San Antonio area (210) 826-1122
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Surviving Spouse Issues

copyright 2001, Paul Premack

Presented to the 2000-2001 Elder Law Course & Guardianship Program, State Bar of Texas

I. INTRODUCTION

Death. The word evokes deep emotional responses. From the survivor’s point of view, the experience brings shock, pain, numbness and relief. The survivor feels both abandoned and overwhelmed. Decisions must be made, the funeral must be held, the family must be notified!

This chapter deals with the issues a surviving spouse may face before coming to see you about probate. Like the attorney who receives a midnight call from the jailhouse about bond, you may receive a call from a client saying, "Joe died. What do I do now?"

II. Death

A. Location

1. Home Death

Due to the availability of hospice care, more families are experiencing the death of a loved one at home. Hospice is a "special concept of care designed to provide comfort and support to patients and their families when a life-limiting illness no longer responds to cure-oriented treatments." The hospice attempts to provide pain management and comfort care, without either delaying or promoting death. This acknowledges a trend in modern medicine to recognize death as an inevitable outcome in certain situations.

a) The family can arm itself with several legal documents:

(1) An Out of Hospital Do-Not-Resuscitate (DNR) Order can be used in the home to avoid any attempt by EMS to resuscitate the deceased.

(2) A Directive to Physicians to enact the patient’s wish that life sustaining treatments be withheld or withdrawn, allowing death to arrive without medical intervention. These were discussed in detail in an earlier chapter.

(3) An Appointment of Agent to Control Disposition of Remains. This special power of attorney takes effect at the moment of death (as compared to a Durable Power of Attorney which, under most circumstances, ends at the moment of death).

b) Who Should be Called at the Moment of Death? There are three options:

(1) The Police. If the death was natural and expected, they will fill out a report and contact the funeral home. If the death occurred under unusual circumstances, they will investigate and call in the local medical examiner, who may transfer the remains to the medical examiner’s office.

The Medical Examiner investigates deaths that are sudden, violent and/or unexpected. The goal is to determine the cause and manner of death. A Medical Investigator may investigate the scene of death and interview witnesses and medical caregivers. If the Investigator determines that the case belongs in the Medical Examiner’s office, an autopsy may be the next step. If an autopsy is not indicated, the Medical Examiner collects body fluids and tissue for toxicology analysis.

(2) The EMS. No matter how well prepared a caregiver may be, the actual death often elicits a call for emergency medical personnel. This is when the surviving spouse should be armed with the DNR order, the Directive to Physicians and a strong opinion that the body should not be disturbed. EMS often transports the remains to the hospital, where a physician examines the body and certifies the cause of death.

(3) The funeral home. Again, if the death is expected, the surviving spouse may simply call the funeral home if prearrangements have been made. The funeral director will arrange for the body’s transportation, for a final examination and certification of the death. If there are no prearrangements with a funeral home, the surviving spouse should do some comparison shopping. A rushed choice is an expensive choice.

There should be no rush to remove the decedent’s remains. Family members may want to pay a final visit within hours of the death.

2. Nursing Home Death

If the death is sudden, it may occur in the nursing home. Otherwise, as the patient’s condition worsens, the nursing home may transfer him/her to the hospital, where death will occur.

Nursing homes do not generally have a place to store the decedent’s remains. They do not want to leave the body in the room for an extended period, especially if it is a semi-private room. The surviving spouse may be pressured to contact the funeral home quickly for transfer of the remains. If this is the case, find out if the body can be moved to the coroner’s office for temporary storage while a funeral home is selected. Again, a rushed choice is an expensive choice.

3. Hospital Death

Death in the hospital is often referred to as an "attended death." The circumstances are known, the causes well documented. Often the physician will certify the death and release the body to the funeral home directly from the hospital’s morgue.

If a person dies in a hospital or other care facility and an attending physician is unable to certify the cause of death, the manager of the institution is required to report the death to the local justice of the peace. At that point, an inquiry is made regarding the cause of death (see the section on "autopsy" below.)

