Resolving the finances of a loved one who has passed away is something that millions of people have to contend with every year. What’s more, you never quite know their financial position until the executor provides you with the information. You can’t see their assets or liabilities, and usually only have an inkling for what they’re worth.
In this post, we’re going to guide you through the process of dealing with the estate of somebody who has died. Some of these tasks you’ll need to complete as soon as possible. Others can afford to wait.
Call Their Employer
If the deceased was still working before their death, then you’ll need to call their employer’s human resources department to stop any pay and benefits traveling in their direction. If you don’t, you could be liable to pay them back – and that might cause financial issues for the estate as a whole.
It is also important to contact the employer to determine whether the deceased person had any life insurance. Sometimes, they have a policy that pays out an income or cash lump sum to the remaining family to use how they like.
Prepare For The Funeral
The next step is to prepare for the costs of their funeral. Again, you’ll want to check whether they have any insurance that covers this. Some people do.
If they don’t, then sometimes the deceased person will include a clause in their will instructing the executor to put money towards their funeral.
Failing that, then you may need to organize finances yourself but canvassing family and friends and getting everyone to chip in. Alternatively, you can finance it out of pocket.
Also, think about the costs associated with burial or storing their remains. A lot of families choose urns from Memorials.com, for instance, for storing ashes after a cremation.
File Their Tax Returns
You’ll also need to wrap up their situation with the taxman, ensuring that they’ve paid any taxes owed on either their income or estate.
If the estate is worth more than a certain threshold, then taxes can come into play here. You’ll need to pay these first before distributing the remaining capital between the benefactors.
Often, this process can take several weeks. In many cases, you’ll need to liquidate the property and sell it to the market. At that point, you can access funds to pay any tax bills and then divide the remainder up according to whatever stipulations there are in the original will.
Collect Copies Of Death Certificates
When a loved one dies, you’ll need to order at least twenty death certificates to distribute to financial institutions, insurance companies, and other agencies with whom the deceased had a relationship. Banks and investment houses won’t hand over money to you just because you tell them the account owner has passed away. They’ll want to see proof. And in their world, proof means an official written document.
Death certificates can be both short or long-form, according to nerdwallet.com. You’ll need to estimate how many of each you’ll need, according to the relationships that the deceased person had before they passed away.
If they were deeply involved in finance and had many assets, then the long-form is probably best. This way, there is less ambiguity about your situation, and you can provide more information to institutions, should they ask for it.
Navigating your own finances is tricky enough. But trying to manage those of somebody else can be even more problematic. Often, it isn’t entirely clear how much their estate is worth and who has rights to which parts of it. Furthermore, your emotions might cloud your decision-making, preventing you from taking steps that benefit you and the other benefactors the most.
For that reason, most people sit down with a financial advisor – an expert they can talk to about the deceased’s financial situation and what to do next.
If there are a lot of assets, you’ll want to speak with a certified financial planner – somebody who has professional training in this area. There’s no need to try to do everything yourself. And if you do, you would wind up making mistakes on either the will or the tax return, potentially creating legal problems.
Whatever you do, avoid making decisions hastily. Sometimes all you want to do is get financial matters resolved and move on with your life. But the long-term costs of this can be high. For instance, trying to sell property fast can cause you to lose thousands of dollars.