More stuff we don’t like to think about…

I recently saw a post (copied below, genericized for privacy) in a financial forum on Facebook where someone was really angry that a bank had “taken advantage” of their situation by wiping out the husband’s accounts to pay a loan after his death. I completely understand why the poster was angry, and heartbroken – unfortunately the bank was not wrong, or greedy, the bank was following the terms of the loan.

We often don’t realize how much bureaucracy is involved with death, particularly a spouse or parent (or anyone where your legal/financial status is tied to that person). Unfortunately, pretty much the only thing that doesn’t lock down after a person passes is their social media presence, that sometimes is almost impossible to turn off (although getting easier).

Getting ourselves organized for death is something many of us avoid, I’m procrastinating and avoiding even thought I just learned this lesson! My Mom passed in the fall of 2017 – we had a few months and she’d been pretty organized – and even so, there have been wrinkles.

Here are a few small steps you can take now so that day to day administration of your life isn’t blown up while you’re processing a heartbreak.

1. Consolidate into as few accounts as possible
2. Ensure that for any joint accounts you’ve talked to the institution to understand what happens if one of you passes – ask them directly “what if one of us dies” – everyone uses euphemisms because death is something that makes us squirm – it’s really important to have no fuzziness on this.
   • Being a beneficiary is NOT the same as being a legal account holder after death
   • Being on a joint account does not mean the account will move to your name
3. If you have a power of attorney for someone you’re aiding, know that dies with the person; you will no longer be able to make any decisions
4. Check the cost of life insurance for any outstanding loans. The example that prompted me to write this would have been much less stressful if they’d had life insurance. The few times I’ve had to interact with life insurance the payout is immediate so it’s well worth it if that loss of income or a loan re-payment would wipe you out.
5. Make sure you are an authorized person on any utilities or other household accounts. The conversations with the phone company after my Mom passed were ridiculous “We’ll need to speak to Ann”, “Ann’s dead”, “I’m sorry, we have to speak to the account holder”. This was after I’d been managing her account for months prior to her death, I must have missed some paperwork step because after she died getting them to work with me took several tries.
6. Create a list of any auto-pay accounts
7. If you’re on a joint credit card, call the issuer, find out which of you is primary and what happens if one of you dies.
8. If one of you does most of the financial stuff and does it online, share the login info. It’s a pain, but much less than the alternative.
9. Definitely consider setting up a trust; it’s not that expensive when you compare it to all the other costs, particularly the costs of not having a trust.
10. Write a will. I’ve provided some links below. This doesn’t have to be more than a few hundred dollars and could save thousands.

Here’s my advice on getting the legal docs done. Avoid fully doing it yourself online. Yes, many people do, but if there’s an issue down the line you’re having to scramble at the worst time. Get names from local referrals. You can do this 2 ways.

1. Ask people from work, church, other social groups if they have an attorney they’d recommend. I focus on people who’s decision making I trust, who I know have similar scenarios to mine. For example – asking a wealthy person for their attorney’s name is likely to be out of my budget 🙂
2. If personal referrals are not a good avenue for you, talk to the local legal association,  county clerk’s office, or possibly even library, to find out who is offering straight-forward low cost services. The goal here is to be getting reasonably objective referrals from non-biased sources.

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Copied from FB post

As many of y’all know, John died a couple of weeks ago, survived by a wife and two small children and he was our sole provider. Today I filed a petition for years support to transfer all of his assets to myself, including his bank accounts. When I went to ABC Credit Union today, with papers showing I was the administer of his estate, they proceeded to place his personal loan in default even though he’s never missed a payment, and withdraw all money from his accounts to satisfy the loan. This includes his last paycheck that was deposited into his account (which was over 3x the normal amount) that was suppose to aid his family. I’m so DISGUSTED that they took advantage of a family who just lost their head of household, for a few thousand dollars. If you bank with ABC, NEVER EVER take out a loan with them or this could be YOUR family.

Edit: My husband was a 32 year old, health-conscious man who went into cardiac arrest while at the gym. This was sudden and it can happen to anyone. I just want to make the families of our town AWARE of what they’re dealing with when banking with ABC before they end up in my position.

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My question is – can banks/credit unions really wipe out a savings account to satisfy a personal loan if their is no insurance on the loan and the accounts are at the same institution? (I am assuming that he did not have a will and that the savings account was in his name only.)

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Links for getting organized:

NOLO – https://www.nolo.com/legal-encyclopedia/how-much-will-lawyer-charge-write-your-will.html

“It’s very common for a lawyer to charge a flat fee to write a will and other basic estate planning documents. The low end for a simple lawyer-drafted will is around $300. A price of closer to $1,000 is more common, and it’s not unusual to find a $1,200 price tag.”

AARP – https://www.aarp.org/money/estate-planning/info-03-2011/cost-effective-wills.html