Confronting Loss

When you lose a loved one, finances are often the last thing you want to deal with. Often, however, they must be handled sooner rather than later. Whatever the challenge you face, we can help you create a plan, tackle the task at hand, and make the financial logistics associated with a difficult time a bit more manageable.

Perhaps the biggest financial hurdle surviving family members will face is settling a deceased person’s estate. Depending on how their estate was structured, different rules may apply. For example, traditional wills will be settled through a probate court. Trusts are governed by different laws and can take several different forms. Be sure you are familiar with the process for each and secure these documents as quickly as possible:

  • Death certificate – Ask the funeral director for as many copies of the death certificate as there are accounts or assets in the deceased person’s name. When in doubt, ask for at least 10.
  • Account numbers – Among the most important are life insurance policies, investments, credit cards, utilities, and mortgages. The executor needs to ensure that these payments are made and records kept.
  • Surrogate court certificates – This form is needed to transfer ownership of the deceased person’s property to his or her heirs.

Paying Taxes

Upon a person’s death, the most significant tax is usually the federal estate tax. However, there are other taxes as well: state taxes, fiduciary taxes or taxes levied on property and investments in foreign countries. Income tax for the last year of the deceased person’s life will need to be paid as well.

Most inheritances aren’t taxed, but different rules apply depending on the asset involved. If the inheritance involves more money than you’re used to dealing with, follow these suggestions:

  • Avoid drastic, knee-jerk decisions – Consider doing nothing for at least six months. Don’t change your current spending habits.
  • Review your financial goals – Ask yourself “What do I want to accomplish with this money?” Not "What should I spend it on?"
  • Choose your advisors carefully – Be sure to talk with reputable financial, tax, and legal advisors that you trust.

Action Steps

The paperwork and responsibilities related to a person’s death can be overwhelming. Be sure to get help from trusted advisors and friends. Prioritize your steps and take them one at a time. The resources on the right-hand side of the page can help you develop a detailed plan.