Financial Steps to Take When a Loved One Dies

Losing a loved one is never easy. Between planning a funeral, tending to final wishes and dealing with the emotional strain of grief, you’ll also need to start making plans to tackle important financial issues. 

While you’re grieving, these tasks may be the last thing you want to think about. And it can be difficult to know what needs to be done or where you should start. We’ve pulled together a list of seven important financial steps to take when a loved one dies. We’ll also give some tips on things you can do upfront to make it easier for your loved ones when you pass. 

1. Get a death certificate 

When someone dies, you’ll need to get their death certificate (and copies of the death certificate) to complete many of the financial tasks on this list. A death certificate is legal proof of your loved one’s death, which is necessary for things like filing claims for insurance death benefits or settling an estate. 

Often, a funeral director can help you obtain the certificate, but you can also get copies by ordering them from the vital statistics office in the state where the death occurred. There may be a (typically modest) fee when you request copies. 

2. Start the probate process 

Probate is the legal process for settling a deceased person’s estate and ensuring that any debts are paid and assets are distributed accordingly. 

If your loved one completed end-of-life planning or had an estate plan, they likely made a will, which needs to be filed with the probate court. An executor (a person named in the will) oversees handing out the decedent’s assets to beneficiaries according to the terms of the will. If there isn’t a will, the court will name an administrator to handle the estate and decide who gets what. 

If your loved one died without a will, their estate will still need to move through probate. But instead of the will dictating who will receive your loved one’s assets, those assets will be distributed according to the intestate laws of the state in which they lived. Usually, this means that the spouse, children and other immediate family members will receive most of the loved one’s assets. 

3. Alert the deceased’s financial advisors and institutions 

If your loved one was working with a financial planner or advisor during their life, those professionals can help you determine what assets your loved one had before they passed away. It’s important to notify them of your loved one’s death so they can begin to prepare for any asset transfers that will eventually be necessary. 

You should also notify any financial institution (bank, brokerage firm, etc.) where your loved one had an account. They can give you information about balances and more if they were not made clear in the will. 

Some assets can pass to beneficiaries outside of a will if the deceased set up transfer on death (TOD) or payable on death (POD) instructions. TOD instructions are for brokerage accounts; POD instructions apply to checking and savings accounts or certificates of deposits. Financial institutions can help you determine who is named as the beneficiary, though you may have to provide a copy of the death certificate. 

Also, if you lost a spouse who was receiving or set to receive any employer, union or pension benefits, you should contact the appropriate institutions to see if those should be discontinued or if you are eligible for survivors’ benefits. 

4. Contact insurance companies 

If your loved one had life insurance, you’ll need to file the necessary claim forms to receive the benefit. You will need to provide the life insurance company with a death certificate and the policy number. After the claim has been processed, the death benefit will be paid to the beneficiary according to the payment terms of the policy. 

Remember, too, to terminate other insurance policies as necessary to avoid paying for coverage that is no longer needed. This could include anything from health insurance to home, auto, renter’s insurance or other policies. When a loved one dies, any claim form will require a copy of the death certificate. 

5. Notify relevant government agencies 

The funeral director will often notify the Social Security Administration of your loved one’s passing, but you may want to double-check. You’ll also need to notify Medicare, Veterans Affairs or any other agency that had been providing benefits to your loved one. 

If you don’t notify these agencies, you may need to go through a lengthy and complicated repayment process for payments received after death. Spouses and other dependents of the deceased are often eligible to receive survivors’ benefits, so be sure to ask when you talk to the agencies. 

Likewise, you should contact the Department of Motor Vehicles to cancel a license and voter registration and the post office to decide where to forward the deceased’s mail. The person who receives the mail can then determine which subscriptions or accounts need to be canceled. 

6. Update credit reporting agencies 

To help prevent identity theft, notify the major credit reporting agencies (Equifax, Experian, TransUnion) of the death and provide them with copies of the death certificate. Plan to periodically check your loved one’s credit report to make sure fraudulent accounts have not been opened. 

7. Prepare final tax filings 

Final tax filings need to be submitted on behalf of your loved one’s estate. Doing so earlier rather than later in the process may make it easier to understand what in the estate is truly available to the heirs and what may be lost to estate taxes. An accountant, tax attorney or tax preparer can help with this. 

7. Prepare final tax filings 

Final tax filings need to be submitted on behalf of your loved one’s estate. Doing so earlier rather than later in the process may make it easier to understand what in the estate is truly available to the heirs and what may be lost to estate taxes. An accountant, tax attorney or tax preparer can help with this. 

Act now to make a difficult time a little easier on your loved ones 

Nobody likes to think about death. But it can be prudent to spend a little time preparing now to lessen the questions and confusion that your family may experience later. Here are some actions you can take now:   

Prepare a will or trust 

Probate is always easier with a valid will in place. If you have not yet prepared a will, consider doing so to avoid a prolonged probate process and ensure that your final wishes are followed. Or, if you establish a trust, you may be able to avoid probate altogether. There are different types of trusts that come with different benefits depending on what you’re trying to do. An estate attorney can help you create what you need to fulfill your wishes. 

Update your beneficiaries  

If it’s been a while since you’ve looked at your beneficiaries, consider reviewing who you have listed on each account to ensure that your assets go where you want them to after you're gone. This goes for your life insurance policy, checking and savings accounts, brokerage accounts and retirement accounts. If you need a little more incentive, remember that accounts that have beneficiaries listed on them may avoid the probate process 

Meet with a financial advisor  

Your financial advisor can help you see the big picture and look for blind spots you may not have otherwise thought about. With Northwestern Mutual, your advisor will get to know what’s important to you and give you tailored recommendations on how to achieve your goals in life and leave a legacy when you’re gone. 

This article is not intended as legal or tax advice. Northwestern Mutual and its financial representatives do not give legal or tax advice. Taxpayers should seek advice regarding their particular circumstances from an independent legal, accounting or tax adviser.