Dealing with a Death in the Family

August 6, 2021

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No one likes thinking about death, but it's something we all must face sooner or later. If you are dealing with a recent passing in your family or have a family member with a terminal illness, it's important to prepare yourself both financially and emotionally before making big decisions.

Take your time. Allow yourself to process your grief. Don't rush any decisions. At time of death, you can focus on dealing with doctors, funeral homes, and immediate family members. This will keep your thoughts organized and give you time to process your emotions before needing to worry about the decedent's finances.

When You Are Ready

Taking charge of financial affairs can help the healing process. It gives you something to focus on and allows you to feel in control. Since each estate is unique, it's important you consult with your own legal and accounting professionals to help guide you through the process.

  • If you are a Trustee, the estate planning documents will provide you with access to funds for funeral and other death-related expenses.
  • If you are a named executor, you will have to wait for court-appointed access to funds, but you should be able to retrieve the decedent's will from the safe deposit box.

Handling Retirement Benefits

If applicable, you should contact an HR representative of the decedent's employer for help with retirement plans. A surviving spouse can roll over money from their deceased spouse's retirement plan into their own IRA.

However, if you are considerably younger than your spouse, you may want to keep those assets in your spouse's retirement plan. This may allow you to access those assets sooner without penalty.

Covering Expenses

One of your biggest concerns following a death in the family will be ensuring the survivors can meet their financial obligations, while also handling legal and funeral costs. Make sure you have sufficient cash on hand to cover these costs. This may require you to take a part of your life insurance proceeds or other death benefits to increase your cash reserves. As a rule, try to keep at least 6 months' worth of living expenses in an easily accessible account, such as a checking or savings account. This will free your attention for other financial decisions.

If you were not the chief financial decision maker in your household, it may help to seek the advice of a fiduciary financial advisor. It's important that you contact a fiduciary specifically, as financial advisors fall into two categories: nonfiduciaries and fiduciaries. A fiduciary financial advisor is required, by law, to act in the best interest of their client, whereas nonfiduciary financial advisors can make decisions that put their own best interest before yours. You can find resources for getting in touch with vetted financial advisors at the websites for the Board Standards for Certified Financial Planners (www.cfp.net) or the Financial Planning Association (www.onefpa.org). Should you seek outside financial advice, make sure to wait until you are emotionally ready to handle this important decision. Be sure to carefully screen any financial advisors before you agree to work with anyone. 

Caring for Emotional Needs

If you're wondering whether you or someone close to the deceased could benefit from bereavement counseling or other support—the answer is most likely yes. You should never be afraid to ask for help if you're having trouble processing your grief. Your community may have mental health services, not to mention the supportive role offered by your local church, mosque, or synagogue.

You should consider creating a lasting memorial to the deceased. Finding a way to honor and remember the people you have lost can be an excellent source of healing for survivors. This could be something as simple as a brick paver in a memorial walkway to create a tangible remembrance that pays tribute to the life of your loved one. If your loved one favored an important cause, charity, or was very involved with their alma mater, consider setting up a scholarship or donation in their name.

What To Do When a Family Member Passes

There are a number of things you and your family will be required to do when one of your loved ones passes away. From a legal standpoint, there is nothing you need to do immediately after a family member's passing. Give yourself time to grieve over and process the loss. However, once you are ready, you will want to handle these things in the first few days:

  1. Locate any health care powers of attorney, advance health care directives, funeral and burial instructions, etc. and review them for possible instructions about disposal of the body and funeral arrangements.
  2. Locate any papers relating to prearranged funeral services or pre-purchased burial plots.
  3. If your loved one has served in the U.S. Military, check the website www.USMilitary.about.com and search for information on Military Honors available at burial such as US Flag and Military Representative.
  4. Contact the decedent's banks to see if they have any safe deposit boxes.
  5. Locate the original copy of the will or trust, if there is one.
  6. Locate all the legal and financial documents that pertain to the deceased person's assets such as deeds, vehicle titles, stocks, bonds and insurance policies.
  7. Locate and secure important personal documents such as driver's license, social security card, passport, birth certificate, divorce decree, legal separation agreement, marriage license, military separation papers, citizenship and retirement documents.
  8. Maintain a detailed list of all expenses relating to the final care and/or death of the decedent. You will probably be able to obtain reimbursement for these expenses from the decedent's estate or trust, and some of these expenses will be deductible for estate tax or income tax purposes.
  9. Contact the deceased person's financial planner, CPA and estate planning attorney. They each need to know and will each have a role in helping you. The attorney will prepare any documents necessary to confirm the authority of the successor trustee of the trust. This will give the trustee access to assets within the trust to cover costs of the funeral and/or other related expenses.
  10. Request a minimum of five death certificates from the funeral home. Most life insurance policies and related assets require an original certificate with the claim form.

