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Handling the Family Estate After Losing a Loved One

| January 16, 2016
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Losing a loved one can be paralyzing. In the midst of emotional numbness and heartbreak, the pressures of finances begin to creep in. You don't know what steps to take, let alone which one should come first. This creates additional anxiety in an already earthshaking time. While the process of handling an estate is arduous, sometimes knowing a few first steps to take can help you feel more in control. To help, we've created a list of five initial steps for the first month or so following the passing of a loved one:

  1. Don’t make any major decisions right now. There's freedom in this. Now is not the time to make decisions about selling a home or changing investments. While bills need to continue to be paid, no major financial decisions need to (or should) be made now. If a professional encourages you to make a financial decision such as purchasing a financial product, this is a red flag. Though it makes our blood boil, we've heard story upon story of “financial advisors” pressuring individuals who are in a vulnerable emotional state after the passing of a loved one. And please--if someone cold calls you, or worse, shows up at your door peddling financial products or advice, do not do business with them. On a related note, do not put any personal contact information in your loved one's obituary. Unfortunately, this opens you to not only fraud, but also unwanted solicitations.

  2. Purchase file folders, then watch the mail and gather. This is a simple way to start getting organized. If bills arrive that are due in short order, pay them, and then file them. If they’re not due in short order, file them marked for review by due date. Some bills will continue, others will need to be stopped. If they’re in a file together, it will be easier to review and make those decisions with a trusted advisor.

    If something arrives in the mail and you don't know what it is, put it in a folder marked "questions". It’s not always easy to determine at first glance what should be kept or tossed. Don’t worry about it now—simply file it for later review. Similarly, file account statements that arrive (checking, savings, investment, 401(k), etc.). This prevents misplacing something important, which can cause additional stress. Don’t worry about having everything clearly labeled or in a particular order. If it’s gathered in a singular place, that’s a win.

  3. Make notes of questions or thoughts that pop into your head and file those as well. Just as with mail, it’s not always easy to know what thoughts should be revisited or dismissed. These thoughts will likely circulate in your mind if you don’t capture them. They may specifically relate to finances or they may not. Questions/thoughts such as, “what are my options with this life insurance?” “Where will my monthly income come from?” “What type of account is XYZ?” “Need to change the title on X asset” “Cancel XYZ membership” “What changes should I make to my current insurance?” Capturing these thoughts for later review can reduce stress and will make it easier to prepare for your first meetings with advisors.

  4. Gather important documents & obtain up to 25 death certificates. While you don't need to worry about sorting through documents immediately, gathering everything together is half the battle. Documents to gather that will not arrive in the mail include: marriage certificate, birth certificate of your loved one, life insurance policies, your late spouse's will, pension and Social Security benefit information, titles, etc. Death certificates are obtained through the funeral home. You'll need them to change ownership on assets, file for life insurance benefits, etc. 25 may seem excessive, but you'll easily need 15 or so depending on how complex your loved one's estate is and how many accounts will need to be transferred or benefits distributed. It reduces stress if you have a good number on hand, rather than needing to request additional copies.

  5. Once you’ve had some time to breathe and organize, we highly recommend you engage a fee-only CERTIFIED FINANCIAL PLANNER™ (CFP®) to help you with next steps. Sorting through the information you've organized is a trying and time consuming task. There's no reason to go it alone. A CFP® will help you create next steps and outline action items. Additionally a CFP® can aid in the communication between you, the estate's attorney and other professionals. The process will move more smoothly when all parties are on the same page. While transitioning financially after a loss and closing an estate can be a time consuming process, having a guide to help you prioritize and identify next steps is key.

    Additionally, evaluating cash flow when you lose a spouse is of utmost importance, and is a piece of the puzzle a CFP® will help you tackle over time. As your personal goals are defined and your new financial picture comes into focus, a CFP® will help you put the pieces of your individual financial puzzle together.

We are honored to walk alongside clients facing these types of transitions. If you'd like to learn more about how we can help, we would love to talk with you. Click Here to contact us or email Melissa Ballard directly at [email protected].

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