My mother died a few days ago. (Thanks in advance for your condolences.)
My sister and I are her sole heirs, my sister is her executor, and one or both of us are named as beneficiaries of her various bank and investment accounts. There is no disagreement between us about the division of the funds: we are going to split them evenly. (The total in question is well under $50,000.)
We have online access to all the accounts and can easily transfer money from them to our own accounts right now.
The question is: is there any reason we shouldn’t do so before the banks are officially notified about her death? Once they find out, will they find it unusual or suspicious or criminal that money was moved shortly after her death? Could we get in some kind of trouble, or will they be fine with it as long as no one complains?
Sorry to hear about that. It sounds like the distribution will be amicable at least. A joint owner on the account can do whatever they like with the money. But if you aren’t listed jointly and just have access, because you have her login or debit card, you should wait until the executor has been appointed and then the executor will distribute the funds. One thing to remember is that debts don’t necessarily just proof away upon death. If you take money out and creditors don’t get paid, they might sue.
One thing to do is check for beneficiaries on the accounts. If beneficiaries are listed, the money goes to those people without going through the probate process. You can begin that process with just a death certificate.
My late wife was an estate attoryney and did this stuff for a living. I never worked for her, but I ate a hell of a lot of dinners with her and learned a lot.
Any moving of money that you do first is wrong, probably illegal, and will bite you in the ass.
If you are actually named beneficiaries of some account, then the bank/brokerage is responsible for paying that money out to the named beneficiaries promptly upon formal death notification. Like the next day or so.
Note that “named beneficiary” on an account is different from a beneficiary named in a will. Typically these are called pay on death / transfer on death (POD/TOD) designations. Where Mom in advance told her bank, using their forms, that when she dies, Bob & Sue Jones each get 50% of the balance.
IF that is the situation you have this will be very easy. As soon as the bank has a death cert, they’ll know to send you the money. In the case of a brokerage, they may require you to open an account at that brokerage so they can transfer your share of Mom’s holdings in-house. Or they may not require that and they’ll be fine about sending Mom’s shares at e.g. Merrill Lynch to your existing account at e.g. Charles Schwab.
Conversely, if what you mean is you’re named in her will to get her assets, then it’ll be a slower process but the same outcome. Step 1 in any case is starting to contact an attorney to handle the probate of the will. Which can be pretty cheap, despite the horror stories, if the estate is small, and simple, and there’s no fighting amongst the relatives.
Sorry to hear about Mom. It’s easy to decide to get busy with the administrivia and sorta forget “the reason for the season”. Seems like a good coping mechanism, but may not be.
Thanks. We are aware that there will be debts and expenses, and aren’t planning to drain the accounts, just move some of the money to our own accounts.
As I mentioned, my sister is the executor. What is involved in getting her officially appointed?
Start by hiring an estate attorney. Everything waits for that. They need to file a simple 1 or 2 page form with the court to appoint sister as the legally recognized executor. Your Mom’s will says what should be done about an executor, and much else. The judge says what will be done.
All this is utterly routine quick easy stuff for them; just all new and unfamiliar to you.
The more information you can gather about the estate, such as account statements, any beneficiary designation forms, etc., the more progress you can make at the first attorney meeting.
Getting appointed executor is handled by the count probate court. Do a search for “probate countyname” to find it. They usually have lots of info for regular people to handle it themselves without needing a lawyer.
The reason you shouldn’t touch the money that’s not in your name is because you aren’t legally entitled to it. The money belongs to the estate until the executor distributes the money.
If you’re named beneficiaires on teh accounts this is simple. Everything waits for you to have official death certificates from your county. Typically the funeral home assists you with all that. Once you have those, call each bank & brokerage and tell them: “Mom died. I have a death certificate for you. How shall I send it to you?” They will run with that ball very quickly and lead you every step of the way through their process.
@Filmore’s information is 100% right for all the money (which might be zero) that’s in accounts that do not have named benficiaries.
