The death of a spouse, family member or close friend brings a deep sadness as the complications of grieving begin. At such a difficult time when you are experiencing the emotional, mental and physical lethargy that comes with such an experience of loss, there is the added strain of having to be mentally centered to make, what seems to be, endless decisions such as: Notification of family and friends, taking care of funeral arrangements, scheduling religious visitation, making arrangements for out-of-town guests, ordering death certificates, and handling immediate financial issues.
When a loved one dies you have to remember IRS deadlines, Social Security Administration requirements, compliance with state laws, and dealing with other grieving family members. There’s also the chance you might have some relatives who feel entitled to more or different assets.
To make this time easier for all involved, it’s critical to plan some of the issues related to death far in advance with some contemplation to make everything go as smoothly as possible when a loved one passes away.
While you should work with your own estate planning attorney, a recent MarketWatch article, titled “9 steps to getting your estate plan in order,” offers some ideas to help you start the process.
Although it’s not easy, discuss the issue of death with your family and determine what each person's end of life wishes are. Experts say that it’s sometimes more comfortable to do this when someone outside the family has died. You want to build a foundation for a smooth transitional experience to make things be as painless and well-organized as you can for your family—as well as for yourself.
Get to know the inheritance laws in your state, and don't assume that, if you have a will, your wishes are set in stone. Some idea of how property passes on death in the state where you live will be helpful. The laws governing property division can get tricky, so consult with an estate attorney. Select an estate planning attorney who’s experienced in estate, probate, and tax planning, and head to the meeting prepared with your questions.
Your attorney will ask you questions about your real property, personal property, and all other assets, guardianship decisions, medical preferences, end of life bequests, and more. You’ll talk about a will, the possible need for a trust, and deciding on an executor of your estate.
Remember that all of your life insurance, annuities, 401(k), 403b, and IRAs are passed to your named beneficiaries, not through your will in probate. It’s important that your beneficiary designations are current and accurate. Speak with the administrators of the investments and get a copy of the beneficiary assignments currently on file—if you need to update or change your beneficiaries, do it right away! Once you’ve submitted the changes, be sure to request confirmation of the change and keep it with your records. Remember that the release of money to the designated beneficiary is contingent on producing an accurate and legible death certificate.
Start a joint checking account with the executor you select. This will give them funds that may be required to pay for funeral expenses, travel for family members, paying for people to help with immediate needs, and bills that come due while waiting for accounts to be released and settlements to be completed.
Set up a secure filing system. This needs to be easily accessible and should contain important documents like birth certificates, Social Security numbers, military discharge papers, marriage license (or a copy of your divorce decree if applicable). You should also provide the location of the safe-deposit box keys, a list of benefits from your current or past employer (such as a benefits brochure), the contact info for your estate planning attorney, CPA, financial adviser, and insurance agent.
Think through what would happen to your investment portfolio if your spouse, child or significant other isn't able to keep up with the activity or isn't knowledgeable to interview and hire a good person to get into the portfolio accounts due to the absence of passwords.
Don’t allow your estate to be drained because it’s not getting proper attention. Be prepared and consider carefully who will handle this for you. Work with an experienced estate planning attorney who can coordinate this essential planning.
Reference: MarketWatch (November 3, 2014) “9 steps to getting your estate plan in order”