Guide to Navigating Financial Steps After a Loved One’s Passing

Losing a loved one is an emotional and challenging time. To help ease some of the burden, we’ve created this guide to provide clear, actionable steps for managing financial and legal responsibilities after a loved one’s passing.

Step 1: Immediate Actions (First Few Days)

• Notify Immediate Family and Close Friends
  • Contact close family members and friends. They can assist with various tasks, including communication with other loved ones. This support network is invaluable for easing some of the responsibilities.
• Request Multiple Copies of the Death Certificate
  • You’ll need multiple copies of the official death certificate to handle many financial and legal processes. These can be obtained through the funeral home or the local vital records office. Aim to get 10-15 copies.
• Secure Important Documents
  • Collect and store essential documents in a safe place, such as:
    • The will or trust documents
    • Insurance policies
    • Financial account statements (bank, investment, retirement accounts)
    • Deeds and titles to property
    • Social Security card, birth certificate, and any military service records
  • Locate Funeral Instructions and Contact Funeral Service Providers
    • Check the will or any advance directive for funeral instructions. Contact a funeral home or other service providers to arrange for the service and manage associated expenses.

Step 2: Notify Key People and Organizations (Within the First Week)

• Inform the Deceased’s Employer
  • Notify the employer about the passing. Inquire about:
    • Final paychecks and accrued benefits
    • Life insurance and any employer-provided retirement plans
    • Information on health insurance cancellation or continuation for dependents
• Contact Key Advisors
  • Financial Advisor: Review account structures, verify beneficiaries, and address potential tax implications.
  • Attorney: If a probate attorney is needed, they can assist with court filings, transferring assets, and ensuring the will is followed.
  • Accountant: An accountant can help with final tax filings and guide you on estate taxes or distributions.
• Locate and Review the Will or Trust Documents
  • The will names the executor (responsible for handling the estate) and details asset distribution. Contact the executor to initiate the process. If no will exists, intestate succession laws will dictate the asset distribution.

Step 3: Manage Financial Accounts and Benefits (Within the First Month)

• Notify Financial Institutions
  • Contact banks, credit card companies, brokerage firms, and other institutions where the deceased held accounts. Each institution will require a death certificate to close or transfer accounts. The accounts may include:
    • Bank accounts (checking, savings)
    • Investment and brokerage accounts
    • Credit card accounts

Checklist:

• Gather death certificate copies
• List all known financial institutions
• Contact each institution to initiate the transfer process

• Notify the Social Security Administration (SSA)
  • Contact the SSA at 1-800-772-1213 to stop any Social Security payments and inquire about survivor benefits if applicable. Spouses, minor children, or other dependents may be eligible for benefits.
• Claim Life Insurance and Retirement Benefits
  • Contact life insurance providers and retirement account custodians to file a claim for benefits. Each will need a death certificate and any necessary beneficiary information.
  • If the deceased had retirement accounts like IRAs, 401(k)s, or pensions, contact each provider to discuss options for beneficiaries.
    

Checklist:

• Contact life insurance provider(s)
• Contact each retirement account provider
• File claims with the required documentation

• Stop Automatic Payments and Subscriptions
  • Review recent bank or credit card statements to identify recurring payments. Contact companies to cancel subscriptions or auto-payments.
  • Examples: Utilities, phone, internet, gym memberships, online services (Netflix, Amazon Prime).
• Notify Credit Bureaus and Close Credit Card Accounts
  • To help prevent identity theft, notify major credit bureaus (Equifax, Experian, TransUnion) of the death so they can flag the credit report.
  • Close credit card accounts after confirming any outstanding balance.

Step 4: Begin Probate or Trust Administration (1-3 Months)

• Understand and Begin the Probate Process (if applicable)
  • Probate is a court-supervised process to distribute assets according to a will. It may not be necessary if the estate is small or if a living trust was in place.
  • The executor should work with a probate attorney to file necessary paperwork, obtain letters of administration, and manage assets.

Checklist:

• Confirm whether probate is necessary
• Locate the will or trust documents
• File probate paperwork with the court (executor or attorney)

• Inventory and Appraise Assets
  • List and value all assets, including bank accounts, investments, real estate, vehicles, and personal property. Some assets may require a professional appraisal, which can be organized by the executor or trustee.
• Settle Outstanding Debts and Liabilities
  • Review all outstanding bills, including medical bills, taxes, and other obligations. Creditors may need to file claims with the estate.
  • Ensure that home and auto insurance policies remain current for any property that will not be transferred immediately.

Step 5: Finalize the Estate (Within 6-12 Months)

• File the Final Tax Returns
  • The executor is responsible for filing the deceased’s final income tax return (due April 15 of the year following death) and possibly an estate tax return (due within nine months of death).
  • The estate tax return is required only if the estate exceeds the federal estate tax exemption threshold. An accountant can help manage these filings.
• Distribute Inherited Assets to Beneficiaries
  • Once debts and taxes are settled, the executor can distribute assets to beneficiaries. Ensure that each beneficiary understands any tax implications related to their inheritance.
• Close Remaining Accounts and Settle the Estate
  • After distributing assets and paying all expenses, close any remaining accounts. Obtain court approval to close the estate if required by probate.

Step 6: Review and Update Your Financial Plan

• Update Your Financial and Estate Plan
  • After settling the estate, it’s wise to review your own financial and estate plans. This may include:
  • Updating beneficiaries on accounts
  • Reviewing and potentially increasing life insurance coverage
  • Drafting or updating your own will and other estate planning documents

Additional Resources

Key Contacts for Assistance

• Funeral Home:
• Attorney:
• Financial Advisor:
• Accountant:

Checklist Summary

• Notify family, friends, and advisors
• Obtain death certificates and secure documents
• Notify financial institutions and settle accounts
• Begin probate or trust administration
• File tax returns and distribute assets
• Update your own financial plan

This guide serves as a roadmap during a difficult time, helping ensure that necessary steps are completed and that you and your family are financially secure. Remember, we’re here to help you every step of the way.

This guide is provided for general informational purposes only. It is not intended as tax advice. For specific assistance, we recommend consulting with your tax professional, financial advisor, and/or legal team before making any changes to your personal financial or tax situation.

Smart Retirement does not provide legal, accounting or tax advice, but we do coordinate our services and work together with our clients’ legal and tax professionals.