B. Organ Donation Issues

1. Method of Declaration. Anatomical gifts allow a client to donate any useful organs upon death. The donation can be legally documented in any one of three ways:

a) Through the Last Will and Testament. Any lengthy delay makes an organ donation impossible. Hence, using a Will as the legal declaration makes little sense, as it is often days before the Will is read. In the interest of speed, it is much better if the client carries a card on his/her person.

b) Through a statement on the driver’s license if it was declared before September 1, 1997. Many people felt the statement provided on the back of the Texas driver’s license was also inadequate to authorize organ donation. The 1997 legislature agreed, deciding the driver’s license statement was not obvious enough. As a result, after September 1, 1997 the law says the driver’s license is not an appropriate method to declare the intent to make organ donations.

If the client already filled out the driver’s license form, it is still valid even after September 1, 1997. However, any new declaration made after September 1, 1997 on a driver’s license is not valid. Instead, the client needs to use the card provided by the Organ Bank or DPS under the revised law.

c) Through a "Declaration of Anatomical Gift." The legislature has asked the regional Organ Banks to provide cards to the Department of Public Safety. I understand this is being done by including the card in a pamphlet. The pamphlets should be available at DPS driver license offices. You can advise clients to get a card by looking under "Licenses" in the Blue Pages of your phone book for your local DPS office. Additionally, they can:

    Call the South Texas Organ Bank at 800-275-1744

    Call the Texas Organ Sharing Alliance. In San Antonio, call 210-614-7030, in Austin, call 512-459-4848, and in Waco, call 254-772-9336

    Call the LifeGift Organ Donation Center in Houston at 713-523-4438 or 800-633-6562

    Call the Southwest Transplant Alliance. In Dallas at 800-201-0527, in El Paso, call 915-534-4430, in Galveston, call 800-201-0529.

2. No Declaration = Family Decision

If the decedent did not sign a donor card then someone in the family must give written permission. A medical professional who is specially trained will approach the family to request the donation. Texas law establishes an order of priority to authorize the donation: 1st the surviving spouse, 2nd the decedent’s adult child. 3rd either of the decedent’s parents, 4th an adult brother or sister, 5th the court appointed guardian (if any), and finally, anyone else authorized to dispose of the body.

If permission comes from a family member and there are others of the same or a higher priority, then an effort must be made to contact those people and make them aware of the proposed gift. Also, the statute prohibits the donation if the decedent ever expressed opposition to anatomical gifts.

3. After The Anatomical Gift. Once the organs are removed, the body is delivered to the funeral home and prepared for burial or cremation as directed by the family. Donation does not disfigure the body, so an open casket viewing is still possible.

C. Body Donation

The Willed Body Program run by several medical schools is different than making an anatomical gift. Donation of the client’s whole body requires a different process. As attorney, you could write a document declaring your client’s wish to donate his/her remains, but it is simpler to follow the rules established by the medical school in your area.

Contact the University of Texas Health Science Center at San Antonio, Department of Cellular and Structural Biology, at 210-567-3900. Contact the University of Texas at Houston, Department of Neurobiology and Anatomy, at 713-500-5610. Or contact the UTHSC Department of Anatomy in Ft. Worth at 817-735-2048. They will send you a "Body Bequeathal Agreement" for the client to fill out, sign and return. The Agreement is another type of anatomical gift declaration, and is authorized by the Texas Anatomical Gift Act.

After the contract is returned to the medical school, the client is registered. It should be kept with the client’s other legal documents.

The Willed Body program also provides bodies to the Texas State Board of Morticians so that funerary students can learn their art.

The medical school usually covers the cost of transporting the body to their facility. After their scientific study is complete (usually in 6 months to 2 years) the body will be cremated. The ashes can be returned to the family if they so desire.

D. Autopsy

1. Authorization

a) Family Choice. Otherwise, the family will be asked for permission to perform an autopsy. The statute gives a priority list for who is may give the authorization: 1st the Spouse, 2nd an adult child, 3rd the guardian of a minor child, 4th a parent, 5th the decedent’s guardian and finally, any next of kin. The Texas Dept. of Criminal Justice (state prison system, if the decedent was an inmate) or the Justice of the Peace can authorize an autopsy even without family consent.

