What Happens When a Loved One Passes Away?
Losing a loved one comes with many layers of grief for the family and friends of the deceased. It can be hard to know what to do first and how to even proceed with addressing their affairs.
For someone, usually an attorney or close family member, it means acting as an executor to take care of a whole host of legal, financial, and personal affairs.
If that person isn’t prepared or knowledgeable about their role, the paperwork and expectation can be overwhelming. Are you wondering what to do when a loved one passes away?
Read on to learn about what to do after you lose someone you love.
Immediately Following Death
While of course, immediately following the death of someone you love, you cry, you mourn. You even think about how to celebrate and honor their life.
From a more pragmatic standpoint, there are some things that need to get done.
Get Death Pronouncement
This sounds rather morbid and probably one of the last things you want to think of immediately following the death of your loved one. But you need to get a copy of the death pronouncement.
The death pronouncement and the death certificate are not the same thing. When a person passes, someone with authority needs to declare them dead. In a hospital, nursing home, or hospice, they will automatically handle this step.
If a person dies at home, they need to get transported to a hospital for a death pronouncement.
The person handling the affairs of the deceased will need a death certificate for many matters and you can’t get a death certificate without a death pronouncement.
Notify Family and Friends and Make Funeral Arrangments
Immediately following the death of your loved one, you want to notify people. These can be daunting phone calls to make. Often it makes sense to ask a few key people to make those calls.
Perhaps you choose one person who handles family, another to handle friends and another to notify work colleagues. It helps to take the pressure off of the immediate family when others do this for them.
You will also begin to plan for a funeral and burial. Of course, when you notify people of the death, it will be one of their first questions. So, you want to again have a plan to disperse this information to everyone.
As you make funeral arrangements, you may want to see if there is any information in the will or estate plan. Often a person who has taken responsibility and created a will and an estate plan will include some information about their wishes related to a funeral.
If the family doesn’t have access to the will or estate plan, the executor should contact the attorney of the deceased for information.
The Days Following the Death
Once you get past the immediate shock of the death and start to make arrangements for the funeral, there are some other things you will want to address.
The family or executor will need to finalize funeral decisions and make decisions for burial or cremation. Many times contacting a funeral home is the smartest option. They’re experienced and can handle all the details on your behalf.
The funeral will need pallbearers and someone to handle the obituary. If the deceased was part of the military contact the Veteran’s Administration. There are some burial benefits that come from being a veteran.
If the person lived alone, you want to secure their property until the executor can make decisions regarding property. You will want to secure their vehicle and find care for pets. Then you will need to forward mail so it gets to the person who will be in charge of handling the financial and legal affairs of the deceased.
Several Weeks Following the Death
Now that the funeral is likely behind you, it’s time to start taking care of the affairs of the deceased. This requires addressing a whole list of legal and financial matters. You will not be able to handle any of them without an official death certificate.
Often you can order official copies of the death certificate through the funeral home. If not you may need to visit a local county registrar’s office. It makes sense to get many copies of the death certificate as the executor will need them for a whole host of tasks in handling the estate.
At this point, it’s important to locate the will if one was done prior to death. Hopefully, the named executor knows the location of the will. If not, check with other financial records or contact their attorney for information about the will. The will identifies who gets:
- Money and assets
The executor will be responsible for carrying out the tasks in the will. If no will is available or was never done, then the estate must go before probate. In probate, a judge will name an executor to handle the affairs of the estate which must get approved through the probate court.
The executor plays an important role from now until the estate gets settled. It’s likely that the executor should also seek the assistance of professionals, especially for larger or more complex estates. The executor may want to consult with an estate attorney to get important legal guidance in handling the estate.
It may also make sense to hire a CPA to help with tax matters. The estate may need to file a tax return and a final tax return might also be needed for the deceased.
Executor and Trustee Duties
An executor and trustee, often the same person, play an important role for the deceased and their estate. Because of the depth of responsibility with these roles, this is a trusted person who the deceased must have had great confidence in.
The person handling the affairs of the deceased, whether they are an executor or trustee needs to have an understanding of the will and trust.
A will is a legal document that spells out the wishes of the deceased. It often spells out the care of minor children and identifies how assets should get distributed to beneficiaries.
A trust is also a legal arrangement where the assets of the trustor, or the one creating the trust, get put in the care of the trustee. It’s the role of the trustee to hold title to property or assets for the benefit of the beneficiary. The trustee acts to care for the assets, to distribute them according to the wishes of the trustor.
