Your first financial order of business is to collect the many documents required to deal with the deceased’s financial affairs.
Order at least 10 certified copies of the death certificate. Most financial institutions, government agencies and creditors require the death certificate before you’re allowed to take actions like closing accounts. Insurance companies also need it to pay survivor benefits.
Then gather up the documents that will help you identify assets and debts and submit benefit claims.
If you are a surviving spouse:
Within three months of the funeral, contact the institutions where you spouse had accounts—such as banks, brokerage firms, insurance companies, and pension fund administrators—and inform them of your spouse’s death. Ask them to guide you through the process of applying for benefits and having beneficiaries transfer ownership of assets.
· If your spouse had an IRA or other retirement accounts, find out if (and when) you will be required to make distributions from them.
· If he or she had a pension through a former employer, ask that company’s benefits office about benefits or other income you may be entitled to.
· Cancel accounts (cell phone, credit cards), memberships and subscriptions that are no longer needed to prevent potential fraud or identity theft.
Meet with the executor of your spouse’s estate (if it’s someone other than you) to go over the documents gathered earlier and to discuss the legal and tax issues related to settling the estate.
Be sure to claim any assets you held jointly with your spouse. In general, joint assets will pass directly to you without needing approval from a probate court. That said, you may need to request that joint bank account funds be released to you.
Next, plan to have tax returns for your spouse prepared (or request an extension) by April 15 and pay any outstanding bills.
Avoid making any immediate decisions about assets you inherit from your spouse, especially if you are still grieving or feeling highly emotional. Instead, consult with a trusted investment professional or a tax expert about tax issues related to the inheritance as well as to get objective advice about managing the new assets.
Don Daigle is a Financial Consultant at Charles Schwab with over 30 years of experience helping clients achieve their financial goals. Some content provided here has been compiled from previously published articles authored by various parties at Schwab.
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