Note that the persons who may authorize an autopsy and the persons who may authorize organ donations are somewhat different. The spouse always has first priority. But for autopsy, the guardian weighs in ahead of the siblings.

An elective autopsy may cost $2000 to $4000, and the family member who authorizes it must agree to pay for it. However, health insurance may under certain circumstances pay for an autopsy if they see a need for one. All accident and sickness policies in Texas contain a clause authorizing an autopsy in the insurance company’s discretion.

(1) Why an elective autopsy?

If the cause of death is unknown or not clearly determined, an autopsy can alert the family to health risks they can anticipate and avoid. Perhaps the autopsy will find a genetic component to the death.

b) Legal Necessity. When the death occurs under circumstances that indicate unnatural causes or when the coroner suspects there might be a disease that poses a threat to public health, an autopsy can be performed. If a person dies an unnatural death (from a cause other than a legal execution), if a body is found and the cause of death is unknown, if foul play is suspected, if suicide is obvious or suspected, if the death was not attended by a physician then the local Justice of the Peace shall conduct an inquest.

If a doctor who attends the death is unable to certify the cause of death, the doctor must report to the Justice of the Peace to request an inquest.

(1) Inquest. The inquest must happen quickly, at the place the body is found or at the place of death. The JP can hold the inquest at any other reasonable location. A body may be disinterred for an inquest. The JP decides, based on advice of the Medical Examiner or a physician, whether an autopsy in needed.

E. Funeral Issues

1. Private or Assisted

Paying for a funeral is often the first financial decision that must be made upon the death. The first rule is: honor the decedent’s wishes. These may be expressed in the Last Will and Testament, in a Pre-need arrangement, or in an Appointment of Agent to Control Disposition of Remains. Most Wills do not go beyond instructing a "decent burial" or the like, and are often left unread until after the funeral.

Too often, the decedent will have expressed no preferences about the funeral. This may be a good time to call upon the family’s religious traditions as a guide to the appropriate funereal practices. The funeral industry, while subject to disclosure regulations, is also aware of the emotional vulnerability of many of its customers. You can warn the surviving spouse to be wary of the following sales tactics:

    The funeral home décor, while on the surface intended to honor the dead, tends to intimidate the living. The survivor is off-balance from the moment he/she enters the funeral home.

    The salesman (called a "funeral director") may use flattery. "Given your position in the community, I’m sure you’ll want….)

    The salesman may use guilt. ("I’m sure you want the best for your husband.)

    The salesman may use examples that do not apply to your situation. ("When your husband arranged his aunt’s funeral, this is what he chose.") But is it what he wanted for his funeral?

    The salesman may call on religious or community "tradition." It is tradition, or simply the canned package the funeral home prefers to offer?

Lisa Carlson suggests this response: "If I spent according to how much I care, I’d be penniless." This acknowledges the deep caring, but that finances are important to the living.

Federal regulations require the funeral home to provide a general price list, a casket price list and an outer-container price list. The same regulations allow the funeral industry to add a "funeral director’s professional services" fee to the bill. This covers overhead and general expenses for the funeral home, and cannot be declined. As such, the survivor should never worry that the funeral home may be poorly compensated if an inexpensive casket is selected. They get their money.

a) Government Aid.

(1) Social Security. A one-time payment of $255 is payable to the surviving spouse if he or she was living with the beneficiary at the time of death, or if living apart, was receiving Social Security benefits on the beneficiary's earnings record. Being apart for medical purposes (one spouse in a nursing home) is not "living apart." If there is no surviving spouse, the payment is made to a child who was eligible for benefits on the beneficiary's earnings record in the month of death.

(2) Military/VA. An honorably discharged veteran may be interred in a national cemetery. The plot is provided free, as is the grave opening and closing, and a simple grave marker. An honor guard and an American flag may also be provided. This saves significant money for the surviving spouse.

