Preparing for the death of a parent is hard enough emotionally, but it’s even harder when you factor in finances. To make things a little easier, we’ve compiled a checklist to help you stay on track.
Just work at your own pace and try to do a little bit each day. The process takes time, regardless of how organized your mother or father was.
Step 1: Prepare for Funeral Costs
Funerals are expensive, whether burial or cremation is chosen. Access the Federal Trade Commission (FTC) costs and pricing checklist to help you make the right decisions.
Step 2: Access Your Parents’ Financial Accounts
This is a lot easier if you are named the executor before your parent dies. If not, you’ll need to meet with a probate attorney. For small estates, it’s possible to get access to bank accounts without having to go to court. It’s important to remember that what qualifies as a small estate varies state by state. Oftentimes, it has to be $10,000 or less, but it does vary, so check your state’s laws.
Step 3: Locate the Will
Hopefully you had important financial discussions with your mother or father before they passed. If there’s a will, locate it early on and have it ready. If your parent hasn’t passed yet, and hasn’t written out a will, strongly encourage him or her to do so. Wills define how assets will be given and greatly minimize any family conflicts. You can also ask to be named power of attorney.
If there isn’t a will at the time of your parent’s passing, you may need to hire a lawyer.
A probate attorney can help you figure out which debts must be settled, as well as determine how assets are to be distributed. If there are a lot of family members and the estate has considerable worth, a probate attorney can help streamline the process to mitigate conflict.
Step 4: Find all Financial Related Documents
As you search for your parent’s financial information, separate everything you find into four categories: liabilities, income, expenses and assets. You should find things like:
- Bank statements
- ATM cards
- Credit cards
- Stocks and mutual funds
- Utility bills
- Loan documents
Step 5: Add Up All Debts
See how much debt your parent had when he or she passed. Some debt may require prompt action on your part.
Step 6: Communicate to Financial Institutions
This step includes banks, credit card companies, insurers, various lenders and investment companies, as well as the Social Security Administration.
Don’t worry about closing accounts yet, especially with the bank. If any money is to come in through insurance or elsewhere, it will need a place to go.
Step 7: File Tax Returns for Deceased Parent
You need to file tax returns for your parent the year that he or she died. Because this involves additional steps you’ve likely never done before, hire a tax professional to help you file.
Step 8: Contact Life Insurance
Life insurance is actually quite simple once a person has died. You’ll be asked to provide a copy of the death certificate, complete the claim application and if you’re the beneficiary, you’ll receive a check.
As you might expect, a “preparing for death of parent checklist” requires a considerable amount of forethought and time on your part. Work on one thing each day so you don’t get overwhelmed.