A Business Checklist of Things To Know When Your Loved One Dies
The most difficult time of your life might also be the time when you most need to pull everything together businesswise for gaming and forge ahead. If your husband, wife, mother, father, child or sibling dies you need to know your rights and responsibilities and what to do next. Here is some information to help.
- Social Security – If you are a spouse. If your husband or wife passes and his or her Social Security was higher than yours, then the net effect will be that you will ultimately receive the same monthly benefit that he or she would have received or, if your benefit was higher, it will stay the same. In either case you receive only one benefit, whichever one was the highest. There is also a small $255 death benefit you may be able to claim.
- The Will Might Need to be Probated – or Maybe Not. Probate involves the Executor taking the Will to the Register of Wills and recording it to establish an estate. If you are a spouse and everything was either titled jointly including your residence and bank and investment accounts and you were named beneficiary of life insurance and retirement accounts, it might not be necessary to probate. If you are not sure, consult with an elder law or estate attorney. Our office advises on this frequently.
- Social Security. You might delay closing a bank account that is titled only in the decedent’s name. Consider automatic deductions coming from the account. Also, if you close the account that receives the Social Security checks too soon, the government might reverse the payment for the month of death giving a negative balance. Note that funeral directors are often helpful both in notifying Social Security, so you do not have to, and in providing death certificates – as many as you need and you may need several. Be sure to discuss these issues with the funeral director.
- Tax Advice. Elder Law and estate planning attorneys are accustomed to giving advice on taxes due – or not – and can be helpful in this regard.
- Creditors. You should not assume that, because you are the closest surviving relative of the decedent you are necessarily responsible for that person’s bills. The bills will first follow the estate of the deceased person and Pennsylvania and other States have specific rules concerning how bills are to be paid for an “insolvent estate,” that is, one where bills are higher than assets. If you are dealing with an insolvent estate, the State where your loved one resided at death lists an order of distribution in which bills are to be paid. In Pennsylvania at the very top are costs of administration such as filing fees, executor’s fee and attorney’s fee and payment of funeral bills. Do not pay credit card bills first if you do not think there is enough in the estate to pay all bills. In Pennsylvania, medical bills, including payments from Medicaid for medical care incurred within six months of the person’s death are given higher priority than older medical bills. Credit card bills are unsecured debt and are on the bottom of the pile.If there is secured debt, such as a loan on a car, the creditor could take the vehicle.Usually other people do not owe on the decedent’s debts but there are exceptions. Although collection agencies may call following the death of a loved one, they are often not attuned to who owes what and under what conditions nor do they often care so if you are unsure of your rights check with an attorney or someone who knows the rules.There are people who can be accountable on a decedent’s debts. If you cosigned a loan or guaranteed payment on a debt, you might be held accountable. A spouse, under the doctrine of “necessaries” might be found to owe for certain specific bills regarding support of a deceased husband or wife such as housing or care but not for other bills. Get help if you are unsure.Direct beneficiaries of life insurance policies and joint owners of property would generally not be responsible for the general debts of the estate.
Proceed cautiously. Help is available.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.