In addition to veterans, the following categories of decedents are also eligible for burial in a national cemetery: (1) a Commissioned Officer of the National Oceanic and Atmospheric Administration, (2) a Commissioned Officer of the Regular or Reserve Corps of the Public Health Service, (3) United States Merchant Mariners who served during WWII, (4) The un-remarried surviving spouse of an eligible decedent, even if that decedent is not buried in the national cemetery, (5) a minor child of an eligible decedent, subject to certain conditions.

Eligible veterans who are buried in a non-governmental cemetery may still qualify for a free grave marker. Use VA form 40-1330 to make the request.

2. Cremation Issues.

Many people desire cremation. They may have a variety of reasons, including:

a) The desire to save money. Cremation can cost as little as $800 with the right arrangements. Several cremation "societies" exist, some for-profit and some non-profit. They take the place of the traditional funeral home by contracting for low cost and no-frills cremations. Check the Internet for the Neptune Society (www.NeptuneSociety.com), the Memorial Society (www.satx.com/sams) and the Internet Cremation Society (www.cremation.org).

Cremation does not require the purchase of a casket, and funeral directors are forbidden to say otherwise. A container is required, but cardboard is often the most appropriate choice.

Strictly interpreted, Texas law requires the cremated remains to be buried in a cemetery or placed in a columbarium. "Columbarium" means a durable fireproof structure containing niches used to contain cremated remains. In practice, the "ashes" are often scattered (although no law specifically allows scattering, no law penalizes it either). Creative (but highly expensive) scattering options exist. For instance, a company called Celestis will launch ashes into space. On a more realistic note, a surviving spouse may retain the urn at home, or scatter the ashes privately in the countryside or in a body of water.

b) The desire to help the environment. Burial space is at a premium in many places (think about New Orleans). The body may also contain harmful toxins, especially if chemotherapy shortly preceded death. Cremation is a cleaner alternative than burial in those instances.

F. Death Certificates

Although the death certificate is a legal document, its use in certain court or legal proceedings is restricted to providing proof of death. The cause of death as indicated on the death certificate may not be admissible in legal proceedings as proof of the cause of death.

The vital statistics office can only issue copies of a death certificate to qualified parties. Other than designated personnel who deal with vital statistics, access to the death certificate is restricted, for 25 years, to immediate family members. For qualified individuals to obtain information from the government, they must provide verifiable proof of their relationship to the deceased.

The process of obtaining the death certificate is often transparent to the surviving spouse. He/she answers a few questions at the funeral home regarding the date of birth, parentage and work history of the decedent. The funeral director forwards that information to the hospital or physician who will be certifying the death. Once the doctor enters the cause of death and signs, the vital statistics office issues death certificates. The survivor has already paid for them at the funeral home, and typically receives them in 2 weeks or less.

The certifying physician has the duty to accurately document the cause of death. While physicians should recognize the potential legal aspects of death certificates and be careful when wording the cause of death statement, their focus is on the medical cause of death. The primary reason the death certificate can only be issued to qualified parties is protection of the privacy of the family and the dignity of the deceased. The family may not want an "embarrassing" cause of death to become public.

This is ironic, as the survivor will be asked to deliver a copy of the death certificate to the bank, broker, insurance company and others. Although they are not primarily interested in the cause of death, it is on the face of the certificate. Confidentiality is destroyed when the certificate is used in this fashion, but financial institutions will not accept any other proof of death.

Texas law calls on physicians to certify the death and release the death certificate to the funeral director within 5 days from the time of receipt of the death certificate. If a physician unduly delays the processing of a death certificate, he/she may be charged with a Class C misdemeanor. If an autopsy or other situation delays the completion of the death certificate beyond the 5 day time limit, the Department of Health recommendation is that it be marked as "Pending Autopsy" or "Pending Further Investigation" and be sent on to the funeral director.

Although Registered Nurses and Physician's Assistants are able to pronounce death, in certain cases, they are not authorized to appear as certifiers on the death certificate. 

