Funeral Exp. and Bequests not showing up in spending
I entered identical special bequests and funeral expenses for my wife and myself. The profile assumes she will outlive me by 5 years.
The total of my funeral expense and bequests shows up as expected in the appropriate column in the Total Spending report in the last year of my life, and the Total Spending column shows an increase to account for that.
No such expenses show up in the last year of my wife's life, and the Total Spending column is just about flat with the previous year.
Per the plan, my wife has no life insurance in her last years. We do not plan to sell the houses to cover these expenses. Rather, we plan to leave them to our child. So I can't figure out what is happening with these expenses.
Can you help me understand this?
RSS
Well, I don't see this behavior when I set up a simple case. I've given each client a bequest of 10k and a funeral expense of 20K and see expenditures in the Excess funeral and bequest column of 30K in the year of death for both the husband and wife (separated by 5 years as per your description). Unless this is some kind of whacky pilot error, we'll need you to open a support ticket and upload your database for analysis.
Best,
Dick Munroe
What's happening here is that the house is being sold when the last spouse dies and used
to pay off the funeral and bequest. Program is operating correctly. We only
display excess funeral and bequest expenditure. Call with any questions on this. 617 834-2148. Best, Larry
Thanks for the quick responses. I'm not sure, though, how to reconcile them.
I set up funeral expenses and bequests for both myself and my wife, as did Dick, but I only see them reflected in the Excess funeral and bequest column in last year of my life (as the first deceased), not in the last year of my wife's life as does Dick. So maybe something is wrong.
On the other hand, Larry says that what I see is the correct behaviour, as it is assumed that the house is sold to pay off the funeral and bequest. That makes sense, so maybe everything is ok.
My guess is that in the sample Dick ran, there may not have been sufficient equity in the house to pay the final expenses, so they show up in the report. In my case there is enough, so they don't show up.
If that makes sense, then all is working correctly. Assuming that it is, I would like to be able to override the "sell the house" behaviour if possible as we don't intend to sell the house but rather give it to my daughter. Is there a way to do that or work around it?
Thanks...
David Shannon
If there is a house involved, ESPlanner assumes that the house will be sold to defray the costs of the bequest and funeral. The expenses show up when you croak because they have to come out of your wife's personal economy (you die, she pays). When your wife dies, the money comes out of your estate's economy and doesn't show up on your reports. You can argue that maybe it shouldn't but that's the way things work currently.
In the case that I ran, there was no house to sell to defray the post death costs, so everything is working as expected.
Best,
Dick Munroe
Thanks for the information. I understand now how it works and it turns out to be pretty easy to work around the "sell the house" issue.
If anyone else is interested, I just took out the funeral and bequest info for my wife and entered those items as special expenses in the last year of her life. They show up in the spending in that year, and all the recommendations change to accomodate them and provide the funds. The houses are left free and clear.
Thanks again. It's amazing how responsive you folks are to questions.
David Shannon
Tell your friends and thanks for the compliment.
You may be able to get the same effect using a reserve fund. IIRC, the code will also use the contents of the reserve fund to defray the funeral expenses.
Best,
Dick Munroe