My dad has a small life-insurance policy, a 401(k), a small pension, totaling less than $100,000. My siblings and I do not know who the beneficiary is on any of these things. We suspect he may have made my uncle — his only sibling — the beneficiary.

I was told (by my uncle) that his ex-wife would receive his small pension because she was the last wife before he died, and that is the law in Louisiana. 

Dad has a home in Indiana that he recently refinanced for about $50,000 less than it is worth and has a truck worth about $10,000 more than he owes on it. He has various personal possessions, none of it worth very much: clothes, household items, photos, etc.

My siblings and I all live in Louisiana. Due to hurricane damage to our homes only one of us has the means to travel right now. We have generally agreed that one of us will travel to Indiana and remove the mementos, photos, etc.

That is where things get sticky.

My uncle accessed my father’s checking and savings while he was dying to purchase a niche in a cemetery. (My siblings and I were able to handle much of the next-of-kin paperwork remotely. )

My uncle has removed my father’s truck from his house, and drove it to his own house. He has called all of the creditors and account holders and reported the death. He did all of this without a death certificate.

He has possession of my father’s wallet, personal papers and keys to his home. He is refusing to turn any of these items over to us, despite not being the next of kin.

He insists that my siblings and I cannot touch anything in the house until it all goes to probate. We did not ask him to do anything. He says he has an appointment in December to see an attorney. Why?

He insists we need an executor. One of my siblings has agreed to handle that. And even if we all agreed to let my uncle act as executor, he has not been appointed anything yet.

Honestly I don’t think my uncle had any business accessing the funds while my dad was under a DNR and too ill to know what was going on.

He has already been through the house multiple times, opened the safe, disposed of medications. Who knows what else? I know he may have our best interests at heart, and may have a need to be involved.

Can he keep us out of the home? Are we permitted to donate household goods, clothing and remove mementos? No one is trying to reverse potential beneficiary decisions or steal from the siblings. 

Do we need probate for the house? It is starting to make us feel very stressed in a time when the siblings wanted to video chat and heal and find peace.

Caught Between the Uncle and a Hurricane

Dear Caught,

Bereavement is a difficult time, even without such shenanigans from your uncle.

Let’s generously assume that your uncle wants to protect your father’s estate, and make sure that everything is above board and distributed equally. He is correct that your father’s estate must go through probate, so all of his assets are accounted for and distributed to his heirs. He is most certainly incorrect in the way he went about it. This should be addressed as soon as possible.

Your uncle was likely trespassing in your father’s home, and had no legal right to remove his property or his papers. A lawyer should request the return of those items so he/she can settle your father’s estate. If your father died without a will, his assets should be distributed among his children. His insurance, 401(k) and pension will be distributed to named beneficiaries. 

All other assets should go through probate. Probate is only avoided if your father had a living trust. That does not appear to be the case here. Hire an estate attorney and appoint an administrator of your father’s estate (or an “executor,” if there was a last will and testament). Your family should not remove mementos from the house until his estate has been settled. 

The estate lawyer has myriad functions, some of which are outlined here by RMO Probate Litigation: “Collecting proceeds from life-insurance policies, assisting in the payment of bills and debts, resolving income-tax issues, obtaining appraisals for the decedent’s real property [and] transferring assets in the decedent’s name to the appropriate beneficiaries.”

I wish you both a speedy and satisfactory resolution of your father’s estate. 

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

More from Quentin Fottrell:

• My married sister is helping herself to our parents’ most treasured possessions. How do I stop her from plundering their home?
• My mom had my grandfather sign a trust leaving millions of dollars to two grandkids, shunning everyone else
• My brother’s soon-to-be ex-wife is embezzling money from their business. How do we find hidden accounts?
• ‘Grandma recently passed away, leaving behind a 7-figure estate. Needless to say, things are getting messy’

Sincerely,

Preparing in Palo Alto

‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.

Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Jacob Passy at TheBigMove@marketwatch.com.

Dear Preparing,

It’s never too late or too soon to strategize the best way to leave a sizeable inheritance to your loved ones. And your dilemma, in particular, clearly illustrates the challenges many longtime homeowners face when it comes to leaving their home to their heirs.

You’ve benefited from longstanding tax arrangements that have made it feasible to own a home as expensive as yours in a pricier coastal real-estate market. And it seems clear from your letter that your children wouldn’t be able to afford the property taxes that would come with such a property if they were to buy it themselves today.

Before I begin to answer your questions, I want to commend you on remaining clear-eyed about what your children will do with your home upon your passing. Too often parents assume that their children or grandchildren will want to inherit the family home to live in it. The reality is, especially if your children are grown, they likely have homes of their own and have no need to take another on, even as an investment property. If the past two, pandemic-ridden years have taught us anything, it’s not always easy being a landlord.

So I’m glad that you’re considering all possibilities — what the property-tax picture would be if your children did keep your longtime home, and what would happen in terms of capital gains taxes should they sell it after you pass.

Property taxes just got more complicated in California

Now, let’s address your first question. For those who live outside of California, a quick primer: Proposition 13 is a constitutional amendment in California that limited increases to the property taxes on homes throughout the state. Notably, a property could only be reappraised for tax purposes when a change in ownership occurred, when new construction was completed or if the market value declined.

But last year, another amendment that was approved by California voters, Proposition 19, changed key components to the taxation policy. While it allowed older or disabled homeowners or people displaced by natural disasters to transfer their existing tax assessed value to a new home even if it was more expensive, it limited the ability to transfer these tax benefits among family members. Notably, in the past, a child could inherit their parent’s tax assessed value along with the home, but it is not so straightforward now.