In some cases, as with emergency room admittance, the pronouncement of death may be made, noted on an intake chart or other patient information form, and the death certificate generated later with the pertinent information transcribed by medical support personnel to the death certificate form. For instance, in some emergency-room admittance situations, the physician may need to pronounce a person dead whose name is not yet known to hospital personnel. The final certificate may be generated later, when the decedent’s name and more information are known.

III. Gather the Documents

A. Checklist of Items

The survivor should be instructed to gather the original legal documents of the decedent, and other vital information. This may include, among other things:

Last Will and Testament

Codicil to any Will

Body Bequeathal Contract

    Pre-need Funeral contract and burial instructions

Cremation Society membership

Family address & phone numbers

Social Security number

    Pension documents for any survivorship payments

    Memoranda regarding the distribution of personal effects

    Living Trust Agreement

    Amendments to Living Trust

    Prenuptial Agreement

    Postnuptial Partition Agreement

    Conversions to Community Property under Family Code §4.102

    Community Property Survivorship Agreement

    Family Limited Partnership Agreement

    Pension Survivorship Rights

    Life Insurance Policies

    Irrevocable Life Insurance Trust

    Health Insurance Policies

    Auto Title (right of survivorship?)

    Deeds to Real Property

    Residential Leases

    Mortgages/Liens against Real Property

    Notes Receivable and Payable

    Judgments of Record

    Active Litigation files

    Buy-Sell Agreement

    Partnership Agreement

    Password lists for computer access

    Last year’s 1040 and identity of tax preparer

    Stocks, bonds and list of bank deposits

B. Secure the Computer

The decedent is fairly likely to have left a computer at home. The surviving spouse may not be familiar with either the operation of the computer or the information stored on it. Vital financial data may be stored in programs like Quicken, Microsoft Money or Peachtree. If your law office has any of these programs, you can save many hours of data tracking by requesting copies of the data files from the surviving spouse.

Other important data may be in computer storage. Is a family tree recorded on the hard drive? It may help you determine the identity of the heirs. Is there a computer address book, with phone numbers and email information?

If the spouse in not computer literate, you may need to recommend that he/she find someone to help close out any subscription agreements the decedent has entered. Does the survivor need or want to continue the decedent’s Internet access agreement? Is there a second phone line or a cable modem that should be closed out?

At the least, the computer hard drive should be "wiped" clean before it is donated or disposed of.

IV. Notifications

A. Family

An obvious but important step is to notify the family. The surviving spouse may have children who are already on the scene, and they can be very helpful making phone calls to siblings, grandchildren, nieces and nephews and close friends. The family address book is a necessity here.

1. Obituary. The funeral home will ask if an obituary is desired. Obituaries are voluntary, and they can be quite expensive. Some families feel that a public obituary is a proper tribute to a loved one. You have no doubt seen obituaries that run several hundred words. Some families feel that an obituary would violate their privacy, or that it is too expensive. The obituary has no legal significance and is not an official notice of the death. A short obituary without a photo is adequate, unless the family desires more.

2. Power of Attorney. If another family member, other than the surviving spouse, holds a Durable Power of Attorney for the "new decedent," the agent should be informed immediately about the death. Pursuant to the Probate Code, acts performed under a Durable Power of Attorney are valid after the principal’s death if the agent did not have actual knowledge of the death, and was acting in good faith. Such an action might contradict the surviving spouse’s wishes, so he/she must impart that "actual knowledge" to the agent quickly.

B. Clergy

After notifying the family, the next call is often to the clergy. The family’s religious beliefs are both intensely relied upon and challenged at the time of death. Religious traditions important to the decedent and surviving spouse should be honored by contacting the synagogue, church or mosque. The clergy may be deeply involved with the funeral, offering suggestions to honor traditional religious practices and meeting with the family to prepare a eulogy.

C. Social Security

1. The Social Security Administration recommends that, as soon after the death as possible, a family member:

a) Promptly notify Social Security of the beneficiary's death by calling SSA toll-free at 1-800-772-1213. The funeral home may offer to make this call for you, and there is no harm in the initial call coming from them. But the surviving spouse should still call SSA soon thereafter to be sure that survivor’s benefits are properly processed.

