When someone you love passes away

Nothing financial has to happen this week. Focus on people, paperwork starts, and protecting what's already in motion.

What to do

• Get a legal pronouncement of death — from hospice, hospital, or 911 if at home.
• Contact a funeral home or cremation provider. Ask for itemized pricing in writing (it's your right under the FTC Funeral Rule).
• Notify close family, employer, clergy, and the deceased's primary doctor.
• Locate the will, any trust documents, and a list of accounts. Common spots: home safe, filing cabinet, safe deposit box, attorney's office, email.
• Secure the home — collect mail, arrange pet care, lock up valuables, don't post the address publicly on obituaries or social media (estate scammers watch).
• Order 10–15 certified copies of the death certificate from the funeral home. Almost every institution requires an original, not a photocopy.

Watch out for

• Don't rush to cancel anything yet — joint accounts, autopay bills, and insurance need a careful order of operations.
• Don't let anyone pressure you into expensive funeral upgrades while you're grieving.

A handful of early notifications stop fraud, freeze the right accounts, and start benefit payments. Keep a notebook with date, person, and confirmation number for every call.

What to do

• Call Social Security at 1-800-772-1213 to report the death and ask about the $255 lump-sum death benefit and any survivor benefits. The funeral home often files the initial report — confirm they did.
• If the deceased was receiving Social Security, the payment for the month of death must be returned. SSA will claw it back automatically — don't spend it.
• Notify life insurance carriers and request claim forms. Most pay within 2–4 weeks of receiving a clean claim and certified death certificate.
• Notify the employer's HR department: group life insurance, final paycheck, accrued PTO, 401(k), pension, FSA/HSA balances, and any AD&D coverage.
• Notify pension plans, the VA (if a veteran — burial benefits and survivor pension may apply), and any union or fraternal organizations.
• Send a copy of the death certificate to all three credit bureaus (Equifax, Experian, TransUnion) and request a 'deceased — do not issue credit' flag. This is the single biggest defense against identity theft.
• Notify banks, credit unions, and brokerages — but ask them to keep accounts open until the estate is settled. Don't close anything yet.

This is when an estate attorney earns their fee. Even simple estates benefit from one or two hours of professional guidance.

What to do

• Meet with an estate attorney. Bring the will, trust, death certificate, and a rough list of assets and debts. Many offer a free or flat-fee initial consult.
• If there's a will, the named executor files it with the county probate court. If there's no will, the court appoints an administrator (usually the spouse or adult child).
• Get 'Letters Testamentary' or 'Letters of Administration' from the court — this is the document banks and brokerages require to act on the estate's behalf.
• Apply for an EIN (Employer Identification Number) for the estate at irs.gov — free, takes 10 minutes online. The estate becomes its own taxpayer.
• Open an estate checking account. All incoming money (life insurance paid to estate, refunds, final paychecks) flows in; all bills and final expenses flow out.
• Make a complete inventory: real estate, vehicles, bank accounts, investment accounts, retirement accounts, life insurance, business interests, personal property of value, and digital assets (crypto, domains, online accounts).
• Make a complete debt list: mortgage, car loans, credit cards, medical bills, taxes owed. Do NOT pay credit card debt out of personal funds — it's the estate's debt, not yours (unless you co-signed).

Watch out for

• Aggressive debt collectors will call survivors claiming you 'have to' pay. In most cases you don't. Send them to the executor.
• Don't distribute any assets to heirs until debts and taxes are settled. Executors are personally liable if they pay heirs before creditors.

Many accounts pass outside of probate via beneficiary designation. These are usually the fastest money to access and the most important to handle correctly.

What to do

• File life insurance claims for every policy — individual, employer group, mortgage life, credit card life, AD&D, and any old policies tucked in a drawer. Check the NAIC Life Insurance Policy Locator (free) at naic.org for forgotten policies.
• When the life insurance check arrives, do NOT rush to invest it. Park it in a high-yield savings or money market for 60–90 days while you think clearly. The insurance company will push 'retained asset accounts' — you can usually get a better rate elsewhere.
• For inherited IRAs and 401(k)s: do NOT cash them out. A spouse can roll them into their own IRA. A non-spouse beneficiary generally must empty the account within 10 years (SECURE Act) but can spread withdrawals to manage taxes. One wrong move triggers a fully taxable distribution.
• Roth IRAs inherited by a spouse can usually be treated as their own — tax-free growth continues. This is a quietly huge benefit.
• Annuities: spousal continuation is often available and usually the best move. Non-spouse beneficiaries face a 5-year or stretch payout depending on contract.
• If a home, car, or account is jointly owned with right of survivorship, it transfers automatically — file the death certificate with the deed/title office to update records.
• Update beneficiaries on YOUR OWN accounts now while it's top of mind — your IRA, 401(k), life insurance, and HSA likely still list the deceased as primary.

By now the urgent tasks are done. Now you methodically close out the financial life.

What to do

• Pay legitimate final bills from the estate account: utilities, medical bills (negotiate — hospitals often write off large amounts for estates), funeral expenses, attorney fees.
• Cancel or transfer recurring services: streaming, gym, subscriptions, cell phone, magazines, club memberships. Most will refund unused portions.
• Cancel the deceased's driver's license at the DMV and surrender any handicap placards (also helps prevent identity theft).
• Cancel voter registration, passport, and professional licenses.
• File the final personal income tax return (Form 1040) for the year of death — due the normal April 15 of the following year. Write 'DECEASED' across the top with the date.
• If the estate earned income (interest, dividends, rent), file Form 1041 estate income tax return.
• Federal estate tax (Form 706) is only owed if the estate exceeds ~$13.6M (2024). Most estates owe nothing federally — but check your state. A dozen states have their own estate or inheritance tax with much lower thresholds.
• Review homeowners and auto insurance — coverage may need to be transferred to the surviving spouse or the estate. A vacant home has different (often more expensive) coverage rules after 30–60 days.

Once the estate is closed, turn the lens on yourself. Your income, taxes, insurance needs, and retirement plan all just changed — sometimes drastically.

What to do

• Re-do your household budget with the new income reality. Survivor Social Security, pension survivor benefits, and life insurance proceeds all change the picture.
• Review your own life insurance — do you have enough now that you're the only earner or only parent? Term coverage is cheap; this is the time.
• Review long-term care planning. Watching a loved one go through end-of-life costs is the #1 reason people finally address their own LTC plan.
• Update your will, healthcare proxy, financial power of attorney, and beneficiary designations. Anything that named the deceased needs a new name.
• Re-evaluate retirement timeline. A surviving spouse's Social Security strategy can change by tens of thousands of dollars depending on when each benefit is claimed.
• Consider tax planning for the year of death and the year after. The 'widow's penalty' — moving from joint filing to single filing — often pushes survivors into a higher bracket. Roth conversions in the final joint-filing year can save significant taxes long-term.
• Don't make big irreversible decisions (selling the house, moving, gifting large sums to family, quitting a job) for at least 6–12 months unless absolutely necessary.

Watch out for

• Beware family members or 'helpful' advisors pushing you into annuities, whole life policies, or investments in the first 6 months. Park the money safely and decide later.
• Beware affinity scams — fake charities, fake debts, romance scams, 'lost insurance policy' letters. Grief is a target.