Experiencing the pain of losing a loved one is difficult. And when you have responsibilities for settling their estate, it can be hard to balance out the emotions you’re feeling along with the analytical process required to deal with the paperwork and financial decision-making.
While learning to live with the loss can be a life-long process, the majority of the legal and financial tasks required will happen in the initial weeks and months that follow your loss. Overall, it may take a year or two to complete all estate settlement responsibilities. Larger estates can take even longer to settle.
To get prepared, take a deep breath, buy plenty of Kleenex, give yourself permission to be emotional, and work your way through these three steps.
1. Set up a communications system
When your mind isn’t clear, it’s hard to remember where you put something, who you called, or what they said. That’s why getting organized needs to be your first step.
If you’re not naturally good at systems and processes, ask a highly-organized family member or friend to help you set up something up that will allow you to keep track of things as you go along. Here are some ideas on what to track.
- Create a communications tracking and filing system, including one for incoming and outgoing calls, and another for mail and emails.
- Keep a notebook handy for the caller’s name, the nature of the call, and the date and time of your correspondence.
- Maintain a list of any correspondence and expected response time. Have a list of the names and numbers of anyone you’re working with and keep it handy.
Having a notebook or a pad is far better than just the nearest thing to write on. It is much easier to create a journal with dates than try to manage dozens of scraps of paper.
2. Gather contact info and documents
Next, gather contact info for critical people you’ll need to communicate with and start gathering documents.
Make a list of your loved one’s attorney, tax advisor(s), financial professional(s), insurance agent(s), and other key contacts. Then start contacting these folks, tracking your progress in your communications system. They can help you make a list of documents you’ll need.
Not all of the documents are going to be easy to locate, and not all are going to be immediately available, so using a checklist is advised. Check out the Executor’s Checklist from the American Academy of Estate Planning Attorneys for a complete list.
Here’s a shortlist of the financial, tax and legal documents of the deceased that you’ll want to have on hand:
- estate planning documents, including wills and trusts
- investment and banking statements
- insurance policies and annuity contracts
- deeds to property, titles to vehicles, lease agreements or loan statements
- birth, death and marriage certificates and pre-nuptial agreements
- certified copies of the death certificate
An attorney can help you review the estate planning documents, and if there is not a will, they can still help you begin the estate settlement process.
You’ll also collect copies of all outstanding bills. These will include:
- funeral expenses
- medical bills
- credit cards, including store cards
- phone and utilities
- mortgage loan and any personal loans
If you need to figure out what assets to sell to pay bills or debts of the estate, a financial professional can help you determine which assets would be most appropriate to use for the short term.
There are also tax returns to be filed. Your accountant or the accountant of your loved one can help you with proper documentation and timely filing. You’ll also want their assistance in understanding the tax consequences of selling or disbursing assets.
Once you have everything in order, have consulted with advisors, paid bills of the estate, and have all needed documents and certified copies of the death certificate, then you can start working with financial institutions to begin the process of distributing assets to beneficiaries.
3. Avoid pressured decisions
For any decisions that are not time-sensitive, go at your own pace. Decisions you make under pressure or on impulse are more likely the ones you’ll wish you hadn’t made. If you’re a widow or widower, consider waiting a full year before making major decisions, such as selling the house or investing large sums. As you’re able, do your research and, where appropriate, get independent second opinions.
Most people find they feel especially vulnerable after losing a loved one, and your instincts may not be as sharp as they normally are. If you don’t feel confident as you’re working through these early-stage decisions, enlist the support of someone who can be another set of eyes and ears in meetings or on calls. And listen to your inner voice if you are finding this an overwhelming experience. It’s vital that you make taking care of yourself a priority during this time.
Getting expert help is a good thing
Many people go their entire lives without having to settle an estate for a loved one. Others may only have to deal with the process once, maybe twice. It’s just not something most have experience in handling. Legal, tax, and financial professionals – if they have been around long enough and work with enough clients – have had to deal with the loss of a client or someone close to a client many times over. It makes sense to draw on their experience when you need help.
For our clients, as their financial planner, we do as much of the legwork as we can, which includes coordinating with their attorney and accountant, helping to put in insurance claims, reevaluating cash flow and expenses, and helping to get accounts re-titled.
There is so much that has to get done while feelings of grief are still quite raw. Especially if the loved one is your spouse, having an experienced, skilled, and supportive advisor partner to help you through makes all the difference.