By Cindy McLagan, EA
The overwhelming emotions you may experience after losing a loved one are difficult enough. Add in the task of handling their personal affairs, and the situation can begin to feel downright discouraging and intimidating. To help you through the process, I’ve assembled a list of tasks you can use as a checklist. Click for a printable checklist: Reference Guide – What to do when someone passes
This list is may seem extensive, but keep in mind: each situation is different. Some of these tasks cannot be completed until an executor or administrator has been appointed; some must be executed by an attorney or accounting professional. Often relatives, neighbors, and friends are anxious and ready to help, so take them up on their offer to help you complete some of these tasks and lighten your burden.
Within the first few days:
- Make sure that there is someone to take care of any pets or dependents.
- Locate any documents relating to any prearranged funeral services or burial plots.
- Have someone keep an eye on the house to deter potential crimes. Lock up the house and all vehicles, have all mail brought into the house, and notify neighbors or police to watch over property.
Notifications to send over the next few weeks:
- If the decedent was employed, notify his or her employer. Ask about benefits or life insurance.
- If the decedent was a veteran, contact the military to determine if there are any benefits or survivor’s benefits available. Visit benefits.va.gov for more information.
- Contact Social Security. They will put the decedent’s Social Security number on a Master Death Index to avoid fraud. Sometimes this is done by the mortuary. Visit ssa.gov for more information.
- Cancel the decedent’s driver’s license, and notify the local election board in your area. This will help protect against identity theft and voter fraud.
- Contact credit card companies; cancel and destroy credit cards. Obtain the decedent’s last credit card statements.
- Contact insurance companies and determine the beneficiaries.
- If the decedent had federal student loans, they will be discharged. Visit studentaid.ed.gov for more information.
- Contact utility companies about the change of name or canceling accounts. This includes phones, internet, gas, electric, water, cable TV, streaming services, etc.
- Fill out a change-of-address form with the post office, so that any future mail will be received by the administrator.
- If you want to receive the decedent’s correspondence from the IRS, fill out a change of address form 8822 with the IRS. Visit IRS.gov for more information.
Secure, gather, and protect assets over the next few months:
- Gather and request important documents such as the decedent’s original will and/or trust; death certificate (you will need several copies); marriage, divorce, and birth certificates; property titles; vehicle titles; passport; and driver’s license.
- Gather all financial records. These may include bank account statements, a check register, and investment and IRA account statements. Determine the titling of these accounts. Close or freeze these accounts if not needed to pay expenses.
- Shred, and don’t throw away, personal documents to guard against fraud.
- Try to gather all user names and passwords for digital assets such as email accounts, online bank accounts, online social media accounts, online reward programs, investment accounts, and digital photo or music collections.
- Determine if the decedent held assets in cryptocurrency and if you have access to the “private key” in order to transfer the asset.
- If there is a safe deposit box, gain access and take an inventory of the contents.
- Obtain copies of any mortgage statements and notify the mortgage company.
- Try to obtain as many years as possible of prior tax returns (at least two).
If you’re managing the estate:
- Do not sell any securities or other assets on the date of death. Take time to think through these arrangements.
- Apply for a tax EIN# for the estate if required (this can be done by an accountant or lawyer, but it’s easy enough to do yourself). Open an estate bank account to handle the estate’s income and expenses.
- Make sure that all residence utilities and mortgage payments are being paid in a timely manner.
- Contact a lawyer to get a letter of administration or begin the probate process, if this will be needed.
- Prepare a list of assets and the approximate value on the date of death. You will need to do this to determine if there are any tax filing requirements. (Remember to step up the basis of capital assets.) For large estates, contact a tax professional to assist with this process.
- Cancel memberships, insurance, health insurance, and other accounts to stop reoccurring charges.
- Be careful not to give out too much information on social media accounts or in the obituary. Monitor and try to close these accounts.
- Go to MissingMoney.com and conduct a free search of any unclaimed property that belongs to the decedent.
- Keep detailed records of expenses and income to assist the accountant and lawyer with the preparation of estate documents and tax returns.
- Determine what assets will be sold or distributed to the beneficiaries. Contact the necessary professionals to assist with these sales.
Don’t forget about tax deadlines. Here is a list of the tax forms that may be required:
- Final 1040 for the decedent
- Due by April 15 following the year of death, it can be extended for 6 months.
- If the decedent was married, the return will be “married filing jointly” for the full year.
- Form 706 U.S. Estate and Generation Skipping Transfer Tax Return (not always required)
- The 2019 exemption is $11.4 million, and the 2020 exemption is $11.58 million (double these amounts for a couple).
- Think of this return as a “picture” of the decedent’s worth on the date of death.
- Due 9 months after death (payment due at this time), it can be extended for 6 months.
- Form M706 Minnesota State Tax Return (if decedent was a Minnesota resident)
- The 2019 exemption is $2.7 million and increases to $3 million for 2020 and onward.
- Minnesota has the same due dates and payment requirements as federal.
- Form 1041 – U.S. Income Tax Return for Estates and Trusts
- If the estate’s gross income (after death) exceeds $600, this return will be required.
- Think of this as income earned from the day after death until distribution.
- Due 3.5 months (15th day of the 4th month) after the month end date, it can be extended for 5.5 months. The executor can choose a fiscal rather than a calendar year end.
We’re here to help.
If you have any questions or concerns about an estate or your next steps, our estate planning specialists and tax professionals are here to guide you through the process and answer any questions you may have. Contact us today.