Author Archives: Steven J Weil, PhD, EA, LCAM

Settling Financial Affairs When A Loved One Dies

By Steven J. Weil, Ph.D., EA, President, RMS Accounting

Losing someone close is always a sad, somewhat frightening, and quite confusing experience. For the person who must also deal with the financial and legal implications, it carries some heavy responsibilities as well. To assist in this process, here is an outline of what should be done from a tax and financial standpoint in order to settle the affairs of one who has died. While some of the issues are hard to face, it is for the good of all concerned to deal with them openly.

Overview of the Process

It’s best to initially look at the whole picture. The first, and saddest decisions come early on at the hospital shortly after death. The attending doctor has the responsibility to sign the death certificate and decide whether an autopsy is required. For most states, unless the death is due to violence, or suspicious, unexplained causes, no autopsy is performed.

However, there may be instances where you would want an autopsy done in case the cause of death may relate to a hereditary issue. If so, your time to make this decision is limited. Similarly, if the deceased was an organ donor, time is of the essence.

Next, decisions must be made regarding funeral arrangements. It is important to find out if the deceased had any specific wishes in this regard, and to coordinate with family and friends. Following this, a number of financial and legal decisions will be required.

The estate of the deceased must be settled. That is, remaining net assets must be transferred to legal heirs. This is called the probate process. In conjunction with this, various federal and state tax returns may be required to be filed on behalf of the deceased.

Succession (“Inheritance”) Tax Returns may be required as well as a final Individual Income Tax Return. If the deceased has an estate that is yielding income while it is still being probated, a Fiduciary Income Tax Return may also be required.

A “Final Accounting” is also done at the end to verify with the legal authorities that all the net assets have been distributed properly after all allowable expenses have been paid.

Within some of these steps are important issues that should be discussed in detail. Since the courts hold the executor of the estate responsible for the proper and timely filing of various documents, it is essential to have a good, working knowledge of these various aspects and the due dates involved.

Included at the end of this text are several checklists that identify in detail what should be done, and what steps must be taken in sequential order for tax purposes.

Get Copies of Death Certificate

You will need to submit copies of death certificates to various places, so make sure you have a number of copies. These are provided at either the hospital or, more commonly, by the funeral home. The cost for extra copies averages $2-8 dollars each. To claim insurance benefits, employer benefits, transfer of assets, etc., requires furnishing a copy of a death certificate.

Find The Will And Safe Deposit Box

Assuming you know that a Will was made out, it is important to find it as soon as you can since it may provide many important guidelines. It may contain burial and funeral instructions; it certainly identifies the person who will serve as the executor — the one who handles all the legal and financial matters after death. It also may list locations of other important papers such as life insurance policies, and safe deposit boxes.

Sometimes the Will may be inside the safe deposit box. Thus, you will need legal authority to open the box. If you can’t find the safe deposit box, you can do a local search of the banks with the help of a lawyer, and you can also contact the American Safe Depository Association in Indiana. They have lists for all participating banks.

What if you can’t readily find the Will? Try asking friends or relatives if they knew which lawyer was used by the deceased. Also, look through address books, file cabinets, checkbooks, or storage facilities to search for clues.

When someone dies without a Will, things are more complicated. Unfortunately, approximately 60% of all Americans don’t leave a Will, according to today’s statistics. In effect, they die “Intestate.” If this is the case, the courts will handle the matter based on the individual state law. They will appoint an executor, and all net assets from the estate will be distributed according to state laws, not necessarily the way the deceased may have wished.

Contact Professional Advisors

Getting a lawyer to handle the probate and estate process is an early priority. Most people use the same lawyer who set up the Will, but you are permitted to use any attorney with whom you feel comfortable.

You should also contact the professional who will handle the filing of the various tax returns. A mistake most people make is assuming the lawyer handles everything in the estate process. This is rare. While most lawyers will handle filing the Succession Tax Returns, they do not usually handle the Income Tax Returns, or the Fiduciary Tax Returns. These must be filed on a timely basis. So the tax accountant should be contacted early on in order that a coordinated effort can be made with the attorney.

Begin The Probate Process: Gathering Information

This is the complicated job of recording all assets and debts of the deceased, and all the pertinent financial records to comply with the Will, the tax laws, and the courts.

The first step is to locate all assets and debts. As we mentioned, sometimes the Will contains most of this information. But, even if it is listed, don’t assume it is up to date. If the Will had been drawn up years ago, many changes may have occurred to increase or decrease the assets and debts of the deceased. You must make a reasonable effort to do a preliminary inventory of the estate within specified time periods in accordance with state laws. Finding this information can be tedious. The information you will need comes from many sources, including life insurance policies, bank accounts, brokerage accounts, safe deposit boxes, stock certificates, bonds, real estate contracts, vehicle registrations, and old tax returns, to name a few. You should also check to see if there were any ties to various fraternal, military, or social organizations.

