“Dearly departed” are the words that no one wants to hear but is a reality that every one should expect to hear at some point in their life. If a family has taken the time to plan for the unexpected passing of a loved one or family member, the burden of what to do next in relation to finances does not need to be as difficult. Many individuals face the prospects of an uncertain future after a loved one has passed away. This is particularly the case when the person who has passed is the one who was responsible for handling the household or family finances. After a tragic loss, the finances may be changed completely as one income earner is no longer alive and that person’s source of income may not be counted upon to assist in the family finances.
After a tragic loss, the surviving spouse or family member can still take several steps to enable a smooth transition to a new financial structure of the household.
1. One should allow time to grieve the tragic loss of a loved one or household supporter but set a specific time to start the process of organizing the finances. They should pick a specific date so that mentally they will have a deadline to focus on and avoid bills from becoming past due.
2. The surviving spouse or loved one should meet with the accountant and family attorney who have handled the finances for the family and review what is the current status of the existing assets and obligations of the family. This would also be a good time to review the provisions of any will or trust document that was left behind. The goal should be that the surviving family member should have a summary of what are the sources of income they can still expect to come into the household as well as what are the current obligations that need to be addressed.
3. One should review credit cards of the deceased to avoid identity theft. Many forget to cancel the credit cards of loved ones who have passed. This would prevent expenses as well as identity theft.
4. Identify all assets of the deceased even if a will is left. Some items such as a bank account or safe deposit boxes may not have been included in the last update of the will.
5. Review all relevant insurance policies and pensions. Some have specific clauses related to the event of death and should be examined as specific documentation will need to be provided for the disbursements of benefits.
6. Make a clear and accurate assessment of any estate taxes that will be required to be paid out of the estate.
7. Take the time to form a new financial plan moving forward. One should consult with tax, accounting and legal professionals to plan for the family estate after the tragic passing of a loved one so that any mistakes in the last financial plan for the estate can be avoided moving forward.