Two of my siblings have asked my mother for a loan. I think loan agreements should somehow be added to the trust, as I am the trustee, and I want to make sure they are repaid or will have to deduct them from my disbursements. Has anyone dealt with this before?
A simple IOU loan doc form can be used. I’m sure that you can find something free on the internet. Just make sure that the debt is payable immediately (or 6 months or some other term) to the estate/heirs/Trust upon your mom’s passing. And if they don’t pay it off, the Trustee can net it out of their prorata share of the Trust. The issue of course, is if there is not enough left over, in which case you’ll have to call the loans.
btw: make sure that mom charges AFR for interest, so she/you won’t have to deal with imputed income.
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The IRS usually will not hunt down family loans under $10k per one estate attorney I spoke to. Larger intrafamily loans have to be documented and interest charged as @bluebayou said above. And the “lender”needs to include the interest when filing their tax return. We decided that a gift would be much less hassle.
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My in laws gave my SIL a large sum of money and wrote it into their trust as an advance on her share of their estate. They put my H on their cottage deed as joint tenant & wrote in their trust that it’s an advance on his share of the estate.
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My friend loaned a lot of money to her folks to pay for the 24/7 care they needed. When the folks passed the surviving kids all agreed she should be repaid before they divided the remaining estate. I don’t believe it was in writing but she kept records of what she spent. She has received the money she advanced on behalf of her parents.
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Oops
New topic - Ensuring credit card ownership is set up as expected.
In another thread, there was mention about difficulties after spouse died because he was sole account owner on a credit card… she was an authorized user (ie had a card in her name). That got me thinking about our main Visa card. We each have our own card, and the bill lists both names. But geez, the Chase United Visa website is quite vague on this point (just has info about address, email addresses). So I called the 800-numberand confirmed that we are both considered joint owners, and it would not be cancelled if one of us dies. That’s good because we have soooo many autopays. If the account were cancelled and autopays rejected we’d be without internet service, a bunch of Apple cloud etc stuff. Recently we even put our electric/water bill on Visa autopay.
I’ve been keen on making sure that bank accounts and investement assets have joint ownership (or at least survivor benefits). But this topic had not occurred to me.
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Thank you for sharing that information. I will start checking our cards. We now have three (which I don’t like, but H had his reasons) and we put almost everything on autopay. There are some things I wouldn’t miss if they were canceled, but I’d hate to have the water or power cut off. It’s easy for me to imagine that in the grief of the moment I would not be thinking about billing issues or credit cards.
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I looked into this on our AmEx HHonors card. It’s in husband’s name and I’m an authorized user. They do not allow joint account holders, unfortunately, since our purchases give us Hilton points. I did look into whether or not I could use the banked points if husband goes first. No, but I can get the points transferred with a bunch of proofs that I’m the heir, but only if I already have my own HHonors account before DOD. So I created my own account, although it has no points so will sit unused hopefully for many years to come.
Our VISA has myself and son as joint account holders and husband as authorized user. I added son many years ago to help establish his credit record. If I go first, husband can keep using it.
I have two more credit cards only in my name; one is an Amazon VISA only used for purchases there and the other is for personal items I choose to buy with my own money. Neither should cause husband an issue since he can use the other cards.
Our joint checking account is in both names. I made sure all my financial accounts had established survivor transfer after updating our will eight years ago.
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Sadly I have two friends who became widows last week. I’ll try to find a way to bring up the topic. (In one case I had worked with spouse at a big corporation, was able to bring the family a fabulous document from a retire FB book with all the pension, benefits etc info. It also mentions SS and other general info, but not credit cards.)
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Marilyn, can you get your own credit card with a Hilton benefit, just to make a couple of small charges a year? It may help to place a few points in your account in case you need to make that switch.
I’d rather not get another card just for that, but will keep an eye out for any alerts on my HHonors membership. I’m sure there are other ways than credit card usage or hotel stays to acquire points. Not sure if the membership requires any frequency of activity.
Oh, I can link it to my Lyft account. Not that I ever take Lyft…. And apparently some restaurants; I’ll check on that.
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One thing I learned at our credit union, each member can have an account and can name a co-owner, but the account belongs to the member.
We each had a checking and a savings account and had each other as co-owner.