Once you have made arrangements to meet with a fiduciary financial advisor, you can start working on the more complex financial issues that will arise with the passing of a loved one. Within the following week, you should:

  1. Contact the insurance agent or agency handling each life insurance policy and request death benefit claim forms. If the deceased had a financial planner, they will often do this for you. Note that most insurers will usually cut a check relatively quickly following the death of a loved one. Do not feel compelled to invest this money immediately. Most insurance companies will let you keep the proceeds from a life insurance policy in an interest bearing cash account until you have a plan for investing it. If you know your loved one had a life insurance policy but you cannot find it, contact the American Council of Life Insurers (www.acli.com), which offers guidance in tracing missing policies.
  2. Notify all other insurance carriers (i.e., health, long term care, umbrella, disability, accidental death, travel, vehicle, homeowners or renter's insurance).
  3. Get a list of all the beneficiaries of the insurance policies with their age, relationship to deceased and their current address and phone number.
  4. Contact the deceased's current and past employer(s) to see if any retirement plans or life insurance policies are in place and request the necessary claim forms. Many companies make every attempt to help the families of their employees after a death. They may immediately cut you a check for wages owed, vacation pay, sick pay, and life insurance benefits. If the death was the result of an accident on company time, there may also be accidental death and dismemberment benefits and you will also need to notify Worker's Comp in that instance.
  5. Gather all of the decedent's bills and expenses that are coming due, bank and brokerage statements, and last year's tax return.
  6. Locate and organize notes regarding assets and liabilities, such as promissory notes, loans, business interests, patents, and royalties.
  7. Check with banks and credit card companies to see if there was additional life insurance connected with the decedent's accounts.
  8. Contact all of the financial institutions that hold any assets of the deceased. Tell them you need the date of death values on each asset in each account. Ask them to send you a copy of this information. Note the name of the individual assisting you.
  9. Locate and secure any items mentioned in a governing document, will or trust or documents of title.

Once you have the death certificate, there are several more steps you will need to take. You will have to:

  1. Process life insurance claims.
  2. Apply for Social Security benefits at 1 (800) 772-1213 (and/or the Veteran's Office at (916) 731-7300 if applicable) and inform them of the death of the individual. Otherwise, you'll be required to pay back any monies overpaid to the decedent. Many times the funeral home will have notified Social Security; confirm this with them.
  3. Close credit card accounts and destroy credit cards.
  4. Notify banks and brokerage firms and remove the deceased's name from any joint accounts.
  5. Meet with the deceased's or your financial advisor, as appropriate, to develop a long-term investment plan for the estate assets, including any life insurance benefits to be received.

Within the following weeks, you will also need to:

  • Gather the legal documents (deeds, promissory notes, deeds of trust, loan or real estate documents), estate planning documents (such as wills and trusts), all current and/or past due bills, statements, claims forms, etc., and set up an initial meeting with the fiduciary, CPA and the estate planning attorney to identify what needs to be done and coordinate who will do it.
  • Lodge the original will with the court in the county of his/her legal residence.
  • Meet with an attorney to determine whether a petition for probate of the will must be filed.
  • Begin preparing for filing the estate tax return (Form 706). Some of the forms and documents you have been collecting will be needed by your CPA or attorney to document date of death calculations for that return.
  • Your attorney or CPA can assist you with finalizing and understanding any legal documents and/or forms that you have received.
  • The fiduciary financial advisor and estate attorney can also assist you with funding the trusts (if applicable) and with making distributions to any beneficiaries.
  • The fiduciary financial advisor and CPA can help you make IRA and pension plan election decisions.

This information is provided as a guide for general information purposes only. New Tripoli Bank does not warrant the accuracy and completeness of this material. This information is not considered a recommendation to buy or sell any investment or insurance. We strongly recommend you consult an attorney or tax and estate planning expert for specific guidance.


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