Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, November 13, 1995 TAG: 9511150002
SECTION: MONEY PAGE: 8 EDITION: METRO
SOURCE: MAG POFF
DATELINE: LENGTH: Medium
A: Neil Birkhoff, a lawyer specializing in estate and tax planning with the Roanoke firm of Woods, Rogers and Hazlegrove, said the Virginia Code (Section 64.1-1 and 64.1-11) provides first for the payment of the funeral expenses, charges of administration and debts. After that, if a divorced parent remarries and then dies without a will, the children will be entitled to two-thirds of the estate. The surviving spouse will be entitled to one-third of the estate.
The estates of people who die without wills are handled by administrators rather than by executors. Birkhoff said the appointment process is governed by Section 64.1-118 of the Virginia Code.
That section states that administration shall be granted to the distributees (or heirs) who apply, "preferring first the husband or wife and then such of the others entitled to distribution as the court or clerk shall see fit."
If no distributee applies for administration within 30 days of the death of the intestate person, the court or clerk has the power to grant administration to one or more of the creditors or to any other person.
The creditors or other persons, however, must certify to the court that they have made a diligent search to find the husband or wife to give notice of their intention to qualify and have been unable to find the surviving spouse.
Birkhoff said a person will not be appointed administrator in any event unless the court "is satisfied that he is suitable and competent to perform the duties" of administration.
With regard to the portion of the estate to be distributed to any minor children, Birkhoff said, the administrator of the estate should petition the local circuit Court for one of two options.
One is a petition for authority pursuant to the code (Section 64.1-57(1)(p) to make distributions directly to the minor beneficiaries of the estate or to a relative, friend or guardian for the benefit of the minor children.
Or he may petition the court for authority pursuant to the Virginia Uniform Transfers to Minors Act to make a distribution to a custodian under that act so the custodian can hold the funds for the benefit of the minor children until they reach age 18.
You should be able to read these sections of the code at the law library at your local courthouse.
Monetary value of
sentimental bond
Q: I am enclosing a copy of a U.S. Savings Bond (War Savings Bond Series E) dated February 1944. This bond was given to my parents by the 1944-45 Galax High football team which my dad was coaching at the time. He, in turn, recently presented it to me for my 50th birthday.
Could you please advise me as to the monetary value of the bond at this time and, since I am very reluctant to cash such a sentimental gift, how much yearly interest it will continue to draw in the future?
A: U.S. Savings Bonds issued prior to December 1965 earned (or are earning) interest for 40 years. Bonds issued starting in 1966 have a final maturity of 30 years. Bonds issued in 1955 and earlier are coming due now, and those purchased in 1966 will reach final maturity next year.
That means that your bond reached final maturity in February 1984, and it has not earned any interest at all for nearly 12 years now. Under the law, in fact, your parents should have paid taxes on their gain in that year.
Your bond is for $25, which was a generous sum of money in 1944. Larry Harding, Roanoke area coordinator for U.S. Savings Bonds, said the bond was worth $105.09 when it reached final maturity in 1984. It will not continue to earn interest.
In general, it is not wise to be sentimental about money and investments. If you don't cash the bond, you will be giving the money to the federal government. However, if you don't think of the bond as a monetary investment, you should hold onto it and discount any loss to you or your family.
Other people holding expiring bonds should take action to cash them in and pay the taxes. Because you will no longer be earning any interest after final maturity, you should find an alternative place to put your money.
Those with enough of an investment in Series E and Series EE bonds may want to roll them over into Series HH bonds. That defers payment of taxes on the accrued interest. You would be taxed only on the semi-annual interest paid by the Series HH bonds.
by CNB