Planning before death eases estate disposal

NEW YORK -- A parent's death can be devastating, taking a heavy emotional toll even on adult children. Then, to add to the grief, there's the difficult task of disposing of the estate -- not just houses, securities and bank accounts, but a lifetime of possessions.

It's a painful responsibility that many baby boomers are dealing with now, or will face in the years ahead.

In some ways, it is impossible to prepare for the process. Just as it is difficult to predict what emotions will surface, there is no way to know in advance all of the family, practical or logistical problems that will arise as children sort through assets and belongings.

"I was reading articles about what to do and what not to do and thought I had become knowledgable, but I'm still learning," said David Grant, 57, a public relations executive in New York who helped his mother go through his father's possessions two years ago and recently had to liquidate his mother's assets when she entered a nursing home.

"Until you deal with it, you just don't know what's involved," he said.

Financial planners say disposing of an estate can be made much easier if parents have done some careful planning, not just leaving a will, but letting children know where bank and brokerage accounts and any real property are located.

It can also be helpful if parents write what are known as testamentary letters, expressing their wishes about who gets the good china or the clock that's been in the family for generations. And they should explain to their children the reasoning behind their decisions.

Time to juggle

But even with such planning, handling an estate can be an overwhelming task, one that has to be carried out while juggling the needs of spouses, children and careers. It often falls primarily on the child or children named as executors of the estate.

For many people, the hardest and most time-intensive part is going through their parents' home.

"You just can't imagine the volume of stuff that's stuck in drawers and in closets," said James O'Connor, a public relations executive in Lake Forest, Ill., one of eight children and the one chosen to deal with his parents' estates. "You need manpower -- if you're doing it yourself, it's a big job."

Each step can drive home the finality of a parent's death, and the difficulty of facing that can help draw out the process. Finding photo albums and scrap books, so tempting to look at, can also slow it down.

"You really have to detach yourself," O'Connor said. "When you come across those photos, look at them later."

Going through parents' possessions can also mean an endless series of decisions -- whether to keep, give away or discard garments, knick-knacks, books, housewares and more -- and possibly conflict with siblings over who will get items of monetary or sentimental value.

"It's really more than a division of property -- it's a division of their sentiments and memories -- good and bad memories," said Steve Barker, a senior vice president with the trust department of Frost Bank in San Antonio.

Barker said that when siblings are unable to agree on who should get specific items, a common solution is to hold a lottery. The siblings draw numbers and select the items they want as each turn comes up.

The many household articles that no one wants should be sold (you can hire an estate liquidator to help) or given to charity. Or, if they're in poor condition, they should be discarded.

Grant and O'Connor both said they had the support of their siblings as they dealt with their parents' estates. But in many families, hard feelings and past differences resurface, making a difficult time harder and even more painful.

If the conflicts are serious, the executor might want to seek some advice from an attorney who deals with estate matters.

But Steve Milner, a lawyer and certified public accountant in Newport Beach, Calif., noted that as long as an executor carries out his or her duties responsibly, other siblings are unlikely to have a case.

Still, he said, "this can cause wounds in a family that can go for years."

Barker suggested executors communicate openly about what they are doing and the actions they take. The more information other family members have, the fewer questions will arise.

When it comes to financial assets such as stocks or bonds, or real estate, the property is often sold and the proceeds distributed as stipulated in a parent's will, or otherwise divided among the heirs. Depending on how much property there is to be disposed of, this can take months or even years.

Easier to deal with are bank accounts -- although sometimes these can carry some unexpected twists. For example, if a parent has left an account in trust to only one child, it doesn't become part of the estate shared by all.

Sometimes, it's hard to know where the property is -- some parents haven't been very organized, and so the children have no idea which bank or brokerage their parents used. They might also have no idea where the real property is located.

If a thorough search of parents' papers yield no clues, Barker said the answers will show up by mail, in the form of account statements, tax bills and 1099s at tax time. And if need be, an attorney or accountant can begin a search of banks and other financial institutions.