We often see personal finance blogs and articles telling us all about preparing our estate plan; what documents to have, how to title assets, who’s on the team. What we don’t see as frequently, is information on what happens after we die. What those who survive us need to deal with in the wake of our passing. This post will touch on the very basics for those spouses surviving a loved one. If you are not the spouse, you can still follow these tips but know that your options and benefits will likely be very different.
The first thing to know, for those surviving a loved one, is that settling the estate may take time. It could take up to one year, or more, depending on the complexity of the estate. Patience will be needed. Let’s look at few of the ‘to do’ items on your list.
You’ll need to obtain a death certificate. This certificate will be requested multiple times possibly by employers, retirement plan administrators, banks, insurance companies, even Social Security.
If you know who your loved one used as an attorney, contact them. They will likely shepherd you through the will reading and help you understand what needs to be done to settle the estate.
Next up, contact Social Security and the Veterans Administration (if your loved one served in the Armed Forces). The Social Security agency pays a death benefit of $255. They will also be able to address any survivor’s benefits for which you may be eligible. For example, a surviving spouse may be eligible for survivor’s benefits as early as age 60 – earlier if disabled. With the Veterans Administration, you may be entitled to benefits such as a small pension, a headstone, a flag-draped casket, partially paid or fully paid burial (if buried in a national cemetery), all depending on whether your loved one served in the Armed Forces.
Life insurance is generally the biggie! If you know your loved one had a policy, you need to contact the insurance carrier and request death claim forms. You’ll need the aforementioned death certificate. Generally speaking, beneficiaries can receive their benefit in either a lump sum or annuitized payment (i.e., spread out over years). Prior to deciding which to accept, talk with your tax advisor and financial planner.
You’ll want to contact your deceased’s former employer. This is in the event your deceased is receiving some form of benefit tied to that former employment. You may be receiving a pension that will now be reduced as a survivor. Or, it could affect your health care coverage if that was a retirement benefit. Speaking of health insurance, if you are on a non-employer plan, contact them immediately to find out what, if anything, they will cover for any final illnesses, if there is a death benefit (some plans offer this), and what your new rate will be as a surviving spouse.
Contact companies that hold your deceased’s retirement plans (if any). For example, if your spouse rolled over their retirement plan to an IRA account, you are most likely the spousal beneficiary unless other planning has been put in place. Or, you could be the sole heir to your last surviving parent’s IRA. How this money is treated will vary depending upon your relationship to the deceased. This is another good time to reach out to your financial planner.
Finally, begin notifying organizations where your loved one was a member. It’s possible the organization may have a special memorial or service they provide. At the very least, you’ll want to let them know so they may let their fellow members know that your loved one has passed. Remember, your loved one likely had friends, acquaintances, and a life you didn’t know everything about. However, the more practical reason is that you may need to have the organization stop billing, or return dues paid.
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