Taking Practical Control When Tragedy Strikes

The death of a loved one is an emotionally challenging time. An unexpected death can leave you feeling unprepared. Not only are you grieving the loss of a loved one, you’re also called upon to untangle the person’s finances—whether they had an estate plan or not.

Here is a detailed guide on the essential steps and paperwork required during this difficult period.

Request the Death Certificate

The first step is to obtain the death certificate, which is necessary for closing accounts, claiming insurance benefits and handling other affairs. You can usually request multiple copies from the funeral home or the vital records office in the county where the death occurred.

Gather Important Documents

One of the first things you’ll need to do for your loved one’s finances is to close unused accounts and claim property. Each time you claim property or notify a creditor, you will need a death certificate. Some companies or agencies will require a certified copy of the death certificate, but for others, a regular copy will be sufficient.

You’ll also want to gather all vital paperwork. This includes life insurance policies, will or trust documents, financial and retirement accounts, bank statements, tax documents and mortgage information. These documents will be essential for managing the estate, paying off debts and distributing assets to beneficiaries.

Update Addresses and Forward Mail

If needed, update the address on all accounts and bills and/or forward mail to an appropriate address. This step helps prevent missed communications, which can lead to overlooked bills or other critical information.

Contact Employer and Government Agencies

Inform the employer of the death and inquire about any benefits, including life insurance and employer-sponsored retirement accounts.

If the deceased received government benefits, contact the agency (e.g., the Social Security Administration or Department of Veterans Affairs) to report the death and stop benefits. You should also cancel any government-issued identification, such as a driver's license or passport.

Notify Creditors, Credit Bureaus and Billing Companies

Criminals can take advantage of the situation by charging credit cards or opening new credit in your loved one’s name. Notify credit card companies, the three major credit agencies (Equifax, Experian and TransUnion), utilities and other billing companies about the death. This step will prevent financial identity theft, which can be messy to correct later.

Also, contact any companies that bill the person on a recurring basis, such as a cable provider or cell phone company. Close those accounts unless a surviving spouse is still using the service.

Make Copies of the Will

Make copies of the will or other documentation that designates the executors of the estate. This will be necessary for legal proceedings and for proving your authority when dealing with banks, insurance companies and other institutions.

Make sure you have several copies on hand, as many companies or agencies will require an original or a certified copy.

Determine Assets and Outstanding Debts

If your loved one used an estate lawyer, their office should help you understand existing assets and liabilities. Assets may include real estate, vehicles, personal belongings and life insurance payouts. Liabilities could include mortgages, car loans, credit card balances or other debts.

Create a comprehensive list of the deceased's assets and debts. This inventory will be instrumental in settling the estate, ensuring all debts are paid and the remaining assets are distributed according to your loved one’s wishes.

The will should outline how these assets will be distributed after debts are paid. If there are any outstanding debts, the lenders will generally pursue the person’s estate, not the heirs. This is a process called probate. Each state has different laws about how long probate lasts.

Some assets—such as life insurance policies and qualified retirement accounts—are not subject to probate. They go directly to the beneficiaries.

If the person had a reverse mortgage on their home, that means fewer assets for their heirs. But, if the inheritors pay off the reverse mortgage, they can generally keep the house rather than sell it.

Work Through the Will or Trust

Finally, carefully work through the will or trust. This involves following the legal instructions regarding the distribution of their assets. Consulting with an attorney who specializes in estate planning can be beneficial in navigating the probate process and ensuring that your loved one’s wishes are honored.

How You Can Be Prepared When Tragedy Strikes

If you’re the executor of a will, there are a few things you can do in advance. That way, you’ll be prepared and know what to do when the time comes.

Get contact information. Have the person share contact information for their estate lawyer and tell you where to find key estate documents. You can also have them list bank accounts, retirement accounts, creditors and other information you’ll need later.

Have tough conversations. It can be hard to have conversations about your loved one’s plans. But knowing that you are prepared to take care of their estate and carry out their wishes can provide them a sense of relief.

Confirm beneficiaries. Have them confirm they’ve named the correct beneficiaries on any life insurance policies or retirement accounts. This is especially important if they’re remarried or in a blended family. They may have named an ex-spouse as beneficiary but want an adult child to inherit the retirement account instead.

We Can Help

We’ve helped many families work through this process over the years. One of the challenges we see is that the executor or trustee may not feel comfortable making financial decisions. They are often chosen for their close relationship with the deceased but may not have experience with the steps required to manage someone else’s wishes and finances.

Our consultants are ready to help—whether that’s to start the transfer process or to prepare your own estate for the future.