11 Financial Steps to Follow After the Loss of a Loved One

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The death of a loved one comes with pain and grief. In those moments of mourning, memories shared together and the feeling of loss dominate.

Yet, even in these moments, love for the deceased requires that you take certain steps and carry out important tasks — or you you may face unnecessary financial stress.

If you haven’t dealt with the loss of a loved one before, the whole thing can be confusing, so it’s important to familiarize yourself with some of these tasks.

Here are 11 financial steps you need to take when a loved one dies.

1. Get an Official Declaration of Death

While this is not purely a financial step, it is crucial to getting a death certificate, which is essential to all the other steps that follow.

If the death happened in a hospital, it would issue an official declaration of death. However, if it happens at home, there is a need to bring in a medical professional who can make the declaration. If a nurse oversaw the deceased’s health prior to death, the nurse could also issue an official declaration of death.

2. Obtain a Death Certificate

In most cases, the funeral home handling the arrangements will issue the death certificate. But you can also get one from the Office of Vital Records.

3. Gather Necessary Financial Documents

Begin by gathering all the relevant financial documents of the deceased. These include estate planning documents (will or trust), documents associated with the deceased’s assets, account statements (bank account, investment account, retirement account), utilities and bills, insurance policies and tax returns.

Each of these documents will play important roles as you proceed.

4. Communicate With All Necessary Professionals

If the deceased had a financial advisor, estate planner, attorney, tax consultant accountant or any other expert, notify them of the death. These professionals will be able to offer additional guidance regarding the remaining steps.

5. Inform All Agencies Providing Benefits

Your deceased loved one could have been receiving benefits from the Social Security Administration, Medicare or Veteran Affairs.

If so, notify them of the death and send a death certificate. In the case of the SSA, the funeral home may have sent a notification already. But you can still confirm if it has been sent since the ultimate responsibility lies with you as a survivor.

This step is important because some of these agencies might provide survivor’s benefits to the spouse or children of the deceased.

6. Inform All Necessary Financial Institutions

Similarly, the financial institutions the deceased is associated with must get a notification (with a death certificate). These include:

— Commercial banks: The commercial banks will need to close the checking and savings accounts of the deceased. Also, if there is a payment on death (POD) order, the balance on the accounts (including certificates of deposits) will be transferred to the designated beneficiary.

— Brokers: Brokerage accounts also need to be closed. Similarly, if there is a transfer on death (TOD) order, the assets will be transferred to the designated beneficiary.

— Insurance companies: If the deceased had a life insurance policy, the insurance company needs to get a death certificate so that the designated beneficiary can receive the benefits.

In addition, you’ll need to terminate other insurance policies like health and auto.

7. Avoid Identity Theft

Credit agencies like Experian, Equifax and TransUnion also need to get a notification so they can be wary of potential identity theft. You will typically need to inform just one of them for the others to become aware.

Regarding identity theft, you might also need to close the social media and email accounts of the deceased. Where it applies, you can choose to memorialize the account instead of deleting it.

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Furthermore, you can also choose to cancel the deceased’s passport by mailing it (together with the death certificate) to the federal government. After the cancellation, you can request for it to be sent back (as a keepsake) or destroyed.

8. Contact Other Important Institutions

There are other non-financial institutions that need to receive death certificates. Sending them a notification will prevent financial loss. Some of these include:

— Post office: If the deceased had subscribed to receive certain mail, the post office needs to receive a notification so they can cancel the subscription. And if there is still important mail that can’t be discontinued, make sure you divert it to a new address.

— Utilities and bill collectors: Utilities and bill collectors also need a notification so they can stop sending bills.

— Motor vehicle department: The Motor Vehicle department needs to stop renewing licenses or vehicle papers for the deceased — it also needs a notification of death.

— Unions and professional, service or fraternal organizations: It’s possible that any or all these organizations provide survivor’s benefits upon the death of a member. Don’t leave that money on the table.

— Voter registration agency: You will also need to notify the agency responsible for updating the voter register so they can remove the name of the deceased. Though some states have automated this process, it’s better to reach out to ensure that the name has been removed.

9. Prepare Final Tax Return

The final tax return is needed to provide some clarity on the financial situation of the deceased and what can be obtained from the estate. You can work with a tax consultant or attorney to carry out this process.

10. File the Will in Probate Court

You need to file the deceased’s will with the probate court. After this, the executor of the will can begin distributing the deceased’s assets in accordance with the instructions.

If you are the executor, ensure you work with the related attorney to carry out the desires of the deceased.

In the absence of a will, begin intestacy process.

Not everyone dies with a will. In that event, the probate court will appoint an administrator that will distribute the assets of the deceased in accordance with the intestacy laws in the state.

The task of the executor and administrator are similar, the difference being that while the former must strictly follow a written will, the latter has to adhere to state intestacy laws.

11. Settle Remaining Debt

In most cases, the remaining liability on a secured debt (mortgage and auto loans) will be payable by the person who inherits them.

All other forms of debt (student loans, credit card loans, medical loans) will typically be charged against the deceased’s estate. If the estate is not enough, the remainder will be cancelled.

However, if you are a co-signer of the debt, you may be liable to discharge whatever liability remains on the loan.

Carrying out any of these tasks will not be easy emotionally. This is why you will need to talk with any legal or financial professional who worked with the deceased. If the tasks become too strenuous, you can also ask other loved ones to assist with the administrative burden.

Out of respect for the deceased and the living, you can at least ensure that no losses or rancor follow.