September 8, 2010 in Business

Stick to necessary decisions following a death


When a relative dies, you and your family will need time to grieve. It is important you do not make any long-term decisions about finances for at least six months. Grief can cloud your judgment.

There are some issues that need to be dealt with after a funeral, and some within legal time periods. Here are some items to consider:

First, notify the decedent’s attorney about the death and find out if there is a will and who has been appointed executor. The executor of the estate, either named in the will or appointed by the court, will need to organize a meeting to review the will in detail and discuss the estate settlement. Ideally, interested parties should attend. If they are unable to do so, it is important they get copies of the will.

The executor also should determine if there was a safety deposit box and get permission to remove the contents.

Here are the necessary documents the executor will need to collect: the will, death certificate, birth certificate, Social Security number, marriage license, citizenship papers, bank statements, deeds to properties, statements on life insurance policies, income tax returns, disability claim, pension summary and veteran’s discharge certificate. This information will be required for determining payments and benefits from insurance, pension, Social Security and other benefits.

It is a good idea to get at least 10 copies of the death certificate; each financial institution usually requires a certified copy. Other tasks to determine are unpaid bills and mortgage balance and payments. It is important to notify the decedent’s creditors and close all credit card accounts.

Be sure to contact the employer’s employee benefit department if the decedent was employed at the time of death. There may be some death benefit, accrued vacation and other final pay due to the estate.

Also, check with the insurance company on any property, such as a home and car; check if coverage is still in effect during the probate process and what needs to be done to maintain coverage.

Set up a bank account in the estate’s name. It is important that family members do not pay final expenses, as it can increase the value of the estate and potentially increase inheritance taxes.

It is the executor’s job to distribute property to the heirs. This usually does not happen until the period runs out for creditors to make claims. This can be as long as one year after the death. Once the executor has an understanding of assets and claims on the estate, distributions to heirs can be made. It is prudent to hold back some assets for the final costs of closing out the estate.

The executor must file an account with the probate court listing any income to the estate since the date of death, expenses, and estate distributions. Once the court approves the probate, the final distributions can be made by the executors. If the estate value exceeds the estate tax exemption for the year of death, a federal estate tax return needs to be filed within nine months of death. It is important to seek advice from an experienced estate planning professional. It may be necessary for a final tax return to be filed on behalf of the decedent as well.

This whole process after a death is not easy, but it is necessary. An organized plan can help make this difficult process doable.

Sarah Rieger is a certified financial planner and member of the local Financial Planning Association chapter. Readers are invited to submit questions on financial planning to be answered in this space each Tuesday. Send questions to askaplanner@

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