Once this information is gathered, a preliminary inventory is used to begin preparing the Succession Tax Returns and to account to the Probate court. The lawyer and/or tax accountant can assist in organizing these items.

The second step is to arrange for the payment of various benefits that may be available upon the death of a person. They include Life insurance benefits, Veteran’s benefits, Social Security, IRA’s, Keogh’s, SEP’s, and other employee-related benefits. Proper tax planning when it comes to the distribution of these funds (especially IRA’s) can be critical to the recipients. Thus, it’s important to get tax advice before you make the payments.

It’s also important to be thorough here because these benefits are not automatic; you must apply for them by providing proof of death, and proof of the beneficiaries.

Life insurance is usually the first to handle since the benefits can be distributed to the heirs within 10 days of notification. Life insurance proceeds do not have to go through probate (although they are subject to Estate taxes). Some tips here: Check with the employer of the deceased for any group life insurance. More than half of all life insurance comes from group plans. Life insurance policies could be in the safe deposit box. Coverage may also come from associations, fraternal organizations, Veterans Administration, credit card supplemental insurance (from death related to travel or accident), bank SBLI insurance, mortgage insurance, some medical insurance policies, credit unions, and others. If in doubt, go through the deceased’s checkbook for checks written out to life insurance companies or groups. You can also check with the American Council of Life Insurance in Washington D.C. to see if any participating companies are listed on behalf of the deceased.

Employee benefits play an important role. Did the person have any pension, profit sharing, stock options, or death benefit payouts available? Does worker’s compensation figure in if the person died from work-related injuries? If in doubt, ask for assistance. Most companies have a person or department that can help you in this area. Call them right away.

Military benefits may be available for deceased veterans. These benefits can be in the form of life insurance, burial insurance, pension benefits to survivors, reimbursement for medical bills, or a lump sum death benefit. Your local VA office can help, but you’ll need to provide information on the service record. Look for discharge papers to get this information.

Social security benefits can be sizable if the deceased left a spouse with minor children. There is also a small death benefit for funeral expenses. You can get help here from the local Social Security Administration office. If the deceased had been receiving social security or pension checks up until death, keep in mind that any retirement checks of this nature that continue after death may have to be returned. The Social Security Administration, in particular, does not immediately know about a person’s death, and there can be a significant lag. It’s a good idea to contact them immediately to avoid this hassle.

Probate And Inheritance Process

There are two related issues to handle. First, you must probate the estate. That is, implement the transfer of assets from the title of the deceased to the heirs. This involves a series of steps designed to finalize this transfer. The death must be stated in an “open forum” which customarily means it is listed in the local papers, and, in some cases, sent to individuals directly (usually potential heirs and beneficiaries).

All known debts are paid out of the estate, and various legal documents (including a final accounting) are recorded with the courts to allow the assets from the estate to pass on to the beneficiaries. This process can take as little as one month or many years depending on the size of the estate, whether it is being challenged, whether the deceased died without a Will and the backlog in the Probate Court calendar.

Inheritance taxes are a separate function. While they share a common denominator in that the value of the deceased’s estate must be established in order to institute the process, the similarities end there. The Inheritance or Succession Tax function is designed to establish how much tax, if any, is owed to the federal and state governments.

The biggest chunk of potential estate taxes usually goes to the federal government. In effect, it is a graduated rate tax that is due on the net value of the estate. Due to various federal credits, if the taxable estate is less than $675,000, there probably will be no federal tax. Nor is there usually any tax if the entire estate is left to a surviving spouse who is a U.S. citizen. Beyond that, however, there is a federal marginal tax rate which can reach as high as 55% of the estate. Normally, this tax is due within nine months from the date of death. There are certain exceptions to this deadline and to the exemption amount if the deceased had a business or owned certain types of real estate. State inheritance taxes can vary widely from the federal laws. Your lawyer/accountant team is usually retained to handle these aspects for you.

Winding Up The Process

Once the Inheritance taxes have been paid and the probate process has been completed, the task is done. As you can see, it can be quite complicated. The more organized the estate is before death, the easier – and less expensive – the process becomes. Moral of the story: Get your own affairs in order before you die to save your surviving family and friends untold amounts of wasted time and frustration.

Steps To Take For Tax Purposes

1. Contact the lawyer, tax accountant, and other appropriate financial advisors you will be using to help with the estate.