(1) If monthly benefits were paid by direct deposit, notify the bank or other financial institution of the beneficiary's death. Request that any funds received for the decedent for the month of death and later be returned to Social Security. The bank will electronically return the funds.

(2) If benefits were being paid by check, do not cash any checks received for the month in which the decedent died or thereafter. Mail the checks to Social Security as soon as possible.

2. Survivor’s Benefit.

a) If the survivor is already receiving SS benefits on his/her spouse’s earnings record, then upon the initial phone call to SSA they will change the payments to survivor’s benefits.

b) If the survivor is already receiving SS benefits, but on his/her own earnings record, then the survivor must apply for survivor’s benefits. The initial phone call to SSA is often enough to get this started as well. For this step, SSA asks for a copy of the decedent’s death certificate. The survivor will get only one check, but it will be based on the bigger earnings record.

c) The surviving spouse receives full benefits at 65 or older or reduced benefits as early as age 60. A disabled widow or widower can get benefits at ages 50-60. The survivor’s benefit may be reduced if he/she also receives a pension from a job where Social Security taxes were not withheld (this impacts many retired government employees).

D. Office of Personnel Management

OPM handles the retirement and death benefits for all federal employees and retirees. Their website is at www.OPM.gov. To report a death, they can be reached at 1 (888) 767-6738.

If the decedent received benefits through the OPM, they will ask for his/her full name, date of death, retirement claim number and Social Security number. They will start the process of activating survivor’s benefits, and may mail claim forms to be completed and returned.

The surviving spouse is entitled to a monthly survivor’s pension only if the decedent so provided upon retirement. The vast majority do so provide. A lump sum payment, covering the benefits earned from the first of the month through the date of death may also be payable to the surviving spouse.

Claim for Federal Employee Group Life Insurance benefits should also be started with a phone call to 1 (888) 767-6738.

E. Other Pension Administrators

The surviving spouse will have information on other pensions the decedent received. If he/she is not sure of the data, ask to see last year’s 1040 tax return. A 1099 should be appended that identifies the company and gives account information for the decedent.

F. Life Insurance Companies

Each policy owned by the decedent must be located. The issuer should be contacted so the claim paperwork can be started. There is no need to wait for receipt of the death certificate; a phone call to the claims department will initiate the process. They will mail claim forms to the beneficiary (hopefully the surviving spouse). This way the survivor may receive the claim forms and the death certificates at about the same time.

The insurance company must pay the claim on receipt of or not later than two (2) months after due proof of death and the right of the claimant to the proceeds. The Department of Insurance has imposed additional time constraints: A company must acknowledge the claim and start investigating it within 15 days of receiving written notice of the claim. Once the company has all necessary information, it has another 15 days to notify the claimant in writing if it will accept or reject the claim. If a company that cannot meet these deadlines, it must send a notice explaining why it needs more time. The company then has 45 days to either approve or deny the claim. If a company rejects the claim, it must explain why. If the company agrees to pay the claim, it must send payment within five business days.

The survivor should also review credit card agreements, loan documents and mortgages regarding credit life insurance. The decedent may have paid premiums so that upon death, a specific debt would be paid by credit life insurance.

V. Assets

A. Survivorship Assets

This chapter will not discuss the probate process. However, many assets pass to a surviving spouse through non-testamentary designations. This may include:

1. A Community Property Survivorship Agreement (CPSA). Texas has a long history of struggle over community property with rights of survivorship. Current law evolved from an unconstitutional attempt to simplify inheritance rights to a viable and legal method for passing community property to a surviving spouse.

Since 1989, Chapter XI, Part 3 of the Texas Probate Code has allowed spouses to agree, in writing, that they want their community property to become the property of the survivor between them upon the death of either of them.

Probate of a CPSA is not necessary. The law provides that the agreement is effective to pass title to the community property without any further action. However, the law does provide a method for "proving" the validity of the agreement in a dispute: the surviving spouse may apply to the courts for an order establishing that the agreement is valid and meets the requirements of the law. This requires the survivor to produce the original agreement in court – but it is of record with the County Clerk, so a certified copy will suffice if the original is lost.

