Steps After Losing a Loved One

Losing a loved one is an emotional experience that can leave you feeling overwhelmed and uncertain about the future.

Financial matters aren't usually top-of-mind while grieving, but you can’t put off settling debts, distributing assets according to the decedent’s Will, and creating ongoing financial security for you and your family.

The process can be complex and emotionally taxing, but professional advice and support can help you to manage your responsibilities while coping with your loss. In this article, we'll guide you through the essential steps after losing a loved one. Hopefully, this information helps ease the financial aspect of your transition while you honor the memory of your loved one.

Addressing immediate financial considerations

Taking care of immediate financial obligations ensures stability and prevents future complications. While the exact process might vary depending on your loved one’s assets and financial circumstances, here are the basic steps.

Identify and access critical financial documents

First and foremost, locate essential financial documents. These typically include:

Estate planning documents. Wills, trusts, and estate plans that outline the decedent’s wishes.
Bank account information. Details of bank accounts, including those with specific transfer upon death (TOD) designations which are transferred to the designated beneficiary without going through the court probate process.
Insurance policies. Life insurance, health, auto, and home insurance documents.
Investment records. Stock certificates, bonds, mutual funds, and retirement account
Property deeds and vehicle titles. Documents proving ownership of assets to transfer or settle.

These documents may be stored in safes, filing cabinets at home, safety deposit boxes at banks, or with an estate planning attorney. Gaining access to these documents may require proof of death and your identification as a close relative or executor of the estate.

Notifying financial institutions and other entities

Once you have gathered the necessary documents, you must notify various institutions and entities.

Financial institutions. Contact the financial institutions and credit card companies where the deceased held accounts. For those with Bank of Hawaii accounts, visit your local branch or contact customer service directly for guidance.
Inform the deceased's employer so they may address any final paychecks, benefits, and life insurance provided through the company.
Insurance companies. Notify providers of life, auto, home, and health insurance to claim benefits and adjust or terminate coverage.
Government agencies. Notify the Social Security Administration as soon as possible, so they may halt future payments. That way, you won’t have to worry about returning excess payments. You may also need to notify the Department of Motor Vehicles and other relevant agencies to update records.

Managing immediate expenses

The immediate aftermath of a loss also involves managing expenses such as funeral costs, outstanding debts that could affect the estate, and regular bills such as utilities.

Establish a budget to cover these expenses and other regular bills during this transitional period. If the decedent has bank accounts with transfer on death (TOD) designations, you may have funds available to cover these expenses.

Understanding and managing estate affairs

Second, manage the broader estate affairs and, potentially, the probate process. This is where the executor of the estate comes into play.

The role of the executor

The executor of an estate is named in the Will and is responsible for carrying out the decedent’s wishes as stated in it. This role involves:

Securing assets to ensure they are all accounted for and protected
Settling any outstanding debts and filing final tax returns
Allocating assets to the beneficiaries according to the terms of the Will
Addressing any legal issues that arise while administering the estate

The executor has a significant responsibility, and this role requires careful attention to detail and the ability to manage multiple tasks.

The probate process

Probate is a legal process through which the court supervises the settling of an estate. If the decedent engaged in proper estate planning, probate may be avoided . If a person died without a Will or the named executor declines to serve, the court will appoint someone to fill the role of executor. This will delay and complicate the probate process.

Once you locate the original Will, you need to file it with the probate court (be sure to keep a copies).

This doesn’t necessarily mean you must go through a formal probate court proceeding. There are several probate options in Hawaii, depending on the type and value of the decedent’s estate.

Affidavit for collection of personal property. If your loved one died with less than $100,000 of personal property and no real estate, you will simply fill out an form Affidavit which is notarized. You simply prepare an affidavit and sign it in front of a notary. This Affidavit lists the decedent’s assets which are collected and distributed by the executor according to the Will (or by state law if there is no Will). and how they’ll be distributed to heirs according to the will or state law.
Real estate. When someone dies owning real property (such as land) in his or her individual name, the estate is subject to the probate process, no matter how small the value of the real property.
Formal or informal probate. It is prudent to hire an attorney to advise you during the probate process. The probate process can be simple and easy if all beneficiaries are cooperative. However, this process can become costly and lengthy if the executor needs instructions or approval from the court to deal with specific issues or a major dispute arises over the administration of the estate..

How to simplify the probate process

Organize all estate-related documents and ensure they’re easily accessible.

Manage the estate’s accounts and bills. You will need to open an estate account to handle all financial transactions, including receiving income and paying bills. You can transfer utilities, regular services, and subscriptions to another family member or close them as necessary. Use the estate’s funds to pay off debts or ongoing expenses in the decedent's name.

Maintain open lines of communication with beneficiaries. This helps manage expectations and reduce conflicts.

Consider hiring professionals, such as attorneys and accountants, to navigate complex legal requirements and ensure compliance with all laws.

Insurance and Benefits

Collecting life insurance and other potential benefits from insurance companies, the government, and employers can provide significant financial support during a challenging time.

Here are a few potential sources of benefits you may be able to access.

Life insurance claims

Find the decedent’s life insurance policy documents which contain details about coverage, the claims process and the identify of beneficiaries.

Notify the insurer of the death as soon as possible. The insurer will provide you with claim forms and instructions on how to proceed. You will be asked to submit a completed claim form and a certified copy of the death certificate.

Once you submit the claim, the insurance company will review it. This process usually takes a few weeks, depending on the company and the complexity of the policy. If the insurance company approves the claim, it will distribute the benefits according to the policy terms, either as a lump sum or in installments.

Government benefits

Certain family members might be eligible for survivor benefits if the decedent was receiving or was eligible to receive Social Security benefits. These can include benefits for a spouse, dependent or disabled child, and dependent parents.

The Social Security Administration’s (SSA) Survivors Benefits guide explains thebenefits and qualifications.

You can call the SSA at 1-800-772-1213 for help with the application process and information about the specific benefits available.

Employer-sponsored benefits

Employer-sponsored benefits can include:

Pension plans. Some pension plans provide death benefits or continued benefits for surviving spouses or dependents.
Health insurance. If you or other dependents were on the decedentd’s employer-sponsored health insurance plan, the Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to temporarily continue health coverage at group rates.
Life insurance. Many employers offer life insurance as part of their benefits package.

Contact the decedent’s employer to inquire about any available benefits, how to claim them, and any related deadlines or requirements.

Moving forward with confidence

Navigating the complexities that arise after losing a loved one is a daunting but manageable task with the right information and support.

You can handle many aspects of the immediate financial matters, don’t hesitate to reach out for professional support if these tasks feel overwhelming during a time of grief.

A financial advisor can help you make informed decisions about the estate and financial planning. An attorney specializing in trust and estate administration can guide you through the legal process , and a therapist can support you through the emotional journey of loss. Together, these professionals form a supportive team to help you navigate this challenging period with clarity, confidence and peace of mind.

To learn more about handling financial matters, visit Bank of Hawaii's Resources page. If you need personalized advice or help understanding the financial implications of your situation, visit a Bank of Hawaii branch near you.