September 7, 2021
Losing someone you love is not something you want to think about, let alone discuss and plan for. When the unthinkable happens, dealing with the financial burden that can be left behind may make it even more difficult. Here are some tips that will help you to start the conversation and to financially prepare – now and after – a loss of a loved one so you can focus on the more important things during a difficult time.
Taking a little bit of time to prepare will be a time saver when the unthinkable happens to your loved one. Are your loved one’s final wishes written down? Do you even know what their wishes are? It’s as simple as starting a conversation and making sure there are proper things in order that will avoid potential conflicts before it’s too late. Reaching out to a financial planner can help guide some of the bigger financial decisions, and he or she can also make sure that things like a will or living trust are aligned with the wishes of your loved one.
Life insurance and investment accounts are especially important to periodically review and keep up to date to ensure there is enough money to cover all final expenses as well as additional expenses, such as medical bills, and cost of living expenses due to lost income. Chances are, if someone relies on them for financial support, they will need to have a life insurance policy to continue that support after they are gone.
Meeting with a funeral director to plan and pay for final arrangements ahead of time may also be something to consider now. The time surrounding a death can be confusing as well as emotional. By taking the time to talk about and prepare for their final wishes now, they can help lift this responsibility from loved ones when the time comes.
You do not have to do this alone! When a loved one passes away, initially you may be in shock and consumed by sadness. Soon after, you might start going over the long list of things that will need to be planned and decided upon. Reach out to family, friends or even planning advisors. At this point, you may have had conversations with your loved one about their final wishes. If you didn’t, seek consultation from family, friends, a preferred funeral home and/or church.
Immediately after a death of your loved one, you will want to publish a legal pronouncement of death and start notifying family and friends. If your loved one has a final wishes planner or legal documentation, obtain a copy, and start your planning with that document.
If there is not a final wishes planner or legal Will or Trust, you can contact a preferred or local funeral home to help navigate the process. A funeral director will help decide what type of service you will have, if any, and help with burial or cremation details.
Also remember you will need several copies of the death certificate for handling financial affairs (such as closing out bank accounts and life insurance claims), and each financial institution may request a hard copy before they’ll process any requests.
Saying goodbye to a loved one and dealing with financial affairs is quite a bit to manage, especially if a death of a loved one is sudden or unexpected. Consider grief counseling to help you to navigate through your feelings and mourning. Be patient with yourself and understand that creating your “new normal” will take some time, trial and error, and patience.
If you haven’t already done so, this is the time to obtain several copies of the death certificate. To order copies of a death certificate, contact the county or state vital records office in the place where the death occurred. The funeral director who handled services can also provide certified copies for you. Every financial institution will ask for a certified copy of the death certificate before proceeding with any requests.
If your loved one has a Will, it must be validated and carried out by an executor named in the will. An executor is the person in charge of disbursing your loved one’s assets to beneficiaries according to the terms of the Will. If there is not a Will, the court will appoint someone to handle the estate and settle the assets. An attorney can help with both of these processes.
Another important task after a death of a loved one is to gather all of their account information and passwords and notify financial institutions and creditors of their death. This may include Social Security Administration, life insurance companies, government services, bank and investment accounts, credit agencies, mortgage company, utility companies, and subscriptions services. A financial planner or professional can help you to determine what assets your loved one has and give you guidance on how to handle the balances of the accounts if that information was not made clear in the Will.
Next, contact the major credit reporting agencies. Ensure you periodically check to make sure no additional accounts have been opened. As soon as you can, submit the final tax filing for the estate. Doing this earlier rather than later will be help you to remember everything that is included in the estate.
Having conversations about end-of-life can be a bit uncomfortable especially if you don’t know where to start. Consider utilizing KSKJ Life’s Final Wishes Planner to encourage conversation with your loved one and use the planner to organize everything from bank account information to mom’s favorite poem to be read at the services.
You will never be prepared to live without your loved ones; but by preparing ahead of time you can have peace of mind that you have a plan in place.
We are not financial advisors. This blog is for informational purposes only. Please consult a tax advisor and/or lawyer with specific questions regarding will, estate planning, etc.
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