With Loss Comes Responsibility
When you lose someone you love it’s beyond jarring to be confronted with financial decisions. The more you take care of in advance, the more emotionally capable you’ll be when something happens. Whether it’s funeral planning, health coverage, or executing a will, you’ll be glad you spent some energy taking care of it.
The National Endowment for Financial Education has great resources on what to keep in mind at various life moments. This is from their overview.
Don’t Plan While Mourning
Avoid making any decisions while you’re mourning, especially if you are a widow or widower. A time of great pain is absolutely no time to try and keep the sharp wit you need to deal with finances. If you receive an insurance settlement or other payment, put it somewhere safe until your mourning has lessened. Consider a bank certificate of deposit (CD) or a money market mutual fund until you have time to explore long-term ideas.
Make sure dependents are covered by health insurance. Call the deceased’s job to find out details about continuing coverage under COBRA for up to 36 months. Dependents must apply within 60 days and pay the premiums. COBRA is available to employees of companies with 20 or more workers and their dependents who lose coverage due to a worker’s death.
Retitle a deceased person’s assets or jointly held assets (bank accounts, credit cards, auto titles, house deeds) into the survivor’s name. You will run into hassles, such as requests for a death certificate and a signature guarantee from a bank officer. It is a good idea to get multiple copies of death certificates, since most financial firms you deal with will require one.
Don’t pay any large debts that a deceased person incurred until you talk to a lawyer. Debts owed by the deceased are generally the responsibility of the estate and should be forwarded to the executor for payment. Many creditors simply will need to wait until the estate is settled. If survivors pay bills out-of-pocket or with savings, they could leave themselves short of cash, both for living expenses or a financial emergency.
Identify and secure resources. Some examples include life insurance policy proceeds (both individual and employer-provided coverage), employee benefits such as a deceased spouse’s 401(k) plan, and veteran’s benefits, including burial in a national cemetery. If the deceased person was employed, contact his or her employer regarding benefits due to survivors. For example, the estate may be due a final paycheck or payment for vacation and sick leave.
Ask for Help
Seek professional advice. Attorneys can help with estate tax returns or a financial planner with investment decisions. Ask questions about anything you don’t understand or feel comfortable with. There are no “dumb” questions when your future financial security is at stake. For the names of local Certified Financial Planner Professionals®, call 800-282-PLAN (800-282-7526) or check this website.
Funeral planning can be much easier if you plan ahead with your loved ones. If you are close enough to the family member to be involved in their post-death financial matters, then you are close enough to work with the person ahead of time to compile a list with information about life insurance, pensions, burial plots and other similar topics. It is much easier to make sure all accounts and relevant details end up on the list if you work with the person ahead of time, while they still are functioning well.
We never know when our time will come so we should all make a list like the one discussed above for ourselves and leave in an accessible spot for our own survivors (and tell them where it is). It is a good idea to take a look every year to make sure it is up to date.
Avoid making any decisions while you’re mourning, especially if you are a widow or widower.
This section will help you keep a level head as you deal with your loss. Here's a great resource from the New York Times which should help.