My mother died one month to the day after her 100th birthday on 07 September 2022. How does one value her investments in companies and mutual funds?
Is it the closing market or NAV price on the day that she died?
Is it the average of the opening and closing market or NAV prices on the day after death?
If the assets were held in a “living” (revocable) trust, do the assets receive a step-up in basis to one of the above market values?
This might be more of a California question. If the deceased had a pour-over clause in their Last Will and Testament, do all of their assets and personal property become part of the trust that is an irrevocable trust as a result of their death? If so, does this mean that their California Probate Estate have a $0.00 value?
Is it the closing market or NAV price on the day that she died?
For mutual funds, NAV for the day of death.
Is it the average of the opening and closing market or NAV prices on the day after death?
Average of the highest and lowest price for the day of death. Neither maybe the opening or closing price.
If the assets were held in a “living” (revocable) trust, do the assets receive a step-up in basis to one of the above market values?
For revocable living trust, yes.
This might be more of a California question. If the deceased had a pour-over clause in their Last Will and Testament, do all of their assets and personal property become part of the trust that is an irrevocable trust as a result of their death? If so, does this mean that their California Probate Estate have a $0.00 value?
Maybe. A court order establishing the executor is still needed. You need professional advice. It also opens the door if beneficiaries of the will are different than the trust to contest the transfer.
If you mother has any retirement account such as IRA, 401K, etc…, make certain that the RMD for 2022 is done.
The funeral home should have notified Social Security. Social Security likely will take back the last payment from the account where it was deposited.
If she had any pension payments, you will need to notify them and it will likely take months to stop them from making payments and to take back payments made after death.
Brokerage and other accounts may have TOD (Transfer on Death) or POD (Paid on Death). These don’t go through probate. I don’t know what happens when that is specified and the account is in a trust. When trusts were newer, we had institutions pushing my mother-in-law to establish TOD on accounts that were in a trust.
Alternate date.
It is possible to assign a date within 6 months of death for determination of value. It applies to all assets.
Another exception is an asset that is sold by the estate within six months of death. If there is a home that is sold within 6 months, the sale price can be used for the valuation.
Alternate date. It is possible to assign a date within 6 months of death for determination of value. It applies to all assets.
The alternate date option is only available when it reduces the amount of estate tax due. If there is no estate tax because the estate is less than the exclusion amount, you must use date of death.
vkg: Thank you for the information on pricing the deceased’s investment assets.
If you mother has any retirement account such as IRA, 401K, etc…, make certain that the RMD for 2022 is done.
I told my mother to close her IRA account two years ago but she didn’t get around to it. The amount that was being sent to her was only a couple of hundred dollars each year and wouldn’t have much impact on her income taxes if she withdrew all of the money from the IRA.
The funeral home should have notified Social Security. Social Security likely will take back the last payment from the account where it was deposited.
The Neptune Society took care of that and notifying the county of her death. The last Social Security payment she received was for the month of August. She was alive the entire month so I don’t expect Social Security to ask for the money to be returned.
If she had any pension payments, you will need to notify them and it will likely take months to stop them from making payments and to take back payments made after death.
When we called the Corning’s pension office, they already knew about our mother’s death. They learned of her death from UnitedHealthCare that learned of her death from Social Security/Medicare.
Brokerage and other accounts may have TOD (Transfer on Death) or POD (Paid on Death). These don’t go through probate. I don’t know what happens when that is specified and the account is in a trust. When trusts were newer, we had institutions pushing my mother-in-law to establish TOD on accounts that were in a trust.
I’m not sure if there are any TOD or POD beneficiaries listed. Need to get the death certificate and probate assigned executor and trustee for the will and trust.