What to Do When Someone Dies

[FaceBook Live Replay. Edited transcript below]

Today we’re talking about what to do when somebody dies. Think of this as your pre-probate checklist.

Search for Documents, and Secure the Property.

Prepaid Funeral Plan?

If you’re not familiar with what that is, there are some folks out there who have paid for and made all of their funeral arrangements while they were living, so that their loved ones and families wouldn’t be stuck with some sort of large funeral bill or with questions about how exactly the person would have wanted their funeral to be. So there might already be a funeral package prepaid for, and you don’t wanna pay twice. So go through the personal documents to see if there’s a prepaid plan.

The Will, or Medical Directives.

The reason it’s important to find these quickly is because those documents will often include burial or funeral instructions. In some states, and in some older wills, the burial instructions are in the will itself. And what I mean is whether or not somebody wants to be cremated, if they want specific religious ceremonies, that sort of thing. So you want to find that out as soon as possible.

Securing Cars, Pets.

This could be something as simple as making sure the car doesn’t get towed, and another example is pets. If somebody passed away with pets and was living alone, you want to make sure that the pets are taken care of, either a friend or neighbor takes them or to a shelter, if necessary.

Securing the Home.

And the big one, of course, is the primary residence. If the person who passed away was living alone in a house, and let’s say it’s the middle of winter, you need to winterize the house. You don’t want pipes bursting, or the snow collapsing the roof or things like that. You don’t have to take care of it personally, you can hire service people for that. And if it’s a building in the city (a co-op or condo), you should notify building management, I mean, they want to know if somebody has passed away and if the unit is vacant.

Make the Funeral and Burial Arrangements.

Organ Donation.

If the person who passed away was an organ donor, you need to take care of as soon as possible. Why? Because it has to happen immediately. Medically the organs have to be harvested (that’s kind of a creepy word) but the organs have to be harvested very soon after passing. If you are unable to find the estate planning documents or if, for example, you find them and there’s nothing there, check the driver’s license. In most states that’s where folks list their preferences on organ donation.

And then just go ahead and execute the funeral and burial instructions. Whatever you found out in the estate planning documents, or if there was a prepaid plan, just carry that out.

Order 10+ Death Certificates.

Better to have More Than Less.

Going back and having to order more from the Department of Health or Department of Vital Records, is just super annoying. I think each death certificate usually costs about six dollars each, so it’s worth paying an extra $12 or $18 and having leftovers, rather than having to deal with going back and ordering more. So for that reason get more than you think you need.

Order Through the Funeral Home.

This way, you’re dealing with a living individual who’s a private business owner, usually. In general you don’t want to deal with an 800 number or government entity, that’s been my experience and I think most people’s experience. So when you order with the funeral home you have somebody attending to you and helping you through that process. So order through the funeral home when you’re taking care of the funeral arrangements.

Don’t Forget the Funeral Receipt.

And lastly, while you’re doing that, collect from the funeral home the copy of the paid-in-full funeral bill. Meaning an invoice or receipt from the funeral home that shows that the funeral bill has been paid-in-full. The reason for this is that you’ll need proof that the funeral bill has paid for the probate court, so you might as well take care of it now when you’re already dealing with the funeral home.

Cancel All the Credit Cards

Just Cancel, Don’t Pay.

You don’t have to pay off the balances, you just need to cancel them, and I’ll go into that in greater detail during one of our bonus items at the end.

Fraud and Penalties.

The bad guys out there, they know that the recently deceased are vulnerable targets, because things are in disarray, and the family doesn’t quite know what to do. So this is one of the areas they like to target. So let’s frustrate those bad guys and just cancel credit cards so there’s no bad swipes.

And then, yes, sometimes the credit card companies can kind of be jerks, and charge interest and penalties on somebody who’s passed away. They’ll usually waive those eventually, but why give yourself the extra work of having to call in and request the waiver of those interest and penalties? Just cancel the cards immediately so you don’t have to deal with that later.

Cancel With Copies, Not Originals.

When you cancel them they’re going to ask for original death certificates. They don’t need original death certificates, they just need a copy. And as we talked about before, you want to really keep as many of the originals as you can so you don’t have to go back to the Department of Health. So do your best to see if they’ll accept a copy, and 8 out of 10 times they’ll accept a copy. But, worse comes to worse and they really insist on an original, just send them an original.

Final Statements.

And lastly you should request final statements. What do I mean by that? While you’re canceling the cards and notifying them of death by sending them a death certificate, also ask them to send a final bill to the billing address. And the reason for this is you’re just kind of killing two birds with one stone, and getting a final bill so that you can give that to the executor when he or she is tabulating the total assets versus the total debts.

Gather Financial Information.

