Focus on Finances

Parting Guide

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Step 2

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Money, money, money. This is one of the stickiest & most complicated parts of dealing with closing out a family's estate. While much of this is handled through a Will and other legal methods, much of the responsibility of settling accounts is put into the hands of loved ones. 

In this Step, we walk you through the majority of circumstances you might encounter when it comes to finances and assets. 

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Step 2: FOCUS ON FINANCES

all debt still needs to be paid

When someone passes away with any form of debt, i.e. auto/home loans, credit cards, unpaid fees, etc.. That debt still needs to be paid.

Fortunately

Unless

When someone passes away with any form of debt. That debt should be paid by the estate and, in most instances, family members will not be held accountable.

you are a cosigner of a loan or living in a community property state. 

Dealing with money after loss

Credit Cards

Fortunately, if proper steps are taken, your family will be protected. 

If not handled correctly and promptly, unattended credit cards may be subject to fraud and ongoing subscription charges.

The debt still needs to be collected even after the passing of a loved one. Luckily, these debts are typically paid for by the estate & money left behind. 

yes, you - unfortunateley- still
have to deal with them

Credit Cards

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after a loved one passes. Make sure to close out all credit cards right away to avoid scammers preying on an account that is no longer active. 

Credit Cards are Subject to Fraud


Alert!

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To ensure that you are made aware of all opened credit cards under the deceased’s name. Contact any of the main credit bureaus, let them know of the passing, and provide the deceased’s information along with the death certificate and they will send back all opened credit cards to you directly.

Call the Credit Bureau

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read next

TransUnion

Experian

Equifax

Here are the phone numbers to contact each credit union on behalf of your loved one.  

Credit Bureau Contact Information 

1-888-378-4329

1-888-397-3742

1-800-916-8800

Debt

  • One of the biggest challenges in claiming life insurance policies is ensuring you are aware of every policy your loved one owned.

  • The best places to look are through family filing cabinets and safe deposit boxes. If unable to locate, look through bank records to see if there were outgoing monthly charges to a life insurance company as well as old tax returns. 

Debt Obligations

segment Two

LEt's Make sure you're taken care of

When someone passes away with any form of debt, ie. Auto/home loans, credit cards, unpaid fees etc.. That debt still needs to be paid. Fortunately for most families, those debts are usually paid from the deceased estate and rarely are the responsibility of another (unless you are a cosigner of a loan or living in a community property state). 



 If you have questions regarding your personal debt payment requirements, we recommend speaking with an attorney. Depending on your income, you may be eligible for free legal services (Insert local legal aid organization)


For the executor of the deceased estate, it is incumbent upon you to ensure that all debts are paid using the deceased’s assets

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Debt Obligations

segment two, part two

Investments

All investment accounts will go to the estate of the deceased unless set up differently before passing. We will break down the three locations below.

where do investments go? 

Made known in a will

Investments

SEGMENT THREE

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  • In this instance, the executor of the will needs to provide a death certificate and proof of their executorship. 
  • The executor will need to apply with the IRS for an Employee Identification Number, you can apply using the link listed below. 
  • The EIN is used to track taxes due, and transactions made
  • Once received by the investment brokerage, the executor will be able to create an estate account and transfer stocks. 

From this point, the executor can move and sell stocks according to the discretion of the deceased’s will.

Apply Here

Apply for an Employee Identification Number

The account has a “Beneficiary Designation” for a specific individual

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Once the account has been transferred in one of these three ways, the new owner or executor will be able to buy and sell stocks as they desire.

The account was set up with a “Transfer on Death” for an earmarked individual


Transfer of Death is the most seamless process, simply contact the brokerage and provide a copy of the death certificate. Once received, the account will automatically be controlled by the designated person not needing to go through probate and is not subject to any debts the deceased may have.

The beneficiary will be able to reach out to the brokerage directly to provide the deceased’s info and mail in a death certificate to gain access to the account.

REal Estate

SEGMENT Four

Oftentimes, real estate is the largest asset a decedent will leave for their surviving family. In most cases, it is spelled out in a will who should take ownership.  All real estate holdings will have to pass through probate to some degree. But don't worry, we have your back when going through the steps to resolving all real estate holdings. 

Real Estate 

With any transfer of real estate holding following the owner’s death, an official transition of ownership will need to take effect. Providing wills and death certificates to the county recorder’s office will need to take place where the property is located in every instance. 

