Considerations for the Two Weeks Following Death
“Considerations for the Two Weeks Following Death,” that’s the subject of today’s ACTEC Trust and Estate talk.
This is Doug Stanley, ACTEC Fellow from St. Louis, Missouri. This podcast will continue a discussion on considerations when receiving the news that a client has passed away (Deathbed Planning for the Two Weeks Prior to Death). In the immediate aftermath of a client’s passing, the focus shifts from planning to execution, involving a plethora of issues that emerge within the post-death administration process. Guest Ellis Pretlow of Norfolk, Virginia, will offer recommendations for professionals during this critical time frame. Welcome Ellis.
Ellis Pretlow: Thanks, Doug. So, like you mentioned, I’m going to be talking about the immediate aftermath of when a client passes away. And it’s been my experience that a lot of times, estate planning attorneys or state administration attorneys aren’t as involved during this period of time. So, it tends to be things the issues that may come up that attorneys aren’t as familiar with or haven’t dealt with as frequently. So, for me, in researching these issues, it was my first time thinking about them. But some really interesting things out there to think about so that when they do come up, you’re prepared, you’re ready for those conversations as this time can be extremely condensed, and things and decisions need to be happening quickly. To be educated on them is very important.
Planning for Burial and Funeral Issues
I’m going to talk generally about three things today. The first are burial and funeral issues. That’s something that I definitely did not have a lot of experience with prior to doing this research and this topic, but it’s actually extremely interesting. State law varies widely on these issues. As Doug mentioned, I’m in Virginia. In Virginia, the person responsible for a decedent’s burial and funeral is first a person named in a burial directive, which a lot of states have the ability to make written burial directives. But I would say, as an estate planning attorney, I didn’t draft a whole lot of those. Only if there was an issue would I do that. So, that’s not always a part of the estate planning package that a lot of clients are getting.
In the absence of a burial directive in Virginia, there’s a huge, long list of about every living relative you can think of, any of whom could make burial or funeral decisions. Absolutely no hierarchy. So it’s essentially whoever shows up and is willing to pay the check, which can create some extremely awful conflicts in this area and what’s already an emotionally wrought time. There’s some crazy case law in Virginia and other states, but it’s important to know your state law so that if something like this arises, you’re able to advise clients and family members on these issues quickly and deal with them expeditiously.
The other kind of interesting point I always like to talk about in the burial and funeral issue realm is the ownership of burial plots. There’s a Virginia case from 2018 that I think took a lot of attorneys by surprise- a Virginia Supreme Court case. I always tell everyone to go and check your cemetery’s bylaws or your state’s laws as to how they relate to the ownership of burial plots.
In this Virginia case, Terry v. Rickett, the Supreme Court said that the ownership of burial or cemetery plots is contractually limited by the provisions and the cemetery’s bylaws or rules. When the cemetery’s rules stated that the plots passed to a decedent’s heirs-at-law upon the owner’s death, that actually overrode the provisions of the decedent’s will. So, let’s say you had a will that said: I leave my residue to my spouse but your spouse might not be your heir at law; you could end up with someone else inheriting those burial plots.
So, I would say just go check those in your state and your burial plots if you own them or your clients and raise that issue, as it can be something that could be a surprise at a bad time when you don’t want to deal with it.
Venue for Probate and Conflicts of Laws
The second topic I want to cover is the venue for probate and conflicts of laws. This is another thing that doesn’t seem to come up that frequently, but with more people having property in different states, I do think it’s something that we have to give a little bit more thought to. The UPC venue statute essentially provides for the correct venue for probate is the decedent’s domicile, which I think we would all kind of consider universally recognized. In the case of no domicile, it’s the county or city where the decedent owned property.
New York and California also kind of base their venue statutes on domicile. Interestingly, Virginia and Texas base it on a known place of residence, which, residence is not exactly the same as domicile. So, there could be a conflict there.
Then there’s the question of what is actually domicile? It’s not defined in the uniform probate code, but generally, I think the legally accepted definition is “the place which an individual intends to be his permanent home or the place to which he intends to return whenever he may be absent.” I had a colleague put it much more eloquently and say, where is the decedent’s heart?
Again, I think that’s something that becomes an issue more and more, especially in the case of Florida. We have tons of clients who spend a lot of time in Florida. They want to be down there for more than half of the year for income tax purposes. But where’s their real domicile? Where’s the place where you need to probate? And it becomes more important when you think about the difference of laws in different states.
So just mentioning Florida, for instance, their creditor laws upon the death of a decedent are very different than some other states. So you may end up with a totally different scheme or think about spousal elections or spousal rights in certain states. Where your probate could have a huge impact on the substantive disposition of the estate assets.
So that brings up kind of a conflict of law issue, another Virginia case I think is really interesting, this one’s a little bit older from 1966, and that’s French v. Short. There was a Florida resident and domicile, nobody questioned that, but he did own property in Virginia. So Florida does not recognize holographic wills, but Virginia does. So the Florida resident decedent’s son went to go probate a holographic will in Florida, and the Florida court said, no, this was not made in accordance with Florida formalities; we’re not probating it. So then, the decedent’s son went up to Virginia, where the decedent owned property and Virginia would probate the holographic will because we allow those holographic wills here, and so it was validly probated.
In that case, the Virginia court determined that the decedent’s domicile was, in fact, Florida, but would admit the will to probate in Virginia because real estate passes according to the law where it lies. So the holographic will would govern the disposition of the Virginia real property, but it would not govern the disposition of the decedent’s personal property or any Florida real property. So, in that case, you ended up with kind of a bifurcated probate with some assets passing according to the will, some through intestacy. That’s another issue to be on the lookout for in this time period, immediately after death when you’re thinking about venue and probate, making these decisions that sometimes may seem obvious but in other cases could have varying consequences on the plan itself.
Don’t Rush Estate Planning Immediately After a Client’s Death
Finally, my third point is always taking a minute to slow down. Don’t rush any actions during this time period because oftentimes, family members are rushing to do things after a decedent passes away that then you can’t take back. So, the big one to think about here are disclaimers. If there is any possibility that anyone would want to make a disclaimer, you cannot have a qualified disclaimer if the disclaimant has accepted the interest or any of its benefits in the property.
So, especially with non-probate assets, joint with right of survivorship, beneficiary designation, you don’t want those named beneficiaries or joint owners to rush to say, yes, I’m going to accept this asset because if they show any type of ownership over that asset or accept any of its benefits, they will not later be able to make a qualified disclaimer.
The other kind of just note in this same don’t rush to take any action is to beware of any potential insolvency. Don’t have a family member take an action that cannot be reimbursed. A lot of times, funeral bills are paid quickly by a family member, and those may not be able to be reimbursed by the estate if it’s insolvent and subject to other creditors’ payments. This is a unique time in an estate administration because the estate hasn’t really started yet, but there are a lot of considerations that need to be thought about prior to getting to that qualification point.
Doug Stanley: Thank you, Ellis, for sharing your knowledge and experiences with us.
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