The survivor may sell any community property which he/she obtains in survivorship, but must wait six months after the date of decedent’s death. The purchaser is assured good title if the CPSA was on record with the County Clerk.

Title companies were initially reluctant to issue a policy based on a CPSA. My experience in the last several years has been generally positive as CPSAs become more widely used.

a) Homestead Tax Exemption. The exemption is designed to lower the amount of property taxes paid by homeowners who reach age 65. It is a "65-plus" exemption, not an "over-65" exemption, as many people believe. To qualify, a homeowner must be 65 or older on January 1st of the year he or she wants the exemption.

65-plus homeowners qualify for a $10,000 homestead exemption on the home’s value against school taxes. Additionally there is a general exemption of $15,000 (for 1998 and later).

If a 65-plus homeowner is receiving the exemption and dies, leaving a surviving spouse under age 65, the surviving spouse can continue the exemption so long as he/she is 55 or older. The younger spouse must also become owner of the house after the death, and must reside in the home.

65-plus homeowners who qualify for the exemption also have a school tax ceiling for that home. The school taxes are frozen at their age-65 level and do not increase unless the home is significantly improved (like adding a game room, but not doing normal repairs or maintenance). The tax ceiling changes if the house is sold and a replacement is purchased.

The school tax ceiling transfers to the surviving spouse if he/she is 55 or older and has ownership in the home. The survivor must, however, apply to the local appraisal district for the tax ceiling to transfer.

2. Financial Accounts.

Legally, there are a limited number of ways to classify bank accounts. The Texas Probate Code clearly identifies the options. The law provides a "Uniform Single Party or Multiple Party Account Form," but in my experience the banks rarely use it, preferring their in-house forms. With the many bank ownership changes of the 80’s and 90’s, you may find that the documentation is not clear. Particularly with the elderly, who may have opened an account "three banks ago," the signature card may be a mess or be unobtainable.

a) Single Party Account without Pay on Death (POD). This type of account is owned solely by the account holder. Upon death, the bank may freeze the account pending probate.

b) Single Party Account with Pay on Death (POD). This type of account, as above, is owned solely by the account holder. Upon death, the person named on the account card owns the account in preference to any testamentary disposition.

c) Multiple Party Account without Right of Survivorship. This type allows each account holder to access the funds in the account without permission from each other. When one party dies, his/her share of the account passes according to the terms of his/her Will. These accounts are not usually frozen upon a death, and any surviving party can withdraw the funds, even though he/she may not be the owner of the fundsand may need to make restitution to the testamentary owner.

d) Multiple Party Account with Right of Survivorship. All of the features of this account are the same as "c" above, except that when one account owner dies the others become its owners. Spouses may make the mistake of listing one or more of their children, along with the spouses, on the survivorship list. Technically, the surviving spouse is left owning his/her ½ community property share outright, plus a fraction of the deceased spouse’s share jointly with the children.

e) Multiple Party Account with Right of Survivorship AND Pay on Death. This account has all the features of "d" above. The difference is that when the last party to the account dies, a beneficiary who was not a party to the account becomes its owner.

f) Trust Account. A trust account is usually set up by one party desiring control, and another as after death beneficiary. When the last named Trustee dies, the beneficiary owns the funds and can withdraw them.

g) Convenience Account. This is significantly different from all of the accounts listed above. A convenience account has a primary holder and a convenience cosigner. The primary holder clearly owns all funds in the account, but the cosigner can withdraw funds. The primary can "lock out" the cosigner by so informing the bank in writing. There is no right of survivorship to the cosigner, but he/she can withdraw funds until the bank receives written notice of your death. Once the bank receives written notice, the account is frozen pending probate.

