A Helpful List of To-do’s for an Especially Difficult Time
Ethan R. Okura
Hawai‘i Herald Columnist
When a family member dies, it can be quite stressful. Not only is there grief, but there are so many things to do. As a general rule, I advise my clients to take care of the funeral, and then after things settle down, to meet with our office to discuss the financial and legal matters.
The following is a list of suggestions that may be helpful when a spouse or parent or other loved one passes away:
- Death Certificates – Usually, the mortuary will give you the form to order death certificates. You will probably need one certified death certificate for each insurance policy, each IRA or other retirement account, automobile and bank account held in the name of the deceased person. Order more than you think you may need, just in case.
- Social Security and Pensions – Contact the Social Security Administration (ssa.gov/agency/contact) and each pension administrator to inform them of the death.
- Joint Accounts and Jointly Owned Real Estate – If your spouse dies, and if you will have more than a few million dollars’ worth of assets someday (now or in the future), do not touch the joint accounts until after you consult an estate-planning attorney. Do not take any money out of the account or write checks (except from a joint account that is needed to pay bills). Until you have checked with an attorney, keep putting rental checks and stock dividend checks into a joint account in the same names as the owners of the property. In other words, the surviving spouse should not take any personal benefit from any jointly held property until the attorney advises you about reducing future estate taxes. Currently the exemption from federal estate (or death) tax is a little over $11 million, but that will drop to $5 million adjusted for inflation in 2026, and the State of Hawai‘i already has a lower exemption of $5.49 million. It’s possible that the federal and/or state exemption could be reduced to an even lower amount. However, most of our clients do not have enough assets to worry about an estate tax. If the surviving spouse will never have more than the exemption amount from estate tax, then there is probably no problem taking money out of joint accounts and putting it into the name of the surviving spouse.
- Real Estate – In Hawai‘i, there are two systems for recording property in the Bureau of Conveyances: Regular System and Land Court System. If the property was Land Court property, a Petition to Note Death has to be filed in the Land Court, along with a death certificate. Show a copy of your deed to an estate planning attorney, and ask whether anything needs to be done.
- Automobiles – If there will be no probate, an automobile can be claimed by going to the City or County Department of Motor Vehicles with a death certificate and signing some papers.
- Life Insurance – Again, if your spouse dies and you may someday have more than the estate tax exemption amount in total assets, do not claim the life insurance proceeds until you have consulted with an attorney. If you will never have more than the estate tax exemption amount, go ahead and contact the insurance agent. Get the claim form, fill it out and send it in with a death certificate.
- IRA’s, 401(k)s, 403(b)s and Profit-Sharing Trusts – If the deceased person had any of these “qualified” retirement assets, it is important to seek advice from a financial planner or estate planning attorney who is knowledgeable. As a general rule, if you are a surviving spouse, you should do a “spousal rollover.” This means that your deceased spouse’s IRA becomes your IRA, and you name your own beneficiaries. If the beneficiary is not a spouse, generally, it used to be best to elect to take the IRA assets spread out over the beneficiary’s life expectancy. However, ever since the SECURE Act passed in 2019, most beneficiaries can’t stretch out the IRA distribution over their life expectancy anymore. Now they must take it out within 10 years, unless they qualify for one of a few rare exceptions. It may be better in some cases to have the IRA go into a trust for the beneficiary instead, so that the beneficiary can be protected from creditors, divorce, and estate taxes. Seek advice on this.
- Revocable Living Trust – If the deceased person had a trust, contact an estate-planning attorney. It does not have to be the same attorney who wrote the trust, but it should be an estate planning specialist. Many people think there is nothing to be done when a person dies with a trust. That is not true. There are certain legal things that have to be done when a person dies with a trust. For example, real estate owned by the trust has to be transferred to the beneficiaries or to the “B” trust if it is an A-B Trust. Oftentimes, we have to get a tax identification number for the trust of the deceased person.
I hope that the suggestions above will reduce confusion during a difficult time.
© OKURA & ASSOCIATES, 2021
Honolulu Office (808) 593-8885
Hilo Office (808) 935-3344
Kauai Office (808) 241-7500
Ethan R. Okura received his JD from Columbia University in 2002. He specializes in Estate Planning to protect assets from nursing-home costs, probate, estate taxes and creditors.
This column is for general information only and is not tax or legal advice. The facts of your case may change the advice given. Do not rely on the information in this column without consulting an estate-planning specialist.
