Ask Dana: A Column Where Personal Finance & Life Intersect
By Dana R. Mascalo CFP® , RLP® , AAMS® , C(k)P®
“Dana, I’ve recently lost a spouse. On top of an overall feeling of mourning and loss, I fi nd myself overwhelmed with the estate and fi nancial matters and don’t know where to begin. Please help!”
irst and foremost, let me acknowledge that the loss of a spouse is one of the most diffi cult life events and transitions that can occur during our lifetimes. Assist- ing with estates and transitions has been a service I’ve provided for many years. If and when anyone you know experiences a loss like this, please take the extra time to be kind, compassionate, and express that you care. Being there, simply listening, and even the smallest acts of kindness can go a long way to assist in the healing process.
F I understand your feeling of over-
whelm. The fi rst thing I’d recommend is to pause each time you approach these matters, breathe, and take a moment to feel grounded. Sometimes in a state of overwhelm, feelings of uncertainty can be paralyzing. You may not be an expert on fi nancial or estate matters, but rest as- sured that is OK. You can do this. Whether you enlist the help of your professional advisors, or you complete the process on your own, be open to the possibility that sorting all of this out might be easier than you anticipate and can actually be quite benefi cial to you in the long run. As your awareness of fi nancial and estate matters broadens with this experience, your con- fi dence should get a boost and the state of overwhelm should decrease.
Your initial major focus of time and energy should be on getting organized. It doesn’t matter where you are in the pro- cess, organization is key. It will help you effectively prioritize and track various tasks
that need to be completed and give you a master list where you can keep notes on progress and to-do’s.
Start by identifying the executor of the
will, which may be you. Also, reach out to your professional advisors, your accoun- tant, estate attorney, or investment advisor. Ask them what services might be included to assist you in this process. Coveted fi nan- cial advisors or planners typically include assistance with estate and fi nancial matters along with the investment or planning services they provide. You could ask your attorney or accountant for a referral or any- one else you trust. My advice is to look for someone with advanced credentials like a CFP® professional, who also operates as a fi duciary so your best interests will be para- mount. Have conversations with two or three so that you can select someone who truly cares, is experienced with estates and planning, and that fi ts with your personality and communication style.
If you prefer to work alone, you will need to gather documentation and begin to make a list of assets, accounts, liabili- ties, insurance, and pensions. It may be diffi cult to fi nd all of this at fi rst depending on what was left as tracking or instruction. Account statements usually come monthly or quarterly and may be online. Accessing the primary email would be helpful to see if any accounts have electronic delivery. A copy of the tax return or phone call to the accountant may help identify where income is coming from too. For example, you may fi nd dividend income listed there which may be from stock held direct at transfer agent or even exists in certifi cate form. Take time to make lists fi rst of all items before tackling the reporting of the death for each account. This is because
each one may have a different administra- tive process and jumping into one may prevent you from fi nishing the master list. Social Security will need to be notifi ed if the funeral home hasn’t assisted with that yet. Any home or other ongoing service contracts in the deceased’s name would need to be changed over if they will be continuing. Simply add these to the master list and work from there.
Once everything is accounted for;
prioritize your efforts. Insurance claims are typically very fast and could provide you (as the benefi ciary) with cash faster than other account types. You will fi nd that some assets will need to go through pro- bate in order to be distributed according to the will. Examples of probate assets include accounts owned in single name, some business interests, and personal property. Non-probate assets may not be subject to the court and would be able to pass to the intended recipient by survivorship rights or benefi ciary designations. Examples of non-probate assets include accounts with named benefi ciaries like TODs, IRAs, 401ks, or insurance, jointly owned ac- counts and living trusts.
As you move down the list, take notes as far as what is required to claim and process each account. Some will need more forms than others and some will require original copies of the death certifi cate. Take care and seek qualifi ed tax and investment advice when it comes to investment related accounts. There is something called the step-up in basis which may allow for the cost basis to be updated in taxable accounts to the cost on the date of death. This could be advanta- geous from a tax perspective for the ben- efi ciary and should not be overlooked.
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