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Financial Decisions After Losing a Loved One

About the author: Lamar Watson, CFP®, is a Fee-Only Financial Advisor in the Washington, D.C. area, that works with clients virtually across the country. Lamar's work with his clients focuses on budgeting, employee benefits, paying down debt, buying their first home, and investing. Lamar is the Founder of Dream Financial Planning, a virtual financial planning firm specifically designed to help young professionals and minorities take control of their finances and fulfill their dreams. Feel free to schedule a complimentary consultation to learn how we use the The DREAM Financial Planning Process ™ to help our clients achieve their goals. 

Losing a loved one is a devastating process no matter if it is expected or not. Unfortunately, even when you should be taking the time to grieve, you will need to make some financial decisions to protect your loved one and their assets that they worked so hard to acquire throughout their life. If you have recently had a loved one pass, it is important to address the financial decision below sooner rather than later. 

Obtain Letters of Administration

When a loved one passes, you will need to obtain what is referred to as a letter of administration or letter testamentary. These letters will give a person authorization to handle the financial accounts and documents of someone who has recently passed away. This will be necessary so that financial accounts can be settled, any necessary bills or outstanding debts can be paid, and affairs that were in the deceased name can be settled. You can obtain these letters by taking a copy of the death certificate and your loved one's will to the local courthouse where they most recently resided and open up a probate file. Once opened, you will be able to handle financial issues on the behalf of the deceased. You can also hire an attorney to perform these duties.

Close or Reassign Any Necessary Financial Accounts

You will want to make a list of all accounts that will need to be either closed or reassigned to someone such as a spouse or other survivor. You may also want to make a note of what the policy is for the closing or transfer of each account. Some credit card companies will require a payoff and closing while others may be reassigned to another person. If you have banking accounts, make sure that the loved one's name is removed and anyone else who needs to have access to the account will be allowed. Some of the accounts you will need to consider include:

  • Bank accounts
  • Credit cards
  • Safety deposit boxes
  • Insurance policies
  • Phone, internet, and utility bills
  • Financial accounts such as stocks, bonds, and retirement.

Notify Government Institutions and Financial Companies

It is important to provide notification of a loved one's death to the government as well as any insurance companies and financial institutions. This will be necessary to collect on any benefits for survivors that there may be as well as serve as a way to prevent the risk of your loved one's identity being used for fraudulent purposes. Companies that should be notified include:

  • Social Security Administration - Depending on the age of your loved one, there may be social security survivor benefits that will need to be filed for. Even if there are no benefits to transfer you should call SSA immediately to prevent your loved one's social security number from being used for fraudulent reasons.
  • Insurance companies - You will need to call any life insurance companies to begin the collection process on any policies your loved one may have had. You will also need to remove them from auto and medical insurance policies they will no longer be using.
  • Post office - While it may not be on the top of your list, making sure the post office is aware of the death is an important step in notifying government authorities.
  • Credit bureaus - Notifying credit bureaus of your loved ones death will help prevent fraud and prevent others from using their name for credit.
  • Utility companies - The utility company will need to be called and changed into the name of someone who will be managing the property to prevent any difficulties with handling the account in the future.
  • Creditors - A lender should be notified so you can begin the process of settling your loved one's debts and if there are any policies regarding the loan in regards to the event of death, it will go into effect.
  • Credit card companies - You will either want to cancel credit cards or remove your loved one's name if it is a joint account. If there is the only account holder, you might want to check to see if they had a payoff policy in the vent of the cardholder's death.

By taking care of financial decisions after the death of a loved one, you will be able to make sure all of the final obligations are taken care of as well as their final wishes. 

Dream Financial Planning Process ™

Whether you're managing student loan debt, starting a business, or considering buying your first home, the DREAM Financial Planning Process™ is tailored to the unique needs of busy professionals is their 30s and 40s. This process focuses more on short-term goals while you grow and evolve in your personal and professional life. If you're looking for guidance on: Financial Planning, optimizing employee benefits, budgeting, student loans, and managing your 401k or investments we can help.

Complimentary Consultation

With uncertainty surrounding the economic stability of our country, it's okay to have fears and anxieties surrounding your own savings and investments. The most productive course of action from here is to reach out to Dream Financial Planning (or whoever your trusted advisor might be) and discuss your options. It's easy to have knee-jerk reactions when it feels like the bottom is falling out, but it is imperative to make decisions using research-backed data and a level head. If you'd like a Complimentary Review and risk assessment of your investment portfolio feel free to send me an e-mail.

Monthly Newsletter

On the first Thursday of every month I send out a monthly newsletter with tips and tricks to help you manage your Finances. In the October Newsletter, I discuss how the stock market doesn't historically care who's in the White House. I also share a Fox Business Network article, where I'm quoted, about paying down debt or investing.


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Disclaimer: Dream Financial Planning, LLC does not warrant that this information will be free from error. None of the information provided on this website is intended as investment, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information is at your sole risk. Under no circumstances shall Dream Financial Planning, LLC be liable for any direct, indirect, special or consequential damages that result from the use of, or the inability to use, the materials in this site, even if Dream Financial Planning, LLC or a Dream Financial Planning, LLC authorized representative has been advised of the possibility of such damages. Please consult with your own advisor before making any changes to your Financial Plan, Investments, or Insurance coverage.