Loved Ones Death

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    AFTER A LOVED ONE PASSES

    A guide to help you

    through the process of

    settling your loved-ones affairs.

    Think First

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    During this difficult time, First Community Credit Union would like to provide this guideto assist you in settling your loved-ones affairs. The following is intended only as anoutline to help you generally understand the probate process. It is in no way offered as asubstitute for proper legal advice which should always be sought from qualified legalcounsel before proceeding with disposition of any property of a decedents estate.

    Death CertificateYou will need to obtain several copies of the death certificate for various businesses thatwill require them such as financial institutions, insurance companies, titling offices, socialsecurity, veterans benefits, and so on. The funeral home will help you order them or youmay obtain copies at the Vital Statistics office for a small fee. In many cases businesses willreject a photocopy and request an original certified copy.

    Other Legal Documents

    It is time to gather other documents you might need such as the title to the car or home,marriage certificates and birth certificates. This will make it easier to transfer assetsformerly held by the decedent to their beneficiaries or family members. Otherimportant documents to be on the lookout for are wills, life insurance policies, investmentpapers, securities, real estate documents, tax returns or W2 forms, social security cards,identification cards, military records, business agreements, bank records, trustdocuments, etc. Generally these are kept in a safe location such as a home safe, safedeposit box, file cabinet, desk or at a storage facility. Do not discard any papers while youare looking through documentation because they could be important even if you think theyare old or expired. It is wise to have a trusted witness with you as you search through the

    belongings and sort through the paperwork.

    Legal AssistanceWhen processing the estate after someone has passed away, it is always a good idea toobtain the help of a lawyer if your loved one had assets that need to be probated. Thelawyer will advise you on what records will be needed and how to proceed. Probating a willand handling their personal or business needs afterwards can be very complex. If you donot know of a lawyer, contact the local bar association or a law school to obtain a referral.Friends and co-workers might also be a good source to find a lawyer. It is important that

    you bring with you all the documentation so they can help guide you in the process. Makecopies beforehand in case you need to reference them.

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    Financial AssistanceObtaining sound financial advice is an important step in handling the affairs of your lovedone. Seek out reputable professionals to assist you in making any financial decisions. FirstCommunity Credit Union offers an in-house investment advisor to give you such assis-tance. For a confidential, no cost review of the assets involved, you may contact our CUNABrokerage Service, the First Investment and Retirement Planning Center, to make anappointment at 281.856.5625.

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    To creditors

    To whom it may concern:

    This is to inform you that my (husband, wife, etc.), full name here, died on date. Iunderstand that his (her) loan may have been covered by a life insurance plan or a disability

    plan through your company. If so, please inform me of whatever documents or steps willbe required to proceed with a claim.

    Sincerely,NameAddressPhone Number

    Please accept our most heartfelt sympathies for your loss.Our thoughts are with you and your family

    during this difficult time.

    Death leaves a heartache no one can heal;Love leaves memories no one can steal.

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    Sample Letters

    To Life Insurance Companies

    To whom it may concern:

    This is to inform you that my (husband, wife, etc.), full name here, has passed away ondate. His (her) policy number was . Please send me whatever documents youwill require to make a claim on the proceeds of the policy. I wish to exercise my rights asbeneficiary to elect settlement options. Please search your files for any other coverage thatmy (husband, wife, etc.) may have had as well.

    Sincerely,NameComplete Address

    Phone Number

    To organization(s) the decedent belonged to

    To whom it may concern:

    This is to advise you that my (husband, wife, etc.), full name here, has passed away

    on date. I understand that he (she) may have been covered by a life insurance planthrough your organization. If reimbursement of dues is forthcoming, please also notifyme of that. Please send me a list of whatever documents you will require and whateverinformation you will need from me as his (her) beneficiary.

    Sincerely,NameComplete AddressPhone Number

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    ProbateIf you are named executor of an estate, one of the first things you should do is contact yourlocal probate court. If you have hired an attorney, they will help you with this process. Aclerk will inform you about the procedures. Probate is a procedure, established by law,for the orderly distribution of estates. It is designed to assure that all the property of thedecedent is collected and protected; that all debts and taxes are paid; and that the person

    entitled to the property receives it. The probate courts have skilled and understandingpersonnel who are willing and able to assist you in completing necessary forms. Generallyyou will arrive at probate court within a week to 10 days after the date of death. Althoughdealing with probate matters at this time may be difficult, it is important that these transac-tions be made as quickly and as accurately as possible.

    Attorneys advise having the following information available for probate:1. Decedents full name and the date of death (no documents are needed).2. If the decedent was your spouse, you will need the date and place of the

    marriage. If there was a previous marriage for the decedent, you will need toprovide the dates of marriage and the date of death or divorce terminating theformer marriage(s).

