Death in the Family - A Guide to the First Steps to Take

Death is part of life - but for the surviving family it is a time of stress, both emotional coping with loss, and knowing what to do to handle the paperwork and the practicalities of what happens when a family member dies.

For the practical questions, CBS Money Watch has created a very useful guide "Death in the Family: 12 Things to Do Now".  It can be printed out and kept with important family papers. Here is a summary of the 12 steps with some thoughts and comments.

General To-Do List

1. Call a funeral director - These professionals will help with the choices to be made. Many people have a prepaid funeral or have created burial instructions - look for these to help celebrate the life of your loved one. In setting the date, keep in mind travel arrangements that close family may need to make. FuneralWise.com has a detailed planning guide.

2. Contact close friends and family - Speak to key people who can contact others.  You may want to change your voice mail or set an email with answers to questions about the details of the memorial services, where a donation in lieu of flowers could be made, etc.

3. Make burial arrangements - The funeral director can help you with these, but note that you will want to again check to see if prior arrangements had been made by the person during their life (and if you have a plan for your memorial, write it down, don't leave it to guess work). If the person wished to be cremated, you’ll have to arrange for the ashes to be interred or scattered.

4. Write an obituary - The funeral director may be able to help — or actually write it, if you prefer. You should consider where it should be placed - local paper, papers where the person once lived, alumni publications, etc. And yes, there’s a Web site with advice on writing obits: Obituaryguide.com.

5. Plan a reception - If you are having a gathering to celebrate a life, delegate to a friend or family member - they want to help you, and this are some details somebody else can run with.

6. Find the original will – You need the original; the court won’t accept a copy. Then you’ll have to register the will at the local probate office. Many legal practices retain the original and give the client copies. Look at the copy and call the law firm on it.  Note only about 30% of the population has written a will - there may not be one to find, in which case the law of the state the person lived in when they died will determine who gets what property.

7. Make like an accountant - You will need to gather all financial information.  First starting place: the mail and monthly statements. Put each in a separate file so you are aware of the assets.  Next place, review the tax return; are there assets listed on there you don't get monthly statements for? Third - keep a record of all bills being paid.  At the very beginning you won't have access to the decedents funds, so one or more people may be making loans to the estate by paying expenses. These should be repaid as soon as the Executor or Administrator has access to the funds.

8. Contact the person’s employer - Contact the employer’s human resources office to see if there are employer-provided benefits.  If the person has retired and gets pension benefits, a former employer should be contacted as well.

9. Watch the mail - After the initial monthly statements, other asset information may eventually arrive by mail.  For assets that only report once a year (life insurance for example), many give statements in early February for income tax return preparation, so you may find additional information then. Cancel magazine subscriptions, catalogs, and anything else arriving by mail regularly.

10. Pay the bills - Make sure you’ve arranged to wrap up any outstanding liabilities: the monthly utility bill, the mortgage, credit card bills, car loans, etc. You can call and advise creditors that you don't have access to the funds if bills will be delayed.  This will also usually get any interest charges waived.  Keep good copies of all bills paid as these will be reflected on the tax returns.

11. File tax returns - At a minimum, a final income tax return (Form 1040) will need to be filed with the IRS and State.   A federal estate-tax filing is required for estates with combined gross assets and prior taxable gifts exceeding $3.5 million. Typically, this is due within nine months of the death. State estate tax rules vary. Depending on the state you live in, the size of the estate, and who the beneficiaries are, you may also have to a State Estate Tax Return, and/or an Inheritance Tax Return.

12. Consult an attorney - This is likely the first estate you have ever handled.  Estate attorneys are professionals in working through an estate.  Being an Executor is a temporary job - with all the responsibilities of a real job, but one for which you may have no training. The Executor can choose what actions they feel comfortable handling, and get help from professionals on others. This keeps costs down while allowing the Executor to be as involved as their schedule permits, while moving the estate along to conclusion.  The author of the CNN Money article puts the use of an attorney into good perspective:

If you’re not comfortable handling an estate, you may want to bring in an estate attorney. At the very least, check in with one after you’ve completed what you can. (Financial planner Jonathan Pond, of Newton, Mass., also has published an excellent, exhaustive checklist for executors.) “I’d recommend just saying ‘Hey, this is what I’ve done, here’s where I’m at, am I missing anything?’” says Diane Park, a financial planner in Minneapolis. “That might take just an hour or two of an attorney’s time.”

This will always be a challenging time - it helps to remember you are not alone and that there are family, friends and professionals you can rely on.

-Adapted from: “ Death in the Family: 12 Things to Do Now”, by Kate Ashford, cbsmoneywatch.com, 9/2/09. Supplemental material and comments from “ Death in the Family - A Guide to the First Steps to Take”, New Jersey Estate Planning & Elder Law Blog September 25, 2009 by Deirdre Wheatley-Liss at http://www.njelderlawestateplanning.com/2009/09/articles/probate-and-estate-administrat/death-in-the-family-a-guide-to-the-first-steps-to-take/ retrieved 10/8/09 (cited in/linked from ElderLaw News from ElderLaw Answers- 10/8/09).

10/09