NOTE: The answers provided here are only partial answers to the most frequently asked questions. We encourage you to visit the links on this website that relate to your topic of interest, which will provide you with important details to your questions. The website will also give you information regarding our experience in helping families, like yours, who have recently experienced the loss of a loved one.
Q. DO I NEED AN ATTORNEY WHEN FILING WITH PROBATE?
A. Most of the time we recommend you use an attorney when going through the probate process. There may be times when we feel people can deal with the probate process on their own. For instance, when probating a small estate (when decedent’s total assets consist of personal property and do not exceed $40,000.00). The decedent may own survivorship real estate or other survivorship assets exceeding $40,000.00 in value and still qualify for this simple procedure. Having said this, your personal preference may be to still use an attorney, for the peace of mind doing so may bring you.
Q. HOW SOON AFTER THE LOSS OF A LOVED ONE MUST I FILE WITH PROBATE?
A. If a will exists, it must be delivered to the probate court within 30 days of the decedent’s death. Be aware also that certain tax documents must be filed within six months of the decedent’s death. There are specific guidelines based on the size of an estate as to the types of forms that must be filed.
Q. CAN I CHANGE BENEFICIARIES IF I CHOOSE TO DO SO, AND HOW DO I DO THIS?
A. When you become the owner of assets left to you by a decedent, you have the right to change the beneficiaries on insurance policies, and other financial accounts, as often as you would like. This is usually accomplished by submitting change of beneficiary forms, or quite often can be handled by your financial advisor. You should exercise caution when choosing a beneficiary. One reason for this is because beneficiary designations override your will. As an example, a carelessly named beneficiary on a financial account can cause a loved one to be disinherited, a disabled child to lose government benefits, and heirs to be hit with a big tax bill. We recommend reviewing all of your beneficiary designations regularly and most certainly after you experience a life-changing event, such as the loss of a loved one. One last important note, beneficiary designations on retirement plans don’t carry over when you roll a 401(k) to a new employer’s plan or to an IRA, or when you convert a regular IRA to a Roth IRA.
Q. IN ADDITION TO AN ATTORNEY, WITH WHAT OTHER PROFESSIONALS SHOULD I BE WORKING?
A. In many cases you may also want a financial planner and an accountant on your team. Working in unison, they can be very effective on your behalf with issues such as proper asset diversification, designing an income distribution plan, tax concerns, as well as other issues.
Q. HOW DO I DEAL WITH BANK AND INVESTMENT ACCOUNTS LEFT TO ME? WHAT DO I NEED TO DO?
A. One of the first things you will need to do is to have the titling of all accounts placed in your name, and to remove the name of the decedent. HOWEVER, this should not be done before you meet with a qualified financial advisor who has expertise in working with families such as yours, who have recently experienced the loss of a loved one. He/she may be able to help you prevent the loss of significant tax advantages by making sure title changes are done correctly. The same rule would apply to any beneficiary changes you may be considering. If you click on our link titled About Us, you will find information regarding our experience, and the process we use in helping families like yours. If you have already consulted with someone you feel is qualified to help you, we would be happy to provide you with a second opinion.
Q. WHAT DO I NEED TO DO IN THE CASE OF A PENSION?
A. The first thing you will want to do is notify the company of the deceased’s passing, so that future payments will be stopped. In the case where you may have a pension plan that allows for a continuance of pension payments to come to you, these future payments can be adjusted accordingly, by notifying the company’s Human Resources Department.
Q. HOW DO I PLAN FOR MY FINANCIAL FUTURE GOING FORWARD?
A. Whether it is setting up an income you cannot outlive, protecting yourself in market downturns, maximizing your returns based on your ability to handle swings in account values, figuring out the best way to make charitable contributions, or coming up with tax efficient strategies, the most important thing is to work with someone you are comfortable with, but who also has the knowledge and ability to assist you in developing a plan.
This is where you will most likely find the services of a qualified financial planner invaluable. You could be facing a need to provide income for yourself for many years to come. The question is how do you plan for this with the most assurance possible that you will not outlive your income? Unfortunately, the majority of people do not plan for this.
Q. SHOULD I GIFT MONEY EACH YEAR TO REDUCE MY TAXES?
A. Gifting is a method sometimes used to help reduce taxes. However, there are so many strategies to explore, including gifting of assets, that a complete review of your financial circumstances is necessary to make any decisions that will benefit you, and future generations the most, when addressing tax planning. This is an area where a team effort on your behalf among your financial planner, your attorney and your accountant would make the most sense.
Q. IS THERE ANYTHING I CAN OR SHOULD DO TO AVOID PAYING UNNECESSARY TAXES?
A. YES. This question is addressed in a number of our links on this website. Attention to investing properly, for the most favorable tax advantages is only one aspect. Avoiding unnecessary interest and penalties by filing forms on time, is just as important. There are many strategies that may be used to pass assets on to future generations. These strategies may offer tax advantages to you now and in the future to your heirs.
Q. MY FAMILY AND FRIENDS ARE GREAT, AND ARE OFFERING ME ADVICE. IS THIS GOOD FOR ME?
A. This is another question we get often. Obviously, it is great to have the love and support of family and friends. However, unless their needs and concerns are identical to yours, though we know their intentions are sincere, the outcome to you could very well not be in your best interest.
Having said that, if you do have a relative or close friend you rely on for advice, you should definitely have them be a part of your dealings with whatever professionals you choose to work with. They should attend any meetings you have with your financial advisor, attorney or accountant. Doing this will be both supportive to you, and at the same time eliminate any confusion that could occur, if you just shared with them the results of the meetings with any professionals on your team. A lot could get lost in translation, which might result in your family member or friend misunderstanding what actually was discussed. This may lead to a misunderstanding of why certain recommendations were made.
Q. HOW DO I CHOOSE A FINANCIAL PLANNER?
A. Always choose a specialist, not a generalist. By that we mean, the person who does your taxes, may not be the person to help you manage the rest of your financial needs. For instance, you probably would not go to your primary care physician for open heart surgery. You would want a qualified heart surgeon who has done many open heart surgeries through the years. With this in mind, we encourage you to visit the link About Us, where you will find information regarding our experience, and the process we use in helping families like yours, who have recently experienced the loss of a loved one. We feel strongly that one of our objectives, with everyone we work with, is to evaluate all of your specific options, discuss them with you, and then engage the ones we feel will be in your best interest. When the advisor you are working with begins to sound more like a sales person, and not like a consultant helping you with the issues you are trying to resolve, it is probably the time for you to consider changing advisors.
I AM A VETERAN (OR THE SURVIVING SPOUSE OF A VETERAN). ARE THERE BENEFITS I MAY BE ELIGIBLE TO RECEIVE?
YES. Our Veterans’ Benefits link explains these possible benefits, and their eligibility requirements in some detail. We strongly suggest you visit this link for many answers to the many questions you may have. In addition, we cannot stress enough that you contact your Regional Veterans Service Office. Their sole purpose is to help veterans and their families, and work on your behalf. We have worked with survivors of veterans who were told by their state that they were not eligible for veterans benefits, and after speaking with their Veterans Service Office, found that they indeed were eligible for certain benefits. Contact information for Connecticut Veterans Service Offices can be found on our Veterans’ Benefits link.
Commonwealth Financial Network® does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.