If you have ever been to London, you might recall seeing these signs all over the Tube, London’s subway system. These signs are there to warn people to be careful- there is a gap between the platform and the train and it can be dangerous to let your foot get caught in that gap. If you don’t “mind the gap”, you could lose a leg or worse!
There is a gap to be aware of when a person dies too. If you don’t “mind the gap” when a person dies, it can create expensive and unnecessary problems for the family.
Here is that gap: While a person is alive but unable to manage their affairs, someone else might do so under either a Power of Attorney or a Healthcare Directive, or both. Both of these documents terminate at the death of the person though, so no one has any authority to access bank accounts, investments, sell real estate or do much of anything to tap into financial assets after death. With funerals costing upwards of $20,000, how does someone pay for burial or cremation and a funeral? That is a real problem for many families!
If a person was wise enough to have a Last Will and Testament, they have appointed a Personal Representative, an Executor, to manage their estate through the probate process. This person doesn’t gain any authority to act though until the Probate Judge appoints them, and that could be two weeks or more. In some circumstances it takes several months to be appointed by the Judge! Until then, no one has authority to act. No one can pay bills, no one can turn off utilities, no one can negotiate with creditors.
So “the gap” is that time between death and when someone else has authority to take over making financial decisions for the recently deceased.
If family members loan money to the estate to pay for a funeral or to pay for other expenses, they might or might not get repaid, depending on how many other creditors there are. You would simply get in line with the rest of the creditors and only get a portion of what you paid back.
So how does someone “mind the gap” in the probate process?
How can a family avoid this trap and ensure a seamless transition of authority when death occurs?