After a loved one dies, you’ll have to cope with grief. And yet, if you have even partial responsibility for settling an estate, you have no choice but to focus on some financial matters. By handling these issues as efficiently as possible, you can help ease some of the strain that everyone in your family is feeling.
Ideally, of course, you should learn as much as you can about your loved one’s financial affairs while he or she is still alive. This may not be a comfortable conversation to have, but it’s necessary. If you have a good relationship, you should be able to ask sensitive questions, such as: Do you have a will? What about a living trust? Do you have a safe deposit box? What are the names of your brokerage and bank? The more you know about your loved one’s situation, the better off you will be when it’s time to deal with the estate.
When that day arrives, what steps should you take? Here are a few to keep in mind:
• Find the will. Obviously, it’s a lot easier to locate a will if you learned its location while your loved one was still alive. When you do find the will, you may want to contact an attorney who is experienced in settling estates. Even a well drafted will might offer options that an attorney can help you understand. Although you might want to work with the attorney who drafted the will, you are certainly not required to do so. If you do not have an attorney, ask friends or your financial professional for a referral. If you are the executor, you’ll have to start the process of carrying out the will’s instructions. If you aren’t the executor, contact the person who has been named to this position.
• Inquire about probate. Contact your attorney or the state’s probate court clerk to determine if probate is necessary. If it is, the executor or executrix should initiate proceedings right away, because probate can be time-consuming.
• List assets. Try to find the paperwork for the deceased’s financial assets – bank accounts, securities, real estate, insurance policies, retirement plans, etc. Take special note of who is the beneficiary of these assets; the naming of a beneficiary can even supersede instructions on a will.
• Notify relevant agencies. Notify creditors, banks, the Social Security Administration and other entities about the death of your loved one.
• File life insurance claims. An insurer doesn’t automatically pay benefits upon the death of the insured. Contact the deceased’s insurance company and file any required insurance claims.
• Open a checking account for the estate. It may seem like a strange job to do, but if you are the personal representative or executor, you might want to open a checking account in the estate’s name. Use this account to pay any bills or deposit funds received while the estate is being settled.
• File tax forms. You may have to file state and federal estate and income tax returns. Your attorney and tax advisor can help you in this matter.
Settling the estate of a loved one will never be a happy task. But if done right, it can show respect for the memory of the deceased – and that’s a worthy goal for which to strive.
*Edward Jones, its employees and investment representatives are not estate planners and cannot provide tax or legal advice. You should consult with a competent attorney for guidance in these areas.
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