Losing a Loved One: A Financial Checklist

10 mins read

By Ben Witcher 

When my father passed at an early age, my mother had to sort through matters which few of her peers were familiar with. I was too young to understand the significance of what unfolded at the time, but I’ve since learned that I owe a great deal of thanks for the guidance of my grandfather. He helped his daughter navigate grief without losing sight of the administrative affairs to be addressed. And I’m convinced it was the attention to these details that opened up opportunities one would want for their grandchildren in such circumstances. He too passed a few years later, but not before teaching me one thing: the importance of keeping a list. 

A list is objective. A list holds one accountable. A list can balance your priorities amidst overwhelming times of emotion or uncertainty. When you plan the work and work the plan, you find reward and reduce anxiety as each item is addressed. Yet, according to several of the surviving spouses we speak with, the ultimate “Honey-Do” list is more of a love note that’s best composed together before you actually need it. 

Collect all key documents 

Your first financial order of business is to collect the many documents required to deal with the deceased’s financial affairs. 

Order at least 10 certified copies of the death certificate (available from the city clerk’s office, county registrar, health department or funeral home). Most financial institutions, government agencies and creditors require the death certificate before you’re allowed to take actions like closing accounts. Insurance companies also need it to pay survivor benefits. 

Then gather up the documents that will help you identify assets and debts and submit benefit claims. These include the deceased’s: 

wills and trusts 

beneficiary designations 

tax returns 

recent pay stubs 

insurance policies 

financial statements (checking and savings accounts, investment accounts including 401(k)s and IRAs, CDs, etc.) 

credit card statements 

mortgage statements and other home-related documents 

If you are a surviving spouse 

Within three months of the funeral, contact the institutions where you spouse had accounts—such as banks, brokerage firms, insurance companies, and pension fund administrators—and inform them of your spouse’s death. Ask them to guide you through the process of applying for benefits and having beneficiaries transfer ownership of assets. 

Here are a few key items to address: 

If your spouse had an IRA or other retirement accounts, find out if (and when) you will be required to make distributions from them. 

If he or she had a pension through a former employer, ask that company’s benefits office about benefits or other income you may be entitled to. 

Cancel accounts (cell phone, credit cards), memberships and subscriptions that are no longer needed to prevent potential fraud or identity theft. 

Meet with the executor of your spouse’s estate (if it’s someone other than you) to go over the documents gathered earlier and to discuss the legal and tax issues related to settling the estate. 

Tip: You both may want to review those issues with a professional such as a financial advisor or an estate planning attorney who can explain the various rules and guidelines involved in administering estates. 

Be sure to claim any assets you held jointly with your spouse. In general, joint assets will pass directly to you without needing approval from a probate court. That said, you may need to request that joint bank account funds be released to you. 

Important: You can change the property titles of joint assets such as a mortgage or any vehicles into your name by contacting your mortgage company or local county assessor and your state’s Department of Motor Vehicles. 

Next, plan to have tax returns for your spouse prepared (or request an extension) by April 15, and pay any outstanding bills. 

Finally, an important “don’t”: Avoid making any immediate decisions about assets you inherit from your spouse—such as an insurance payout, an IRA or a brokerage account—especially if you are still grieving or feeling highly emotional. Instead, consult with a trusted investment professional or a tax expert about tax issues related to the inheritance as well as to get objective advice about managing the new assets as you plan for the future. 

If you are the executor or administrator 

You’ll have many responsibilities if you are legally tasked with making decisions about and implementing actions for the deceased person’s estate. Some of the most important steps you’ll need to take include: 

Determine if probate is needed. Probate is the legal process through which the deceased’s estate is settled and administered to beneficiaries, creditors and others. Small estates may be exempt from this process and can be settled quickly, while larger estates may need to go through probate court to be finalized. Probate is begun first in the deceased person’s state of residence, and laws vary widely from state to state. 

Apply for a tax ID. Get an Employer Identification Number (EIN) from the IRS and include it on all tax returns and tax documents you prepare for the estate. This number will help ensure that all probate estates and trusts are properly accounted for. 

Set up an estate account. This is a separate bank account exclusively for handling all estate financial transactions such as paying bills and receiving income benefits. 

Manage the estate’s finances. Do an inventory of the estate’s assets and obligations and notify any beneficiaries. Let creditors know of their right to make a claim. And collect any income that is due to the estate—including salary, employee benefits and insurance proceeds. 

File estate tax returns. In general, estate tax returns are due nine months after the date of death. An accountant can help ensure that all potential creditors are notified of the death, that all bills have been paid and that any distributions have been documented properly. 

Distribute assets to heirs. Make disbursements according to the provisions of the will. 

As you and your spouse work through your lists, be sure to include periodic reviews in your process. 

It can be said that many of our clients here in the Low Country have won the game of life. They’ve made it to their dream retirement destination and are positioned to make a meaningful financial impact on generations to come. To them we say – Congratulations… Now have you written your love notes? 

Benjamin Witcher is a Financial Consultant at Charles Schwab in Bluffton with over 7 years of experience helping clients achieve their financial goals. His practice focuses on leveraging Schwab’s exceptional Legacy & Charitable planning platforms to make a lasting impact on the people and causes that matter most to his clients. Some content provided here has been compiled from previously published articles authored by various parties at Schwab. 

For more information, visit the Bluffton branch website at www.schwab. com/bluffton or call (843) 473-3620. 

(1021-1DKR) 

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