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Losing someone you love is likely one of the most difficult things you’ll experience in your life. 

However, things will eventually settle a bit, and it will be time for you to tackle handling your loved one’s finances. This is quite an undertaking, especially when you’re dealing with grief.

That’s why we’ve chatted with and gathered some priceless information from Shane Phillips, author of the book “First Steps: A Comprehensive Guide to Financial Matters After a Death.” When faced at age 16 with the death of both of his parents and his sister in a plane crash, Phillips turned the tragedy into a learning experience that he now shares with others of all ages dealing with the loss of a loved one.

Today we are going to share a tutorial on how to handle financial matters after you lose a loved one.

The first step: Gather information

Bank Account Information Loved One's Death

When you lose a loved one, you can feel overwhelmed by emotion, and not be sure what to do next.

That’s where the advice of Phillips comes in: “The most important step is to gather as much information as possible.”

This information should include:

  • Bank accounts
  • Investment accounts
  • 401K
  • IRA accounts
  • Life insurance policies
  • Other assets

You also want to find out what liabilities your loved one was faced with, such as:

  • Credit card debt
  • Car loans
  • Mortgages

“The biggest mistake I have seen is when people make decisions or take action without knowing all of the information,” says Phillips. “It is really important for the personal representative or executor to take their time and understand all of the pieces of the deceased[‘s] financial picture.”

Typically, that means turning to professionals whose line of work involves handling matters such as these.

Who to contact

Who to Call After a Loved One's Death

Though the ones close to you will know about your loved one’s death, there are other people that may not, but need to know.

  1. The Bank. The most important person to contact after your loved one’s death, according to Phillips, is the bank where your loved one had his/her accounts. By doing this, the bank can “mark the account as deceased and essentially freeze the account until a personal representative or executor is assigned.”
  1. Debt Holders. The next people you’ll want to contact are those that held your loved one’s debt including car loan note holders, mortgage companies, and credit card companies.

    “There are regulation and guidelines that creditors have to follow when a person dies,” shares Phillips. “This includes the suspension of interest being charged, or adverse action being taken due to lack of payment.”

The biggest challenge

Though no part of this process is easy, there are some parts of handling a loved one’s financial matters after death that will prove to be especially difficult.

According to Phillips, the biggest challenge is “not knowing what the deceased had in terms of assets and liabilities.”

Most of us are too busy to be diligent about keeping a personal balance sheet. Thus, when your loved one passes, you will feel as if you’re playing a “guessing game in terms of where their bank and investment accounts are held, and what credit accounts they have,” says Phillips.

Phillips credits additional challenges in this area to modern technology and our use of the cloud. Many people do not know the login and password of their loved one’s accounts, and determining that can be quite difficult and time consuming.

With all the hacking that occur in today’s world, Phillips notes that protecting user data is a major priority of financial service companies, and is something they pride themselves on.

While this is great when your loved one is alive, it can pose some serious problems when you are attempting to access your loved one’s data once they have passed.

You may be surprised to find that, as Phillips informed us, “there is not a federal policy for the release of data in the event of a person’s death. As a result, users are subject to the estate information laws to their state, or to the state in which the data actually resides.”

To combat this problem, Phillips suggests setting up a data repository “that you can each access, should one of [you] die unexpectedly.”

How to organize the paperwork

Organize Papers in a Binder
You will likely be overwhelmed with the amount of paperwork that goes along with a loved one’s death.

Thankfully, Phillips has some tips on how you can get organized to ensure you keep all important documents together.

This organization begins with getting a standard large three-ring binder, or an accordion folder to store documents.

As you receive paperwork including death certificates, bank documents, insurance company information, etc., you can store it in the binder or folder.

“It is important that you store the folder or binder in a safe place,” advises Phillips, “as it will end up containing a large amount of personal information about the deceased individual. You don’t want that information to fall into the wrong hands.”

Phillips suggests you may even go so far as to buy a lockable fireproof box that you store the folder in.

Accept help

Following the death of a loved one, there will be many things you need to do to handle their financial matters.

Some days you may feel confident you can handle the tasks at hand, and other days you may feel ready to give up. Anger is an emotion Phillips expects many people will feel — anger that their loved one didn’t organize things better prior to passing.

“It is okay to feel this way,” says Phillips. The days will be up and down, and one of the best ways to help you through the most difficult days is to seek help. “Find an individual, or a group of friends and family, who you can count on to help you through the coming days,” suggests Phillips.

Chances are good you’ve had many people offer to help you in whatever way you need following your loved one’s death, and be sure you take them up on that.

“There will be a number of things that you will need to take care of in order to settle the estate and resolve outstanding financial matters,” says Phillips. “When you try to do this along with coping with your own grief, it can be an overwhelming and exhausting process.”

However, Phillips warns you to be wary of those that seem a little too helpful, “especially financial, legal or insurance advisors with whom neither you nor your family have had a previous relationship.”

Checklist of financial things to cover

Checklist of Financial Things to Cover
To make things more simple, Phillips has put together a checklist of financial things you will need to cover upon your loved one’s death.

Personal Documents

  • Death Certificate
  • Social Security Number
  • Employer contact information
  • Marriage, birth, and death certificates / adoption papers
  • Military records and discharge papers

Asset Documents

  • Investment or brokerage statements
  • Life Insurance policies
  • Pension, IRA, or retirement statements
  • Certificates of deposit
  • Bank statements, checkbooks & registers
  • Notes receivable
  • Motor vehicle titles

Legal & Tax Documents

  • Will
  • Trust
  • Divorce papers
  • Bankruptcy filings
  • Nuptial agreements
  • Partnership or corporate agreements
  • Deeds and deeds of trust
  • Previous years personal tax returns

Miscellaneous Documents

  • Health insurance papers

Debts and Liability Documentation

  • Safe deposit rental agreement & keys
  • Leases
  • Unpaid bills
  • Notes payable
  • Auto Loans
  • Credit Cards and other unsecured debt
  • Mortgages