7 Things to do When a Loved One Dies
When you lose a loved one, it's a time flooded with uncertainties. Beyond funeral arrangements and family, how to handle your loved one's finances can also be overwhelming.
The steps below can help you take a systematic approach to handle the financial side of a loved one's loss and take the guesswork out of what to do.
Request copies of the death certificate
"We need a death certificate" is a phrase you'll hear multiple times as you work to wind-down your loved one's finances. Banks, life insurance companies, retirement account custodians, and more will all need legal proof of death before they can distribute assets.
You can usually obtain copies of death certificates directly from the funeral home and at a nominal cost. If you need to request copies by another means, check with the city clerk or office of vital records where your loved one died.
Locate the estate documents
Your loved one's estate documents (a will or a trust or perhaps both) provide a roadmap for action, and you should locate them as soon as possible after the death.
If a will needs to be probated, it should be filed in probate court, after which an executor will be approved. The executor will then be in charge of handling the estate's financial matters and ensuring the beneficiaries receive their bequests. With a will, the approved executor will receive letters from the court that declares them the person legally authorized to act on the estate's behalf.The letters will be requested by multiple entities, including banks, Social Security, creditors, and more to confirm authority of the executor to act on behalf of the estate.
Gather important financial documents
If your loved one didn't have a complete list of all their financial accounts, you should consider making one to aid you in determining how the estate will be administered. Locating all accounts might involve going through mail or email, reviewing a checkbook register and credit card statements, and examining things in the home like cable boxes or streaming services connected to the TV like Netflix or Amazon Prime. You might ask your loved one's employer about benefit plans and insurance coverage provided to them as well.
The following obligations should be included on this list:
- Bank and credit card accounts
- Retirement accounts
- Household bills
- Mortgages and loans
- Tax returns
- Insurance policies
With financial accounts, access may be limited to the estate's executor or the trustee of a revocable trust. In that case, you can give the list of accounts to the executor or trustee and they'll be able to handle access with their letters or proof of authority under the trust. Some accounts might have a feature called transfer on death (TOD) or payable on death (POD). If so, assets in those accounts will pass outside of probate or the trust to the person named as the beneficiary (unless the estate or trust itself is named as beneficiary; in which case the terms of the estate or trust will apply).
Banks, life insurance companies, and retirement account custodians will all need legal proof of death to distribute assets where they need to go.
Manage final bills and modify or close accounts
With the list of financial documents above, you can determine which final bills need to be paid. From there, you can decide which accounts should remain open (and for how long) and which accounts, such as bank accounts or credit card accounts, are ready to be closed.
If your parent died and they don't have a surviving spouse, consider what you'll be doing with their home (selling it, terminating a lease) and determine how long you'll need to keep utilities connected.
If your spouse passed away, you could likely transfer essential household bills into your name only.
An estate attorney can help you determine your obligation to make good on a loved one's outstanding debts. Laws vary from state to state, and dying doesn't necessarily mean debt is forgiven.
Contact social security
While the funeral home typically notifies the Social SecurityAdministration (SSA)1 of a person's death, it's always a sound practice to contact the SSA yourself too. First, you'll ensure that your loved one's Social Security number is frozen. This will prevent unscrupulous individuals from stealing your loved one's identity. Additionally, there could be survivor's benefits owed.
When you speak with an SSA agent, you can find out what forms and documents need to be filed for them to make any final payments to your loved one's estate or other beneficiaries.
File life insurance claims
You don't have to wait until you have a death certificate to file for life insurance benefits. As soon as possible, reach out to the claims department on any life insurance policies. An agent will take your information and inform you of the next steps. There may be a few forms to complete, and you will likely be asked to provide a death certificate.
If you're not sure if your loved one had life insurance, you can review bank statements to search for premium payments. You can also use the online policy locator2 from the National Association of Insurance Commissioners (NAIC).
Contact the employer
Finally, if your loved one was still working when they passed, you'll want to contact their employer. You might want to ask if your loved one had any company property in their possession at the time of death. That way, you can make arrangements for returning it.
The death of a loved one is always a difficult time, but these steps can help relieve some of the financial burden.
Important disclosure information
This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
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