Moving Forward Financially After the Loss of a Loved One
Even as you work through your grief, there are some important financial tasks to take care of along the way. Here is a framework to use as a starting point.
The loss of a partner or family member is a life-changing event laden with intense emotions. Whether the death is sudden or precipitated by an illness, the loss is just the same — real and painful.
There are no rules about how you should feel or how long it will take you to regain your energy and capacity to move on. Grief is difficult to avoid as well as the avalanche of financial and legal undertakings that will require your immediate attention.
However, there are several actions that can ease this process and help you to get back on track financially.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
A Checklist of Tasks to Complete
After you've attended to the emotionally charged events of funeral preparations and services, it can be helpful to take a step back and prioritize.
Some tasks will be more pressing than others. Here’s a checklist of what you will need to address in short order.
- Collect Social Security number, birth certificate, marriage certificate and military discharge papers.
- Get at least 10 copies of Death certificates — each death claim will need to be accompanied by an original copy of the death certificate
- Notify the Social Security office of the death and file a Social Security benefits claim form to qualify for the death benefit. The official Social Security death benefit is just a one-time $255 payment. However, Social Security survivor benefits are much more important as they provide family members with monthly payments that sometimes last for the rest of their lives.
- Locate car title(s).
- Get current statements for bank, brokerage and retirement accounts.
- File the person’s will with your local Probate Court (or have your attorney file it). If your loved one did not have a will, that person is dying “intestate.” Their heirs will have no say over any of the deceased’s assets and their estate goes into probate, which is a legal process to decide who will inherit what.
- Obtain letters testamentary from the local courthouse (attorney can obtain). This is a document issued by a court of public or official authorizing the executor of a will to take control of the deceased person’s estate.
- File a death claim with the person’s life insurance company, if applicable.
- Check with the Employer’s Benefits department about survivorship pension, health insurance, unpaid salary, life insurance benefits, if applicable.
- Prepare a preliminary monthly budget and income summary.
This is a stressful time, especially if the surviving partner did not play an active role in the finances. If you don’t have an existing relationship with an attorney, accountant or a financial planner, seek the advice of a trusted friend or family member who can recommend one. If you have a working relationship with one or more of these professionals, it is time to assemble your team to tackle the next set of actions.
- Retitle joint accounts into your name.
- It is commonly recommended to keep a joint checking account for at least a year — to deposit checks made payable to the deceased. However, this may not be true in all cases.
- Transfer any inherited IRA into your name and take out a required minimum distribution, if applicable. Assign new beneficiaries.
- Update deeds for any real estate joint held with rights of survivorship.
- File a federal estate tax return within nine months. Some states have earlier deadlines for estate returns.
Overcoming Grief Takes Time
The loss of a loved one can bring with it immense pain and suffering, particularly if the death is unexpected. With such a financial burden and countless legal requirements placed on your shoulders, it can be difficult to remember that grief takes time.
Don't let the outside pressures overwhelm you. Now is the time to lean on friends and family for support. Don't rush yourself or break down with anxiety just to get the process done as soon as possible. Finances can be tricky, but not as tricky as pain. Allow the pain time to heal and you'll be able to better move on emotionally and financially.
The challenges you're facing don't have to be faced alone. There is always help available to assist you during this time of mourning. Keep in mind that financial matters can be dealt with anytime, but grief is something that cannot be controlled, so taking your time is the best thing you can do for yourself.
Securities offered through National Securities Corporation, member FINRA/SIPC. Advisory services offered through National Asset Management, an SEC registered investment adviser. Fixed Insurance Products offered through National Insurance Corporation.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Ephie Coumanakos is the co-founder and managing partner of Concord Financial Group and a graduate of The Wharton School of The University of Pennsylvania. She specializes in the areas of retirement and pre-retirement planning, asset preservation, wealth management and estate planning. Ephie frequently appears as a speaker at financial workshops in the areas of retirement and estate planning, asset preservation strategies and tax management.
-
Setting Objective Criteria for Employee Bonuses Aligned With Company Goals
When employees win, the company wins.
By Stephen Nalley Published
-
A Modern Guide to Money Etiquette: Gifts, Tips, Splitting Bills and More
What is modern money etiquette? The customs for splitting a restaurant check, purchasing a wedding gift, tipping and more have evolved. These guidelines can help.
By Emma Patch Published
-
Potential Ripple Effects of Taxing Unrealized Capital Gains
The proposed tax on unrealized gains would be limited to those with a net worth above $100 million, but some see a broad impact on markets and businesses.
By Brian Skrobonja, Chartered Financial Consultant (ChFC®) Published
-
Succession Musts: Thoughtful Planning and Frank Discussions
When it comes to passing on the family business, you don't want anyone to be surprised about who will control or inherit the business after the owner's death.
By David Handler, J.D. Published
-
Five Keys to Retirement Planning and Peace of Mind
Long, worry-free retirements don't just happen. You have to make them happen. The good news is that it may not be as hard as you think.
By Josh Leonard, Investment Adviser Published
-
Here's How to Find Your Way Out of the Inherited IRA Maze
To navigate complex rules on inherited IRAs and RMDs, start by breaking down key terms and common scenarios. A clearer picture of your next steps will emerge.
By Evan T. Beach, CFP®, AWMA® Published
-
Should You Move Your 401(k) to an IRA Once You Hit 59½?
Some 401(k)s allow for in-service withdrawals at age 59½, opening up greater investment options. Here are three reasons for taking the plunge.
By Joe F. Schmitz Jr., CFP®, ChFC® Published
-
When It Comes to Insurance, How Much Risk Can You Take?
Either you or an insurance company takes on the risk of protecting your belongings from loss or damage. Can you afford to self-insure?
By Karl Susman, CPCU, LUTCF, CIC, CSFP, CFS, CPIA, AAI-M, PLCS Published
-
Five Ways to Minimize a Higher Capital Gains Tax Rate
With Harris’ proposal to raise the capital gains tax rate (which would require congressional approval), investors might want to consider tax-lowering options.
By Michael Aloi, CFP® Published
-
Collar Investing Strategy Can Help Protect Your Nest Egg
Here are some key considerations for using the collar strategy of put options and covered calls to safeguard your wealth in retirement.
By Matt Amberson Published