Legal Issues That May Arise After Death
The death of a loved one can be one of the most trying times in a person’s life. Between planning for the funeral, gathering friends and family together to grieve and dealing with your own emotions, it can undoubtedly be an exhausting and trying time. However, it’s important to remember that the time after your loved one’s death is crucial to your own financial and legal well-being, and there may be several issues and affairs of the estate that need to be addressed once the funeral is over.
Of course, one of the most common legal issues that arise after the death of a loved one is that of finances, especially when it comes to any debts or unpaid bills that are left behind. If your loved one leaves behind a will and an estate with clear instructions as to how assets should be allocated, then there shouldn’t be many legal ramifications for you and your relatives. If there’s no will, however, then it might be a good idea to hire a lawyer and an accountant, as you’ll encounter several legal and financial issues when dividing assets amongst relatives, creditors and lenders.
Without a will, all the assets of the deceased come together in what is known as an estate. Once the estate is formed, it then is given to the next-of-kin; if it was an unmarried child who died, the estate is left to the parents; if it was a married individual, the estate is then left to the spouse (ask a lawyer for advice if you need help with deciding who gets the estate). Once the estate is designated to the next-of-kin, it’s up to that person to allot the assets to pay off any debts that the deceased owed.
Before contacting creditors and lenders regarding repayment, make a list of all assets and liabilities that your loved one had. Assets could include anything from a car, a 401(k) fund and anything else that had value. However, make sure that your name is on these assets, as any bank accounts with only the deceased’s name will be temporarily frozen from your access (providing a death certificate will make these accounts accessible to you if you’re next-of-kin).
If after tallying the assets you find that there’s not enough money to pay off any bills or unpaid debts, you’ll need to contact lenders and creditors to let them know that you’re not going to be able to make payment right away. Follow up any phone calls with written letters, since this will provide a paper trail that may help you out should you encounter any difficulties with creditors and lenders. Alert your lawyer and an accountant for assistance, since the estate will have to go through probate, in which a court will decide which bills get paid off first. If this happens, creditors and lenders should not pursue you for payment – make sure you know your rights so that you can protect yourself from lender harassment. Creditors and lenders encounter these kinds of scenarios all the time, in which they’re required to write off these losses – they should not come after you or other loved ones to make up for the difference.
If your loved one did leave a will behind, make sure you file it with a court within 30 days after the death so any unpaid bills are settled with any death benefits from life insurance. In regards to life insurance, be sure to quickly file life insurance claims, since payments are paid to beneficiaries outside of the court (there’s no probationary period before you can file). Be sure to notify Social Security of the death, and close any old bank accounts that may be left over after all of the bills are paid. Additionally, if you had to pay any fees (such as those accrued from requesting death certificates), make sure that you’re reimbursed from the estate.
The financial and legal costs of the death of a loved one doesn’t end once the funeral service is over – in fact, the month following the funeral can be exhausting and trying if attempted alone. Make sure you ask for the assistance from family members and friends, who can lift some of the burden off of your shoulders. After all, you need time to mourn the loss of a loved one as well – don’t be afraid to take that time for yourself in the midst of attending to the affairs of the state.