Losing someone you love is heartbreaking. You might experience days, weeks, or even months of grief, mourning the loss while trying to move forward. Having to deal with that loved one’s affairs after their death can be just as overwhelming.
Unfortunately, you might be tasked with taking care of your loved one’s financial matters after they pass. While money is probably the last thing on your mind right now, it’s important to address certain things as soon as possible. Not only will addressing these matters ensure your loved one’s wishes were granted, but it will take care of any financial issues they may have been experiencing.
So, what should you do to effectively manage their finances?
1. Gather Important Documents
The first thing you’ll need to do is make sure you can find all of your loved one’s important financial documents. That includes things like:
- Deeds, titles, loans
- Insurance policies (including life insurance)
- Financial accounts
- Investment records
Having all of these documents in front of you will make the next steps much easier. Plus, you won’t have to worry about any incorrect information or assumptions, and you can ensure your loved one’s affairs are taken care of the way they would want.
2. Notify Financial Institutions
It can be difficult to talk about a loss, but if you’re in charge of your loved one’s finances, it will be up to you to contact their financial institutions — including banks and credit card companies.
These institutions will likely have additional steps you should follow to take control of any money in your loved one’s name, or any debts they might owe. It’s important to keep in mind that debts don’t just get wiped away because of a death. However, that doesn’t mean the burden will fall on you or your family.
3. Determine Outstanding Debts
Speaking of debts, once you organize what your loved one owed, you can work on paying those debts off as quickly as possible. Typically, the estate of the deceased pays off any existing debt. If there isn’t enough to cover everything and there is no money or property left, the debt typically just won’t get paid.
That goes for all types of debt, from credit cards to most outstanding loans. For example, if the deceased was making payments on their car and the estate can’t cover the debt, there are a few options. The car might have to be repossessed by the dealership. Or, a family member may want to take over payments and keep the vehicle. In that case, they would either need to transfer the loan or refinance it in their name.
4. Update Beneficiaries
Ideally, your loved one won’t leave any debt behind. They might even have money in a trust or in assets that they want to share with family members and friends. You can usually determine their wishes if you were able to find a will when you were gathering documents. In some cases, an attorney may need to read the will. In the reading of the will, beneficiaries will be named for the deceased’s assets.
Typically, life insurance will also pay beneficiaries like spouses and children. But, your loved one may have had more private, personal possessions that they wanted certain people to have.
If your loved one didn’t have a will, you’ll likely follow intestate succession laws that distribute your loved one’s assets according to their closest living relatives. However, let this serve as a reminder that it’s always important to have a living will. If there are older individuals in your life right now, encourage them to make their wishes known and make things official.
As you’re going through the grieving process, the last thing you probably want to worry about is financial information. However, getting through financial matters quickly and efficiently will allow you to move forward, and find some comfort in knowing you’re doing something good for the person you lost.