My mom passed away this year, leaving her children a modest estate. In the years leading up to her death, she saw her health declining and wisely decided to get her affairs in order. After my dad died a couple years earlier, she wanted to review and update their decades-old estate plan.
The original plan had been drafted by a firm in Portland, but the attorney had since retired. At 85, my mom had no interest in driving into the city, so we found a small firm in Brunswick, conveniently close to my office. For those familiar with the area, you’ll understand why she preferred staying local. Smaller firm, smaller parking lot, less formality. It just made sense.
The Basics of Her Estate Plan
Most people reading this won’t need a complicated estate plan—especially if your parent’s estate is below the federal estate tax exemption, which is currently $15.00 million (but set to revert to $5.49 million after 12/31/2025 unless Congress intervenes). For most families, simple is better.
When my mom redid her estate plan, she still owned her home and had a straight forward financial setup.
All she needed were four key documents:
- Financial Power of Attorney
- Healthcare Power of Attorney
- Healthcare Directive
- A Will
The cost at a small firm? Usually under $2,000. Always confirm, but in my experience, local firms handle this well—and supporting local businesses is a bonus.
Her Assets Were Simple
My mom’s financial life wasn’t complicated.
She had:
- An IRA inherited from my dad — with designated beneficiaries (me and my three siblings), so it avoided probate.
- A taxable brokerage account — with a TOD (Transfer on Death) designation. Also bypassed probate.
- A local bank account — used for Social Security, IRA distributions (RMDs), and bill payments.
- A credit card — used monthly, paid off regularly.
- Her home — which she was in the process of selling.
If you’re unfamiliar with TOD accounts: they allow assets to pass directly to heirs without going through probate, as long as proper instructions are in place.
Understanding Probate (in Maine)
Probate is the legal process that allows creditors to make claims against an estate. In Maine, the executor (or “personal representative”) works with an attorney who publishes a notice in a local paper, starting a four-month clock. After that, any creditors who haven’t come forward are barred from making claims.
In my mom’s case, there were no surprise creditors — just the usual: a credit card, medical bills, and assisted living costs.
Where I Went Wrong
We overlooked one thing: her bank account didn’t have TOD instructions. That became a problem.
At the time of her death, my mom had just sold her home. I handled the closing as her power of attorney the day before she died. The check—made out in her name—was deposited into her local bank account.
I had planned to transfer the proceeds to her Schwab TOD account, invest it conservatively (likely in a U.S. Treasury fund earning around 4% annually), and leave enough in the bank to settle final expenses.
But she passed the next day. And by law, the bank froze the account until they received:
- A death certificate (typically 2 weeks in Maine)
- Court documents appointing me as personal representative
This froze access to hundreds of thousands of dollars—money that could’ve been earning interest and covering final expenses.
Why This Matters
The delay wasn’t the bank’s fault—they were following the law. But because the home-sale proceeds weren’t in a TOD account, they became part of the probate estate and were locked up for over eight weeks (and counting).
If I had done one thing differently, this all could have been avoided.
Key lesson: Keep the bulk of the assets in TOD accounts or deposit large sums into TOD-designated accounts. Maintain a smaller balance in a non-TOD account to pay for bills, utilities, and final estate expenses.
This way, you preserve access to funds needed for short-term costs without locking away major assets in probate.
A Final Word of Advice
If you’re going to serve as executor (or are setting up an estate for a parent), understand this:
- You may want to keep some funds outside of TOD accounts to cover final expenses.
- Avoid keeping major assets trapped in non-TOD accounts as they could get caught up in probate.
I’ve served as a fiduciary for clients for years, so I was comfortable in the role. But even with experience, I made a mistake that delayed the process and cost the heirs time and interest income.
Hopefully, this cautionary tale helps you avoid that same mistake.
