A Time of Need

We all experience a range of emotions throughout our lives, including happiness, joy, fear and anger.  But when a loved one passes away, emotions understandably have a greater impact on our daily lives. Grief is a natural and healthy process, but unfortunately, there are other realities that require our immediate attention during this stressful time.

Research has shown that most long-term financial decisions are heavily tied to emotion and major life events. It could be a marriage, job change, birth of a child or, in this case, the death of a loved one. In all instances, such events can unknowingly bring emotion into the decision making process at a very critical time – where proper planning can make all the difference.

Making financial decisions is necessary even during times of grief. Timely, practical planning can help you avoid or decrease the chances of future financial hardships. The following is a brief summary that you can use as a guide to help you immediately after the death of a loved one and over the next year.

As Soon as You Can

First, know that you don’t need to do most things right away. Don’t make any major financial decisions such as major changes in investment strategy, retiring or buying/selling your home. These can wait for several months, if possible. Here are some things that cannot wait:

  1. Obtain multiple copies of the death certificate.
  2. Make funeral arrangements.
  3. Review any wills.
  4. Slow down discretionary spending and review emergency cash reserves.
  5. If you don’t do it already, take control of your bill paying.
  6. Review health care coverage.
  7. Notify all financial institutions.
  8. Apply for death benefits.
  9. Collect any life insurance benefits (consult with an independent financial planner and/or CPA about the best manner in which to collect.)
  10. Look into Social Security survivor benefits, if it applies to you and your children.
  11. Check with the human resources department at your spouse’s employer to check for additional death benefits.

In the Coming Weeks and Months

After much of the above has been or is in process of being addressed, you can start to think about the intermediate term and what needs to be accomplished. Always remember to keep your emotions from dictating your financial decisions. They will constantly be shifting during the grieving process and it’s important to be aware of your current state. Anger, sadness, denial and depression are fairly common.

Organize Your Financial Life

By now, you have already organized the information related to the urgent planning steps. Now it’s time to continue by collecting and consolidating your financial records, such as:

  1. Investment accounts
  2. Retirement accounts
  3. Vehicle titles, deeds and bank accounts
  4. Lists of debts
  5. Income tax forms from the last two to three years

The following are several more important steps to take during this intermediate process:

  1. Transfer all joint accounts and assets including bank accounts, investment accounts, loans, mortgage, etc. into your name.
  2. If you don’t already have one, consider obtaining a credit card to establish a line of credit for yourself.
  3. Put your cash from any life insurance into safe short-term cash instruments. Money market funds and short term CDs will suffice.
  4. Leave your investments alone for now. Your long term needs have undoubtedly changed, but it takes time to decide how or if these changes require a long term portfolio adjustment.
  5. Some investments may require immediate attention – such as stock options or concentrated positions in company stock. Seek professional help from your wealth manager and CPA.
  6. Update your will and beneficiaries.

Down the Road

Most experts agree that you should wait six to 12 months to start considering longer range planning decisions and tasks, which might include:

  1. Collecting all financial and estate documents.
  2. Settling the estate. Work with an estate planning attorney and handle any of the legal aspects of the settlement.
  3. Filing an income tax return on behalf of the deceased.

Your Plan

Develop your own life plan. If you haven’t already, now is the time to start thinking further into the future. A few things to consider:

  1. What are your needs moving forward?
  2. Do you need a new estate plan?
  3. What are your career options? If working, can you now retire?
  4. Do you need to revisit your investment allocation and strategy?
  5. Should you consider moving?

Dealing with the death of a loved one can be an overwhelming experience. Attempting to make sensible financial decisions in the midst of such emotional grief can be difficult. It’s important to prioritize, don’t rush and try to go it alone.  Enlist close family members to help you with some tasks and to be there for emotional support. It’s also a good idea to seek out the help of trusted professionals such as a financial advisor, estate planning attorney and tax professional to help address and accomplish your short, intermediate and longer term goals.