The death of a loved one is a traumatic event that presents both emotional and practical challenges. It can change your finances, your future and how you feel about your future. Financial obligations don’t disappear when a person passes on and without a good plan, heirs can get penalized with outstanding obligations, tax liabilities, probate costs and more.
The sooner you alert banks, credit cards and other institutions, the faster the process can be. Most accounts will require “reregistering,” or updating the account ownership to a beneficiary or to the estate of the deceased. Depending on what type of assets the decedent owned, there may be different ways to update ownership or distribute assets. If a beneficiary was named, the process could move quickly – bypassing any probate issues. Calling a Janus Henderson Representative is the best way to streamline the process.
Let us help.
Contact a Janus Henderson Representative at 800.240.4313 to get started.
It can be a difficult time to think about collecting documents, but it’s important to have an understanding of all your loved one’s affairs. Use this brief list as a guide for the most important information you may need.
Financial institutions and probate courts use the death certificate as proof of death. To obtain certified copies of the death certificate, contact your state's vital records office. A good rule of thumb is to obtain at least 10 certified copies for various organizations that might need to be contacted during this process. The death certificate will also have the Social Security number of the deceased, which will be required to update any accounts.
If no beneficiary is listed on an account, the estate representative or executor must provide probate documents, such as letters of testamentary, to change ownership of the account. These documents prove appointment of the representative to the estate. They must bear an original stamp, seal or signature of the probate court and must be dated within the last 12 months. However, if a beneficiary is listed on the Janus Henderson account, then no probate documents will be needed. Only the beneficiary or estate representative may initiate the change of ownership process.
Inheritance tax waiver
If the deceased individual's state of residence was Alabama, Indiana, Ohio, Oklahoma, Pennsylvania, Puerto Rico or Tennessee, you may need an inheritance tax waiver depending on the state’s requirements. If you think this may apply to your situation, please contact a Janus Henderson Representative for details.
Trust documents help clearly identify the successor trustee(s) of the trust. To change the trustee(s), you may need to provide a photocopy of the pages identifying the trust, the successor trustee pages and the signature page of the trust document under which the trust was established.
There are many options, choices and pitfalls when it comes to inheriting assets. A tax or legal professional can help you sift through the noise and make better decisions – especially if other family members or close personal relationships are involved.
Tax professionals can help the beneficiaries or executors with estate disbursement and can also provide a clear picture of outstanding assets and debts before involving the courts or incurring any other administrative costs. They can also answer questions about keeping any assets or distributing them in the most tax-efficient way.
Probate attorneys can assist with more complex estate, trust or will questions. They can answer questions about estate distribution among family members, or what to do in the case of unlisted beneficiaries.
Things get much more complicated when an estate includes a business, commercial real estate or any other asset that requires special ongoing handling. You might want to consult experts if you need to manage, appraise or sell a business.
Many estates include a mix of retirement and non-retirement accounts, individual/joint investments, custodial agreements or others. You may be the beneficiary of some or all of these accounts. In that case, you face two options:
Keep it invested.
Take some time to review the asset allocation mix set in place by the deceased. They most likely created it with themselves in mind. The mix they selected may not match the beneficiaries’ needs and should be reviewed. However, keep in mind that any moves made in a non-retirement account may have tax consequences. If it’s a retirement account, there may be ways to stretch out any required IRS distributions and keep assets invested longer.
Cash it out.
If this is the option chosen, make sure to understand the tax implications. Besides the federal and state taxes that could be associated with the "cashing out" of inherited assets, there may be additional IRS rules to be considered, especially for retirement accounts. For non-retirement accounts, you may want to look at the cost basis, or the amount that has already been taxed. Cost basis is used to help you report a gain or loss associated with the selling of shares.
There are many different rules and options depending on your decision. Contact a Janus Henderson Representative for assistance.
Contact Janus Henderson with Questions
A Janus Henderson Representative can help you understand your options. Contact us at 800.240.4313 with questions.