    3. The names and addresses of all heirs, next of kin and beneficiaries.4. A will, if one exists.5. A summary of the decedents assets.

    The form of proceedings will vary on whether or not the decedent died with a valid will. Ifthere was a will and it can be admitted to probate and if it named an executor or executrixwho is willing and able to serve, an order will be entered appointing that person to act as

    the personal representative of the estate. If the will provided for independent administra-tion, Letters Testamentary will be issued by the clerk. A sufficient number of these shouldbe ordered as they will be required for most of the executors transactions on behalf of theestate. If the will provided that no bond is to be required of the executor, then one is notnecessary as long as the proper procedures are followed in a timely manner. However, ifthe testator ( the decedent who made the will) did not waive the bond requirement in thewill, one will be required in an amount set by the court to cover the value of all liquid assets.

    If the decedent died without a will, this is referred to as an intestate succession. If the heirs

    chose to have an independent administrator appointed, they must all agree on the personwho is to serve. Prior to this, there must be an heirship proceeding to determine who theheirs of the estate are. An attorney ad litem will be appointed to represent the missing andunknown heirs and will insure no heir is omitted. An intestate succession is much moretime consuming and expensive than an independent administration under a will. Avoidingit by means of a validly executed will is always wise. If the heirs disagree on the personto be appointed as administrator, any heir or creditor may file to be appointed. The courtwill generally consider the surviving spouse or closest next of kin to be the logical choice.However, if there is a struggle over the issue, the court may appoint a third-party, usually anattorney, to serve. This should be avoided whenever possible since the expense of this type

    of administration can be enormous. After his appointment, the administrator will take theoath of office and file the required bond, unless the court waives it.

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    After taking the oath of office, the personal representative of the estate, whether anexecutor or an administrator, must within thirty days of his/her appointment publish anotice in the local newspapers notifying creditors that they have to present claims againstthe estate within the time allowed by law. (Claims are debts incurred before the persondied).

    The claims process varies with whether the administration is independent or dependent. Anindependent personal representative, like a dependent one, must file an inventory of theestates assets within ninety days of appointment. Thereafter, no action is taken by theprobate court and any creditors are free to make demand on and sue the independentrepresentative just as they could the decedent. The independent representative is free todeal with these claims as the estates finances may warrant.

    In a dependent administration, letters can be sent to secured and unsecured creditorsrequiring them to present their claim to the representative within the time allowed by theprobate code for that type of debt. If the claims are not duly presented in proper form, andauthenticated, they are barred. Also, if the claims are not acted upon within a statutory timeperiod they are considered rejected and a lawsuit to recover them must be filed in a timelymanner against the estate. All claims in a dependent administration are presented to theprobate judge and, if approved, are paid in the proper order of administration.

    If you are not an independent representative, you cannot pay any claims against theestate unless ordered to do so by the court. If you are an independent representative, youmust be sure that the estate is more than sufficient to pay all claims and all expenses ofadministration. If you are in doubt about the validity of a claim, consult an attorney

    before acting. Ordinarily the expenses of the last illness, the funeral, and local taxes can bepaid at once because such bills take precedence over other claims.

    Small EstatesIf the decedent had no will, and has assets valued at less than $50,000, excluding thevalue of the residential homestead, the foregoing procedures might be avoided by the filingand recording of a small estate affidavit. This form is available from the probate clerksoffice and, if properly complied with and approved by the probate court, can be used as analternative to standard probate proceedings. Other types of heirship affidavits have very

    limited use and are used only to identify heirs where the decedent has been dead for overfour years.

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    2. Send letters to all creditors and various organizations the decedent may have beendealing with notifying them of the death.

    3. Contact unions, service organizations, automobile clubs, or professionalorganizations to which the decedent belonged in order to find out whether he orshe had any eligible benefits. Many such groups offer life insurance policies atattractive group rates and/or may return unused annual dues that have been paid.

    4. The employer will help you determine if the decedent was covered by a lifeinsurance policy and can proceed to guide you in filling out claim forms. Accruedvacation and sick pay may be available. Terminal pay allowances, gratuitypayments (tips), service recognition awards, unpaid commissions, disability incomeand credit union balances may be available.

    5. Pay special attention to the decedents health benefits to determine if dependentsare still covered and for how long.

    6. Banks and credit unions may freeze funds until they are notified by the joint accountholder or Executor/Administrator as to what steps they need to take next. This is tohelp prevent fraudulent withdrawals from the various accounts. Contact a BranchManager for further direction on any FCCU accounts.

    7. It is important to keep detailed records of conversations. Make note of therepresentatives names, title, phone number, and the instructions given. Documenteverything in a binder and keep all the records together for easy referencing.

    TaxesIt is important to consult with a skilled tax advisor to help with State and Federaltaxes. Inheritance taxes must also be reviewed. Rates and exemptions vary from state tostate. For deaths occurring in 2011-2013, the exemption from estate taxes has been set at

    $5,000,000, but this limit is temporary and only applies for the next two years, after which,it will be subject to revision.