Each account had different purposes in running our household, but when my husband died, as a deceased member, his accounts had to be closed.
The funds came to me, but I was down to one checking and one savings account and had to rethink those processes.
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Our main checking account was at a credit union, but we also had one I never used at Wells Fargo. The credit union, while a joint account, had my husband as the owner. When he died they gave me 6 months to close it; I had to get all the bill pay set up to change the account to my name. Still not sure why it was so difficult, but we finally got it done. While I had new checks printed, the checking account number is the same, only my member number changed.
I do not use the WF account other than for the safety deposit box. We were grandfathered in for the box is free and there are no fees on the savings and checking account. Once I can move my mother’s jewelry from the safety deposit box, I will close that account. I didn’t want to close too many things at a time as I was worried about my credit score. So far it hasn’t budge, still in the excellent area, so I should be good to close the accounts.
While all our credit cards were in one of our names and the other as an authorized user, the better cards had my husband as the card holder. As I wanted to keep 2 of those, I had to have those changed to my name, working with their death departments. Amex screwed up, so it took months to get the cards in my name. I needed them to just transfer ownership so I didn’t lose the rewards attached to the cards. Closed the WF Visa in his name as I have my Costco Visa.
It was more work than I wanted to do after losing my husband, but I got it done.
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Interesting. I wonder if some of this varies by bank/credit union. My mother had me defined as co-owner on her checking account at our credit union (though my name was not on the checks, and I did not realize tis til after she died). After she died, they took her name off and told me that I would have to close out the account after estate settled (or maybe they said 6 months?) since it was associated with her SSN. Eventually I opened a new account there for that money, with my SSN (and sister as beneficiary).
I will ask more about this at my credit union. Our joint checking account, which has autopay for many of our bills (including LTC premium), is really my account ….with account number based on my old employee number. If I died first, my husband would be in a jam if it got closed out.
When I was trying to figure out how to set up beneficiaries/POD on all my bank accounts, it seemed that every bank had a different way of doing it. I wish it was a law that every kind of financial institution had to have a tab on their webpage explaining their process. How to set stuff up, what happens when an account holder dies, etc. It would be nice if you could do a lot of this stuff online, but at least put the information out there on what they require. It was like pulling teeth in many cases. And people/account holders die every day! This isn’t some rare/odd event that they deal with.
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Or is this just a credit union issue (which still requires membership for an account ‘owner’)? Commercial banks have no such restriction.
When my last parent passed, the then co-owner of their checking account (my niece living in the home to help out) at BofA became full owner of the remaining funds in the account, upon presentation of the death cert. Didn’t matter what the Will or Trust documents said.
Edited to add, my local credit union was really easy to work with in setting up a checking account for my folks Trust to pay bills. (I was Trustee.) They were much easier than dealing with either BofA or Chase. So something to consider for folks in that situation.
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And although I’m not a BOA fan (with all the various acquisitions of local and regional banks sometimes the changeover is pretty stressful) I found their “estate services” team fantastic and efficient. And the reps kept a paper trail (or more accurately- ever contact was tracked in the account) so I didn’t have to repeat the story, produce the documents (death certificate, letter of appointment as executor, bank statements of the deceased). It was all captured and then transferred/managed very quickly.
When I did the final/final/final closeout (after every bill or possible check had been presented) and had the information to have the proceeds transferred to the heirs, the rep suggested cashier’s checks which I think cost $25 each. So as I was ready to write the last check on the estate account the teller said “of course there is no charge”.
The acquisition team? Not so helpful. The estate services team? Got to give them credit.
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I believe this is just a credit union issue at the main account holder is a member, while the other account holder is not. While I didn’t know this when we opened the account a long time ago, boy did I learn when trying to change the account to my name only!
I mentioned to many that I would have never expected WF and our business account to be easier to deal with than my credit union. The credit union was so user friendly and helpful prior, that in a million years I would never have expected the issues to change the account. WF was just a lot of paperwork with untrained bankers; the business account at Synovus was so easy and quick I had to wonder if it really was now in my name!
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I had exactly the same experience with BOA’s estate department when my mother died. In general I hate Bank of America for many reasons but they did a good job with closing out her accounts, both investment and checking/savings, and distributing the proceeds of her trust.
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