Upon the death of your parents and in the absence of a surviving spouse, you may need to intervene to help settle their financial affairs. Although you are also going through the grieving process for your parent, it is wise to understand some practical aspects of untangling your parents’ financial situation.
What to do with financial affairs upon your parents’ death?
Managing your parents’ estate after their passing can be overwhelming. The laws governing financial affairs and assets after death can vary significantly depending on the state involved.
In general, you will want to first find your parents’ will or trust or any other estate planning documents, which can provide a roadmap for the difficult path ahead. You will also want to locate any pre-paid funeral arrangements, which can help save money for related expenses.
If you do not know where to find these documents, check cabinets, closets, and even refrigerators (which may protect documents in case of a fire). In some states, a will can be submitted to a government agency. Or check with your parents’ attorney, if available.
Managing Financial Accounts
It can sometimes be difficult to locate the bank accounts, brokerage accounts, and retirement assets that your parents held, especially if they did not leave behind any estate planning documents.
The personal representative of the estate or the court-appointed fiduciary or legal guardian of the estate will have the authority to search for your parents’ assets, according to Alba Patel in an email to The Balance. Thus, this person may contact your parents’ attorney, tax accountants, and financial advisors because the tax return can provide insight into your parents’ various sources of income.
However, assets from accounts that have designated beneficiaries, such as retirement accounts, do not go through probate. For example, if you know that your parents named you as a beneficiary for a savings account, you will contact the financial institution and follow the specified rules with the bank or broker or credit union to close your parents’ account. You will typically need to provide a death certificate and personal information about your parents and possibly court documents. The institution will then distribute the funds to the named beneficiaries of the account.
For security reasons, Schonfeld also recommended contacting credit card companies about your parents’ death to help prevent unauthorized use.
Managing Insurance Claims
If you are listed as a beneficiary on your parents’ life insurance policy, follow these steps:
- Locate the policy: Ensure that the policy is still in force and obtain the policy number.
- Contact the insurance company: Submit a claim form and the required information, such as a death certificate and proof of beneficiary status.
- Wait for the claim to be processed: The insurance company will process your claim, which may take a few days to several weeks, for
Source: https://www.thebalancemoney.com/am-i-responsible-for-my-parents-debt-when-they-die-2386097
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