After you receive the death certificates here is the next list of items to perform.
Step 1: If your parent has life insurance and/or Long Term Care policies, notify them.
Step 2: If your parent has an IRA, set up an inherited IRA for yourself and then contact the holder of their IRA to direct them to move it to your new inherited IRA account. For more information on inherited IRAs, which allow you to withdraw the money over the next 10 years and thus reduce your tax impact, look here. Note that everything is easier if you and your parent have your accounts at the same brokerage.
Step 3: Give your bank (joint checking account) that death certificate that you have been promising them. The joint checking account becomes yours.
Step 4: Give your brokerage the death certificate for the trust account and instruct them, as trustee, what to do with the contents per the details of your parent’s trust. They will just trust you to decide how to disperse it as trustee and will not “police” the trust’s directions. While others are waiting six months or more for a will to be probated, you are done already! And my husband would tell you to sell everything after it hits your own trust (yes, you should have also set up a trust for yourself) and then reinvest it. This is your chance to reallocate your assets and to avoid paying taxes on the growth of your parent’s investments since you get to start with your own higher cost basis.
Step 5: File your parent’s original will and certified death certificate with your county’s probate court. This is required (in Missouri) within one year of death. My attorney is doing this for about $250. However,if you have all of your parent’s belongings in joint accounts and trusts, then you have no reason to actually probate the will. But if at some future date you unexpectedly discover that your parent owns something that is still in their name, then this will allow you to lay claim to it.
Step 6: Wait long enough to make sure it is fully paid, then cancel that joint credit card account.
Step 7: Be sure to save a chunk of money in your joint checking account to pay outstanding bills for about 6 months. Also, estimate your parent’s income taxes for this year and set aside that amount. When you are sure that you have paid every bill, then you can split the remainder of this checking account with any other heirs. You can gift up to $15,000 per person per year (in 2020) without tax consequences.
Step 8: Next year, file your parent’s income taxes.
You can finalize everything by finishing up any loose ends.