The good news is that converting your home into a rental property won’t necessitate a reappraisal of the home for property tax purposes. However, it could make a difference if and when your children inherit the home.

“The Prop. 19 rules say that you can pass a principal residence to your children, so long as it was the primary residence of the parents before, and it’s the primary residence of the child thereafter,” said Yin Ho, a California-based senior associate on the real estate team of international law firm Withers. Because the home is now a rental home, if you were to pass away now, your children wouldn’t be entitled to this benefit.

Ho noted though that if you were to change your mind in the future and resume living in the home yourself, you could preserve that benefit. However, your children would need to plan to live in the home after you died — if they didn’t, again, they would not be eligible.

The deadline to transfer property to one’s children proactively to retain the property-tax assessed value was back in February, so you’ve missed that window of opportunity. But such a transfer wouldn’t have been advantageous from a capital-gains tax perspective, because it would have nullified your kids’ ability to receive the step-up in basis.

Similarly, if the property had been owned by an LLC all along, it might have continued to qualify for this tax break, Ho said, but because it wasn’t that strategy won’t help you here.

Rental homes can still receive a step-up in basis when inherited

When it comes to the step-up in basis, you’re fine there. Rental homes qualify for that the same as primary residences, Ho said. So long as your children are able to sell the home quickly when you die, they should face little in the way of capital-gains taxes. At one point some Democratic lawmakers were considering reducing or eliminating this tax benefit as part of the Build Back Better social-spending package, but those proposals went nowhere.

Nevertheless, there are reasons why you may want to consider creating an LLC or trust to own the home. An LLC could offer legal and financial protection should problems ever arise with one of your tenants in the future. And a well-designed trust can keep property out of the probate process, allowing it to pass onto your kids more quickly after you die. That could help them sell the home more quickly and avoid a larger tax bill.

As I suggest to many readers who write into The Big Move, an accountant or lawyer well-versed in estates and property ownership will prove extremely vital in helping you to determine the best path forward to ensure your children get the most out of your home. Hopefully this information will be a useful starting point for you as you explore what options are still at your disposal. Best of luck.

By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

That’s not surprising, Ted Rossman, senior industry analyst at CreditCards.com, told MarketWatch. CreditCards.com has done other research that shows people who work in tip-based jobs tend to tip better, he said.

“It does happen that, nowadays, most service-industry workers are Gen Zers and millennials. So I do think that there is some element of they know what it’s like, maybe they work in a tip job themselves or they have recently,” Rossman said. “They’re kind of watching out for their own there.”

Overall, respondents were most likely to give increased tips to restaurant waitstaff (27%), hairstylists or barbers (19%), food delivery people (16%), bartenders (10%) and coffee-shop baristas (9%).

As for giving year-end tips to service workers that don’t typically receive tips throughout the year, people plan to tip their housekeepers more than any other service provider (47%).

Those surveyed plan to tip a median of $20 to mail carriers and trash collectors, $25 to teachers, $30 to landscapers, and $50 to housekeepers and childcare providers.

“It’s great to reward these hard-working people who help us throughout the year,” Rossman said. “Now more than most years, too, a lot of these people have struggled through the pandemic — either losing money or just having to get up and go to work every day and do important jobs when maybe some of us were able to work from home. So it is a nice thing to do if you can.”

And if you don’t have extra cash in your budget this year, Rossman suggests cashing in rewards points from credit cards for either cash-back or gift cards to give.

If money is still tight, you can show your appreciation in other ways. Maybe you can leave out prepackaged snacks or baked goods and drinks for delivery drivers. You can write a nice note to your kid’s teacher or go in on a gift with other parents, Rossman said. “It is the thought that counts, right?”

In a similar vein, the survey also found that 87% of U.S. adults believe it’s important to shop locally to support small businesses. In a reversal of the tipping trend, older adults are more likely to say supporting small businesses is important, with 93% of boomers and 88% of Gen Xers compared with 82% of millennials and 80% of Gen Zers.

But Rossman said to take these results with a grain of salt, as people might think shopping small and local is the right thing to do, but it’s not what they always end up doing.

“I would say though, that when push comes to shove I do wonder if a lot of people will end up buying online and buying from the big stores just because they often have lower prices. They often have better e-commerce structures,” Rossmand said. “They’re better equipped to solve the supply-chain crisis this year, because they just have a lot more scale to do things like chartering their own freight ships and maybe absorbing some of these higher cost pressures.”

But it’s not all bad news for small businesses: Small Business Saturday was a success this year, with American Express
AXP,
-3.52%
reporting 18% year-over-year sales growth.

Still, Rossman worries about small businesses, considering everything they’ve faced during the pandemic. “So to the extent that people can live up to this and help them with their holiday shopping, that would be great.”

The anticipated fourth season of “Stranger Things” will premiere in the summer, though Netflix didn’t give an exact date. The show, one of the streaming giant’s biggest breakout hits, has led to numerous merchandise tie-ins, including “Stranger Things” sneakers by Nike Inc. 
NKE,
-0.37%,
limited edition Coca-Cola Co.
KO,
-3.16%
cans and special boxes of Cheerios, Lucky Charms and other General Mills Inc.
GIS,
-2.76%
 cereals.

Other shows returning next year include a third season of “Locke & Key,” the fantasy-horror drama; a second season of “Alice in Borderland,” based on a graphic novel of the same name; and a third season of the superhero saga “The Umbrella Academy.”

New series coming in 2022 include an animated one based on Hasbro Inc.’s
HAS,
-2.24%
Magic: The Gathering card game; “The Midnight Club,” based on horror books by author Christopher Pike ; and a show adapted from videogame franchise “Resident Evil.”

An expanded version of this report appears on WSJ.com.

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