2. Begin the inventory process of recording assets, their values at date of death, and any debts/liabilities the deceased had.

3. Apply for federal and state tax identification numbers for the estate, if needed.

4. Prepare federal and state Succession/Inheritance tax returns.

5. Handle accounting reports for Probate.

6. Prepare outstanding Individual income tax returns for the deceased.

7. Prepare Fiduciary income tax returns for the estate.

8. Do the final accounting to close the estate.

Summary Of General Steps To Take

* Make necessary hospital decisions shortly after death. Autopsy or not, picking up personal belongings, donating organs, and getting copies of death certificate.

* Locate Will and safe deposit box, and contact attorney and other appropriate financial advisors.

* Arrange for Funeral/Memorial, notify friends and family.

* Contact decedent’s employer for details on death benefits. Locate life insurance policies, apply for proceeds. Arrange for the continuation of payment of decedent’s bills.

* Notify Social Security, Veteran’s Administration, and other associations for possible benefits.

* If required, notify Post Office for address change.

* Contact various financial organizations of deceased: banks, mortgage holders, retirement plans such as IRA’s, Keogh’s, brokers, mutual funds, people who owed money to the deceased, insurance companies holding auto, fire, medical insurance policies, DMV, credit card companies.

* Arrange for miscellaneous change and/or shut off of service agreements: Utility companies, oil companies, newspaper and periodical subscriptions, clubs, cable TV.

* Follow up on various tax matters as previously listed.

* Dispose of decedent’s assets, and belongings according to Will. If donating clothing, furniture, etc. to a charitable organization, provide a detailed list and get a receipt for tax deduction purposes.

* Re-evaluate your own situation regarding your Will, and information available to survivors in event of your sudden demise. Make it easier for your survivors than it was for you.


By: Steven J Weil, PHD, EA, LCAM

According to the U.S. Small Business Administration, there are around 28.8 million small business located in America. Small businesses, which maintain fewer than 500 employees, account for 99.7% of all business in the US. Around 82% of small businesses fail due to cash flow problems, a US Bank study discovered. But, Dr. Weil says that cash flow isn’t the only issue that small businesses face. Below are 10 main reasons why business in America fail:

  1. Having too strong an attachment to sales at any cost.
    While everyone knows sales are important, what is often forgotten is that sales without profits serve no purpose. Every sale needs to contribute to the bottom line.
  2. Cash flow is the lifeblood of every business. If you run out cash, the business dies. It’s important to understand what cash you do or don’t have for a given undertaking. Your cash flow is impacted negatively when you are carrying accounts receivable for creditworthy but slow-paying customers.
  3. Know your true costs. A business owner who forgets to include costs because they are not paid at the time of a sale can quickly find the business in the red with unaffordable payments due.
  4. Understand your sales tax and other tax obligations. Failure to collect sales tax from a customer does not get you off the hook for paying that uncollected sales tax. By the time an audit comes about, your lack of knowledge could cost you tens or even hundreds of thousands of dollars.
  5. Be sure to follow all employment laws. Both the state and federal governments have a say in everything from minimum wage to overtime. Even if your employees agree to something less, you can and will still be held accountable to comply with the law. Failure to do so can create huge financial liabilities.
  6. Keep good records, and do keep business and personal information separate. Not only will you need to have books and records for your business at tax time, but having accurate books and records can help you spot developing problems before they drag your business under.
  7. Consult experts when the need arises. Guessing at the tax consequences, labor rules or meaning of a contract can cost you everything. When you are not sure, consult an accountant, attorney or whatever expert. One thing you can be certain of is that consulting an expert to avoid a problem will be a lot less expensive than using an expert to resolve a problem.
  8. Be careful about borrowing. Getting cash today by pledging credit card receivables or factoring can be expensive and rob cash flow that you will need to operate. Be mindful of the cost of any borrowing along with the repayment terms.
  9. Never risk more than you can afford to lose on just one customer. We have seen more than one business allow a “good customer” to run up a large account or place an order so big that failure to pay or a problem with the order can result in a catastrophic business failure.
  10. Never let just one customer be responsible for more than 10% of your total business. A business that has one or two customers that represent 50% of its total sales is not really a business; it’s a de facto employee without the benefits.