3. Brokerage Accounts and Dividend Reinvestment Plan accounts.

In 1997, the "The Uniform Transfer of Securities on Death Act" momentarily set up a class of Transfer on Death (TOD) accounts with a variety of documentary requirements. It was quickly reconsidered and repealed before its effective date. This left us with the Probate Code provisions regarding survivorship and pay-on-death accounts. When the account is held with an out-of-state institution (as are most DRIPs) the institution’s internal paperwork is vital. It must clearly indicate a right of survivorship or a pay-on-death designation; if it does not, the institution is likely to demand letters testamentary. This may be good for your law firm’s bottom line, but can be frustrating to the client who expected immediate access to a fund.

4. Automobiles.

Only recently has it become easy to put a car titles into right of survivorship. This is evidenced by a separate right of survivorship agreement on record with the Dept. of Transportation, and for very new titles may actually be reflected by wording on the title. If so, title can be transferred to the survivor by presentation of the title and death certificate to the local tax assessor-collector’s office.

If the title lists both names but there is no right of survivorship, the tax assessor-collector will ask for either Letters Testamentary, an Order Admitting Will to Probate as Muniment of Title, or an Affidavit of Heirship to a motor vehicle. (This form is available for free download from ftp://ftp.dot.state.tx.us/pub/txdot-info/vtr/vtr-262.pdf).

B. Checks Payable to Decedent

If dividend checks or other payments made out to the decedent arrive in the mail, the surviving spouse has two options:

1. He/she can return the payment, requesting that a new check be issued to the "estate of decedent;" or

2. Since money in hand is hard to turn away, and if the surviving spouse is the sole heir, the payment can be deposited to an account that bears the decedent’s name. Since the decedent is not available to endorse the check, the best course is to endorse it as "deposit only to account xyz." Banks will almost always receive funds, even if hesitant to pay them out.

C. IRA funds

The question has never been "will the IRS get a chunk" of a decedent’s IRA; rather, it is "when will the IRS get a chunk." The combination of income tax and estate tax on a large IRA can be devastating. If the surviving spouse is IRA beneficiary, he/she can rollover the IRA into his/he own IRA, deferring income tax. The survivor can also defer estate tax using the unlimited marital deduction. This does not solve the tax problem, it just delays it.

The surviving spouse must contact the IRA trustee, probably a bank or brokerage. He/she will need to supply a copy of the death certificate. The trustee will process the IRA rollover in-house.

D. Trust Assets

With a revocable grantor trust, it is likely that the surviving spouse will be the successor trustee. This minimizes the procedures that are required, as there will not be a change of ownership. The trust may simply continue for the surviving grantor’s benefit.

If the survivor is not named as the successor Trustee, then authority for management of the assets will vest in the person who is named as successor Trustee. That successor will need the original trust agreement and a certificate of death in order to access the various trust assets.

If the grantor trust contains by-pass provisions (to fully utilize the unified credit of the first to die) then Trustee will have to re-title appropriate assets to fund the by-pass trust. While the trust agreement should contain clear instructions to carry out the funding, most survivors will call upon you as attorney to assist with the process. If you drew up the trust, you will know your own terminology. If the trust is not yours, you will need to study its provisions. You may need to meet with the survivor’s broker or bank to transfer assets.

VI. Review of Spouse’s Documents

You should encourage the surviving spouse to review his/her own planning documents. The decedent may have been the survivor’s only named agent in a durable power of attorney or a medical power of attorney. If so, the survivor has some thinking to do about a new and trusted representative.

The survivor’s Will should be reviewed to reflect any new dispositive instructions. Perhaps the decedent had a different attitude about a particular heir, and now that he/she is gone, the survivor desires to drop that heir (as the decedent can no longer find offense in the act). Perhaps the decedent was named as the survivor’s sole Executor. Again, the survivor should quickly select a new Executor and sign an updated Will.

The survivor should also reconsider any "right of survivorship" arrangements. All the rights of survivorship between the decedent and the survivor should have performed their function, leaving the survivor as sole owner of various assets. The survivor can, if he/she wishes, now add the children or any intended heir to various assets to enable non-testamentary transfer upon the survivor’s death.

Certain legal arrangements may have been rendered irrevocable upon the decedent’s death. Sometime revocable grantor trusts become irrevocable on the death of a grantor (by agreement of the parties).