When you lose a loved one, many things are more important than tying up the legal loose ends. But, after the more important issues are addressed, you might ask what legal steps are necessary? In terms of legal matters, there are three primary things to do upon the loss of a loved one: (1) find, collect, and protect property and money, (2) arrange for the payment of any outstanding debts as necessary, and (3) give the money and property to the beneficiaries or heirs entitled to them. Your level of involvement in each of these steps will depend on whether your loved one left a last will and testament or trust and whether you are the unlucky soul picked as the executor or trustee.
File the Will – If your loved one left a last will and testament, the law requires that it be “filed” with the court within 30 days of the person’s death.
Assemble Papers – You will need to locate and obtain information concerning the deceased person’s assets and any outstanding debts. Often you will need to review the loved one’s files, documents, and mail to ascertain this information. Keep an eye out for bank account statements, retirement records, life insurance papers, income tax returns, deeds to real property, and titles to vehicles. It may be helpful to contact the person’s accountant, attorney, or financial advisor if you know who they are.
Obtain Death Certificates – Most accounts and life insurance policies require some proof of death before they will release any money. This is done by mailing a copy of death certificate. Sometimes copies are enough, but if not, certified death certificates can be ordered from the Office of Vital Statistics.
Contact Social Security – If your loved one was receiving social security, you should notify the Social Security Administration of the death. There are two reasons this is important. First, any social security payments made after a person dies must be returned. Second, if you are a surviving spouse, you may be eligible for death benefits. Don’t put this off for too long.
Taxes – A final tax return should be filed and any outstanding taxes paid. Also, if your loved one had income from another state, there may also be tax obligations in that state. Federal estate taxes are due only if the gross value of the deceased’s estate is more than the gift tax exclusion amount, which changes from year to year. An accountant will be able to give you more advice on this matter.
Pay Debts – Based on the documents and records you compile, you will know if your loved one had any debts that need to be paid. Often, debts can be negotiated upon a person’s death and some debts (particularly student loans) are extinguished with death.
Distribute Property – After debts are paid or negotiated, the remaining property may be distributed to the loved one’s beneficiaries or heirs. Again, in some situations a court will need to approve of any distributions before they are made.
The above items are not comprehensive. Depending on the circumstances, various additional steps may be necessary. It is possible that a court may be involved at some point and will need to review and approve your actions following the death of your loved one. Make sure to keep careful records of everything you do.
Obviously, some of the stress for those left behind can be greatly alleviated by doing some simple things prior to death. Among others, consider making and updating a list identifying your assets, account numbers, and debts. Filling out those pesky beneficiary designations on your investment accounts and life insurance policies is also a big step. Creating a trust, or at least drafting a will is also an important way to minimize the stress your family will feel when you’ve passed.
Clifford Gravett lives in Mesquite and is an attorney with Bingham Snow & Caldwell. He is licensed to practice in Nevada, Arizona, and Utah. He can be reached at (702) 346-7300, email@example.com, or 840 Pinnacle Court, Suite 202 in Mesquite.