Top 5 Mistakes to Avoid When a Loved One Dies
Regardless of whether or not you are the estate representative, it is prudent to avoid these mistakes for your peace of mind.
- Failure to protect estate property:
Personal property: Don’t just lock the doors. Change the locks and video each room. Don’t wait until after the funeral. Family feuds often erupt over missing items of sentimental value.
Insurance: Make sure all liability insurance policies are current on premiums including but not limited to home and auto.
- Don’t move assets until advised.
Distributing the assets to the beneficiaries is the last step of estate administration, not the first. Submitting a claim for retirement plan benefits is particularly complicated.
Higher estate taxes, capital gains taxes, and income taxes may result from failure to plan carefully for using, claiming, or moving estate assets.
- Don’t assume nothing needs to done.
It is usually the surviving spouse who makes this mistake. All estates must be administered no matter how straightforward it may seem. Numerous tax and title issues (and opportunities) are presented when the first spouse dies. Failure to administer could mean higher estate taxes and capital gains taxes.
- Don’t pay the creditors of the deceased prematurely.
Creditors are often willing to settle for a smaller amount once notified of the debtor’s death. A successful negotiation with the creditor can lead to a settlement that can enhance the value of the estate for the beneficiaries. When appropriate, the estate’s representative may want to dispute the creditor’s claim.
- Don’t blow deadlines.
There are too many deadlines to list here. A partial list includes for exercising spousal rights, filing the will, retirement plan distributions, and tax filing deadlines.