List of Assets and Debts.

You need to put together a list of assets and debts so that you know whether or not the estate is solvent, whether or not there’s more assets than there are debts.

Find the Advisors.

The easiest way to do this is to get ahold of the advisors. For example, for a bank or brokerage account, find the wealth management person or the financial advisor. Maybe there’s a life insurance agent, CPA, tax advisor, or even estate planning attorney. And the reason for this is it’s always easier to deal with a live person than with an 800 number. Even if you’re just walking into a branch, that’s just always gonna be better than dealing with the 800 number.

If you’re able to track down the CPA, maybe the CPA happens to know who the financial advisor is or who the attorney was and then they can lead you to the next person. And just do your best to just track down the whole team for the person who passed away.

Check for Beneficiaries.

While you’re doing this, you should also check for beneficiary designations. If you’re not familiar, beneficiary designation is when you add a name to an account so that it automatically pays out to somebody after you’ve passed away. The most common example is life insurance, life insurance by its nature is something that pays out when somebody dies. So you name a beneficiary, usually. But many folks don’t realize that you can also do that for bank accounts, brokerage accounts, 401K, IRA, and pensions. So just check when you’re contacting these advisors and making the list of assets and debts, try to figure out who the beneficiaries are. Sometimes they’ll give you a hard time, and won’t really release that information, just do your best, be persistent.

Last 3 Tax Returns.

And lastly make sure you get copies of the last three years’ tax returns, when you’ve tracked down the tax advisor or the accountant.

Meet with a Probate Attorney.

Do You Need a Lawyer?

Now you need to figure out, do you even need a lawyer? If I haven’t already, I’ll record a separate video just on that topic. Because there are a lot of estates who don’t need one, so make sure that you don’t spend money where you don’t need to, right? Also, aside from whether or not you even need a lawyer sometimes you don’t even need to do probate at all. Some examples would be if the person made a trust or had beneficiaries named on all of his or her assets, there’s just a couple scenarios.

Who Should be Executor?

One of the most important parts of the meeting is confirming the executor selection. If there’s a will that names an executor, you must confirm that this is the right person for the job, or that the person’s still alive, or even wants to do it. Or if there is no will you must confirm who is the next of kin and who’s eligible and able to be the executor. Because figuring out who is the executor is the first domino for a lot of other steps that you need to take, so it’s important that you figure that out in your consultation with the probate attorney.

Those are the first six steps that you take when somebody passes away. I have two more bonus tips that hopefully you’ll find helpful.

Bonus 1: Don’t Forward the Mail (Yet).

Why not forward the mail? Many people like to be responsible, or go-getters, and they run to the Post Office and forward the mail to their house. So why is that sometimes a mistake? Well, as we just talked about, one of the main reasons you’re meeting with the probate attorney is to confirm who is going to be the executor. If it turns out that somebody else will be the executor, and not the person who’s forwarding the mail, then you have to do a second mail forwarding.

In our experience, the Post Office does not handle that well. If they have two consecutive mail forwarding orders, or applications, the mail just goes haywire, stuff starts getting lost. So this is the last thing you wanna do.

So what’ll happen is let’s say Uncle Bob, the patriarch of the family, steps in and immediately forwards the mail to his house. But he learns that, hey, this executor thing is a lot of work, I don’t want to do it, And a nephew or the attorney steps in instead. But now we can’t undo that forwarding to Uncle Bob. And now Uncle Bob is stuck in this sort of middleman position where even though he doesn’t want to be involved he has to collect all the mail that he’s getting and then re-forward it to whoever is the executor.

Bonus 2: Don’t Pay the Bills (Yet).

We touched on this briefly when were talking about canceling the credit cards, but not paying off the balance yet. The reason for this is because you don’t want to pay off any bills until you know you have enough money to pay the bills.

You need to make sure the estate is solvent otherwise you could get yourself into some trouble where you might actually owe money. Let me give you an example.

If somebody passed away with $100,000, and it looks like they only have $50,000 dollars in debt (American Express credit card, a balance on a car payment, and so forth). So you think oh, I’m safe, let me just get this out of the way and pay these off. So you pay off $50,000 and now you have $50,000 left. Or so you think.

Then, BAM! At the end of the process, you realize there was a Medicaid lien, or massive back taxes, of $75,000. But you only have $50,000. Uh oh, what happens there? You may owe the $25,000 difference!

You should have waited until the end of the process, then you could prorate how much you pay everybody (there’s actually an order of priority, and taxes must get paid first, Uncle Sam does not wait for anybody). So, that’s why you wait, you need to make sure you have all the creditors, taxes, and debtors all in order before you pay a dime, otherwise you could get stuck paying the difference.

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