Planning for the Death of a Family Member: Checklist for When It Matters Most
The families who navigate a loss with the least financial stress and confusion are almost always the ones who thought through some of this before it happened, and the ones who had a trusted advisor to call when it did.
This blog covers two conversations: preparing your own affairs so your family is not left scrambling, and knowing what to do when you are in the middle of a loss right now.
Preparing your own affairs
The most important thing you can do for your family is make sure the right documents exist, stay current, and can be found. More families than you would expect discover after a loss that a will is outdated, a beneficiary designation was never updated after a divorce, or key account information is simply unknown.
Will and/or trust. A current, properly executed will directs where your assets go. A trust can transfer assets outside probate, maintain privacy, and provide control over timing and conditions of distribution. A will written more than five years ago, or before any major life change, needs review.
Beneficiary designations. Retirement accounts, life insurance policies, and some bank accounts transfer by beneficiary designation, not by your will. An outdated designation overrides your stated wishes entirely. Review these separately, on a schedule.
Durable power of attorney. This document designates someone to make financial decisions on your behalf if you are incapacitated but not deceased. Without it, your family may need to pursue court-ordered guardianship, a costly and slow process.
Healthcare directive and healthcare power of attorney. These communicate your wishes for medical care and designate someone to make healthcare decisions when you cannot.
A letter of instruction. Not a legal document, but among the most practically useful things you can leave behind. Tell your family where to find your will, your accounts, your insurance policies, your login credentials, your safe deposit box, your financial advisor, your attorney, and your accountant. In grief, having this information in one place matters enormously.
Life insurance review. Coverage in place, amount appropriate, beneficiaries correct, policy properly structured within the estate plan.
When you have just lost a family member
The immediate aftermath of a loss is not the time for major financial decisions. It is the time for logistics, for grieving, and for getting the right people on the phone.
First days:
Obtain multiple certified copies of the death certificate, typically ten or more.
Notify immediate family and close friends.
Contact the deceased's employer to address final payroll, benefits continuation, and any pension or life insurance claims.
Secure property, vehicles, and valuables.
First two weeks:
Contact the Social Security Administration to report the death and ask about survivor benefits.
Reach out to the deceased's financial advisor, attorney, and accountant.
Locate estate documents, will, trust, insurance policies, account statements.
Notify life insurance companies and begin the claims process.
Contact the bank to understand account access, particularly for accounts held in the deceased's name alone.
If the deceased was on Medicare, notify Medicare and any supplemental plan carriers.
First month:
File for probate if required.
Transfer or retitle assets as directed by the will, trust, and beneficiary designations.
Review joint accounts and update ownership.
Address ongoing bills, subscriptions, and automatic payments in the deceased's name.
Review the surviving spouse's own financial plan; income, Social Security, Medicare, insurance coverage, and investment allocation may all need to change.
Meet with the estate attorney to begin administration.
Over the following months:
File the final income tax return for the deceased.
File an estate tax return if applicable.
Distribute assets per the will or trust.
Update your own beneficiary designations, will, and estate documents to reflect current circumstances.
The surviving spouse
The financial transition for a surviving spouse is one of the most consequential events in personal finance, and one of the most frequently underplanned. Income may change. Social Security benefits may change. Tax filing status changes. Medicare coverage may need to be addressed. A portfolio built for two people may need to be restructured for one.
This is not the time to move fast. Take a breath, find an advisor you trust, and work through the picture without anyone pressuring you into decisions before you are ready.
Ascent Advisors has sat with many families through this process. We are not here to sell something in a moment of vulnerability. We help you understand what you have, what needs to happen next, and what can wait.
This blog is for informational purposes only and does not constitute legal, tax, or financial advice. Consult your estate attorney, tax professional, and financial advisor regarding your specific situation.