When clients lose a loved one, financial advisors can be there for them in various ways. They might offer condolences and send flowers, but they can also help clients navigate this trying time financially. The grieving process often occurs alongside a number of tough and occasionally overwhelming tasks, and many of these required steps aren’t obvious to someone who has not experienced the loss of a loved one.
As a financial advisor, you can inform your clients about what needs to be done to help make the process easier for them. The following list is intended to act as a roadmap for guiding clients through what to do regarding a deceased family member’s finances:
- Let the proper parties know.
- Prepare to meet with the funeral home.
- Notify the deceased’s employer.
- Gather legal and financial documents.
- Meet with professionals and organizations.
- Contact other companies and agencies.
- Review and update the client’s financial plan.
Let the Proper Parties Know
Your client’s first step is to notify family, friends and clergy of the passing of their loved one. They will also need to contact the Social Security Administration, Department of Veterans Affairs (if appropriate), and the person’s employer, as well as cancel any appointments he or she had scheduled.
Prepare to Meet With the Funeral Home
If their loved one openly discussed funeral or burial wishes, they may already know if the person had prearranged or prepaid funeral arrangements. If not, your client can look for a letter of instruction in the deceased’s papers or call a family meeting to discuss what the funeral will look like.
Your client should be prepared with the following information when they meet with the funeral home:
- Date and place of birth, parents’ names, names of pre-deceased relatives and survivors, and dates of marriages and divorces.
- Highest level of education and occupation, including military information found on form DD214.
- Place of burial or final disposition if a cemetery plot was previously purchased.
- Records of the decedent’s life insurance policies.
- At least 10 copies of the death certificate.
- Notice of death or obituary for the funeral home to send to the local newspapers.
- Photographs for the funeral home to use during the embalming and cosmetic process.
- Clothing, undergarments, jewelry and/or glasses to be used for the viewing.
Notify Social Security and Veterans Affairs
It is common for funeral homes to notify the Social Security and Veterans Affairs offices, so have your client verify that this has been done. The funeral home may also contact the life insurance company (or companies), but you can help your client get the death claim forms to complete and submit.
Notify the Deceased’s Employer
If the deceased was working, your client must notify their employer. The employer will provide forms that will allow the family to claim any employer-sponsored benefits, such as life insurance plans or retirement benefits, as well as salary, vacation pay and sick pay that is owed.
Gather Legal and Financial Documents
You will play a crucial role in helping your client to find and organize the decedent’s legal and financial documents. Start by creating a list of assets the deceased owned. Then your client can begin the process of locating the documents associated with the assets.
Estate planning documents, such as a will or trust, are necessary to know who is in charge of the estate assets and how property is to be distributed. Your client should also look for:
- Birth certificate, death certificate, Social Security card, driver’s license, passport, citizenship papers and military separation papers.
- Marriage certificates and divorce decrees.
- Life insurance and annuity policies.
- Beneficiary designations, including beneficiaries’ names, addresses, Social Security numbers and phone numbers.
- Checking, savings and credit card account statements.
- Safe-deposit box.
- Certificates of deposit, stock certificates, and brokerage and investment statements.
- Retirement plans and pension information.
- Mortgages, loans, leases, deeds, titles, promissory notes, business interests, royalties and real estate documents.
- The previous year’s tax returns.
- Property and auto insurance policies.
- All current and past-due bills.
To find the documents, your client may need to do some detective work. Encourage them to sort through their family member’s paperwork to locate financial documents, and have your client check the person’s mail (including email, if they can gain access) to discover accounts that may have been overlooked. If life insurance information is not readily available, contact the American Council of Life Insurers for guidance in tracing missing policies.
Meet With Professionals and Organizations
The laws governing how a deceased person’s estate is handled vary from state to state, and each estate administration is unique to the individual. Your client may have their own legal, accounting and professional experts to help them navigate the process. Your client may need to schedule appointments with several professionals and organizations, including:
Attorney. Consult an attorney regarding the decedent’s will. If it needs to be probated, the attorney can file for a federal employer identification number, or EIN, for the estate and provide assistance throughout the process.
Social Security Administration. Families who are entitled to death benefits should contact their local office to schedule an appointment.
Veterans Affairs. Contact the local office to file a claim for survivor benefits, such as pension payments and financial aid for a spouse and heirs.
Bank or credit union. Make an appointment to meet with a representative to close or retitle existing accounts or open new accounts.
Certified public accountant. A CPA can review the tax situation and determine if the estate needs to file a separate estate tax return.
There are hidden costs of managing an estate, and the right professionals can help your client navigate the necessary steps. Make sure your client knows that these legal and professional fees are paid by the estate, not from their own pocket.
Contact Other Companies and Agencies
Finalizing a deceased person’s estate is a complex process. Tying up loose ends can feel intimidating, and you can guide your client to the right companies, organizations and agencies they need to contact, which may include:
Medicare. Cancel prescription drug coverage, a Medicare Advantage plan or a Medigap policy, for example.
Post office. Request the decedent’s mail be forwarded to another address.
Utilities and bill collectors. Contact utility companies, credit card issuers, mortgage lenders, loan companies and other creditors. Close accounts and get records of amounts owed.
Credit agencies. Report the death and protect against identity theft.
Unions and professional, service or fraternal organizations. Ask about life insurance or other benefits through these organizations.
Other insurance carriers. Medical, dental, vision, long-term care, umbrella, disability, travel, vehicle, homeowners or renters insurance carriers are the possibilities here. Report the death, cancel policies, and inquire about applicable premium refunds.
Online accounts. Close email, social media and other web-based accounts associated with the deceased.
You and your client may need to work with the estate attorney to handle some of these affairs. The estate attorney can explain what is required and if there are any special considerations because of personal or family circumstances.
Review and Update the Client’s Financial Plan
Updating your client’s financial plan should be a top priority after their loved one passes away. Start by making sure they have enough money on hand. You may suggest they use some of their life insurance payouts or other death benefits to cover current expenses and funeral expenses.
Review their insurance policies to determine whether life and health insurance coverages need to be updated. You may also need to revise their beneficiary designations, wills, trusts, powers of attorney and investment plans.
Whenever you talk to your client about the death of a loved one, make sure they feel supported. Listen to their concerns and acknowledge that this is a very difficult period in their life. Then help them find the resources and services needed to navigate the situation.