If there is a will and a trust, this whole situation starts to get very fact dependent on the exact terms of the will and trust and the exact laws of your state. And the exact ownership of each account Mom has. Best to wait until you’ve talked to the trust attorney.
In the usual & typical case, you and Sis would not be the beneficiaries of the will. The trust would be. You and Sis would then be beneficiaries of the trust. And if the trust owns any of these accounts, then they (usually) will not have people like you and Sis listed as POD/TOD. Since the trust never dies, those designations would be moot. Typically. YMMV.
As you can see it gets real deep real quickly and messageboard advice based on generalities and assumptions is asking for trouble.
However, this is clearly not the case with at least one bank account which is jointly in my mother’s and sister’s name, right?
Not that we want or need to transfer any funds before the banks get the death certificate, what possible consequences could follow, since we are the rightful heirs? Could and would the banks or the state complain, sue, or prosecute?
Accounts held jointly with Mom & e.g. Sis are yet a different situation.
it’s clear that your whole scenario is more complex than can be safely dealt with here. Really. Trust me. I’ve seen a lot of horror stories of well-meaning beneficiaries going off half-cocked and creating mess that costs lots of money to repair. All in the haste to get a couple grand out of a checking account to avoid OOP expenses for the burial.
As I said, there’s no need for us to do anything in a hurry. It’s just that there didn’t seem to be any practical or logical reasons why we shouldn’t, since it is [going to be] our money. Which is not the same as there being no legal reasons.
I was just wondering what those reasons, and the possible negative consequences, might be.
I have just been dealing nearly the same situation. My mother died in February. She had spoken with an attorney last year and added TOD designations for my brother and me on her bank accounts, her house, and her car. She had a prepaid burial plan. She also left a will. We checked with her attorney and he said because everything was already set up for TOD, the will was a bit redundant because it specified the same thing. We wouldn’t really need to do anything with the will as long as no one had any problems with the TOD arrangements. We let the bank know she had passed, and they froze her accounts until we were able to bring in the death certificate and proof of our identities. For now, my brother and I have transferred the money into a joint account that we can use to pay taxes and insurance on her house, or take care of any other expenses until the house and other property have been sold. We had a consignment auction this morning for anything in her house that we decided not to keep. A realtor has started the process of helping us sell the house.
Right. For the most part, any joint accounts that had your sister’s name on them are now your sister’s accounts. On a joint account, when one account holder dies, the other account holder becomes the owner of the account. Essentially, that account is now your sister’s account and your sister’s money to do with what she wishes. It won’t be considered part of the estate.
I think it’s important to clarify: are these joint accounts, or are you just named as beneficiaries? And even if nominally titled as “joint” accounts, we’re you really joint title holders, or was it just a convenience account (that is, you were listed as a joint account holder, but really it was only so you could help your mother pay her bills with her own money).
Is there a difference? I think a joint account is a joint account, no matter the reason. Any and all persons listed as owners of the account have access to the money.
It kind of depends on what is meant by “joint account” - people often refer to a joint account to mean that more than one person is able to sign checks , withdraw money , etc. but that can be accomplished in different ways. For example, in some states, you can set up a “convenience account” that explicitly is not a joint account. The second person is not a joint owner, simply an authorized signer in the same way that the person authorized to sign checks on the PTA account or withdraw money form the bowling league account doesn’t own the money in those accounts.
But sometimes , people set up an actual joint account that they intend to use as a convenience account. A lot of time it doesn’t matter - if my mother’s checking account has $2000 and my sister is a joint owner, it’s not worth it for the other three of us to fight for it. If my sister was an only child, it wouldn’t matter. But if there was a quarter million in that account , there’s going to be a fight unless it’s very clear that my mother intended to leave that account to one child. And my sister will most likely be able to withdraw it , if she’s fast enough - but that doesn’t mean she’ll get to keep it.