Did the decedent own any real estate?
If they owned a home or other types of real estate, we first need to look at the deeds that were recorded on their property to determine the current owner. Each recorded deed may alter ownership in some way. I have seen deeds that were recorded, but the county discovered errors and refused to register a change in ownership. If the decedent sold someone a piece of property, but prepared the deed themselves and made errors, it can be difficult for the buyer to gain control of the property, especially after the seller has died.
If the home is still in the name of the decedent, we look to see if they owned the property jointly with anyone else. Joint Tenants automatically gift their ownership to the survivors that are listed as Joint Tenants with the decedent. This works great for couples, unless they die at the same time, or unless the survivor is mentally incapacitated.
Joint tenancies are a problem for children. Property gifted to your children at or after death are free of capital gains tax, which is about 20% of the increase in value between your original purchase price and the new sale price. Capital gains can only be wiped away if a gift happens at death or later. Gifts made by adding a joint tenant prior to death cannot avoid the capital gains tax. Please do not add your children as joint tenants! If you have already done so, please have them deed it back to you.
If a home is owned solely by someone who has died, we are forced to go to probate to get the authority needed to sign on behalf of the decedent and transfer the property. A power of attorney is useless after someone has died. Instead, a judge must name someone as the Personal Representative of the decedent. If they left a Will that named a Personal Representative, it won’t officially give them authority until a judge issues an Order naming them as such. Once named in an Order, they can sign a deed that transfers the property.
If the home was placed in a Trust properly, we normally will skip court entirely. The Successor Trustee has instant authority to transfer the property by deed. They simply need to record an Affidavit of Death of Trustee with a copy of the death certificate. This shifts control of the property from the original Trustee to the Successor Trustee.
Did the Decedent own a Bank Account? (Or any type of financial account?)
Financial accounts have an easy option for transferring the money to your heirs at your death: naming a Pay on Death Beneficiary. You can only do this by communicating with your financial institution. They will note your choice in their records. There is no cost for doing this.
If you have set up a Pay on Death Beneficiary, the named heir can visit the bank, prove the death of the decedent, prove the identification of the heir, and sign a few forms to receive the money and assets held by the bank.
When a married couple owns a bank account jointly, Utah law gives the surviving spouse the money in that account. This includes second marriages where the surviving spouse is not the parent of the Decedent’s children. If you enter into a second marriage, please take note that any accounts you hold jointly with your new spouse are automatically owned by the surviving spouse.
This is just the tip of the iceberg in regards to estate planning issues that come up in a second marriage. Talk to an Estate Planning Attorney located in your state (not just a relative that happens to be an attorney) to learn how both before and during a second marriage, you can plan for gifts to your new spouse and your children without being steamrolled by state laws that control how to make those gifts for you, even when you have written a will!
Sometimes I have seen parents that add their children as signers on their bank accounts. This gives the children access to help pay bills. Unfortunately, doing this has many drawbacks and could have been accomplished without those drawbacks if the parent had instead signed a Power of Attorney giving the child authority to access the bank account. Joint signers, set up without a power of attorney, will inherit the funds in the account. Some of those heirs may feel like gifting a portion to the other children, but they are under no legal requirement to do so.
If you have not set up a Pay on Death Beneficiary, and there are no joint surviving owners of the account, then the account will be frozen when the bank learns of the death of the owner. This process sometimes will lock out heirs while allowing ongoing expenses like monthly subscriptions to continue draining the account, even when the decedent is no longer using those services.
If the decedent owned less than $100,000 to their name at their death, the surviving heirs can submit a Small Estate Affidavit to the Bank. This affidavit is created without going to court, but it has the same power as if the person signing it had sworn to tell the truth while sitting on the witness stand. The bank must release the funds in this case to the heir or pay penalties for refusing to do so. Large national banks are notorious for dragging out this process with their legal departments.
Did the Decedent own Vehicles at their Death?
Vehicles registered in Utah, whether a car, truck, or even a mobile home, large trailer, boat, motorcycle or off road vehicle like a 4 wheeler, have a license plate and title document. When someone dies, we need to get their name off of the title to move forward with ownership or sale of the vehicle. If there were two people on the title, then the survivor can file a death certificate with the Department of Motor Vehicles (DMV) to have the decedent’s name taken off of the title.
If the decedent is the only name on the title, then the DMV will only transfer ownership if the decedent had (1) no more than four vehicles registered in their name, and (2) the total value of those vehicles does not exceed $100,000. If the decedent had 5 vehicles in their name, or just two new trucks worth a total of $101,000, the DMV will not release the titles. The only option now is to go to court, and get someone named as a Personal Representative of the decedent’s estate. With the court appointment, the Personal Representative has the authority to sign and transfer ownership of all the decedent’s vehicles.
There are many other issues that can come up after death. It will cost you nothing to meet with me to discuss your situation in a free consultation. Learn how you can distribute the decedent’s estate and avoid errors that could bring unexpected heirs or creditors to your door demanding payment after you have already mistakenly distributed the estate. Knowledge is power. Let me give you some of that power. (See my ad on page 7, in the E-Edition)
This article will discuss general principles of law. Please do not take action based on this article alone. Only an attorney can discuss your specific situation with you and then help you determine your best course of action.
