It's never easy to lose a loved one, whether they've lived a very long life or they were taken from you too soon. Saying goodbye is always difficult and sad.
Beyond the funeral and processing grief, there are practical financial matters that need to be taken care of after a loved one passes away. Navigating this process in the wake of a death is one of the most overlooked and emotionally charged financial challenges you'll face.
One of the best gifts a loved one can leave you is all the information to make this process as easy as possible! It's a difficult conversation to have, but talking to your parents and siblings about where you would find all of their accounts, passwords and more if they should pass away can make this process a lot smoother. If you have children, provide them with this information for your own accounts. Having a will, estate plan and life insurance could also make this process a lot easier for those left behind.
Unfortunately, not everyone is able to do this before they pass away, especially if it's an unexpected occurrence. Even if that conversation does happen, here are some of the things you may need to do when a loved one passes:
Locating Accounts and Documents
This is the first step you should take, as soon as possible after a loved one dies. In addition to getting multiple certified copies of a death certificate (as many banks, insurance companies or government agencies will ask for certified copies), you'll want to find: will and estate documents, trust documents, insurance policies, the person's Social Security card, bank and loan documents, and investment accounts. Try to locate their usernames and passwords to accounts, too.
Notifying Institutions
Over the coming weeks, you'll need to notify everyone of the death, including banks, insurance companies, loan companies and anywhere the person has had financial dealings. One tip: Don't pay anything over the phone immediately. Some companies will immediately say, "Well, the person who died owed us money," but those companies will need to wait until you're able to verify information and talk to an accountant about the estate and what you're legally required to do.
Contacting Social Security and Government Benefits Programs
This is one of the most time-sensitive steps and one that many families overlook. The Social Security Administration must be notified of a death promptly. If the deceased was receiving Social Security benefits, any payment received for the month of death or later must be returned — keeping those funds can result in serious legal and financial consequences. If a surviving spouse or dependent children are involved, they may be eligible for survivor benefits, so it's worth contacting the Social Security Administration directly to understand your options. Beyond Social Security, you'll also want to notify any other applicable government agencies, including Medicare or Medicaid, the Department of Veterans Affairs if the deceased was a veteran, and any state or local pension programs they may have been enrolled in.
Notifying the Employer's HR Department
If your loved one was still employed at the time of their passing, contact their employer's Human Resources department as soon as possible. HR can help you understand what benefits may be available to you, including any life insurance the employer provided, unused vacation or PTO payouts, pension or 401(k) distributions, and continuation of health insurance coverage under COBRA. If the deceased was retired, their former employer may still have relevant pension or benefits information, so it's worth making that call regardless.
Understanding Joint Accounts and Beneficiary Designations
Not all assets pass through a will, and this surprises many families. Accounts that are jointly held, or that have named beneficiaries on file, typically transfer directly to the surviving owner or named individual, bypassing the probate process entirely. This includes joint bank accounts, life insurance policies, retirement accounts such as IRAs and 401(k)s, and payable-on-death (POD) or transfer-on-death (TOD) designations on investment accounts. It's important to understand which assets fall into this category early on, as the process for claiming them is separate from, and often faster than, settling the estate through probate.
Managing Digital Assets
In today's world, a person's financial life extends far beyond paper documents and physical accounts. Your loved one may have had PayPal or Venmo balances, cryptocurrency holdings, online savings accounts, or subscription services that continue to charge a card even after death. Social media platforms like Facebook and Instagram have their own memorialization or account removal processes. Loyalty and rewards program balances, such as airline miles, hotel points, credit card rewards, may also have real monetary value and their own transfer policies. If you're able to locate usernames and passwords, or if the deceased used a password manager, this can make navigating the digital side of the estate significantly easier.
Managing Estate Accounts
You'll need to talk to an estate attorney to determine whether the person's estate will need to go through probate, which is a court-directed process of authenticating the person's will and administering their estate. You'll need to open a bank account specifically to manage the estate finances. In most cases, debts are paid from the estate, not by any of the person's relatives personally (unless the living person co-signed on a loan or account). There are estate laws in place to help you understand which debts to prioritize, and you should avoid paying any creditors before you have a full understanding of the estate's assets and these rules.
Avoiding Grief-Related Fraud
Throughout the whole process, you should be very aware that there are some awful people out there who will try to take advantage of you in your time of grief. Some of the most common scams include creditors who demand payment immediately without sufficient documentation (and threatening legal action if payment isn't made quickly), scammers who demand money to release documents or information about accounts, and funeral homes that request payment for supposedly pre-made plans with the deceased.
We hope your family remains healthy for as long as possible, but if you're going through this process, we're here to help. Don't hesitate to reach out to us.
