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Plan Well, Retire Well

Bills, Surprises, and Quick Decisions when You Lose a Loved One

Woman looking puzzled and stressed

Kathy Sweedler: This blog post was originally posted in 2013 by Karen Chan, CFP, retired Extension educator. A reader recently requested it. This is a timeless topic, still helpful today, and I’m happy to repost it.

When our father, died, I think my sister and I both felt like we were wading through a sea of details.

Individually, most of them weren’t a big deal. But the volume and speed with which they had to be handled made it stressful.

Depending on the situation of your loved one, these things might be different for you. But perhaps reading about our experience will help you think about the things you may need to deal with.

Funeral Arrangements

I knew my dad had made no funeral arrangements. When it became clear that his time was short, my sister and I began to think about the immediate decisions that we would need to make:

  • Where would the visitation (it’s not called a wake where I come from) and funeral be held? There’s only one funeral home in town, but the church was the other option.
  • Who would we ask to be pallbearers? With our small, aging family, there was no obvious answer to this. He was a 30-year state police officer, and we were so pleased to learn that the police force had an honor guard ready to provide this meaningful, final tribute for him.
  • We had to write an obituary. No matter how well you think you know your loved one’s history, it’s not easy to write an accurate obituary when you’re not at home where you can search for information.
  • Who would deliver the funeral service? Dad was unable to go to church for the last several years, so that connection felt weaker than it would have at any other point in his life. 
  • Donations or flowers? If we wanted to offer the option of making a donation in lieu of flowers, where should that be?
  • What are the newspaper deadlines? In this rural area, most of the newspapers are weekly. Missing a deadline means that people won’t know about the death until long after the funeral.
  • Who did we need to notify about his death? Fortunately, my sister had the old Rolodex my mom had maintained. And in my electronic address book, I had “hometown” and “family” lists of contacts that I had collected over the years.

Assisted Living Facility

Dad was living in an assisted living facility when he died. The terms of the contract with the facility gave the family a certain number of days after his death to remove his belongings. While my sister kept vigil over my father, she began to go through the few belongings he still had in his room. It was hard and felt awkward, but she said it was good to be doing something while she sat with him.

Social Security Benefits

Dad was receiving Social Security benefits when he died. I think the funeral home notifies Social Security of the death, but my sister and I went ahead and called them a few days later. That turned out to be a good thing, since they explained that the last deposit he received would have to be taken back. So in other words, don’t close or empty the account until Social Security gets their money back.

Creditors, Bills and Taxes

I have read about needing cash (liquidity) in an estate to pay creditors. Dad would have been quick to say that he had no creditors – he owed money to no one. While it’s true that he had no debts like a mortgage or even a credit card, there were still bills and taxes that had to be paid.

Several of these expenses needed to be paid before we could set up a checking account for the estate:

  • Payment to the funeral home. If we paid earlier, we would get a discount. Beyond a certain number of days, we would owe interest.
  • Will and Executor Fees: Fees associated with filing the will and qualifying of the executor(s). 
  • Probate tax. In this state, there is a tax based on the value of the probate estate. It had to be paid when my sister and/or I presented ourselves to the Clerk of Court to be appointed executor.
    • Until you’re appointed as the executor, you have no right to get information about the deceased’s accounts. No matter – we had to estimate values and pay the tax. Since we had Power of Attorney for Dad’s finances while he was living, we had a pretty good idea of these numbers. Otherwise, it would have been pure guesswork.
    • What’s a probate estate? It’s everything that is controlled by the will or that passes by state law of intestacy if there is no will. It doesn’t include things that are owned jointly or for which there are Payable on Death or beneficiary designations, for example, because those assets are not controlled by the will and do not go through probate.
  • Payment to the chaplain or pastor who officiates at the funeral, and any musicians who provide music for the funeral.
  • Fees for filing the will and qualification papers in another location where Daddy owned some land – even though it was just other county in the same state.
  • Pharmacy bill.
  • Assisted living facility bill.
  • Utilities.

Until we could get a checking account for the estate opened and money from Dad’s bank account transferred into it, the only option was for my sister or me to pay these bills and later be reimbursed from the estate. If you’re short on cash yourself, this could be rough. My sister had been paying Daddy’s bills for the last couple of years, and she had the foresight to go ahead and pay any bills that she could before Daddy passed. In a couple of cases, that resulted in a refund later. We preferred that to having to pay the bills ourselves after his death and keep records so that we could be reimbursed from the estate.

Additional Costs

  • Cellphone Bill: My sister saw the minutes on her cell phone skyrocketing as she called family members to keep them up to date. She was able to temporarily switch to another plan with her carrier and save herself some of the overage fees she would have owed otherwise.
  • Hotels and Travel: Since we no longer had a family home in the area, all of the family members had to stay in hotels for multiple nights. These trips also involved expenses for meals and gas or airfare.

I’m fortunate that my sister and I worked well as a team during this time. If we had been at odds, each of these decisions could have been a battle. 

This post was part of a blog thread Karen Chan began when she and Kathy had both recently lost a loved one and wanted to share their experiences, especially the financial aspects, as a blog series. Neither authors are attorneys or authorities on estate planning, and these posts do NOT give any kind of legal or estate planning advice.