.
Although my parents are in their late 60s and they don’t squirrel money away. My grandmother did, though, and she was in her 80s when she died eleven years ago. We found several thousand stashed in books and what-not when we were clearing out her place.
I believe that when the generation born during and after WWII dies, I won’t see even 1/10 th of the hidden stashes of cash that we do today. It was no doubt a depression/bank failure mentality.