Check my thinking please

[BulldogTom]

Client passed on Thursday.   On Friday, he received in the mail his debit card for the California Middle Class Relief payment.   My thinking is that the funds on the card are part of his estate, as he was alive when CA processed it, and his executor can activate and draw the funds from the card.   Went online to look for a FAQ but did not find anything on the FTB website covering this.

Is my logic sound?

Tom
Longview, TX

[ILLMAS]

Geez, I don’t know if I like this person family priorities, but good question.

[Catherine]

You can make a good case for it being an asset of the estate. The mailman might have simply forgotten to drop it off on Wednesday (that sort of delay sure happens around here a lot), in which case it would have been estate asset. If there was a postmark on the envelope, or any letter coming with it that was dated, I'd be even more inclined to say asset. If the estate needs funds to pay a lawyer (or you!) or for death certificate copies, or upkeep on the residence, those are all appropriate uses of the funds.

[BulldogTom]

It is only $200 on the card, and the estate does not need the money.   The daughter (sole beneficiary who has had POA since her father started declining about 2 years ago) asked if she should keep or send back.   I don't think she needs to send back for the reasons I stated above: it was processed by the state at the end of October and the mail just got to her.   I think once the state determined he was eligible, which he was on the processing date, the funds belong to him, therefore part of his estate.

@ILLMAS There is no issue with the family priorities.   Daughter is the only living relative, and she was just trying to make sure she was doing what was right.  

Tom
Longview, TX

[Terry D EA]

Tom,

I know you know this. But...the daughter's POA expired when her father passed. Don't know what CA calls them but she has be appointed the Fiduciary by the will or court and be granted letters of authority over the estate. I agree with you and others, the card should be part of the estate and as Catherine stated, you can make a good argument based on the post mark on the envelopes.

[Catherine]

On 11/14/2022 at 3:46 PM, Terry D EA said:

the daughter's POA expired when her father passed

Good catch, Terry! I was making the assumption that since she was sole beneficiary she was also appointed as executrix.

[DANRVAN]

On 11/12/2022 at 5:27 PM, BulldogTom said:

 My thinking is that the funds on the card are part of his estate, as he was alive when CA processed it, and his executor can activate and draw the funds from the card. 

 

On 11/13/2022 at 7:11 AM, BulldogTom said:

 I don't think she needs to send back for the reasons I stated above:

I see two prongs to your question: legal and tax.  Whether she has to send it back is probably a legal question (though for an minor amount) that I would not likely advise on.  However, if your search came up with an answer I would pass that on to the client.

Regardless, if the proceeds are not returned, then I would include them in the estate.