    We trust this information has been helpful in your time of need. We have included somesample letters to assist you in contacting the various organizations. Please feel free tocontact our Special Services department at 281.856.5300 or visit with your local BranchManager for assistance with the financial affairs held at the Credit Union.

    Free PamphletsThe Federal Trade Commission provides Funerals: A Consumer Guide. It is available bycalling toll-free 1.877.382.4357 orhttp://www.ftc.gov/bcp/edu/pubs/consumer/products/pro19.shtm

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    changes for tax purposes and to disburse valuable death and survivor benefits.TRS will require the name, address, and telephone number of a family member,friend, or other person who can act as a contact for TRS, as well as the TRSparticipants date of death. At that time, TRS will request a copy of the deathcertificate when it is available for verification purposes.

    2. After receiving notification of the death, TRS will mail out benefit information and

    forms to the beneficiary. If the participants death occurs while employed by aTRS-covered employer, then TRS must receive salary documentation from theemployer before information is sent out in order to determine the actual benefitto be paid.

    3. The beneficiary should complete and file the claim form and related documentsbefore the first anniversary of the death of the participant or retiree to avoidadverse tax consequences.

    4. When TRS receives all completed documents, the claim will be processed and thedeath benefit will be paid.

    When important member records are not kept up to date, a longer time period may beneeded to process a claim. You may contact the Teachers Retirement System at the TRS website at www.trs.state.tx.us or by calling TRS toll-free at 1.800.223.8778.

    Veteran BenefitsThe U.S. Department of Veterans Affairs (DVA) will pay up to $300 in funeral benefits toqualified veterans or up to $2,000 when death was due to a service-related-cause. DVAwill also provide an American flag for the casket and burial in any national cemetery otherthan the Arlington Cemetery in Virginia. If the decedent is eligible for burial in a national

    cemetery but you opt for another cemetery, a benefit of $150 is available. If the decedentdied during active duty or within 120 days after discharge from a service connected cause,the branch of the military involved usually awards a lump-sum amount.

    You and your children may be eligible for financial aid under the Dependents EducationalAssistance Act. The period of entitlement for children is generally between the ages of18 and 26. For spouses, it is generally for a period of 10 years from the date of deathor date of eligibility, whichever comes first. In addition, survivors may be eligible for a10-point preference when they apply for a civil service position. For further information andassistance in applying for Veteran benefits, call or visit your nearest DVA regional office. For

    more information, contact DVA at 1.800.827.1000 or www.cem.va.gov.

    More Probate MattersIt is important that all bills are gathered and businesses and employers are notified. Hereis a list of items to consider:1. The credit bureau will place an alert on the credit report so future advances will not be

    allowed on open credit lines. Call Equifax at 1.800.525.6285 and choose option 5.Also, call Trans Union at 1.800.916.8800 and Experian at 1.888.397.3742 andremain on the line for assistance.

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    Who are the Heirs?In Texas, many people are under the mistaken belief that if they are the surviving spouse ofthe decedent, they are also the sole heir of the estate. This happens to be true only if thereare no children or all children are those of the surviving spouse and the decedent, and if allthe property is community property. If there are children from before the last marriage, thesurviving spouse only receives his or her half of the community property and the decedents

    children share the rest. While there is a presumption that all property on hand at the timeof death for a married decedent is community property, if the decedent had property frombefore the marriage which is segregated or had inherited property during the marriage,this is separate property. If there is a surviving spouse and children or their descendents,the spouse inherits one third of any personal property and has a lifeestate in one-third ofany real estate. The rest goes to the children or their descendents. If there is a survivingspouse and no children, the spouse receives all the personal property and one-half of thereal estate and the remainder goes to the other heirs.

    Any person who wishes to renounce an inheritance or any portion thereof must file a properdisclaimer with the probate court no later than nine months from the date of the decedentsdeath for it to be effective.

    Bank AccountsYou will need to obtain a Tax ID number (EIN) in order to open a bank account for theEstate. This can be obtained at www.irs.gov, search for form SS-4, which can be appliedfor online. Upon completion of the form, you will receive your EIN immediately andcan then proceed to open the Estate Account. Before opening the account, an Executor

    (Executrix) will be required to present a current Letter Testamentary. If there is no willthen, an Administrator will be appointed by the court. He or she will present a Letter ofAdministration. These individuals are the only ones that can open an Estate account. Yourlawyer will guide you in this process. An Estate account is needed in order to facilitatethe accumulation and division of the assets. Life insurance proceeds not paid out to abeneficiary will often be payable to the Estate of ____ (the decedent) and will thereforeneed to be deposited in the Estate account. This is also true for funds in various bankingaccounts where the bank or credit union will close the account and send the proceeds to theExecutor or Administrator at their request. It is important that accurate record keeping bedone so that all funds can be accounted for.

