Here’s what happens with your assets after you die:
“In this world, nothing can be certain, except death and taxes,” Benjamin Franklin once said in a letter.
Unfortunately, those words are as valid today as they were in the 1700s.
Worse, sometimes the two come as a package deal!
After all, when someone dies, their family must go through a lengthy series of tax, financial, and legal steps to sort out the deceased’s affairs.
It will be necessary to determine whether or not there is a will in place.
The executor will be named in the will if there’s a will. In lay-person English, their job is to administer the process by which assets are transferred. These include paying the deceased’s debts, filing their income tax returns, and distributing any remaining assets according to the terms of the will.
If there’s no will, the remaining assets pass to the decedent’s heirs according to the country’s law in which purchases are in control. The court appoints the executor (referred to as the administrator).
The executor or closest family member will need many copies of the death certificate.
It’s essential to get multiple copies of the death certificate. They will be necessary when notifying financial institutions, government agencies, insurance agencies, and others about death. These typically require an original document.
The Coroner provides the death certificates in Hong Kong. It’s a good idea to obtain at least 10.
Family members – usually – will not collect the deceased’s debts.
The deceased’s estate is liable for debts, but the deceased’s family is usually not.
The exception to this is when debts are in joint names/cosigned, in which case the survivor party will be responsible for the debt.
Notably, although the family is not legally responsible for the debts, they could still feel the effects. Any money or assets are in use to pay off the deceased’s obligations before the surviving parties handle anything.
Every group and company known to the deceased will be in direct contact with the Coroner.
An executor will need to contact the banks, savings providers, mortgage providers, credit card companies, and insurance companies to notify them of the death.
Additionally, they will need to get in touch with the “everyday things” that may not immediately come to mind. These include utility, internet, phone, and TV companies—even the deceased’s employer.
The executor will have to file a final income tax return and possibly deal with estate taxes.
“The executor will also have to file a final income tax return for the decedent. On the income-tax return, the executor will indicate the decedent is deceased.”
Also, for certain countries worldwide, death taxes are to be paid. For example, the Executor is responsible for filing the relevant forms if an American has an estate worth US$5,430,000 or a UK Domicile has an estate above GBP325,000. Taxes will be levied on asset values over these amounts.
However, “if an estate tax is due and a return is not in the report, there are penalties for failure to file and file to pay, and interest is in negotiation on any amounts due. The executor distributes the assets without filing the return, the government may have recourse against the executor.”
If an heir wishes to live in a home with mortgage debt, they are responsible for making the payments.
If a person who inherits a house with mortgage debt wishes to live in it, they will be responsible for making the mortgage payments!
The person inheriting can only sell the house once they own it. This may cause problems if the mortgage payments are in amass. How long will the lender not let you pay before foreclosure?
If the deceased rented, what happens to the lease agreement upon death?
The most important thing is for the Executor to find out if the property can be vacated or must continue with the current terms.
Technically, the deceased’s estate is responsible for the rental payments until the lease’s expiration. However, the lease can sometimes be broken. The executor will continue to pay the rent until new tenants move in.
Creditors will have a claim against the deceased’s estate.
Loans fall under the ‘estate planning’ category — meaning that the executor will handle them.
The executor will pay off the deceased’s debts — including car loans, credit cards, and tax loans — from the estate’s proceeds.
But if the estate needs more money to pay off the debts. Provided the deceased was the only one who borrowed the loan, the lender can repossess the borrowed object against or write off the loan itself (credit cards or tax loan).
“When a person dies, creditors have a claim against their estate. The executor pays all of the decedent’s debts with their assets.” “If the decedent’s assets are insufficient to pay his or her debts, then those debts die with the decedent so long as somebody is not jointly liable”.
The executor of the deceased’s estate can reclaim any debts owed.
“A debt owed is an asset of the decedent’s estate. The executor of the decedent’s estate is in charge of collecting the debt. It is important to make sure that debt is in the title so that the executor will have a way to learn about the debt.”
Someone must contact the local post office to stop or forward incoming mail.
Sometimes it’s easy to forget the small, day-to-day things, but it is vital that someone contacts the local post office to stop or forward any incoming mail.
Additionally, it would be a good idea to cancel any magazine subscriptions the deceased may have had.
There’s also the question of what to do with emails and other online accounts.
Sometimes, a person agrees that no one else will be entitled to their online account. The company will delete the report and its contents after death.
But different companies have different rules.
Here are a few of the regularly used:
Gmail account:
- The deceased decides what to do with the account before death.
- A relevant party can submit a request regarding the deceased’s account to close it, obtain data, resolve a potential hijacking, or notify Google that the user has died.
iCloud account:
- When you sign up to iCloud, you agree that your account is “non-transferable” and that any rights to your Apple ID/content in the account terminate after death. The account will begin the erase phase. Upon receiving the death certificate, all the content within the deceased’s account will be erased.
Facebook/Instagram account:
- The account can be “memorialised.” It will say “remembering” next to the name, and no one can log in.
- A person can delete their account before death.
Twitter account:
- A person authorised to act on behalf of the estate or a verified immediate family member can work with Twitter to deactivate the account and possibly delete specific images.
To help your loved ones handle your “full” estate when you pass away, it is worth sitting down to create a list of everything you own. It can include bank account numbers, mortgage lender details, stockbroker accounts, life insurance savings, and anything else you may receive in the mail.
Whatever information is subject to – your Executor/s can handle all of the required duties. I think this should be done in line with your Will.
This allows everyone, including the courts, to understand to who you want your assets to go. It saves excessive time – this takes long enough with instruction to give out your investments. Without them can add years – and costs. It is not free to distribute your estate, so the more information is given, the less your loved ones have to payout.