Quotes & Media

Media Quotes &  Recent Press

LifeLock – Tax Fraud: What You Need to Know 08/10/17

GoBankingRates – Know Before You File: Tax Breaks for 2017  01/17

Senior Outlook Today – Tax Strategies with Retirement in Mind 12/01/16

National Financial Educators Council – Teaching Children Personal Finance 01/16

CNBC – Smart ways to gift money during the holidays 12/14/15

MainStreet 02/09/15

FoxBusiness Web Site 02/11/15

Retailmenot Blog 02/19/15

Learnvest Web Site 04/14/15


Healthcare Q&A

Affordable Health Care Act (Obama Care) Deadlines

Here are some answers to the most frequently asked questions on the impending October healthcare law deadlines.

Question: What is the most important item that small businesses need to account for with regards to the October deadline?

Answer: The most thing to do is distribute a Notice of Exchange Coverage Options document to all employees prior to October 1, 2013. Any employee hired after the October 1st deadline must be given the notice within 14 days of hire. See the letters below for your particular situation.

Notifications for Employers who provide insurance:
Notifications for Employers who do not provide insurance:

Question: I own a small business of only 2 full-time owners and one part-time employee. What am I responsible for doing by October 1st?

Answer: Similar to all other small business with less than 50 employees you must distribute the forms to all full-time and part-time employees. Employees should sign a verification form for your records indicating that they received the form.

Question: What are the requirements for the January 1st, 2014 deadlines?

Answer: As the individual mandate begins on January 1st, 2014 all individuals (with a few limited exceptions), must purchase “minimum essential coverage”. Therefore all of the insurance market reforms will go into effect at that time in which case any new insurance policies that are issued after January 1 must comply with all new insurance regulations.

Question: Do I have to provide a Notice of Coverage Options to part-time student employees?

Answer: Yes, it is required for all employees.

Question: As a seasonal employer with less than 50 employees, are we required to meet the October 1st deadline for the “Notice of Coverage” even though the workers won’t start until December?

Answer: Yes, you are required to distribute the Notice of Coverage Options document to employees, however you have 14 days from the day they start working to distribute the document.

Question: Is a company still allowed to require a waiting/probationary period before new employees can be added to the health insurance? If so, how long?

Answer: Yes, a company may still require a waiting period, however it may not exceed 90 days from the employee’s start date for a full-time employee.

Question: Are there copies of the notices available in Spanish? Do we need to supply employees with both the English and Spanish versions?

Answer: Notices of Employees Coverage Options are available in Spanish at You are not required to provide an English and Spanish version however you should be sure to get a signed receipt of notice from each employee for your records.

Question: The model notice has an area to state whether we offer a plan to all employees or some employees. If we only offer a plan to qualified employees, do we need to give a separate notice to those that are not eligible versus those who are? If so what needs to be changed on the notice?

Answer: Use the model notice for businesses that offer to some or all employees ( Use the box on page 2 of the form: to check “Some Employees” and then fill in employee qualification details.

Question: I own a small business with less than 20 employees. Several of my employees purchase health insurance on their own — what happens to them when they don’t participate in our group health program?

Answer: If they choose not to participate in your company’s plan, they may get coverage in the exchange. Based on the affordability of your plan, they may or may not be eligible to receive tax subsidies in the exchange.

Question: My company has 2 separate corporate entities with some similar board representatives and are all under one group insurer. Each entity has less than 50 employees, however together they have over 50 full-time employees. Are we considered as the over 50?

Answer: Businesses that are considered a “controlled group” need to be aggregated together when considering their responsibilities under the healthcare law. There are basically three tests to determine whether your businesses are considered a “controlled group”: a brother/sister text, a parent/subsidiary test, or a hybrid.

If 5 or fewer people own 80% of a business then it is considered to be a controlled group. Therefore if 5 or fewer people own multiple businesses then they will be aggregated.

We recommend that business owners consult with a benefits attorney to work out if their businesses need to be aggregated.

Question: I’m confused about this new healthcare law. My company only has 8 employees, some with medical insurance and some taking care of it from other sources. What companies are NOT required to do this?

Answer: Companies with fewer than 50 full-time employees are not required to offer health insurance to full-time employees, however you are still required to provide the notice of healthcare coverage options. With regards to employees’ insurance, Medicare insurance is an acceptable method of coverage with regards to the individual mandate.

Question: Wait…I thought the deadlines were delayed another year. What do we need to do now with our employees under Obamacare?

Answer: While some provisions have been delayed others are continuing on schedule. The employer mandate that requires businesses with 50+ full-time or full-time equivalent employees to offer health insurance to full-time employees or pay penalties has been delayed one year (until 2015). In most states, businesses with less than 50 employees with have more limited offering options under Obamacare’s small business exchanges (SHOPs) and will only be able to enroll their employees in a single health insurance plan.

