Dear Mr. Miller:
My Dad recently died. There’s me, my two sisters and my one brother. They all agree that I should be in charge–I guess because I’m the most organized and they all live out of town. I think my Dad had a lot, but he was pretty secretive and didn’t really tell us what he owned or how wealthy he was—or wasn’t. How do I get started identifying and gathering his assets so the four children can divvy it up? I don’t have a lot of time as I’m working full time supporting my own family of three.
Son With No Time
Dear No Time:
Finding and taking control of the assets is what we refer to in estate settlements as “Marshalling the Assets.”
Who’s In Charge: You’ve pretty much hit the nail on the head trying to figure out where to start. For the uninitiated, that’s always the first question. So here’s the surprise–the place to start is not with the assets but with the documents. Were there any? Any Trust, any Will? If there were, then you need to read them to determine who your Dad named to be in charge (i.e. the Executor or the Successor Trustee). It may not be you, it may be one of your siblings or maybe even a bank or trust company. And the documents may even refer to specific assets that may or may not still be in existence.
Who Was the Attorney: Then determine who the attorney was who drafted the documents. Although you typically do not need to retain him and may retain another attorney, it may be wise to find out if he has a file with any information in it. With a Will, the attorney was probably one of the witnesses; and with a Trust the attorney may well have signed the document. The attorney may have a wealth of useful information, depending on how old the documents may be. For example, in my office we complete a property schedule each time we review the client’s estate planning situation (ideally every 2-3 years but typically a bit longer). Although our property schedule may not name the specific bank it will indicate approximately how much was held in bank accounts, securities accounts, and how many parcels of real estate were owned (and in what counties and if any were out of state), life insurance, etc. So the information the attorney has could be quite helpful.
If you can’t find information on the attorney or the documents are so old that the information is out of date, there are other avenues to investigate. To an extent you are going to turn into a Private Eye.
Search the House: Search your Dad’s residence. You may find income tax returns which will reveal many of his investments. You may find property tax bills, bank, securities company, or life insurance company statements.
Real Estate: For starters, where did he live; did he own that property. If you don’t know, a simple review of the property tax records (open to the public) will often clear up the mystery. Many attorneys can run a search of the county records to see if he owned any other properties.
Financial Accounts: Get the mail forwarded to you through the post office. Every financial institution sends out periodic account statements. Once you have those, you merely need to look at the statements to see how much money/securities is held in the accounts and how title was held.
Life insurance and annuities policies: These companies generally send annual statements. But take a look at his checking account records and see if any life insurance companies were paid from the account or made deposits into the account. Once you identify the companies, then you will need to contact them along with your Dad’s social security number. You can get that from either his income tax returns or from his CPA.
Hire an Attorney: I don’t care what anyone says regarding how easy it is to settle an estate–it isn’t! And you are going to put in effort and it is going to last for at least a few months if not longer. At least, that’s true if you want to do it right. After all, you need to obtain control of all of these accounts and assets. Do you know how to do that? You need to value all of the assets–do you know how to do that? And, no, lower value is not necessarily better–at least not for income tax purposes. So you are going to want to hire an attorney. Some tips on how to do that are here and here.
Liability: There are a myriad of details and issues with which you must deal. The assets, of course, but also your three siblings (the beneficiaries), any creditors (like the electric, cable, phone company or the charge card institution), and the taxing authorities (IRS, State Income Tax Agency, County Property Tax Authorities). You have responsibility, which is simply another word for liability, to all of these entities and people. A screw up here or there could cause you to get sued, so you have to be careful. And that’s where the attorney can help you big time–to stay out of trouble and, hopefully, out of court.
Conclusion: If any of the assets are in California or your Dad lived in California, give us a call at 760-436-8832 for a free initial consultation to start solving your problems and gaining access to the assets.