    Insurance ProceedsTo establish proof of a life claim, most companies will need a statement of claim andproof of death. Contact each insurance company and ask them for their requirements.Proof of death is generally the death certificate. In some cases an obituary notice or theattending physicians statement can be used if they will accept them. Insurancecompanies do reserve the right to ask for further information or proof if deemed necessary.The claimants certificate must be completed by the person legally entitled to receive theproceeds and must state in what capacity he or she makes the claim. He or she must be

    prepared to provide positive ID if necessary. If the beneficiary is a minor or is not capableof the task, a guardian should file the form. If there is not a beneficiary, then the Executor

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    or Administrator must complete the form and the funds will then be placed into the Estateaccount for disbursement. In the case of a deceased beneficiary, a death certificate forthem will be needed by the insurance company.

    In making a claim, a copy of the policy should be furnished with the claim papers. If asettlement agreement is involved, or if an optional plan is elected, the policy should be

    retained.

    All life insurance claims should include the following:1. Policy number(s) and face amount(s).2. Full name and address of decedent.3. The decedents occupation and date last worked.4. The decedents date and place of birth and source of birth information.5. Date, place, and cause of death.6. Claimants name, age, address, and Social Security number. Federal

    legislation requires all taxpayers to furnish identifying numbers, usually theSocial Security number, to persons and companies making taxablepayment to them.

    Other information that might be required:1. When did the health of the decedent first begin to be affected?2. If death resulted solely from bodily injuries, state whether such injuries and

    death were due to accident, suicide, or homicide.3. Name and address of each physician who attended to the decedent during

    the last five years prior to death.

    4. Who had possession of the policy?5. Is an Administrator or Executor to be appointed?6. List any other life insurance policies that the decedent may have had

    (company, amounts, date).

    Insurance Settlement OptionsAfter you receive the proceeds of the policy, you will have to decide what to do with them.

    Unfortunately, this comes at a time when you may be least prepared or least able to makesound financial judgments. For this reason, keep in mind that the life insurance benefitcan be paid out in several ways. If there is no immediate need for a lump-sum payment,consider the various settlement options available. These options define the ways in whichmoney can be paid over various periods of time, in various amounts. The great advantageof delaying immediate payment of the entire amount is that it gives you time to evaluateyour changed financial situation and to talk it over with your financial advisors if you wish.Do not feel like you need to make a rush decision. In many cases you can take what youneed now and delay the rest until such time as when you have been able to review all youroptions.

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    The common settlement options fall into these general categories.1. Interest Only: The principal remains with the insurance company and interest is

    paid periodically. Provisions can be made for the right to unlimited withdrawalsat any time.

    2. Life Income or Annuity: The Company guarantees to pay a stipulated benefit ona set date for the lifetime of the beneficiary.

    3. Fixed Installments: Proceeds are paid according to the needs of the beneficiary inagreed amounts over an agreed period of time. The beneficiary decides the amountof each payment and the period of time involved.

    For example: A widow or widower with school age children might choose a plan thattogether with Social Security would maintain the familys standard of living until the childrenfinish school. Because this might be a long time, the amount could be lowered as eachchild finishes school. Therefore, payments are highest when the need is greatest.

    Social Security Benefits

    Among the many details you will have to handle, one of the most important is to notify thelocal Social Security office of the death. If the decedent was covered under Social Security,there is a lump-sum death benefit of $255 that may be available for a spouse or for thebenefit of minor children. In almost every case, the funeral director will contact the localSocial Security office. Remember that benefits are not automatic which is why it is importantto visit your local office as soon as you can. Delay in applying can result in the loss of somebenefits. To reach the Social Security office by phone, call 1.800.772.1213.Bring the following:1. Proof of death (either from funeral home or death certificate);2. Your Social Security number, and the decedents number;3. Your birth certificate;4. Your marriage certificate if you are the widow or widower;5. Proof of U.S. citizenship or lawful alien status if you were born outside the

    United States;6. Your divorce papers if you are applying as a surviving divorced spouse;7. Dependent childrens Social Security numbers and birth certificates, if available;8. Decedents most recent W-2 forms or federal self-employment tax return;9. The name of your financial institution and your account number so your benefits

    can be directly deposited into your account.

    Teacher Retirement System BenefitsBeing familiar with how to request TRS death benefits can greatly ease matters at a difficulttime. The following checklist should assist with this process:1. When a TRS member or retiree dies, a family member, friend, or other

    responsible party should notify TRS. The members employer or funeral homemay offer to assist in this process. TRS must be notified of the death evenif a monthly annuity will continue to be paid to a beneficiary under a retireesoptional form of annuity. Prompt notice allows TRS to make the necessary

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