All businesses must still distribute a Notice of Coverage Options document to employees by October 1, 2013. The health insurance exchanges will open for enrollment on that date. The individual mandate will begin on January 1, 2014 — requiring nearly all Americans to purchase health insurance or pay penalties. All health insurance requirements will take effect on January 1, 2014 which will potentially cause individual and small business health insurance costs to increase.

Question: Are any more delays expected for the individual mandate?

Answer: The House of Representatives has passed legislation that would delay the individual mandate for one year to match the year delay in the enforcement of the employer mandate that was issued by the Obama Administration. Unfortunately the President opposes this legislation and has threatened to veto any legislation that would delay the individual mandate, therefore we do not anticipate a delay at this time.

Question: Since the deadline for offering healthcare to 30+ hour employees was pushed back to 2015 but individuals are required to purchase in 2014, will we have to pay a penalty on those that are on the exchange in 2015 or will they have the option to come on our plan at that time? If they chose to stay with the exchange (because of rebates from the government) will we still have to pay a penalty?

Answer: Final regulations regarding the employer mandate have not been made as of yet. The Exchange is supposed to be capable of prohibiting employees who have the offer of affordable health insurance coverage from their employer from accessing subsidized coverage, even in 2014.

Question: When does the exchange open and when does it close? If you miss the enrollment period when it be open for enrollment again? Will qualifying events allow for a change?

Answer: Open enrollment begins October 1st, 2013 – March 31st, 2014. While open enrollment for exchanges will begin on October 1st of every year they may not last as long in the future however that is not known for sure at this time. Individuals will be able to change benefits or enroll after a qualifying event, likely within 60 days.

Question: Can an employee drop their coverage through their employer and enroll in coverage through the exchange? If so, could they get a tax credit if they qualified and did so?

Answer: Employees can only drop their employer sponsored health insurance and obtain a tax credit if the coverage is inadequate or unaffordable. Inadequate is defined as the coverage has a plan generosity measurement below 60% (meaning health insurance premiums must cover at least 60% of expected health costs and the employee is responsible for the remaining 40% in cost-sharing through deductibles, co-pays, and/or coinsurance. Affordable is defined as having the employee’s contribution to the policy at less than 9.5% of the employee’s income (Box 1 of the employee’s W-2 form). If an employer offers multiple plans, it would be he employee’s contribution to the lowest cost option. As long as the employer-sponsored insurance meets the requirements of being affordable and adequate, then an employee is prohibited from receiving tax credits on the individual exchange to help purchase coverage.

Question: Is it my responsibility as the employer to track what insurance my employees have?

Answer: If your employee elects something other than your plan it is not your responsibility to track their insurance coverage.

Bookkeeping – “Rent a Controller”

We provide you with complete, timely reportsthat will manage your cash flow.

We will produce the following reports weekly and/or monthly:

Accounts receivable aging


Cash disbursement listings
Bank reconciliations
Accounts payable reports
Sales tax reports
Cash demand projection
Payroll tax reports
Cash balance reports
Other business tax reports
Balance sheets
General ledgers
Income statements
Customized reports

You will be surprised at how much you can save. Youcan reduce many variable costs, office space, payrolltaxes, employee benefits, equipment costs, softwarecosts, and the effort! Contactus for a free estimate of the cost savings foryour business.

Firm & Employees

About the Firm and our Employees – We want to know what you think of us. Let us know if you were pleased with how we handled your accounting, Bookkeeping, Payroll or tax matter.  Did someone in our firm go above and beyond your expectations, tell us who and how they helped you?  If we somehow did not live up to your expectations we want to know that as well?

Tax Q&A

Tax Questions & Answers – Need an answer to a tax question or what if? Here is your chance to ask one of our professionals. You can also use this Blog to tell us your tax story good or bad. We want to hear your ideas, questions, and concerns. We will also use this space to keep you up to date on the latest information coming from the IRS, Congress, and other sources about taxes.

Bookkeeping Q&A

Bookkeeping Questions & Answers – Basic bookkeeping can keep you out of trouble, help you increase your profits, and lower the cost of having your tax returns prepared.  It can also be a little confusing from time to time. Need help choosing software for your business or knowing how to handle a transaction, here is your chance to ask our experts. Have a story about bookkeeping good or bad share it with us.  We could always use a few laughs and might even shed a tear if your story is sad enough.

Business Q&A

Business Questions & Answers – We always tell our client’s that if they have a question and don’t know who to ask, start by asking us.  After plus 25 years of owning, building, and helping other business owners to succeed we have accumulated a lot of knowledge which we are happy to share. We may not have the answer you want or even know the answer but if we don’t we can probably tell you where to look for the answer you need.