5 Financial Steps to Take After A Loved One Dies

Published 5:56 pm Sunday, November 20, 2022

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A loved one’s demise is one of life’s most painful yet inevitable experiences. You grieve the loss of a shared history, a daily lifestyle, and a future planned together. Most bereaved families want to shut down and retreat during this time. However, they endure it since they have to deal with several tasks amid their mourning.

Working on a deceased’s finances is one of the practical considerations to deal with after funeral arrangements. It’s crucial since certain financial decisions could either secure or jeopardize your financial future. 

Specifically, here are the first five financial steps to take after someone’s death. 

Organize Necessities 

Get ahold of all the deceased’s personal documents or records and update them. First, get multiple original copies of their death certificate. Take note that some companies, like insurers, may not accept photocopies, especially when dealing with annuity contracts. 

Since you’re doing these updates on behalf of the deceased, obtaining a certificate of appointment can be helpful. It documents your authority to act as the deceased’s personal representative. The language used in settling an estate varies in each state, so it pays to ask a professional for this. 

Moreover, open an estate checking account. You’ll use this to pay bills and receive accounts associated with estate settlement. Opening a checking account will do, but you typically need a 9-digit employer identification number (EIN). 

An EIN is assigned to employers, corporations, partnerships, sole proprietors, estates, trusts, and other entities for reporting and tax filing purposes. To get it, you must fill in Form SS-4 and submit it to the Internal Revenue Service (IRS). The form is just downloadable online. 

Lastly, find a notary public in your local area. A local notary will provide you with protection in legal matters. They’ll be needed when processing the deceased’s documents as well. Apart from it, look for a medallion signature guarantee. It’s a special stamp that confirms the authenticity of a signature authorizing a transfer of securities held in physical form. 

Update Financial Accounts

List all the deceased’s credit cards and debit cards. They’re usually in wallets, filing cabinets, or desk drawers. Additionally, gather copies of statements for credit cards, bank accounts, pensions and retirement accounts, and brokerage accounts. 

Further, contact the following financial organizations: 

  1. Banks of the deceased and your joint financial accounts (e.g., investment, bank, and credit) to update ownership and beneficiary designations;
  2. Insurance companies for the deceased’s life, health, and auto policies to update names and beneficiaries, as well as to maintain their assets (e.g., cars); and
  3. Credit bureaus to minimize the risk of identity theft.

It’s also important to check their outstanding debt, such as a loan from life insurance policy, mortgage, or credit card balance. Just to be clear, you’re only responsible for the deceased’s debt if either you cosigned for them or you’re liable for the debt, like joint loans. 

The debt in the deceased’s sole name is typically repaid out of their estate. Even if there’s not enough money in their estate, the creditors can’t ask anyone else to repay the outstanding debt. 

Update Third-Party Benefits

Look into third-party benefits that can be financially helpful for you during pre and post-financial arrangements. Specifically, contact the following organizations: 

  1. Social Security Administration for the deceased’s benefits, cash assistance, and possible one-time death payment;
  2. The deceased’s Former Employer for possible benefits, especially if the company offered a 401(k) account, group insurance policy, or retirement plan; and 
  3. Veterans Affairs for financial assistance with the funeral expense and cost of living of the deceased’s surviving family members, but only if the person was a veteran. 

Update Real Assets

During the estate settlement process, figure out how to update and manage their assets or properties. For example, if they owned cars, find the title and registration for each vehicle before updating them. There’s a need for you to cancel their driver’s license. 

Update property titles if the deceased owned real estate. If they owned real estate in multiple states, learn how the probate processes go in those areas. Ancillary probate may be necessary if you’re a non-resident of those states. 

Seek Professional Help

Contact professionals if you think you can’t make wise financial situations with your current condition. When it comes to your financial needs and goals, a financial advisor can guide you through evaluating many different money matters following the death of a loved one. 

If the deceased had an estate plan, contact their estate attorney. Estate attorneys will inform you about your loved one’s will and revocable trust. Specifically, they’ll tell you if the deceased has executors of the will, trustees of any existing trusts, and guardians for the care and financial management of a minor.

Final Thoughts

While grief can sit heavy, you can’t delay putting the deceased’s financial affairs in order. People who have recently passed away are typically tempting targets for criminals, and that’s the last you want to happen. As soon as you get through the funeral, start following these five steps right away.