Things to Consider When Your Loved One Passes Away

There are few things more difficult than coping with your spouse or parent passing away. On top of the emotional strain of this difficult time, you also may find yourself planning a funeral, tending to final wishes, and dealing with family matters.

When it comes to the financial considerations, it can be difficult to know what needs to be done or where to start. Typically, few if any financial actions must be done immediately. In fact, we often advise survivors to not make any major financial decisions until they have emerged from the early stages of their grief. Still, there is important work to do, and so it makes sense to have a plan for the work ahead. Here are some important things to consider.

Here is a checklist for steps to take after a parent passes away.

Don’t go it alone

Settling a loved one’s estate can be a long process and a lot of work. Much of that work is specialized work, having to do with tax, legal, real estate, and investment issues. If you are the executor or successor trustee of the estate, you have an important responsibility to make sure certain things get done. This doesn’t mean you can’t delegate tasks to specialists though.

In fact, it often makes the most sense to lean on a team of advisors, such as a CPA, an estate attorney, and a financial advisor. Your advisors can help you address any immediate issues and develop a plan of action. Along with professional advisors, it’s smart to lean on a family member or friend who you trust.


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First things first

Beyond the immediate tasks of planning the funeral and notifying family and friends, the first thing to do is order a death certificate. You will need it to complete a lot of financial tasks involved in settling your loved one’s estate, such as filing to claim insurance benefits and taking control of bank or brokerage accounts.

The funeral director can help you obtain the certificate, or you can order copies from the state vital statistics office.

Know the whole picture

To build your action plan, you will need to know your loved one’s financial picture. What are the deceased’s assets, liabilities, income sources and expenses? Knowing each of these lets you know what actions need to be taken. If there are bills to pay, you’ll need to know who is due to be paid, how much and when they are due, and how they are paid. There may also be death benefits due them, such as with life insurance, annuities, or employee benefits. 

In our work for clients, we create financial summaries such as a balance sheet and a statement of income and expenses (cash flow projection). We review these together with our clients and discuss any issues or actions to be taken. We also encourage them to share and review these with key family members who will take over when they die or if they need help later in life.

Who and when to notify

If your loved one received employer or pension benefits, contact the appropriate institutions to notify them. If notification isn’t done on time, you could have to repay some of them. Spouses and other dependents may be eligible to receive survivors’ benefits, so be sure to ask when you talk to the institutions.

If your loved one had life insurance, you’ll need to file the necessary claim forms to receive the benefit. Remember to terminate other insurance policies such as health insurance, home, auto, renters, or other policies.


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Navigating the probate process

Probate is a legal process to prove that the will is valid and to distribute the deceased’s property as the will (or state law if there is no will) directs.

Probate is generally required in California, but a simplified probate may be used if the probate estate value is less than $166,250. Assets that pass by Transfer on Death instructions or beneficiary designations can be excluded.  Assets titled in the name of a living trust or owned jointly by two spouses can also be excluded. 

If your loved one has a will, it needs to be filed with the probate court. An executor (who will be named in the will), is the person in charge of handing out your loved one’s assets to beneficiaries according to the terms of the will. If there is no will, the court will name an administrator to handle the estate and decide who gets what. An estate attorney can help with this process.

Other important considerations

Settling an estate can take a long time, and other considerations can come up. Here are a few:

  • Contact the Department of Motor Vehicles to cancel license, voter registration, and to transfer vehicle titles.
  • Final tax returns need to be filed for the decedent and for the estate. Remember to consider any taxes and advisor fees due before distributing money to the beneficiaries.
  • Fraud can be committed against your loved one even after they are deceased. To reduce the risk, notify the major credit reporting agencies of the death. Also, periodically check the deceased’s credit report to assure no fraudulent accounts have been opened.

About Jon Beyrer

Jon Beyrer, EA, CFP® is a partner of Blankinship & Foster LLC and is the firm’s Chief Compliance Officer. As a lead advisor, he focuses on helping families achieve their goals with sound wealth planning. In the community, Jon serves on several boards and is co-founder of the Professional Alliance for Children, a legal/financial charity for families of ill children. He has been quoted in The Wall Street Journal, The New York Times, and the Journal of Financial Planning. Jon lives in San Diego with his family.

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