Checklist for the Passing of a Family Member

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1 Checklist for the Passing of a Family Member Julie A. Clairmont-Shide The Harbor Financial Group at Morgan Stanley Checklist for the Passing of a Family Member The death of a family member is a difficult experience. All the financial decisions created around that loss are extensive. Please note: states vary regarding requirements; therefore, reviewing your plan with your estate After your family member passes, contact close family, friends and any ministry; both for information exchange as well as emotional support. Arrange the funeral, burial, cremation and/or memorial Julie A. Clairmont-Shide, CFP Portfolio Management Director Senior Vice President Wealth Advisor (561) julie.clairmontshide@morganstanley.com The death of a family member is a difficult experience. All the financial decisions created around that loss are extensive. attorney will be an important step to fill any additional requirements. This guide is not meant to replace advice from your attorney but is meant to alert you to issues needing to be understood and explored further. Preliminary Tasks service. If you are not certain, check with any written instructions outlining final wishes. These are usually found with the estate documents. If the deceased requested any anatomical gifts, arrange for this as well as any rituals intrinsic to your culture. If the deceased was a Page 1

2 veteran, check with the Veterans Administration to see if they may be eligible for burial and memorial benefits. There are websites that can assist in the process of evaluating your funeral options such as the Funeral Consumers Alliance that might be worth checking. It is helpful in some cases to immediately notify your brokerage institutions. In the case of discretionarily managed assets, they will have to make immediate arrangements to process the account, depending on who the trustee is or, in the case of jointly held accounts, the person whose social security number is first on the account. Notify family and friends of the final arrangements. Notify the deceased s place of work or professional organizations If you are working, arrange for bereavement leave. Write biographical information and then place an obituary in the local paper. Obtain certified copies of the death certificate. These can be ordered through the funeral home. You will need multiple certified copies for various reasons such as applying for benefits and settling the estate. [In Florida there are two types of death certificates; the Long Form (which includes cause of death) or Short form (without cause of death from the County)]. You should order one short form for each county in which the decedent owned real estate and one for filing in the probate proceeding]. For other states, check the regulations. Locate all of the decedent s estate planning documents, deeds and titles/vehicle registrations (such as automobile) and other relevant documents. Report the death to the Social Security ( ). If the deceased was receiving benefits via direct deposit, request that the bank return funds received for the month of death and thereafter to Social Security. Don t cash any Social Security checks; return them immediately to Social Security. The local Social Security Administration office will usually schedule an appointment with the surviving spouse to determine eligibility for a $255 lump-sum death benefit or other survivor s benefits. Contact your estate attorney for help in settling the estate. If you do not have one, get several recommendations and interview them (either in person or by phone) and ask about any and all costs involved. Make a list of the decedent s assets, both real and personal, including valuable jewelry and art as well as any liabilities including most recent payment statement or coupon book. Put safeguards in place to protect any property, including taking possession if needed, of personal property, certificates, etc.; make sure mortgage, insurance, taxes and any assessments or Home Owners Association fees continue Page 2

3 to be paid until settlement or disposition. Be sure to check if there is a safety deposit box. If the box is titled in joint names, the survivor has an immediate right of access. If only the decedent owned the safe deposit box, an interested party may have to petition the court to gain access. If this is the case, the law will only allow the person to initially remove the Will, a deed to a burial plot or burial instructions, and life insurance policies (may be given to the named beneficiary only). The person granted access may examine the contents of the box and make an inventory. Arrange to retrieve the decedent s belongings from the workplace. Ask about continuing health coverage, or potential survivor s benefits. Contact past employers regarding pension plans, IRA custodians, or trustees. Review all designated beneficiaries and post-death distribution options. Locate any insurance policies; be sure to include possible group policies in addition to individual ones such as mortgage insurance, auto credit life insurance, accidental death and dismemberment, credit card insurance and annuities. Contact all companies to file claims for insurance of which the probate estate or trust is a beneficiary. Many companies will only deal with the beneficiary or personal representative. If there is a problem with this, check with your settlement attorney. Contact all credit cards companies to inform them of the death. Cancel any cards unless you are named on the account and wish to retain the card. Obtain the most recent statements and last year-end statement for each individual and joint account including brokerage, TOD accounts, irrevocable and revocable trust accounts, bank, IRA and other retirement accounts; recent credit or liability account statements, any promissory notes or loans, medical bills, funeral bills and evidence of payment, the last three years of income tax returns and any gift tax returns filed previously; retitle jointly held assets such as bank and brokerage accounts and, any stocks and bond certificates not in an account, and real estate. If the decedent owned, controlled or was a principle in a business, check to see if there are any buy-sell agreements under which their interest must be sold. Contact the Veterans Administration or Civil Service Office of Personnel Management if the decedent was a veteran or active/retired Civil Service. If the decedent was retired military, also contact the Defense Finance and Accounting Service Casualty Assistance Line to report the death and check for survivor annuity. A copy of the marriage certificate will be needed. Next Steps After you have selected your estate/trust/probate attorney, you will need to do the following: Page 3