Transfer of Real Estate Holding

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To make the probate process smoother, the surviving spouse or domestic partner whose name is also on the title of the property, is recommended to submit a Spousal or Domestic Partner Property Order to the court clerk 4-5 days before their probate hearing. 

If you are the surviving spouse...

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REVIEW NO. 2 of 2

read more

The process will be handled in probate court through the order of final distribution and then ownership be divided between surviving family members once all taxes and debts have been accounted for.




remove the deceased’s name from the property by using a Spousal or Domestic Partner Property Order and a signed affidavit proving ownership






a new deed will need to be by the successor trustee, which will transfer the title to all beneficiaries.





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For survivors who were joint tenants in the ownership of the property

If the property was held in a living trust

"If there is no will, or if there is no surviving spouse or domestic partner."

Next up

Real EState Quick Tip

So you know...
If the property is valued below $100,000, the situation may qualify to be handled as a
non-formal probate case

(meaning, it doesn't go to court)
  • If using a Certified Public Accountant to file taxes, they simply need to be made aware of the passing and the date the death occurred
There is no need to file a death certificate.


  • The refund is to go to the deceased’s estate
          Unless there is a joint return, or it is due to a
           court-mandated representative



  • If a tax refund is due, the person claiming must fill out IRS form 1310. 


Possible situations for filing taxes for the deceased.

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Access form here

Taxes

  • If money is owed, it should paid through the deceased’s estate
  • Taxes should be paid before to the distribution of funds to beneficiaries
  • If the money would have been available if the executor had not distributed it, they may be responsible personally for the payment 



  • If the deceased is filing jointly with their surviving spouse, the executor will sign on behalf of the deceased.

  • If the deceased happens to be a dependent at the time of passing, they may be considered as such for that year’s filing

  • Spouse of the deceased is allowed to “file jointly” or “married filing separately” for the first year, but in subsequent years they may not unless remarried
          All filings must be discussed and approved by the executor 


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If the deceased happens to be a dependent at the time of passing, they may be considered as such for that year’s filing

If there are questions beyond what is listed, it is recommended to discuss all filings with a Certified Public Accountant in conjunction with the executor of the will.



Family Benefits

Probate

According to the American Bar Association, “Probate is the formal legal process that gives recognition to a will and appoints the executor or personal representative who will administer the estate and distribute assets to the intended beneficiaries.” The goal is to ensure that the will of the deceased is carried out while also paying all debts and taxes due. It is a legal procedure that can take time, be handled quickly, or in some instances, may be avoided altogether. 

Probate

Segment Six

Responsibilities of the Executor

If the deceased created a will or trust before their passing it will provide an executor. The executor is legally obligated to carry out the will, while also ensuring that all debts and taxes are paid. 

If they fail to do so, the executor may become financially responsible for repayment to either debtors or assets deprived of beneficiaries.

If no will or trust was created, their family or the court may designate one. If the deceased was survived by a spouse, it will often fall upon them.


What is the Executor of the will??? 

Executor of the Will

Breaking down the probate process

  • Take an account of all the deceased’s assets.
  • Make a list of everything the person owned.
  • Identify what type of property each item is
          (Real property - land, buildings, real estate 
          leases, personal property - All property that
          is not real property).
  • Find out how the property is owned (owned outright, joint account, designated beneficiary, etc…).
  • What type of real estate deed (transferable on death, joint tenancy/joint ownership, community property - owned by spouses/ domestic partnership, in trusts name - owned by a trust. deeds are public record and are available at the county recorder office).
  • Property that is government benefit like Social Security should be provided with no need for probate (property with named beneficiaries, life insurance, bank or retirement accounts, pensions, annuities).

If deemed necessary to open a probate case
The petitioner (executor) must file forms with the court 


Get The form FOR YOUR STATE

Don't leave any stone unturned when it comes you dealing with the financial estate of a loved one. Below you can download  & print our checklist from your library of resources. 

Download your guide checklist

Want to be more
hands on?

Download the List

pssst - 

From the library!

You're almost through it all! In this last section, we cover everything from social media to homeowners insurance to closing Hulu accounts. Click the above header to start completing your final step to peace in the passing of your loved one. 

Head to STep 3: Odds & Ends