When a loved one passes, various details must be handled in short order and rapid succession. Read up. Be prepared to bring matters to a close quickly and efficiently.
Part I - Finances
It is difficult time when a loved one passes. Yet, organization is key when trying to keep in the best state of mind during this time. Settling the estate of a lost loved one can be a time-consuming and complicated task. This article will give you some tips on how to get organized to make all necessary processes run smoother.
- Get copies of the death certificate
When finalizing finances of the deceased loved ones, a death certificate will, in most instances, will most likely need to be presented. For example, in processes like claiming insurance, social security and employee benefits, transferring assets and other financial obligations this official document is required. Additionally, things may come up further down the line that will require a death certificate. Death certificates can be obtained at the funeral home, as well as the hospital. The process can take up to two weeks to process. Extra copies for the various requestors can be obtained as well, ranging between $2-8 each. About ten copies are recommended.
- Find the Will and safety deposit box
Finding a Will, if you believe there is one made out, is a vital step, as this will provide guidelines for further steps in this process. For example, the Will states who will serve as the executor- the person responsible for all legal and financial matters. It will also contain burial and funeral instructions. Finally, the will could list the location of other important documents, such as insurance policies as well as reveal any safety deposit boxes that contain important papers.
Sometimes, however, the Will itself could be located in a safety deposit box. If that is the case, a legal authority may have to gain access. Finding the box can sometimes be a task in itself, as the location may not be something left behind. A search of local banks could turn up a box, as well as the Indiana-based American Safe Depository Association. The ASDA can provide you a list of participating banks.
If the back official discovers the Will in a safety deposit box, they will directly file it with the probate court. Once the executor is named, he or she will get to examine it for other contents. If a Will is not found, but a burial policy is, it will be given to you.
If a Will cannot be found, the first step is to do a thorough search of desks, filing cabinets, checkbooks, address books, computer accounting programs and even in saved documents (ex: Will Making software) for clues to dealing with lawyers or an actual will. Ask around people he or she knew to see if they knew of any dealings with lawyers.
If a Will is not found, as in many cases of a deceased loved one, the state names an executor, as well as determines how the money is distributed. This is referred to as “Intestate”, which means the courts determine where assets go, even if it is not how you know the deceased would have wanted it.
- Find Professional Advisors
Once a Will is located, an attorney should be contacted as soon as possible. If you comfortable with the lawyer who handled the Will, then you are one step closer since you already have your representation. However, if you do not have a Will or are not comfortable working with the lawyer already involved, you can search for someone else. Aside from a lawyer, you will need to find someone in the financial realm to assist with filing tax returns. Much to the surprise of many, lawyer cannot handle every aspect of dealing with an estate. A tax accountant is key in helping you file any federal, state and local income tax due, as well as Fiduciary tax returns. If there is a business involved, this becomes even more important.
In the midst of sorting through finances, a funeral has to occur. Once you determine if there are prearranged funeral and burial instructions, you need to make the arrangements. If not, you will have to arrange one, perhaps coordinating with relative and close friends. In this process, also comes announcing the death to the local media and of course, notifying friends, relatives, neighbors, colleagues, fellow club members, etc. After this painful process, comes more work. However, make the most of this time of mourning with those close to you. You will find that many people are there to help you through the rest of the process should you need assistance.
- Settling the Estate
A. Probate Preparation/Information Gathering
The probate process, or the process that transfers the assets from the deceased to heirs, is made up of many intricate details. That said, preparing for it is indeed a complicated matter. In getting ready for this process, you will have to record the assets and debts of the deceased, as well as get all other financial issues that could pertain to the estate in order. Debts are paid out of the estate, so this needs to be accomplished before inheritances can be awarded.
To locate these assets (and debts), you will have to turn to the important documents you may have found with the Will, or while looking for the Will. If these items are listed with the Will, but the will was written several years ago, you may want to check with those parties to make sure the information is up to date. Debts could have increased or decreased since inking the document. A total inventory of the estate needs to be taken, which includes searching for life insurance policies, bank accounts, stocks, bonds, vehicle registrations, real estate contracts, broker accounts, old tax documents and more. In addition, the death announcement in the newspaper also allows for people to come forward with claims against the estate, things that may not be notated in papers you come across. People do only have a certain amount of time to make these claims.
Along with this process will come looking at various bank accounts. If the deceased shared the bank account with a spouse or someone else, the survivor will still have his or her access. If not, the account could be closed. However, access cannot be gained until an executor is named. But, before closing the account, you may want to use funds for funeral expenses. Also, check with the bank for anything that may be directly paid from or deposited to the account. The attorney you have appointed will be able to help clear everything up.
Once everything is gathered, a preliminary inventory is made up. This then allows the Succession Tax Returns to begin being prepared, which then leads to probate court. There may be a deadline for doing all this. Check your state law to be sure how much time you have. Be sure to comply with this law. Having the help of others close to you, as well as professionals will make this daunting task more bearable.
- Paying Benefits
After the above information is gathered, some of the benefits of the deceased may be made available to heirs, such as life insurance, any IRA’s and other employment related benefits. Life insurance is generally the first that can be handled. There may be additional sources of this coverage other than an employer. There could be policies through fraternal organizations, travel clubs, veteran’s administration, credit card companies, mortgage companies, medical insurances, banks and more. Again, the deceased checkbooks, filing cabinets and other storage areas can be a great resource to locate this information.
Social security benefits can be a sizable sum if the deceased left a spouse or dependents. Help with this information can be obtained from the Social Security Administration. Military benefits also may be available, including money for funeral expenses. Checking the deceased discharge papers will lead to discovering any information pertaining to these benefits. The local office of the Veteran’s Administration can be of help here as well.
In fact, these benefits can sometimes be paid out within ten days of providing proof of death and proof of beneficiaries. However, this does not happen automatically. These benefits must be applied for timely and properly. So, not only is a death certificate an absolute necessity, but documents of the living as well. Spouses and dependents will need marriage certificates, as well as birth certificates to prove their relationship.
- Inheritance Process
After everything above is gathered, the probate process begins. This process could take a month, a few months- or ultimately years, depending on the size on complexity of the estate. If the deceased dies without a Will, if there is a dispute among heirs and estate is challenged or if there is a backlog of cases in probate court are three reasons that could slow this process. But once the estate is settled, all known debts are paid off. This is thanks to your organization of tracking all appropriate items down. Then, assets are passed to heirs.
With being an heir comes one more step- inheritance taxes. The lawyer and accountant you have on board can help you with this.
On a final note, an estate organized before death, is the best way for an execution and probate to run smooth, and also less expensive. If you are reading this article to prepare for a loved one dying, talk with them about the location of documents, and encourage the writing of a will if not already done. If you are reading this to prepare for you own death, leaving things organized with clear instructions will make your passing a much easier process for your own loved ones.
In summary- here is a quick list of what to locate and act upon:
- Assistance of Attorney- for execution of will/estate
- Assistance of Tax Accountant- for filing of taxes
- Death Certificate- to show proof of death for various claims
- Funeral/Burial Policy/Cemetery Lot Deed- for instructions
- Will- for executor/directions
- Safety Deposit Box- for Will and other important documents
- Insurance Policies- for beneficiaries and payment instructions
- Checking/Savings Accounts- goes into estate for probate, unless joint
- Stocks/Bonds-goes into estate for probate, unless joint
- Mortgages/Other Bills- goes into estate for probate and payoff, unless joint