4 Provide any of the documents you have collected that they deem relevant. Discuss with them how to ascertain the value of the property at the date of death. Regarding brokerage, bank and other institutions which hold liquid assets, the institutions should be able to provide the date of death value. Other assets may require appraisals. Your attorney will open administration proceedings. The will shall be filed with the appropriate probate court. If there is real estate owned in other states not held in trust, an ancillary probate will be filed in those states. They will obtain a federal tax identification number for the probate estate or trust. A checking and or brokerage account may be opened for the estate (probate or trust). Discuss with your attorney and CPA to determine who will be involved in any of the tax related steps. Update your own estate plan if your family member was a beneficiary or appointed as an agent, trustee, or guardian. Update beneficiary designations on your own retirement plans, insurance policies, annuities, etc. If property was held jointly with you, determine the best way to update a beneficiary such as a revocable living trust or Transfer on Death. Re-evaluate your budget, short and long term finances, your insurance needs, and investment options. Manage the investment of securities, accounts and money to preserve their value. If you have a mortgage on real estate, especially your home, do not pay it off without the advice of your attorney and your financial planner. Subsequent Steps: Preserving all assets of the estate. The personal representative or successor trustee must take action to preserve the value of the assets or the probate or trust estate. Upon settlement of the estate, you and your attorney can distribute and transfer the assets and close the estate. Pay the debts of the decedent. The personal representative or trustee is responsible for determining what debts the decedent had at the time of his or her death, verifying the validity of those debts and paying the debts. This process can create liability for the administrator and should be done only with advice from your attorney. After the debts are paid, the personal representative or trustee must then determine the identities of the beneficiaries and distribute the proper share to each. Take the time to review this step carefully to avoid any future liabilities from distributing too early. Real estate and securities may have to be liquidated to obtain a proper distribution. For property owned jointly with the decedent with a right of survivorship, usually only evidence of death of the decedent and proof of identity of the surviving joint tenant(s) are required to title the property in the surviving joint tenant's name(s). For real estate, a Page 4

5 certified copy of the short form death certificate should be recorded in the public records of the county where the property is located to provide evidence of death. [In Florida, if applicable, an Affidavit of No Florida Estate Tax Due should also be recorded to clear the title from any potential estate tax lien]. Check this requirement for other states. The personal representative or trustee is responsible for filing all appropriate tax returns and paying any tax liability. Ask your attorney and CPA who will help file, if needed, the federal estate tax return (IRS Form 706) and filing income tax returns for the estate while it remains open (IRS Form 1041). Page 5

6 Julie A. Clairmont-Shide, CFP The Harbor Financial Group at Morgan Stanley Julie A. Clairmont-Shide Julie Shide is a Senior Vice President, Wealth Advisor and CERTIFIED FINANCIAL PLANNER TM for The Harbor Financial Group at Morgan Stanley in Boca Raton, Florida, a team of portfolio managers and wealth advisors that help affluent investors protect and simplify complex wealth with orchestrated financial care. She has 30 years experience in financial services with specialized training in financial and estate planning. Julie Shide is a Wealth Advisor with the Wealth Management division of Morgan Stanley in Boca Raton, FL. Although Julie Shide has compensated Attorney at Law to have this article featured in its publications, this is not a solicitation nor intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors. Morgan Stanley Smith Barney LLC ( Morgan Stanley ), its affiliates and Morgan Stanley Financial Advisors or Private Wealth Advisors do not provide tax or legal advice. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Smith Barney LLC. Member SIPC. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP, CERTIFIED FINANCIAL PLANNER TM and federally registered CFP (with flame design) in the U.S. CRC /17 Page 6