Financial Steps to Take When a Loved One Dies

When a loved one dies, coping with the loss is one of the most difficult things you’ll face. On top of the emotional strain, you also have to plan a funeral, tend to final wishes and settle important financial issues.

While you are grieving, it can be especially difficult to know what needs to be done or where you should start. Here are seven important financial steps to consider when a loved one dies.

The 7 financial steps to take when a loved one dies

Obtain a death certificate

When a loved one dies, you’ll need to get their death certificate (or copies of the death certificate) in order to complete a lot of the financial tasks on this list, such as filing claims for insurance death benefits or settling their estate. Often, the funeral director can help you obtain the certificate, but you can also get copies by ordering them from the vital statistics office in the state where the death occurred.

Start the probate process

If your loved one completed end-of-life planning or did estate planning, this will likely include a will, which needs to be filed with the probate court. An executor (a person named in the will) is in charge of handing out your loved one’s assets to beneficiaries according to the terms of the will. If there isn’t a will, the court will name an administrator to handle the estate and decide who gets what. An estate attorney can help with this process.

Alert the deceased’s financial advisors and institutions

A financial planner or professional can help you determine what assets your loved one had. Financial institutions can give you information about balances and more if they were not made clear in the will.

Some assets can pass to beneficiaries outside of a will if the deceased set up transfer on death (TOD) or payable on death (POD) instructions. TOD instructions are for brokerage accounts; POD instructions apply to checking and savings accounts, or certificates of deposits. Financial institutions can help you determine who is named as the beneficiary, though you may have to provide a copy of the death certificate.

Also, if you lost a spouse who was receiving or set to receive any employer, union or pension benefits, you should contact the appropriate institutions to see if those should be discontinued or if you are eligible for survivors’ benefits.

Contact insurance companies

If your loved one had life insurance, you’ll need to file the necessary claim forms to receive the benefit. You will need to provide the life insurance company with a death certificate and the policy number.

Remember, too, to terminate other insurance policies as necessary. This could include anything from health insurance to home, auto, renter’s insurance or other policies. When a loved one dies, any claim form will require a copy of the death certificate.

Notify relevant government agencies

The funeral director will often notify Social Security of your loved one’s passing, but you may want to double-check. You’ll also need to notify Medicare, Veterans Affairs or any other agency that had provided benefits to your loved one. If notification isn’t made and payments do not stop, you may need to go through a lengthy and complicated repayment process. Spouses and other dependents of the deceased are often eligible to receive survivors’ benefits, so be sure to ask when you talk to the agencies.

Contact the Department of Motor Vehicles to cancel a license and voter registration, and the post office to decide where to forward the deceased’s mail. The person who receives the mail can then determine which subscriptions or accounts need to be canceled.

Update credit reporting agencies

To help prevent identity theft, notify the major credit reporting agencies (Equifax, Experian, TransUnion) of the death and provide them with copies of the death certificate. Make a plan to periodically check your loved one’s credit report to make sure fraudulent accounts have not been opened; if they have been, notify the agencies and authorities.

Prepare final tax filings

Final tax filings need to be submitted on behalf of your loved one’s estate. Doing so earlier rather than later in the process may make it easier to understand what in the estate is truly available to the heirs. An accountant, tax attorney or tax preparer can help with this.