Legal/financial/general info needed: sudden death of a spouse

Hi all. I wish I didn’t have reason to ask this. My sister’s husband–of only 3.5 years–died unexpectedly on Sunday. We still don’t know what happened; he wasn’t home at the time, and the autopsy/medical examination is, for some reason, taking what feels like an awfully long time to come back to us with info. (We can’t even schedule the funeral before we know when my brother-in-law will be released to the funeral home.)

Likelihood is that it was a heart attack. He was 48, in good health, but had a history of a heart attack 20 years ago. Nothing since, though, and as I said he took excellent care of himself. But you never know.

Anyway. My sister is devastated, after waiting so long to find a remarkable man to love her the way she deserves, and for her to care for equally… only to lose him way too soon. I’m helping her emotionally, as much as I can, but looking ahead I know there are other things that will need to be dealt with. Worse, there are things I know we don’t know that will also need to be dealt with, but we may forget it.

I’ll call him Mike. Mike died without a will. He ran his own business out of their apartment, had his own bank accounts (both he and my sister had separate accounts), probably had a savings account somewhere. Since he had to go out to meet clients a lot–he worked helping small businesses set up point-of-sale systems–he had very tight security on his various laptop/computer/phone devices (in case they were stolen). He changed the passwords often, which is good computer security hygiene but difficult now, because my sister, let’s call her Carla, doesn’t know the latest passwords.

Obviously we’re going to have to get an accountant (Mike didn’t have one) and probably an attorney who deals with estate planning. One thing we’re all fairly sure of is that Mike did not have debts, or if he did, they were negligible. He was adamant about paying off credit cards ASAP, and paid various bills via cash or check.

In addition to the Point-of-sale business, which was active income, he also had somewhat passive income working as a credit card payment processor (or setting up payment processors… not quite sure how to explain this). He set the various online stores up to allow them to accept credit cards, and in return he received X% of sales.

Whew. okay, the difficulties I see are:

  • Somehow breaking in/figuring out how to get into his computers/devices

  • Getting in touch with his active point-of-sale clients, who’ll need to find someone else to service and support their systems. There’s also informing the company for which Mike was a vendor; he sold a few different POS systems–yeah I know POS is a terrible acronym, but that’s what they’re called–so there’s more than one that needs to be informed.

  • Figuring out where his bank accounts are. This one seems problematic because as I understand it, since he died intestate and Carla wasn’t on these accounts, she isn’t entitled to get access to the accounts without going through probate.

  • How to deal with the passive income? If these stores made an agreement w/Mike to pay him this percentage of their sales, is there any way Carla can continue to receive this income if she takes over Mike’s company (if that’s even possible)? Or does Mike’s passing immediately make those agreements void?

  • What about money he’s currently owed? When the checks arrive they’ll be made out to his business name. This may be a really stupid question, but this is money that’s still counted toward Mike’s estate, right? The clients don’t get out of paying what’s owed just because he died, do they?

  • What about his credit cards? Do they need to be cancelled immediately? I know he has some automatic payments through them (e.g. for his webhost), so arrangements like that need to be dealt with.

  • To answer a question you might ask: no, we don’t think he had life insurance. (I know, I know, this is basically a huge cautionary tale for married couples to get their plans in order.) But he may have a retirement fund somewhere. Hopefully going through his papers–and his computer system if it’s possible, as I know he scanned a lot of his old documents rather than maintaining the paper versions–will help us identify such things.

  • More info: They rented their apartment and luckily Carla’s name is on the lease, so there’s no mortgage or home insurance to be dealt with.

Okay I know this is a lot. But I’m trying to get the bases covered so I can be prepared, and help my dear sweet beloved sister through this. Offhand, for those who’ve been through this–or if you’re an estate attorney or a financial planner (though I know you’re not OUR attorney or financial planner, and it’s not to be considered advice, etc. etc.)–do you have ideas on some of the above questions, and also, any other areas/details I’ve missed and shouldn’t forget about?

Sigh. I can’t believe this is happening. Mike wasn’t just my sister’s husband, he became my friend too. Just such a kind, generous, funny, irreverent, intellectually curious, impassioned man. He would have gotten along with the SDMB well, though probably end up in the Pit a couple of times for getting into arguments in GD. :smiley:

Thanks in advance if you can help out.

Oh man, what a situation!! My heart goes out to your sister and your whole family.

I’m guessing that Mike or his company was signed up as a reseller for some merchant account service, like Authorize.net. It’s highly unlikely that there is an agreement between Mike and a customer that the customer figures out an amount and hands it over to Mike. Instead the company that does the credit card processing automates the payouts, and the customers don’t even know that Mike gets a cut. Mike does the selling and some of the support on behalf of the merchant company and in return they give him a cut of what they make off his customers. It’s probably the same company through which he processes his own credit card transactions.

If that’s the case then whoever takes over the business will just take over his reseller account, just like they would take over his merchant account for processing credit cards. They/the business would still be in charge of selling/renewing the customer’s merchant accounts every year and doing support on behalf of the merchant processor.

A lot of this will also depend if his business was incorporated or not. If so, the business and contracts would survive him. Otherwise, the business receivables are part of the estate.

Do you have his tax returns? Did they file jointly? That will show what interest and dividend interest he received if significant and the firms he got it from. If everything is in the computer you might get copies from the government:

Thank you very much, ZipperJJ, FinsToTheLeft and PastTense. These are all quite helpful.

