How to manage your finances during grief

Grief after a loved one's death is gripping and pervasive. I was overwhelmed by it after my mother's passing and witnessed my father and siblings grapple with it in their own ways, too. One thing that grief does not leave ample room for is thinking intentionally about one's finances. However, neglecting to manage the finances after a loved one's death can prove disastrous.
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I have compiled a checklist to help navigate your finances following the death of a spouse or loved one. Don't try to navigate this alone. Lean on family, close friends and trusted professionals, just as you do in your grieving.

Immediate steps

1. Locate the will and notify the executor. The attorney who drafted the will does not have to be the attorney that must administer the will. Use a competent estate attorney with whom you are comfortable.

1. Confirm that the funeral home has notified the Social Security Administration of the death. 
2. Obtain certified copies of the death certificate from the funeral home. An original death certificate is usually needed to change the registration on each account. 
3. Pay current bills for the month.  
4. Evaluate current income and expenses. 

Next steps

1. Notify the deceased’s health insurance/Medicare and no longer pay the premiums. Contact credit card companies and request to transfer joint credit line if desired. Inform life insurance agent of death and file claim. Cancel auto insurance after deceased’s car is sold or given away.
2. Compile and organize documents and locate assets. Locate the safe deposit box and examine contents. Locate/list online passwords. Compile a list of trusted professionals.
3. Apply for Social Security benefits, including a one-time death benefit of $255. A surviving spouse at full retirement age qualifies for 100% of spouse’s benefits. Also apply for life insurance benefits.
4. Set up and/or update a system for paying bills.

Settle estate

1. Contact an Estate Attorney. 
2. Locate the will, trusts and other estate documents.
3. Inventory and value all assets and debts as of date of death and determine the gross estate.
4. Apply for an estate tax id # and open an estate checking account if necessary.
5. An estate tax return (Form 706) is required if the gross estate exceeds the estate tax exemption of $11.4 million (Federal) and $1,537,656 (Rhode Island), and is due nine months after date of death.
6. An estate income tax return (Form 1041) is required if estate assets earn income > $600.
7. The executor distributes property after debts (funeral, legal & medical) are paid. 
8. The Simplified Method (in RI) can be used if an estate consists of personal property having a fair market value of $15,000 or less.
9. Special issues that must be addressed include retirement account issues such as required minimum distributions, IRAs and 401(k)s. Probate is another special issue. Avoid probate if possible because it is time-consuming and expensive. Jointly held assets automatically pass to the surviving owner and no probate is needed. Title still must be transferred and most of the time title passes by operation of law and no documents are needed other than release of estate tax lien. Another special issue is income taxes. Federal and state income tax returns of the deceased are due for the year of death and due by 4/15 of the following year. The surviving spouse may file a joint income tax return in the year of death.

Looking ahead for surviving spouse
Review insurance, investments and income tax planning for the surviving spouse. Create a retirement income plan. Update the surviving spouse’s estate plan, including the will, revocable living trust, durable power of attorney for finance and advance healthcare directive. Retitle jointly held assets. The one exception: keep joint checking account open for one year. Update beneficiaries on retirement accounts, annuities, life insurance and bank accounts. Share the estate plan with family members.

As you grieve, I recommend that you simplify your life, take control of spending and saving, and do not make any major financial decisions for one year. Be good to yourself and courageous enough to lean on others for support.


Beth Carroll is a CPA and a Professional Daily Money Manager. Her company, Cornerstone Money Management, LLC, helps seniors in their homes with billpay, financial organization and cash flow management. You may reach her at [email protected] or 401-323-4895.