A trustee has many obligations, let’s take a closer look at what the trustee might need to handle following the death of a loved one.
Act as a Fiduciary
One of the most important things about a trustee is their obligation to act as a fiduciary. This fiduciary role means they have an obligation to act with only the very best interest in mind for the trust. A fiduciary is held to a high standard for how they go about making decisions on behalf of others.
The fiduciary has the obligation to make decisions that hold the best interests of the estate. They get the role of trustee with the expectation that they can have no self-interest in the decision-making. Their obligation is to care for the affairs of the estate so that it benefits the beneficiaries of the estate.
Follow the Trust
Because the trustee gets this trusted role, they must follow the guidelines put forth by the trust itself. They must be familiar with the wishes outlined in the trust. Then the trustee must act following the wishes spelling out by the trustor in the trust.
After a person dies, their trustee will want to look carefully at the will and trust to examine what needs to get done. Seeking the advice of a trust attorney is probably a smart idea, since there may be tax implications for the estate and probate might be required.
With some estates, the trustee will act to disperse assets to the beneficiaries and the affairs of the estate can be closed.
Often though that is not the case and the trustee will continue to care for the assets and investments in the estate long after the deceased has passed.
Imagine if the deceased has young children who are beneficiaries of an estate. The trustee will have an obligation long after the deceased has passed to continue investing on behalf of the trust. They will need to care for assets and make investment decisions that will care for the minors into the future.
Another obligation of the trustee in an estate is to make decisions about distributing assets to beneficiaries.
In some cases, the will and the estate plan are quite specific and it’s clear how and when assets should be distributed to the beneficiaries.
In other scenarios, the trustee must make subjective decisions about the assets of the trust. They must be prepared to make hard decisions regarding the assets. There may be beneficiaries who seek money from the trust, some might even say want to grab their share.
The trustee must be prepared to make those hard calls and even say no to giving out assets from the trust if it isn’t in the best interest of the trust overall. This will, again, be especially true if the estate needs to remain active for a long period of time.
Accounting and Taxes of the Trust
One way to think of a trust is to imagine it as its little corporation. The trustee must be accountable for all financial decisions made through the trust. The trustee will have to account for:
- Income to the trust
- Distributions from the trust
- Expenditures by the trust
Anyone who is a beneficiary of the deceased and is named in trust should have access to this information. The trustee is obligated to provide a financial breakdown typically once a year.
Although some trusts are written with specific requirements for accounting. Following the death of a loved one, this is another area where a trust attorney could be very helpful.
There are many different kinds of trusts. Depending on the type will impact the tax obligations for the trust. Many people opt to create a trust to have their assets protected from tax implications both before and after their death.
When a trustee agrees to this role, they have an obligation to carry out the duties. Having said that, they can opt to delegate some of these responsibilities to a person who might be more equipped to handle the intricacies.
The Affairs of the Deceased
For the person tasked with handling the affairs of the deceased, one of the things they will need to do is locate all assets of the deceased. They need to know what assets are available and connected to the deceased. This is often more easily done when the assets of the deceased are placed inside a trust.
The person must also locate any bills still due from the deceased. The estate will be obligated to pay off any debts that were in place for the deceased. This might include a mortgage, taxes, credit card debt, and utilities for any property.
Do Death Notifications
Earlier it was suggested to get several copies of the death certificate when it’s available. This is because the person charged with handling the affairs of the deceased has several notifications to make.
One of the first places to notify is the Social Security Administration. If the deceased was receiving benefits from the SSA, those need to get stopped. It might also be that there are death benefits available for beneficiaries of the deceased. Each circumstance is different, so it’s important to get with the SSA right away and notify them of the death.
If there are any life insurance policies, you want to notify them of the death. This will prompt them to pay any death benefits that are due.
Beyond that, any financial institutions where they may be assets or debts should be notified.
For each of these notifications, a death certificate will be necessary.
Know What to Do When a Loved One Passes Away
When a loved one passes away many people face immense grief. It can be so helpful when they have others to guide them through all the other steps of handling the affairs of the deceased.
Often it makes sense to seek out legal advice from an attorney who is knowledgeable about taxes, trusts, wills, and probate. If you need help creating your will and trust or managing that of a deceased love one, we can help. Contact us today to set up an appointment so we can look over what needs to get done.