Brushes & Budgets

I’ve worked at the credit union since July of 2011. I’ve never imagined having this longevity with one place before I turned 40. With that longevity comes a massive amount of experiences serving in different capacities. This post is surrounding my time in Loan Servicing and a few things I learned about mortality. I’m sure you’ve heard of this heading before but trust me it’s not what you think. So what do I mean when I say “you can’t take it with you”? We’ll explore the title in just a moment. Grab a snack, a glass of water, or maybe even hard liquor because you may need it, and I’ll tell you exactly what I mean. FYI…this is a very heavy topic.

From 2017-2018, I had one primary specialty and that was credit reporting. A secondary specialty I obtained used to be known as, Deceased Accounts.

My first thought provoking question to you all is: Do your loved ones know what to do with your assets once you pass away? I know that’s a little morbid but it’s a very necessary evil. I’ll use myself as the example by answering this question.

No, my loved ones do not know what to do with my assets if I were to pass away.

I own a home with equity, I own a vehicle that has a cash value that’s higher than my loan balance, I have a 401k, HSA, life insurance through my job, and a few accounts. If I dropped dead now, majority of my assets would have to pass through court for the state I reside in. My family would have to pay for my burial fees out of their own pockets first and wait until my estate is absolved.

It’s all problematic.

What happens to everything else though? I’m glad you asked. My family would have to come and speak with Probate Court which is in the Clerk of Courts in my county and let them know about my demise. Probate Court handles matters surrounding the estate of a decedent as well as other matters. Probate is what I’ll be referencing going forward. The Probate will then, release the proper court documents to my family, but it could take time and that’s not without paying a fee. Sometimes that fee is HEFTY. Depending on the court documents, that also may mean an estate has to be created.

Here’s the thing…the car and house I mentioned, can’t be sold/refinanced until my family has these court documents. There’s also the option to surrender the vehicle to my financial institution. In this case, the car would get sent to auction and the proceeds would pay down or payoff my balance. If anything is left, it would be deposited into my account and then may be released to my estate.

I’m going to make things worse. Let’s say I have a Will (Last Will & Testament). The process is the exact same for my state. The thing that differs are the court documents that will be provided. One difference is my Will gets to say, who gets what and that is the power that it holds.

So how do we help our loved ones BEFORE we meet our inevitable fate? What can we do since, you can’t take it with you? I have two suggestions for you: Joint Ownership with right of survivorship and/or beneficiaries.

If I add my family as the beneficiary to my accounts, all my financial institution needs is a death certificate along with documentation about their identity, then the funds will be released. When adding beneficiaries, you financial institution may request you gather the social security number of those you are adding. It’s also advantageous to keep their contact information up to date (review yearly) and make sure the beneficiary is aware that they’re a beneficiary for your accounts. Joint owners have it even better, they can continue to use the account as long as they need too.

There is a big downside. Beneficiaries are only for monetary assets and joint ownership has to occur at the time of funding for a loan. Property is treated differently. With each state having different rules, just know Probate could possibly be involved. Contact the creditor if there is a loan/mortgage or the registrar of deeds for the county the home is in, if the title/deed is free and clear for further instructions.

When my dad died in 2019, he had a flip phone, keys, and his clothes. That was it for his assets. He didn’t even have a bank account. I had been on the other side of things when helping others figure out what to do for their loved ones and now, it was my turn. I got to know what it takes to wrap up someone’s affairs who doesn’t have much. That made things slightly simpler.

You can’t take it with you, is more of a warning. No matter how much or how little you have in assets, the state doesn’t let anyone rest or give you the opportunity to grieve. You don’t want your family scrambling trying to figure out what to do. Set things up to make it as easy as possible because there will always be something that needs to be done. Someone will always have their hand out, from greedy relatives, to paying the funeral home. Let your loved ones worry about what really matters.

Until next time.

Photo Credit: https://www.soundwisdom.com/blog/8-ways-to-live-again-after-losing-a-loved-one