Oftentimes when I am assisting a family in estates or with guardianships I often find that the decedent/incapacitated person owned unique or troublesome assets.
Difficult Assets in Estates or Guardianships Include:
These are almost impossible to sell once they are issued. If they are premier companies with premier properties there is a secondary market, but you will not get close to what you paid for them. The problem with timeshares is once you own them you are on the hook for the annual maintenance fees forever and ever (and ever) and the documents do not really protect you from the maintenance fees rising. So please beware of purchasing timeshares and know what you are buying. Some recommend holding the timeshares (if the issuer allows) in a separate revocable trust or LLC so that they can be disposed of with less financial risk to you.
Old Partnerships and Corporations:
Corporations are there to protect you from personal liability for business activities. However, many people do not keep up their corporate documentation. Often they do not observe corporate formalities and keep their personal assets separate from their business. Not only does this impair the corporation’s ability to protect your personal assets but it can be a nightmare when you are trying to sell corporate assets after a shareholder gets ill or dies.
Old Insurance Policies:
Today there are a lot of old small, cash value life insurance policies out there. Sometimes the company is still in business and you can easily cash in the policy. Sometimes not. There are websites that can give you information on old policies and companies but it is best to deal with these issues before someone dies.
A long time ago there were a number of life insurance companies that were call mutual insurers. They were not stock companies and they were owned by their policyholders. Many of them demutualized and issued small amounts of tradable stock to their policyholders. Often those shares of stock were dormant or issuing a few dollars of dividends every year and then become an issue after the shareholder died. Also, many people still have stocks in certificate form. If the share certificate is lost the cost to replace the shares is substantial. Keep stocks registered with a broker in street name and you will save a lot of grief.
Often after death I learn of unknown assets, stock that the decedent owned, bank accounts that were escheated to the state, etc.
Many Small Accounts:
I often assist clients in estates where the decedent had a few thousand here and a few thousand there. This makes marshalling and dealing with your estate much more annoying than it needs to be.
Rule of Thumb:
Assess your own and your parents’ assets regularly. Know what you/they have and sell small amounts of stock and consolidate funds in one or two financial institutions. Check unclaimed property every few years. A little effort now can avoid a lot of inconvenience later.
About The Author
Named One of the Main Line’s Top Elder Law Attorneys
by Main Line Today
Robert M. Slutsky has practiced Elder Law since 1992 and was one of the area’s first elder law attorneys. Rob Slutsky advises clients on Medicaid and Asset Protection Planning, Guardianships, Wills, Trusts, Powers of Attorney, Estate Administration, Special Needs Planning and General Estate Planning. He has represented for profit and non-profit elder care providers and the Pennsylvania Department of Aging. Rob Slutsky has been the solicitor for the Montgomery County Office of Aging and Adult Services, the Area Agency on Aging for Montgomery County, for more than 15 years.