Does the New Stimulus Check Impact My Colorado Estate Plan?

With the recent signing of the $900 billion pandemic relief package, individuals have begun receiving stimulus checks in the mail. Because this was the second stimulus check—and there have been talks of a third, $2,000 check—many have questions about whether these checks will impact their Colorado estate plan, and what to do if a deceased relative received a check. Because the COVID stimulus checks are complicated and may implicate other aspects of a person’s life, below is a discussion of the common questions about estate planning and stimulus checks.

How Much is the Stimulus Check?

The plan approved by Congress—and signed into law by the president—provides a $600, one-time payment for most adults, plus $600 per dependent child. However, couples making $174,000 or an individual making more than $124,500 will not receive a stimulus check. Recently there has been discussion of another $2,000 stimulus check, but there is no indication of whether this proposal will pass both the House and the Senate.

What Do I Do if a Deceased Loved One Receives a Check?

While most Americans will be receiving a stimulus check, there are groups of individuals who cannot receive a check; deceased people are one of these groups. The IRS has previously noted that deceased individuals—along with their estates or trusts—are not eligible. Although over one million stimulus payments were sent to Americans who had died during the first round of payments, public officials hope this is not as prevalent during this round. This error occurred because the stimulus checks are being sent to people based on their 2019 tax returns. So, if an individual filed a 2019 tax return and has since passed, there is a possibility that the IRS is unaware they have passed and will send them a check.

However, if an individual receives a stimulus check on behalf of a deceased relative during this second round of payments, they are still advised to send the money back to the IRS. While this may seem like a difficult process, the IRS has recently provided specific instructions for returning an economic impact payment—which the stimulus check would qualify as—sent to a person who has passed away.

If the payment was a paper check and has not been cashed, the individual should write “void” in the endorsement section of the back of the check and mail it to the appropriate Colorado IRS location. The individual sending back the check should also include a note explaining why the check has been returned. If the payment was a paper check that has been cashed —or it was a direct deposit—individuals should submit a personal check immediately to the Colorado IRS and write their social security number on the check, so the IRS can identify them. They should—like the uncashed check—also include a brief explanation for why they are returning the check.

Because matters involving a deceased’s estate are complicated, individuals with questions about the stimulus check should speak to an experienced estate planning attorney.

Contact a Colorado Estate Planning Attorney

If you or a loved one needs advice about estate planning—whether regarding stimulus checks or creating n Boulder estate plan generally—contact the Braverman Law Group. We provide our clients with detailed guidance on how to resolve their estate planning issues and ensure their needs are being met. We inform you of any changes to your Colorado estate plan, and how stimulus checks—or any future Colorado legislation—impacts your plan. To schedule a free consultation, call us today at 303-800-1588.