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by William Bissett, CFP®


As the financial planning industry took off in the 1990s and 2000s, baby boomers were saving for education expenses for their children and for their own retirement. It was important to have life insurance and estate documents in place in the event they died prematurely, but those documents control what happens many months after they have passed away. What happens from the time of death until the will starts to play an important role? Don’t assume that revocable living trusts will take care of the issue.

Developing a tailored checklist for the family to go through at death can minimize stress for grieving spouses and children. Let’s propose a checklist for our clients and begin to tailor it to their needs.

Locate the Letters of Last Instruction

This should be an important document prepared by the client detailing helpful information to the family. At a minimum, it should have information regarding organ donations, burial preference, prepaid funeral arrangements, desired service details, and other immediate details desired by the decedent (cremation, autopsy, etc.).

Notify Family, Friends, Employer

Contacting family, friends, the employer or employees, and other inner circle people is obvious. Although the first instinct may be to notify the decedent’s professional advisers, this step may be best left alone depending on the relationship. Remember that financial institutions freeze accounts solely in the name of the decedent upon learning of their death. In some instances, the family may need access to some of those accounts. Discussing this in advance should provide comfort that everyone knows what to do.

Locate Information for the Death Certificate

Hopefully, the client detailed the information for the death certificate in the letters of last instruction. If not, this information—which includes the decedent’s parents’ birthplace, the number of years the decedent lived in the state, military service details, etc.—should be gathered relatively quickly. In most instances, the funeral director will file the original death certificate, so the family will be asked for this information fairly early in the process. Official copies of the death certificate can be obtained later.

Make Funeral Arrangements

In situations where funeral arrangements have not been pre-planned, the next of kin (closest relative) is typically responsible. If they are not able, then it passes to the next of kin until someone is able to fill that role.

Set Meeting with Attorney, Planner, and Others

For most clients who have gone through the estate planning process, it is going to be important to meet with their professional team (for the professionals meeting with clients dealing with the death of a loved one, Amy Florian’s book, No Longer Awkward, is a good resource). This meeting will cover what needs to happen financially over the next couple of weeks to avoid running afoul of the estate plans. It also may be the time to decide the executor, because that person will need to start gathering important paperwork.

Delay Important Financial Decisions

Emotions make us think irrationally. There should be a list of known questions with answers left behind regarding important decisions. That way, the thinking has taken place in advance, with consideration to a host of issues.

Gather Important Paperwork

This may require going to the safe deposit box, if someone has access to it. If not, some paperwork will have to be gathered after the Letters Testamentary have been obtained. The family will need to obtain copies of the death certificate, military discharge papers, marriage license, and other personal documents. They’ll be necessary for filing for benefits and navigating the estate administration process.

Pay Expenses, Organize Bills, Follow a Budget

For estate planning purposes, there may be accounts that should not be used to pay expenses, as it may jeopardize the ability to disclaim assets or bring unwanted scrutiny on others. The American Taxpayer Relief Act of 2012 has mitigated these concerns somewhat with the higher estate tax exemption equivalent amount, but it is still helpful to confirm which accounts can be used for paying bills. If nothing else, the executor can use funds from outside the estate, as long as they track their expenses and submit a reimbursement from the estate.

This is a good time to review the budget, if one has been pre-established, and to organize the bills. Families need to be flexible about where to look and what to expect; bills come via mail, email, or online bill pay. Families may lose access to certain accounts when they notify the financial institutions of the death of the decedent, so maintaining a list of how things are paid will ease the burden of being in “blackout” during these times.

Notify Financial Institutions

As we know, the accounts owned individually by the decedent will be frozen until they can be transferred appropriately, so make sure everyone is prepared to not have immediate access to these accounts. Heirs may lose access to which bills were paid online, as that information is typically tied to the specific user and not shared with an executor. This means that some bills may get lost in the shuffle.

Record the Will

This step is going to vary depending on the particular situation. In some cases, it could be beneficial to open the estate as soon as possible, while in others (like when most assets are owned in a revocable trust) it can be delayed because the assets are not frozen in the estate settlement process. At this point, the court will also issue the Letters Testamentary to the executor, legally identifying the executor to finish the business of the decedent and close out the estate. The executor can also establish a taxpayer identification number and open an estate checking account.

Start the Claims Process

Now is the time to start determining the potential benefits available to the decedent’s loved ones, including life insurance, Social Security, and veteran’s benefits. The funeral director will have filed a “statement of death by funeral director” form with the Social Security Administration, but the family will need to determine which benefits are available to them and potentially make decisions about how and when to receive those benefits.

Determine Employer Benefits

If the decedent had family health insurance through their employer, this needs to be addressed. It is likely that COBRA will be elected, but determining the best option for the family health coverage is important. It also is important to find out about Health Savings Accounts, Flexible Savings Accounts, and other cafeteria plans. And, it’s an ideal time to examine the best options for any executive compensation plans, such as stock options, restricted stock, deferred compensation, and other compensation strategies. This is also the chance to determine the best way to handle the 401(k) of the decedent.

Gather Important Documents

Here is a list of documents that should be pulled together—each client’s situation may require additional documents:

  • Estate documents
  • Pre-planned charitable gifting arrangements
  • Last three years of tax returns 
  • Business agreements/papers 
  • Rental and lease agreements
  • Title/registration for cars, boats, RVs
  • Real estate titles
  • Personal liability insurance documents for the house, car, rental properties, and other assets 

Meet with Attorney (Again)

After gathering the important documents, there may be questions, so it never hurts to check in with the estate attorney. If it hasn’t already been done, this is the time to review which accounts should be used to pay expenses of the estate and the surviving family.

Address Miles, Points, and Rewards

One asset we don’t discuss with clients on a regular basis is their rewards programs. For clients who travel often, such rewards programs could have substantial value. Every rewards program has terms and conditions that govern what happens to the rewards at the death of the owner. In many instances, the rewards die with the owner, but it is worth understanding the terms and conditions. After all, if the points are in the decedent’s name and the credit card company doesn’t know they have passed, a spouse may have access to those points through the login feature until the account needs to be renewed. Yes, there are laws in place to prevent this, so the family must proceed with caution.

Locate Logins

I’ve heard that the average consumer has logins to more than 25 websites. The family will need to locate all of these and begin the process of notifying the sites of the death of the decedent. For example, accounts may be maintained at Flickr, Shutterfly, Facebook, LinkedIn, Twitter, WordPress, Gmail, professional association sites, and message boards.

At this point, it is good to begin cancelling the personal accounts of the decedent. These will include the contracts and subscriptions of the decedent such as cell phones, magazines, newspapers, and professional associations. It also is important to notify the credit agencies (Experian, TransUnion, and Equifax) so that they can flag the decedent’s information to protect against identity theft and fraud.

Notify the Appropriate Government Entities

This step is necessary to start cancelling various government identities including voter registration, driver’s license, identification cards, passports, and parking permits.

A lot of important personal and emotional steps must to be taken alongside the ones presented here, but this is a start. Each of us will lose clients, and helping clients prepare for the future is what we do. Help them build a checklist for their families to use during those most difficult days, weeks, and months.

William Bissett, CFP®, lives in Charlotte, North Carolina, and is a wealth manager with Pinnacle Advisory Group. He also is the founder of Principled Heart (www.principledheart.com).

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