Ask the Expert: Collecting estate money

The tax code doesn't let you claim a

The tax code doesn't let you claim a deduction for giving away money unless your gift is irrevocable. (Credit: iStock)

Lynn Brenner

Lynn Brenner Lynn Brenner

Brenner answers questions about all aspects of family finance.

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After my father died in North Carolina, my mother, who now lives in New York, received a $500 refund check from Blue Cross Blue Shield of North Carolina made out to his estate. Banks won't cash it without "letters testamentary." Going through probate to get those letters will likely cost more than $500. One bank rep said most people just give up when facing issues like this. How can my mother cash this check without going through an expensive legal process?

 

Bank representatives all too often are unaware that surviving family members can claim money owed to an estate (subject to certain limitations) without going to court simply by filing a small estate affidavit, says John J. Barnosky, a Uniondale estate lawyer. If your father left less than $30,000 of assets -- not including jointly owned assets or assets with named beneficiaries -- New York and North Carolina laws both let his surviving spouse file an affidavit with insurers, banks, government agencies and employers to collect money they owe his estate.

Disposition of an estate is governed by the state where the decedent lived. If that's North Carolina, call the insurer and ask how to obtain the affidavit that will let the company issue a new $500 check payable to your mother. In New York, you can apply online for this affidavit free of charge. You'll need the decedent's original will (if he had one); a certified copy of the death certificate; the names and addresses of surviving family members; and a list of the decedent's unpaid creditors. You'll also need the account numbers and value of assets that he owned in his sole name, including bank accounts, investment accounts and insurance policies without named beneficiaries.

The bottom line It's not always necessary to go through probate to collect money owed to an estate.

Websites with more information bit.ly/Pm80JK and bit.ly/TupG55

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