When a loved one dies, someone needs to take charge settling the estate. This includes finding all of their financial information and their Will, paying their bills, dealing with Social Security and other automatic payments and filing their final income tax return. You can do it yourself or hire a lawyer to help you.
One family was prepared in that they were already handling bill pay for their loved one and had a funded revocable living trust to hold the assets, but still there were many loose ends taking months to resolve.
-Who’s in charge?
The first thing to determine is who settles the estate. If there is a Will it will be the Executor and if there is a Trust it will be the Trustee. If your loved one died without either, next of kin step forward to be appointed by a local court to act. Family members nearby make the most sense since there is often an empty house to monitor and local court documents to be filed. Ideally, your loved one planned ahead with a a Will or Trust and used this time of Covid lockdown to prepare. When naming an Executor, Trustee or even Guardian for minor children be sure to ask the people you are naming if they are willing and able to act. It is important to get the estate administration underway right after the funeral and within 30-60 days of death. Procrastinating makes for more work and can even tempt fraudsters and criminals.
- Get more death certificates than you can imagine you need
Get at least 12 death certificates because banks, brokerage firms, and many other institutions will require an original. Some will accept copies but better to have extras on hand.
- Know whom to notify
First notify Social Security and any other recurring payers such as VA benefits or pensions. Notify insurance companies to begin the claims process. Pay and close credit cards quickly so fraudsters don’t get hold of your loved one’s identity.
-Protect the physical assets
Secure the house right away and arrange for pet care or rehoming immediately. Take care of plants and landscaping to make the home look lived in. Take pictures of home contents, write an inventory and consider changing the locks. Remove valuables at the first visit to secure them elsewhere. If the house will be empty for some time, be mindful of water systems to prevent mold or frozen bursting pipes. If the person died with tenants or housemates, arrange for them to leave and sell the house as soon as possible.
- Follow the money:
The executor must pay bills (including utilities, phone, cable, etc.) and find all sources of income (e.g., from 1099 tax records). A death certificate will be needed to access account records, change passwords and close accounts.
- These accounts aren’t part of the estate
Certain accounts are distributed directly to beneficiaries. These include pay-on-death or transfer-on-death accounts like retirement plans. Joint accounts will pass automatically to the joint owner. The executor may notify the institutions of death but not distribute or handle these funds.
- Don’t forget to file a final tax return
The executor must file the deceased person’s final income tax return by April 15 of the year after death. If the person did not file returns those will need to be filed as well.
- Where to turn for help
Estate administration can take months and can be an onerous job. You can hire a probate attorney or a professional fiduciary to administer the estate. Fees are normally a percentage of the value of the estate and can be well worth it especially if no one is willing to take on the role of settling the estate.