“When a member of your family dies, you could be left to pick up the financial pieces. Finding all the information you need can be challenging.”
This year, more families than usual are finding themselves grappling with the challenge of managing the affairs of a loved one who has died. Handling these tasks while mourning is hard, and often families do not have time to prepare, says the article “How to manage a loved one’s finances after they die” from Business Insider. The following are some tips to help get through this difficult time.
Someone has to be in charge. If there is a Will, the person named in the Will is responsible for administering the estate of the deceased. That person is usually called the executor or personal representative. If there is no Will, the closest next of kin is eligible to serve as the administrator. It should be someone who has the necessary skills to take the lead. This individual is honest and trustworthy, capable of handling many details, and can handle sometimes mountains of paper work. This includes arranging for the funeral, paying debts and claims, gathering assets, collecting accounts, paying the final taxes and distributing the inheritances as per the will or state law.
When one member of a married couple dies, the surviving spouse is the usual choice. Otherwise, a family member who lives closest to the deceased could be the next best choice especially if they have the administrative capabilities as well. That person will need to petition the local probate court to be appointed in order to take care of assets remaining in the decedent’s names and often the residence. It the residence is to be sold, that is an additional duty of the administrator to make those arrangements until it is sold. Being physically nearby can make many tasks easier.
It is always better if these decisions are made before the person dies. Wills should be kept up to date, as should power of attorney documents, trusts and advance directives. When naming an executor or trustee, let them know what you are asking of them. For instance, if your Executor will need to arrange for your pets and/or be your children’s guardian it would be best if they knew and consented to this special responsibility.
Do not delay and leave the burden to your heirs. Grief is a powerful emotion. Your family will be dealing with these strong emotions especially if the death was unexpected. It may be hard for them to get through the regular tasks of the day while grieving. The additional work of managing an estate is a difficult burden at a difficult time. You are providing a clear and well thought out estate plan as described in your Will to ease the burden.
Get more death certificates than seems necessary. Your Executor should be prepared to order sufficient copies of the death certificate. If you have a detailed asset list it will help them know the number of death certificates they will need. At least a dozen certified copies are recommended. Banks, brokerage houses, phone companies, utilities, credit card companies, etc., will all request the death certificate. While there are instances where a copy will be accepted, in many cases you will need an original, with a raised seal.
Who should the Administrator to notify? If the decedent is receiving Social Security, they need to be notified. Usually the funeral director will do this as a courtesy. Social Security Administration can be notified by an email. If there are any other recurring income or retirement payments, like VA benefits or a pension, IRA distributions, etc. those institutions need to be notified. The same is true of insurance companies, banks and credit card companies. Fraud on the credit cards of the deceased is quite common. When a notice of death is published, criminals look for the person’s credit card and Social Security numbers on the dark web. Act fast to prevent fraud.
Protect the physical property. Secure the home of a decedent right away. Are there plants to be watered or pets that need care? Take pictures, create an inventory and consider changing locks. Take any valuables out of the house and place in a secure location. If the house is going to be empty, make sure to take care of the property to avoid any deterioration or signs of abandonment, which will make the property a target.
Paying the bills. Depending on the person’s level of organization, you will have to identify where the active Bank or other accounts are so money is available for necessary expenses. You also need to determine if anything is being paid automatically, and be wary of the checking account being overdrawn. Old tax returns can be helpful to identify income sources. Determine what accounts need payment in the short term, like utilities, mortgages, credit cards.
Some accounts are distributed directly to beneficiaries, like in-trust-for accounts, transfer-on-death accounts, 401(k) s, IRAs and life insurance policies. Joint bank accounts and real property held in joint tenancy will pass directly to the joint owner. The executor’s role is to inform the institutions of the death, but the financial institutions will disperse these accounts with beneficiaries directly. These accounts are not the responsibility of the executor as they are not governed by the Last Will and pass outside the Will.
File tax returns. The executor is responsible for filing the final taxes, due on April 15 of the year after death. If taxes were not filed for any prior years, the executor has to resolve the filing of back taxes as well.
Consider getting help. Our firm’s attorneys can assist with the administration of an estate. We will prepare the necessary court papers to have an Executor or administrator appointed and will work collaboratively to settle the estate, pay the bills and competently distribute the funds to the named heirs. Expect the tasks to take anywhere from six months to two years, depending on the complexity of the estate and the New York county in which the estate is probated. Our firm aims to share the burden and work of estate administration and to be sensitive to the emotions that come along with this difficult work.
Please call our office anytime for assistance with your Estate Planning, Estate Administration, Long Term Care Planning, Medicaid or Special Needs Planning: (718) 238-6960 or firstname.lastname@example.org. We will be happy to schedule an appointment with one of our attorneys.