The death of a parent, whether sudden or expected, is not something we can ever prepare for emotionally. But if you’re in charge of settling their affairs after they are gone ― a process that can take up to a year or more ― there are ways to minimize stress.
Adult children can help honor their parent’s wishes and protect their financial legacy during a difficult time by delegating tasks, seeking guidance, and creating a schedule for what needs to be done when.
“The job of settling one’s parent’s financial affairs is very important and it can be a tough one,” depending on how well your parents planned ahead, said Stefan Greenberg, a partner with Lenox Advisors in Stamford, Connecticut, noting that organization at the outset can help prevent costly errors. “Mistakes often translate into time and money being spent unnecessarily.”
The following provides an outline of the tasks — many of which can be assigned to family and friends to lighten the load — that must be taken after your parent passes away:
Your first steps after you lose a parent are to:
- Notify family and close friends.
- Arrange for the care of any dependents or pets.
- Secure their home and valuables (cars, jewelry, cash) so that they don’t attract unwanted attention.
- Arrange for mail to be collected and voice messages monitored.
You must also obtain copies of their death certificate — some attorneys recommend as many as 12 — which will be necessary to manage their financial and legal affairs (closing accounts, accessing benefits, and claiming life insurance death benefits). You will need the death certificate in hand before you can arrange for a burial or cremation, too. You can request them from either the health care facility where they died, or from an attending nurse if your parent passed away at home.
State and county vital records offices each have their own requirements, but, generally speaking, you will need the following information to finalize the death certificate: their full name, maiden name (if applicable), Social Security number, birth and death date, cause of death, gender, race/ethnicity, marital status, divorce decree (if applicable), educational background, occupation, and their city and state of birth. Most also ask where their father and mother were born and died.
Veterans will also need their service date and location, service number, date and location of service separation, grade/rank/rating, and organization and branch of service.
Planning their funeral
In the days following your parent’s death, you will need to arrange for their funeral — a big job by anyone’s measure. Here again, don’t be afraid to ask for help from family and friends.
“You go from coping with the death to planning their funeral in less than 12 hours,” said Bob Arrington, past president of the National Funeral Directors Association (NFDA), told MassMutual. “In some ways, it’s similar to waking up one day and being told that you have to plan an entire wedding in two days.”
Be aware that funerals can be expensive. The median cost of an adult funeral with viewing and burial was $7,848 in 2021, according to the most recent data from the NFDA. When the cost of a vault is added, something required by many cemeteries, the cost rises to $9,420. (Related: Funeral costs and considerations)
Your parent may have left detailed funeral instructions or a prepaid burial plan among their paperwork kept at home or in their estate documents, such as their last will and testament. Others may leave a life insurance death benefit that can potentially be used to help cover final expenses. Their attorney or financial professional may have insight on whether and where that paperwork can be found.
“Hopefully, they have it organized and have walked through everything with their executor,” said Robert Bradley, a financial professional with MassMutual Greater Philadelphia, who notes that a lack of advanced planning forces those left behind to guess at what the deceased would have wanted at an emotional time, which often leads to infighting. “It can really tear families apart. The next thing you know they’re fighting over what’s mine and what’s yours. A lot of people don’t like to plan and think about their estate, but it’s important.” (Related: Preplanning a memorial service)
Regardless of any planning that was done in advance, the AARP suggests the adult children hold a family meeting after their parent passes away to discuss the details, create a budget, and delegate tasks, such as ordering flowers, writing the obituary, and sending out thank-you cards.
Contacts to call
In the days and weeks following your parent’s passing, there will be dozens of phone calls that must be made. Financial professionals, banks, insurance companies, and government agencies should be notified first by phone and then, more formally, in writing.
Your first call is to the executor of your parent’s estate, if other than yourself. The executor is responsible for the financial details, including locating your parent’s assets, and managing them until they are distributed to the inheritors, and deciding whether probate proceedings are necessary. They also pay final debts and taxes, use estate funds to pay ongoing expenses, and supervise the distribution of the deceased person’s property. (Related: You’re an executor…now what?)
You should also contact:
- Your parent’s employer, if he or she was still working. (Ask about any retirement accounts or corporate benefits for which they may be eligible.)
- Their attorney, who may have access to their estate planning documents.
- Their financial professional or accountant (or yours) to discuss estate and income taxes.
- The Social Security Administration and, if applicable, the Veterans Administration.
- Pension companies.
- Their life insurer to inquire about any death benefit.
- Other insurance companies (health, auto, disability).
- The Department of Motor Vehicles to cancel their driver’s license and transfer titles of their vehicles.
- All three credit reporting bureaus, including Experian, TransUnion, and Equifax, which can provide a list of your parent’s creditors.
- Lenders (including mortgage and auto).
- The post office to have their mail forwarded to you.
- Credit card companies.
- State or county board of elections.
- Social groups, religious institutions, or professional organizations to which your parent belonged (ask about any funeral benefits for which they may be entitled).
You may also choose to close or update your parent’s social media sites, including Facebook, Instagram, LinkedIn, YouTube, and Pinterest. Each have specific instructions for reporting the death of an account holder and some require a copy of their death certificate and proof of authority (including a power of attorney document or your designation as the executor of their estate). The NFDA offers specific tips for notifying social media of a loved one’s passing.
As you communicate news of your parent’s passing, the NFDA recommends keeping a copy of all notices you send, complete with contact information and reference numbers, so you do not duplicate efforts or overlook an important call.
Lastly, you or the executor of your parent’s estate (if that person is not you) will need to track down the following documents needed to settle your parent’s estate. Those include their:
- Last will and testament
- Birth certificate
- Social Security card
- Marriage license
- Life insurance policies
- Bank and retirement account statements
- Loan documents
- Military discharge papers
- Deed to their burial property
- Most recent income tax returns
- Copies of their outstanding bills to ensure that any final bills get paid in a timely fashion, to avoid late payment penalties
The process of settling our parent’s affairs can be overwhelming at times. And with tax and estate laws differing by state, mistakes are all too common. For those reasons, many turn to professionals for help.
An attorney, tax accountant, or other financial professional who specializes in estate planning can be instrumental in determining which assets may be subject to probate, the time-consuming and often costly legal process of authenticating a deceased individual’s will and appointing an executor or personal representative. And they can help you categorize and value assets correctly, prioritize payments to creditors, and advise on estate and inheritance tax rules to avoid unnecessary taxes and penalties. (Learn more: Probate: What is it, and why people fear it)
“There could definitely be tax consequences on the back end of different retirement accounts and how that gets distributed out to beneficiaries,” said Bradley, who noted that he goes a step further with a client’s beneficiaries. “I try to be the first phone call, and I’ll often reach out if I have their contact information. In some cases, my client (who passed away) may only have a life insurance policy or their IRA account with us. If we don’t have all their accounts, we help their beneficiaries contact the other professionals and companies involved to get what they need.”
Discover more from MassMutual…