Checklists

One of the things that the estate lawyer asked us to create for him was a listing of every financial asset we have, with contact information and account details. Every bank. Every insurance company. Every investment organization. Everyone. Everything. They used this to create letters to go to all of them, notifying each and every one that my name and/or my wife's name should be taken off the ownership doc and replaced with the trusts that we set up. Apparently, the general concept is that if the trust owns the assets, they're not accessible in probate. The structure is set up so that when one of us dies, the assets that are uniquely ours goes into the trust that the other one owns. Kind of slick, actually. And considering what taxes can be, I think the guys fee was well worth it. Creating that list, though, was a royal pain. Even though we were amazed to find that, no, we actually didn't know some key information. And we thought we knew everything like that!

Some time ago, my mother put my name on her checking and savings accounts.The intent was two fold: so that we could see if she was making unusual withdrawals -- suggesting someone was scamming her -- and so that if she became incompetent, we'd have access to her funds if we needed them. The lawyer told me that this, though not unusual, counted as a 'gift' of half of the each account's value, and that she should have reflected that gift as a deduction on her taxes the year that it occurred. As it happens, it hardly matters; it was well within the lifetime exclusion for gifts, but still: it came as a surprise. And it did reduce her taxable assets by fifty percent. (My mother frequently would tell me that she didn't want people to know exactly what she had, lest it be taxed. I'd say No, No, you have it already, it's not income, it's not taxable. Apparently, I was wrong. ) The lawyer told us that he knew of a part of Pennsylvania where the tradition was to add a child's name to the deed of ownership for the family farm when the child reached twenty five. This, too, was a gift, though the farmers "didn't know this". In fact, he said, they did know; they just acted as if they didn't. This year, the IRS found out about it. Good times for my profession, he said, laughing.

We get a newsletter called Consumer Reports Money Advisor. It's got the kinds of pieces of advice that we liked in the Kiplinger Newsletter, without the articles aimed at people with a lot more money than us. The current issue has an editorial titled Be Kind To Your Executor, saying, among other things, that you ought to have a single source of information that lists every financial asset you own, with contact information. I thought of our lawyer, and smiled.