Does anyone have experience with Estate Accounts?

My aunt died in September and I am the Executor for the Estate.  She was in Pennsylvania, I'm in North Carolina.  It was a small, simple estate, not going into probate. I am the only beneficiary.  I have been cancelling stuff and getting refund checks back.  To date, I have around $400 in refund checks that I don't know what to do with.  I do have an attorney in PA, but her advice was to try to deposit the checks in a joint checking account I held with Doris (that I've been using to pay the bills with).  However, there are no branches of that bank in the area, and flying to PA to do it would cost a heck of a lot more than the checks are worth.  I think I have all of her outstanding bills paid (unless there are some additional medical expenses I'm not aware of yet).

So I was wondering if any of you TCSers have experience with estate accounts, especially for estates that are not in probate, or any experience with dealing with this sort of thing.

Whose name is on the checks? Are they made out to you, as executrix, or to your aunt's estate?

Do you know anyone in PA that you trust to deposit the checks for you, if you mailed it out?

Draco said:

 
Do you know anyone in PA that you trust to deposit the checks for you, if you mailed it out?

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Yes. But would they let her do it since I'm the one who is executor?  Maybe I need to call the bank and see what they can tell me.

thats a good idea.. call the bank and see. maybe you need to sign the checks first or something

Maybe I could get her a limited POA, I was looking at that earlier. First I'll call the bank, maybe tomorrow or next week.

My mom passed in June. I am also the executer of her estate as well as my dads POA. Our attorney filed her will with the court. They put notices in the paper that any and all outstanding debts should be forwarded to our attorney. I think it is 6 months they give for any outstanding debts. I was told not to take moms name off any of the accounts as checks may roll in for years. I am still getting refunds from Blue Cross. I would not add anyone to POA, the bank should let you send checks and deposit for you. I spend more time on my parents finances every week than I do on my own. My parents banks are great to me so it is more time consuming than a hassle. I wish you the best of luck!

KittyMomma1122 - I'm sorry about your mom. It sounds like her estate has gone to probate?  My attorney said that since it was a simple estate (one beneficiary - no property owned other than a car) we could avoid probate and just file something with the court in "two or three months."  Hopefully, she knows what she's doing.  So far I'm just paying her bills with a joint checking account that we had, and that's where attorney told me to try to put the refund checks.  I guess my best option is to call that bank to see if they can tell me the best thing to do.  I've talked to the other bank where she had an account  about an Estate Account but I need more information before I go that route. I  don't think there will be any more refunds coming in.  She lived a very simple life and I've taken care of all the utilities, the car insurance, apartment insurance, medical insurance.  I try to search online and the only thing that ever comes up is when an estate has gone to probate.

You need to deposit everything in a separate account. If you don't, the IRS will consider the money to be your income (and will be taxed as such) since it will be mixed up with your finances. Inheritances under $4M or so (I don't know the exact amount for this year) are not taxed if you prove it's an inheritance.

The name on the checks needs to be either "Aunt Name's Estate" or "Your Name, Executrix of Aunt Name's Estate, and the account needs to have the exact same name. To open the account, you will have to show all the paperwork: death certificate, Will naming you as executrix, your IDs, aunt's social security number, and whatever else the bank needs.

If the checks are made out to you personally, you need to have the vendors reissue them or you will pay taxes on them. They cannot be in your aunt's name since it is illegal to deposit or cash checks made out to a deceased person (and the banks won't do it if they know). Maybe there isn't much tax on $400, but the estate account is for everything that was hers - any cash and money from anything you sell. Open a separate account unless you don't mind paying unnecessary income taxes.

SwampWitch said:

 
You need to deposit everything in a separate account. If you don't, the IRS will consider the money to be your income (and will be taxed as such) since it will be mixed up with your finances. Inheritances under $4M or so (I don't know the exact amount for this year) are not taxed if you prove it's an inheritance.

The name on the checks needs to be either "Aunt Name's Estate" or "Your Name, Executrix of Aunt Name's Estate, and the account needs to have the exact same name. To open the account, you will have to show all the paperwork: death certificate, Will naming you as executrix, your IDs, aunt's social security number, and whatever else the bank needs.

If the checks are made out to you personally, you need to have the vendors reissue them or you will pay taxes on them. They cannot be in your aunt's name since it is illegal to deposit or cash checks made out to a deceased person (and the banks won't do it if they know). Maybe there isn't much tax on $400, but the estate account is for everything that was hers - any cash and money from anything you sell. Open a separate account unless you don't mind paying unnecessary income taxes.

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I don't think my attorney is advising me very well on this, and I can't get her to respond in a timely manner.  She told me, and I've read elsewhere, that you don't need an estate account if it doesn't go through probate.  Everything I have read is based on the estate going into probate. Attorney's advice was that it was "worth a shot" to try to deposit them in our joint account.  There is only one beneficiary on this estate, and nobody is contesting anything. She didn't own anything other than her personal items in the apartment and a car.  I've already dealt with the car and the apartment. Whether I did that correctly or not, it was on attorney's advice how I handled it.  I've paid all her bills that have come in so far.  I'm keeping records of everything, and I've kept the attorney updated on everything I've done to date.