Merchant account, yes, that’s the term my mind was groping for, ZipperJJ! Thanks, it was really bugging me. And of course you’re right–pretty sure he was a reseller for one of the big ones, FirstData I think it’s called? If there’s a way to transfer the reseller account into my sister’s name, that would be a huge relief as far as fairly regular income goes. He wasn’t doing much active selling to new accounts anymore (perhaps none, actually), as his primary business took so much time. So it would just mean maintaining the existing clients–something I can help with (despite my inability to remember the term, oops).

FinsToTheLeft (gotta ask, what’s the derivation of that username?), until you asked that question I had been thinking of his business as a sole proprietorship, but I just remembered that no, the business was called, let’s say, Mike’s Thingies LLC. So if it’s an LLC that means the business can be passed on/sold/continued (or whatever a financial planner might advise)… right? Although from quick research, it seems to depend on the operating agreement and whether Mike made any reference to what should happen in the event of his death/incapacitation. I guess this is just something we’ll have to learn after going through his things.

And very good point, PastTense, re: the tax returns. I hadn’t even considered them. I don’t know yet if there are hard copies (I’d imagine there are, especially of the most recent ones–aside from the whole not-making-a-will thing, Mike was responsible as hell) but that’s something I’ll keep a close eye out for.

Thanks again for the help so far, guys. The funeral’s tomorrow and we probably won’t be able to focus on financial stuff until after the weekend, and I know my sister will find professionals to help dig through all this, but having some guidance gives me comfort, for some reason. I don’t want this hanging on her head and I’d like to start this process from a vantage point with at least a minor amount of knowledge.

I’m a small business owner in Canada, and we don’t have LLC companies here but I believe that it is not a shareholder corporation that you can transfer. You would need a US-based Doper to weigh in, or a local lawyer/accountant once you can unravel things.

My username is a Jimmy Buffett reference to a song called Fins. I’m a little more left finned/wing so I picked that as my username.

Best of luck to you and your sister.

Hiring professionals is going to get expensive, so you need to do as much as you can before going to them.

The first priority is getting into the computer. We just had a thread on this:
http://boards.straightdope.com/sdmb/showthread.php?p=19571482

Either add to that thread or start a new one describing exactly what kind of computer it is. Are there portable drive backups? You might just be able to read the files from there.

Sorry to hear this. Have her contact her county probate office and find out what she needs to have herself declared the executor. She’ll need the death certificate and to fill out some forms.

Find out what bank he used. Once you have the approval from the probate office, you can go to the bank with the probate authorization to get access to the account. Then you can look at the various withdrawals to figure out where he has other accounts like credit cards and such.

If you can’t find the tax forms at the house, contact the IRS office and see about getting copies of his older filings. That should show any non-retirement accounts where he received dividends or interest. The IRS may also know which retirement accounts he has since those funds have to send forms to the IRS.

Without a will, all assets should transfer to her. I would assume that would include the business. If she knows which POS vendors he used, she may be able to contact them to see if there are other agents in the area who would might want to buy out the business. The POS vendors may also be able to provide her with the full list of his clients.

Does Mike have any children? Ex-spouse?

Regards,
Shodan

Oh I do appreciate your responses so much!! Thank you, everyone.

Thanks also for letting me know of your username’s derivation, Fins! :slight_smile: Re: the LLC deal, I think the law here in NY seems to imply that after the death of a single member LLC, assuming there aren’t any specific provisions for dissolution in the company’s operating agreement, the heir(s) have a certain number of days to request to keep the LLC going and transfer it into his/her name. At least if I’m reading this correctly, which is a big “if.” Luckily we do have a couple of attorneys in the family who can at least help translate some of the legalese, even though their areas of expertise lie elsewhere.

PastTense, good point about the fees, and I’m grateful for that timely link! As far as I know there’s a backup drive, though I don’t know if that too is locked up tight; we’d also want to get into his phone, to which he was perpetually attached like a lamprey to a shark. Someone suggested that if we removed the SIMM card it might be possible to put it into another phone of the same make and access it that way, but that sounds way too easy to be true. Anyway I’ll investigate that link further, thanks!

filmore, that list is getting printed out (or at least copied!)–wow, that’s immensely helpful! Gadzooks what a headache for my sister. I’m glad she’s got us to help her out.

Shodan, no kids, but an ex-spouse who’s currently somewhere in Ireland. Good grief, do exes enter into things when there’s no will specifying their inheriting something? That would be… very unpleasant. He does have other relatives whom I’m sure Carla will consider if there are any assets that can be distributed (especially anything sentimental, or that she might have heard Mike discuss wanting to give to the relative(s) some day).

So much to do. Funeral is tomorrow, and we don’t even know the cause of death yet, which is adding more stress/dread to the situation. But at least I’m getting a better idea of some of the financial angles we’ll be dealing with once all that stuff’s over.

Thanks again very much!

My condolences for your loss. My best advice is to find a good estate attorney and let them sort this out. It’ll be expensive, but worth it.

An ex-spouse should not be entitled to anything unless there was something specific mentioned in their divorce decree.

Let this be a lesson to anyone reading - please draw up a will, even if you don’t have a lot of assets. Otherwise the state will determine how your assets are distributed and it may cost your family a lot of time and expense.