Unfortunately, we all encounter the loss of a loved one, but there is hope. I promise! It might seem like you'll never be the same again and that's partially true. Eventually, you will find new happiness with children, grandchildren, friends, and other parts of your family support group. There will be a coping process that's different for everyone. It's natural to feel out of sorts and it can often be far worse for those who weren't as involved with the family's finances. No need to worry, we have you covered.
It's never an easy change in our lives and it's often more complex than the emotional and physical loss of our spouse or significant other. Navigating the death of your wife or husband is a challenging and emotional process. As a financial professional, working alongside estate planning attorneys and certified public accountants (CPAs), we provide invaluable support to clients. Here is a detailed list of steps to take, in order of priority, along with specific details and examples to help our clients understand the importance and validity of each thing you'll want to review.
Immediate Steps After the Death of a Loved One
Obtain a Legal Pronouncement of Death
Importance: This is the first step to getting a death certificate, which is essential for handling the deceased's legal affairs. Keep in mind you may need more than just one official copy and the cost varies by county. You'll typically need at least a few of these to help through life insurance claims, moving retirement assets, real estate and any other asset or loan.
Details: If the death occurred in a hospital, the staff will handle this. If it happened at home, call 911 to have a medical professional declare the death[1].
Notify Family and Friends
Importance: Seems obvious, but this is a part of the process in self-help. It's not going to be easy and it will certainly be emotional to make those calls. Feel free to have a loved one or friend help relay the message. Informing close family and friends is crucial for emotional support and to begin the process of planning the funeral.
Details: Use a group text, mass email, or individual phone calls, but more than likely you'll be reaching out to the person who's closest to you to start things off. Social media can also be used to send notice to friends and distant relatives. You'd be surprised who reaches out to help you when you need it most[1].
3. Secure the Deceased's Property
Importance: If you lost your husband or wife this will happen without thinking about it. If you lost a friend or a close relative that's not in you're area, you'll have more to consider. Protecting the deceased's home and belongings prevents theft and ensures everything is in order for the estate settlement.
Details: You've gotta love the thieves who pretty on someone's death to take advantage of the situation. Lock up the home, secure valuables, and consider notifying the police if the home will be vacant for an extended period[1].
Arrange for Care of Dependents and Pets
Importance: Immediate care for dependents and pets is essential to ensure their well-being.
Details: Contact family members or friends who can temporarily or permanently take care of dependents and pets[1].
Plan the Funeral and Memorial Services
Importance: This provides closure for family and friends and honors the deceased's wishes.
Details: Work with a funeral home to plan the service. Consider any pre-arranged plans or preferences the deceased may have had[1].
Financial and Legal Steps
Obtain Multiple Copies of the Death Certificate
Importance: Death certificates are required for various legal and financial processes.
Details: Request multiple copies from the funeral home or the local Office of Vital Records[2].
Locate and Review Estate Planning Documents
Importance: These documents outline the deceased's wishes and are essential for the probate process.
Details: Gather the will, trusts, power of attorney, and any other relevant documents[2].
Notify Financial Institutions and Close Accounts
Importance: Prevents identity theft and ensures proper handling of the deceased's assets.
Details: Inform banks, credit card companies, and other financial institutions of the death. Close or transfer accounts as necessary[2].
Contact Insurance Companies
Importance: Life insurance policies can provide financial support to beneficiaries.
Details: Notify life, health, and other insurance companies to begin the claims process[2].
Settle Debts and Final Bills
Importance: Ensures that all outstanding obligations are met and prevents creditors from making claims against the estate.
Details: Pay off any outstanding debts, including mortgages, loans, and credit card balances[2].
File for Probate
Importance: Probate is the legal process of distributing the deceased's assets according to their will or state law.
Details: Work with an estate attorney to file the necessary paperwork and navigate the probate process[2].
Long-Term Financial Planning
Update Beneficiaries and Legal Documents
Importance: Ensures that assets are distributed according to the deceased's wishes and current circumstances.
Details: Update wills, trusts, and beneficiary designations on accounts and insurance policies[3].
Review and Adjust Financial Plans
Importance: Reflects changes in income, expenses, and financial goals after the loss.
Details: Work with a financial advisor to reassess budgets, investments, and retirement plans[4].
Consider Tax Implications
Importance: Proper tax planning can minimize liabilities and ensure compliance with tax laws.
Details: Consult with a CPA to understand estate taxes, inheritance taxes, and any other tax implications[4].
Establish a New Estate Plan
Importance: Prepares for future events and ensures that the client's wishes are documented.
Details: Create or update wills, trusts, powers of attorney, and healthcare directives[3].
Evaluate Income Needs and Sources
Importance: Ensures that the surviving family members have sufficient income to meet their needs.
Details: Assess current income sources, such as Social Security, pensions, and investments. Consider potential changes in income needs[4].
Plan for Long-Term Care and Healthcare Needs
Importance: Addresses potential future healthcare costs and long-term care needs.
Details: Explore long-term care insurance, healthcare proxies, and advance directives[3].
By following these steps, clients can navigate the immediate aftermath of a loved one's death and plan for their financial future. Providing compassionate and knowledgeable support during this time is crucial for helping clients achieve peace of mind and financial stability.
References
If you haven't checked out my PennyWise Financial Podcast, watch a clip from an episode with a local attorney while we navigate some of the hottest legal topics regarding your overall estate plan. Kevin Johnson, Esq, and his team deliver a clear message. You'll see topics that cover all sorts of things that tie into financial decisions or goals we plan for every day with our clients.
Scroll down a little past the clip to watch the entire episode. It's available on all major podcast platforms like Apple Podcasts, YouTube Music, Spotify, Amazon Music, and YouTube.
Or click below to watch the full Episode
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