What to Do Financially After a Parent Dies

May 4, 2022 by Chevron Federal Credit Union

When a parent passes away, coping with the loss is overwhelmingly difficult at best. And along with the grieving, there are also final wishes to carry out and financial issues to manage. It can be hard to know where to begin, but there are ways to make such responsibilities less stressful.

A good first step is to triage your tasks into three stages: immediate, soon and later. Then, you can tend to financial matters in an order that will be helpful as you move forward. Here are some important priorities within each time frame.

What to do immediately

Get copies of the death certificate. Funeral directors should be able to order these for you at the time you’re arranging for their services. While the size of your parent’s estate may dictate how many you need, a good rule of thumb is to request about a dozen certificates. That’s because each financial institution, government agency, insurance company and other benefits providers will require proof of death before granting access to any account or policy.

Determine key benefits and make claims. If your parent was employed, contact HR to see if certain benefits coverage will continue for family members and get details about any employer-sponsored life insurance policy and retirement plan account.

If your parent was retired and receiving Social Security retirement benefits, notify the Social Security Administration (SSA) of the death as soon as possible to avoid having to return the benefit received for the month of death and any later months. Ask about survivors’ benefits eligibility, whether for a spouse or dependents. (Note, SSA will notify Medicare.)

Make a quick list of current, ongoing expenses. Focus on bills that may continue for now, such as household upkeep, utilities and property taxes. And earmark others, like subscriptions and credit cards, that should be canceled or cleared. Ensure you’re receiving important mail by setting up a forwarding address with the post office.

 What to do soon

Gather and review estate plan documents. Did your parent have a will or trust? If so, these documents will be the guide for many financial decisions in front of you. (If you had a power of attorney for finances in place, it’s no longer valid after death).

Going forward, and depending on the size of the estate and scope of the trust, some or many assets may have to be settled and distributed through probate. If you’re named executor, you’ll need to put together an inventory of accounts, assets and obligations, stay in touch with beneficiaries and manage the process.

Access, transfer or close out accounts. There may be different rules that apply depending on the type of financial account and how it’s titled. For example, if you or a surviving spouse are named on the account, you’ll have automatic rights of survivorship. Or, if an account has a “payable on death” or “transfer on death” designation, the funds can pass directly to the named beneficiary when the last owner on the account passes away.

To sell investment assets like stocks and bonds, you may need a medallion signature guarantee, which is typically available from a bank, credit union or brokerage where you do business. Different from a notarized signature, this seal authenticates your signature and ensures you have legal authority to manage or liquidate the holdings.

What to do later

Make decisions on property or other assets. If you’ve inherited a parent’s home or other real estate, you generally have three choices: sell it, rent it or keep it — perhaps for yourself or siblings. Each option comes with legal, financial and emotional consequences, so it’s a matter to take time to think about.

If you’ve decided to sell, your credit union membership offers the free HomeAdvantage® Program, which connects you to a network of real estate professionals, exclusive resources and rewards to help in the process. If there are other types of assets that have value, they may need to be shared, appraised or sold.

Prepare final tax returns. Generally, a final individual income tax return will need to be filed, reporting income up to the date of death and claiming credits and deductions that apply. And because your parent and their estate are separate taxable entities under IRS rules, you may also have to file an estate tax return — if the estate generates more than $600 in annual gross income.

Managing a loved one’s final financial affairs

As an heir, putting a parent’s affairs in order after they die is a big responsibility with many important parts. But you shouldn’t go it alone. If your parent had relationships with a financial professional, accountant or estate attorney, engage them to help you along the way. Or, if there aren’t established professionals in place, ask your credit union for referrals or consider Affinity Trusts, a Chevron FCU partner.


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