Estate Planning: A Financial Checklist After the Death of a Parent

The death of a parent comes with a lot of emotion — and a lot of paperwork. If you don't handle the latter, everything will be more complicated. Here are the financial steps to take.

by Adam Bulger
Originally Published: 

No one thinks dealing with the loss of a parent will be pleasant. We expect a morass of unfamiliar and uncomfortable emotions. We anticipate unprecedented grief. But no one warns us about how much math and paperwork it entails.

Sorting out a parent’s estate after their death is a slow, sometimes grueling process that starts while you’re grieving and then drags on for months. Even if your parents left behind a clear estate plan and instructions about their wishes, you still may be tasked with a daunting list of responsibilities.

It’s hard to know where to start. Kelly Crane, CEO of Napa Valley Wealth Management advises focusing on the most important and urgent things first, such as funeral arrangements and access to short-term money to pay for the funeral.

The process will seem unbearably confusing while it occurs but recording your steps can help you make sense of it when it’s over.

“In a time of grief, it can be hard to remember why you made certain decisions, so take notes on all your choices,” Crane says. “Keep track of expenses, how you’re being charged and how you will pay for it. This can be especially important if there are other siblings with which you want to reconcile later how and why arrangements were handled.”

Below, we’ve created a financial checklist to help you get through this difficult time.

See if Your Parents Had a Plan

Your job will go smoothly if your parents got their affairs in order while they were alive. All of the needed documents and information might be organized in a single, easy to find place. Moreover, they would have left a will and possibly a living trust outlining how their assets should be distributed and have named an executor, the person responsible for managing the deceased person’s estate (more on this below).

“If they pass away and they don’t have a will, you’ve got to get an attorney to have somebody appointed as the executor,” New Jersey-based accountant Tracy Beveridge says, noting that squaring away the estate prior to death or mental incapacity is less expensive and less aggravating in the long run. That way, everybody knows who’s getting what and who’s doing what. Also, the surviving family may be able to avoid probate, where a court distributes the estate’s assets. “You’ll save your children a lot of heartache and a lot of work.”

Get The Death Certificate

The death certificate is the key piece of paperwork for what lies ahead. The government-issued document contains a signature from a medical examiner, doctor, or coroner and proves the death occurred. The procedures, associated costs and formats of death certificates vary by state; a helpful state-by state guide is here. Funeral home directors or attorneys typically prepare them and file them with state or local records offices. Get 10 or more certified copies. Prices vary by state but you can reasonably expect to pay between $5 and $15 per certified copy. Get moving on the death certificate as early as possible. Depending on where you live, it can be a slow process. “The death certificate typically takes a couple of weeks,” California based wealth advisor Brent Thomas says.

Figure Out Who’s in Charge

The executor manages the estate. They’re often a surviving child or close family member of the deceased. Ideally, the deceased announces their intended executor before dying. Unfortunately, that isn’t always the case. Thomas says he’s seen several family members be taken aback by the choice of executor. “We always encourage our clients to make sure that [the executor] knows that in advance and that everybody knows that in advance,” Thomas says. “So that the siblings aren’t surprised that the one they thought would be the trustee or thought will be the executor is not that person.”

Focus on Funeral Expenses

The estate often pays for funeral costs but that money may not be forthcoming until months after the funeral. Nonetheless, funeral homes expect payment for services when they are arranged. So whoever takes responsibility for the bill needs to hold on to the receipt and be patient about reimbursement. “You need to figure out who the executor is or who the trustee is and that person is going to need documentation to actually pay those costs,” Thomas says. In addition, your parents’ insurance or pensions may include provisions about funeral costs.

Gather the Documents

Ideally, the deceased already organized their vital paperwork. If not, you’re going to have to hunt down their birth, marriage and death certificates, as well as a copy of their Social Security card, tax returns and statements for banking and investment accounts.

Work With Attorneys And Accountants

If you can’t track down assets or accounts, their financial advisor, tax advisor or attorney can often help you find and inventory assets documents and accounts. And since they’re interested in continuing to manage the estate, they may volunteer to help sort things out. “We’re already gathering trust documents and reviewing recent inventory of their assets, so when the family member reaches back out to us, we’re able to say, ‘hey, let’s help you through the process,’” Thomas says.

Access Online Accounts

Not everybody has enough wealth to need a wealth manager. Far more investors have accounts through services like Vanguard or Fidelity that they access online. Since people might neglect to tell their executor their passwords–or even if the account existed in the first place–you might have to do some sleuthing. “Sit down at their desk or wherever they paid their bills,” Crane says. “You’re looking for a list of accounts or individual account statements to create a list of assets, account numbers and contacts. For pensions, find the company’s human resource contact or the pension administrator.”

Tax forms can also offer clues. “If you still can get a hold of things like the annual tax returns, then you can see that last year they had a 1099 from a brokerage or retirement account,” Thomas says. Once you have your parent’s death certificate and Social Security number, it’s fairly painless to access the accounts. Online brokerages like Vanguard and Fidelity have dealt with this scenario before and created straightforward systems to transfer account ownership.

Contact Government Agencies

Government agencies that paid benefits to the deceased, like Social Security or Veterans Benefits Administration, need to be informed of the death as soon as possible. Funeral directors often handle Social Security but you can find information about contact them here. You may need to return or instruct the bank to return Social Security payments made after your parents’ death and could be eligible for a $255 Social Security payment. The Veteran’s Administration offers a variety of benefits for surviving family members. You can find contact and other information here.

Handle Life Insurance

After a lifetime of arguing with insurance companies over the cost of root canals and hospital stays, dealing with life insurance is blessedly simple. They’ve already agreed what they’ll pay when the death occurs. As long as you provide the death certificate, they’ll mail a check. “You call up and you say this person passed away, usually fax them a copy of the death certificate and they issue the beneficiary the check,” Beveridge says. “It’s usually as simple as that.”

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