I've already shown the paperwork to the bank, and they are supposed to advise me after it has been verified. I don't think $400 added to my income would increase my tax bracket, but I just don't want to do something illegal.  Inheritance is taxed 15% in PA, but I don't know what part of it they consider since I've already received the bill based on the amount she had in the larger of her bank accounts (which wasn't huge).

My main question about estate account is if there are fees to open it / maintain it, and what happens to the account after the estate is closed.  Bank guy couldn't answer me that. He said no fees to open it, but for less than $400 I can't see they would want to maintain it with no fees - unless it's a law that they have to.

Probate is proving the validity of a will. You don't have to do that because nobody is contesting it and the amount is not large. The inheritance part is the same whether the will went through probate or not.

I think your attorney is not worried since it is a small amount of money. The easiest way by far would be to deposit the checks in the joint account, IF the bank would do it (maybe you can mail them to the bank?). Opening an account with $400 will incur fees, whether it is an estate account or not. If you deposit the checks in your name, you would need to list them as income on your taxes, but maybe that's okay for a small amount, if you indicate it was an inheritance, I do not know. If you received cash for the car, you will need to report that as income one way or another.

Maybe you should get a letters testamentary? Your attorney should be able to help, and quickly, so her fees don't eat up the cash.

Regarding the estate account: you close it after you have wrapped up everything. You can take money out of the account since it's yours, as long as your paper trail shows the money went into the estate account first since it was an inheritance.

p.s. I don't know about laws in your state, so please use my advice only as a starting point.

p.p.s. I'm sorry to hear about your aunt's passing. 

Thanks for the advice, Swampwitch. I looked again, and it's only about $269 in refunds.  I didn't sell the car, I transferred title to my name (on attorney's advice), and I am keeping it. We received $275 for the contents of her apartment, which I in turn paid to the person who was helping me with those arrangements, since I had returned to PA by then and landlord wanted stuff cleared out ASAP.  I wish I had had more time but all of this was coinciding with DH's doctor appointments, biopsies, surgery so I was torn in two directions.

Anyway, I will be filling out an inheritance tax return form PA REV-1500, which has to be paid within 3 months of her passing, that's what I get from the lawyer. 

I'll call the bank in PA see if they have anything to recommend regarding the checks.  I don't really want to have to open an account for $269 if I don't have to.

Call your local court house and speak with the Clerk of Court. That person can give you advice about how to do things.

Misty8723 said:

 
My aunt died in September and I am the Executor for the Estate.  She was in Pennsylvania, I'm in North Carolina.  It was a small, simple estate, not going into probate. I am the only beneficiary.  I have been cancelling stuff and getting refund checks back.  To date, I have around $400 in refund checks that I don't know what to do with.  I do have an attorney in PA, but her advice was to try to deposit the checks in a joint checking account I held with Doris (that I've been using to pay the bills with).  However, there are no branches of that bank in the area, and flying to PA to do it would cost a heck of a lot more than the checks are worth.  I think I have all of her outstanding bills paid (unless there are some additional medical expenses I'm not aware of yet).

So I was wondering if any of you TCSers have experience with estate accounts, especially for estates that are not in probate, or any experience with dealing with this sort of thing.

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You can deposit cheques via mail.  Don't sign the back. Just put "For Deposit Only into Account #  XYZ"  and then mail the cheque to the bank.  I would suggest filing the Will with the court though.  It makes it legal. You don't need a lawyer to file the Will. 

When you say "Refund" cheques, do you mean income tax?  If not, you will have to file a prorated income tax return for her as she was responsible for income tax prior to her death.

Back in the 90's I worked in law and did a lot of wills and estates, but that was a long time ago and that was in Canada where the laws are likely different.

Natalie_ca said:

 
You can deposit cheques via mail.  Don't sign the back. Just put "For Deposit Only into Account #  XYZ"  and then mail the cheque to the bank.  I would suggest filing the Will with the court though.  It makes it legal. You don't need a lawyer to file the Will. 

When you say "Refund" cheques, do you mean income tax?  If not, you will have to file a prorated income tax return for her as she was responsible for income tax prior to her death.

Back in the 90's I worked in law and did a lot of wills and estates, but that was a long time ago and that was in Canada where the laws are likely different.

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I will have to see if I can get that lawyer to verify that she filed the will with the court - I know she said it doesn't have to go through probate, but that's not the same as filing it, right? 

By Refund, I mean money back from places where I cancelled her accounts, such as auto insurance, renter insurance, AAA. 

blueyedgirl5946 said:

Call your local court house and speak with the Clerk of Court. That person can give you advice about how to do things.

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Hmm, never thought of that. I assume I would need to call Clerk of Court in PA, though.

Misty8723 said:

Hmm, never thought of that. I assume I would need to call Clerk of Court in PA, though.

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You probably would. I did read that you are in NC and dealing with a situation in PA. But I think a call to the Clerk of Court there might help get you some answers. Good Luck. I know what you are dealing with is stressful.

Have spoken to a rep from the bank in PA, they have a mobile app and I can either use that to deposit checks or I can mail them to a PO box.  Endorsement is me as Executor.  As long as they have proof that I am executor (they do), it is okay.