When a loved one dies, it can often be an emotional struggle to move on – but for some it can also be a financial struggle. On top of managing funeral bills, you may have to pay off your loved one’s debts as well as continuing to pay bills that you may have shared the burden of before. To avoid unwanted financial struggles, here are just a few tips for financially managing the death of a loved one.
It’s beneficial to plan ahead for the death of loved ones, as much as you may never want it to happen. Talking about death with loved ones can be awkward but necessary – it’s important to know what plans your loved ones have made, whether they’ve written a will, taken out life insurance or set up savings. If no plans are in place and your loved one seems reluctant to discuss them, it could benefit you to start putting aside some savings (if anything, to cover funeral bills). You don’t want to be having to take out a loan to pay for their funeral.
Obtain death certificates
When a loved one dies, you will need their death certificate. Certain people may need to see it as proof. You will get a death certificate when registering the death. It could be worth asking for several copies in case multiple creditors are asking to see the certificate. This guide How To Obtain Death Certificates offers more information.
Notify their creditors
A lot of people will need to be notified of your loved one’s death. On top of notifying their bank, you will need to notify all creditors in order to let them know that they will no longer be making payments. Their death certificate will generally be needed as proof when cancelling memberships and prescriptions. Loan companies, credit card providers and energy providers may be able to freeze payments temporarily until decisions are made on the future of your loved one’s estate.
Consider hiring a probate lawyer
Probate is the process in which your loved one’s estate is handed down. At this point, there will also be a decision made as to what happens to your loved one’s debts. If you’re a beneficiary of the estate, you generally won’t have to pay these debts, however money could be taken from the value of the estate – if debts are larger than the estate’s value, you may end up inheriting nothing. You can read up more about the process here at this guide Probate Matters: Paying Debts and Selling Assets. Hiring a probate lawyer could be worthwhile for also guiding you through the process.
Work out if you are owed any extra payouts
You may be entitled to receive money that isn’t discussed during probate. This could include life insurance payouts, work compensation payouts or benefits. Do your research to find out what you may owe – it could help you to financially manage after the death of your loved one.