Recently, we discussed preparing for the worst-case scenario. You can give peace of mind to those left behind by creating a plan that outlines what will happen in the event you die unexpectedly.
What if it’s the worst that has happened, and you have no plan? What should you do when a loved one passes away unexpectedly?
How to deal with an unexpected death
Let yourself heal.
Don’t let practical concerns about final costs and finances get in the middle of your emotional needs.
It is okay to feel and grieve the loss of someone you love without having to fill out a mountainous amount of paperwork. You can get any help you think you need to protect your mental state and health.
Do not rush to throw away sentimental items.
Rushing through the financial affairs of a loved one who has passed away can lead to regrettable mistakes. Find out what people who have been there have learned. You may want to get rid of anything that reminds you of your loved one, but it’s worth selling or giving away something you wish you had.
Don’t throw away sentimental items or assets left behind by your loved ones. Protect yourself and protect yourself from predators.
Prepare yourself for the future.
You can expect to feel grief and sadness after someone unexpectedly passes away. During holidays, celebrations, and vacations, you may feel depression or holiday blues. You should seek professional medical assistance if necessary, and remember that eventually, it will become easier to deal with.
What should you do when you are able to deal with emotions?
Financial advice is available.
Talk to a financial advisor after you have spoken to someone who can help you process your loss. If your loved one has a financial advisor or an attorney, start with them. You can find a financial advisor if they do not have one. But be sure to get recommendations from trusted people before you commit.
A nonprofit counselor can speak to you for free if your loved one has left more debts behind than assets. Speak to the human resources department of their employer if your loved one is still employed. You may want to find out if their employer offers death benefits or insurance.
Collect paperwork
You’ll need death certificates–multiple copies for different accounts, typically. Find out if you need to keep your loved one’s ID documents, such as their birth certificate, social insurance card, or marriage license. If there is a Will, you’ll want to locate it.
Note: If the veteran served in the military, their discharge papers will determine if they qualify for “Veterans Death Benefits” that help cover funeral and burial costs.
Save all receipts as you pay for final expenses, such as funeral and burial costs for your loved ones. You may need to file a final tax return for them. Gather any documentation related to final medical bills if your loved one died due to illness.
Gather all paperwork pertaining to any properties you own, such as mortgages, reverse mortgages, or home equity loans that are still outstanding. Find information on investment accounts, retirement accounts, insurance policies, and bank accounts. Also, look for regular bills such as utility and credit card statements. You can help yourself by finding a credit report and a recent tax form.
Note: If you’re doing this to deceive a utility company, it may be illegal for you to continue to use utilities such as water, electricity, or gas in the name of a deceased individual. You will need to enter personal information such as the name of the dead, their phone number, death date, and social security number.
Summary of the financial situation.
Make a complete accounting of your income, assets, and liabilities. You need to know if your estate is sufficient to cover all the debts that are due.
Special attention should be paid to any assets with outstanding debts, such as a car that has an auto loan due or a real estate property with a mortgage. If the heirs cannot assume these payments, then it might be time to sell or return the asset to the lender. Notify insurance policies covering real estate and vehicles.
Take over your accounts.
You’ll want to make a thorough and complete inventory of all the accounts and obligations that your loved one held. You should close any accounts you can and prevent new bills and expenses from arriving. You need to transfer any accounts that you plan to keep open into your name. This will give you total control and allow for budgeting to meet all payments.
Do not pay off outstanding debts before you have completed an assessment of the debts owed and your monthly cash flow.
Notify agencies.
You should notify anyone who had an account with your loved one, including the three credit bureaus and the Social Security Administration. Also, any organizations to which s/he was a member. Some organizations, such as veterans’ agencies or unions, offer their death benefits.
Obituary Scams
Beware of obituary scams or bereavement frauds. The swindlers who scour obituaries pretend to be relatives or friends of the deceased and contact surviving spouses to commiserate. According to an article by AARP, these displays of simulated sympathy can turn into romantic scams and “attempts” to defraud beneficiaries of inheritance money.
Deal with debt collectors.
Do not commit to anything if a debt collector contacts you. You can expect them to be uncaring about your loved one’s financial situation and to pressure you into paying off the debt immediately.
First, talk to a credit counselor and make a plan. It’s possible that you are not responsible for the debts. This depends on where you live, how it was structured, and whether your spouse died. It’s usually the estate of the deceased that pays the debts and not the survivors. (Unless it’s the spouse, cosigner, or joint account holder). Do not be pushed into paying off a debt that you aren’t responsible for using your own money.
