Losing a loved one can be one of the most incredibly trying experiences of a person’s life. Between funeral planning and alerting relatives and friends to the death, it can often seem like a huge relief once the funeral is finally over. However, the month after a loved one’s death is a crucial time for settling the deceased’s finances – and for ensuring the protection of your own. If you need advice on how to financially move on after the death of a spouse, parent or other relative, then read on to find out what you need to know on making the change as smoothly as possible.
One important note: it can often be tempting to push aside sorting out any financial matters in the midst of your grief, so if you need help with any of these steps, enlist the aid of friends and family members. They’ll provide much-needed emotional support as well as assist you with any legal or financial difficulties you may encounter. Additionally, contact professionals who can give you the best advice on how to manage your finances and settle any debts that were left behind by a loved one.
First, get several original copies of the death certificate, as you’ll need these in order to close any bank accounts and prove to lenders that your loved one has passed. Find any financial records that your loved one left behind in order to itemize all accounts and bills – a tax return will provide you with a good starting point. Next, contact an accountant to verify which debts and bills are actually yours, and which can be canceled due to your loved one’s death; don’t pay any of these bills, as a court will later liquidate assets in order to settle debts owed to creditors and lenders.
Next, if your loved one left behind a life insurance policy, meet with the company so you can start receiving payments (there’s no probationary period for when you can start receiving payments). If the life insurance policy is a particularly large one, consider putting it aside for a college education fund for any surviving children. Your accountant or tax advisor can help you find a savings account that will help this money to grow – and it can provide much-needed financial assistance when those tuition bills start appearing in your mailbox. Remember, it’s important to use any funds that are left to you wisely; it’s best not to spend the money on new things, as you may need it for any future emergency expenses. Consider investing the funds or using it to pay off your mortgage or any major debts that might provide a financial strain. A financial planner will help you to maximize any funds that you receive so you’ll always have an emergency cash cushion.
Additionally, don’t forget about your bills during this particularly grievous time. If you miss any payments, your debt can spin out of control very quickly – and without the financial support of your loved one, you could end up in trouble. Enroll for automatic payment if you haven’t already so you won’t miss any important mortgage or credit card payments.
If your loved one left behind more debts than assets – and it’s not an uncommon occurrence – you’ll need to turn to the courts for help. Within thirty days after the death of your loved one, file the appropriate paperwork with a court (ask a lawyer for advice on what specific paperwork you need), who will then liquidate the deceased’s assets in order to pay off any and all debts that have been left behind. During this time, creditors and lenders cannot harass you for payment, so make sure they know that your loved one’s estate is currently in probate.
Handling finances on your own – especially after the death of a spouse or partner – can be a tumultuous and scary time; yet it is possible to tackle these problems in a smooth and efficient manner. You’ll need to resort to using a monthly budget to keep track of your income and expenditure, as well as invest any money in order to maximize your cash flow. Recruit help from professional lawyers, accountants and tax advisors as well as friends and family members; they’ll help you to legally settle your finances as well as help make the most of any funds that you may have received after the death of your loved one.