Death is inevitable so whether it is a spouse, parent or another close friend or family member who has passed, it is important to know what to do when someone dies. Most of us have had a family member or friend die and can remember their funeral and how your loved one is missed at family gatherings.
Many friends and family members are a part of memorial services and comforting one another through the mourning period after their loved one has passed. A lot of times, it is overlooked how much there is to do for the closest family members who are handling the details and the paperwork that follows a person’s death.
It is important to know what to do when someone dies so that key steps aren’t missed when finalizing the many areas of a person’s life.
Planning Funeral Services
The first thing that comes to mind when listing what to do when someone dies is planning their memorial.
Many times family members have already planned and made some arrangements ahead of time. The important parts of planning a funeral service are choosing the funeral home, deciding between burial and cremation, purchasing a casket or urn, and arranging for the memorial visitation and services.
Funeral homes are usually local and there aren’t many choices. Sometimes the memorial service will take place in a church or meeting area but often times, the funeral home has a place set aside for a service. Depending on burial or cremation, the family will choose a cemetery. This is where there are many more choices whether it is a family plot, or somewhere chosen for proximity or sentimental reasons.
For cremation, family members can have the ashes kept in a memorial location or often people have asked for their ashes to be spread somewhere meaningful. Those pieces of information are good to have ahead of time and sometimes people make their wishes known in their will if they have not shared with family members in advance.
Filing the Death Certificate
Part of making the funeral arrangements will include the funeral home or cremation organization filing a death certificate as one of the responsibilities of caring for the deceased body.
The person in charge will obtain personal information from family such as name, address, date of birth, parents’ names and birthplaces, and a few other details. They will also need the signature and some information from a doctor, coroner, or medical examiner stating the date, time, and cause of death.
Close family members will need copies of the death certificate for various reasons including transferring ownership of homes and vehicles, filing insurance claims, applying for social security or death benefits from employers, and other documentations.
It is good idea to order copies from the funeral home or cremation organization when they file the death certificate on your behalf. If you don’t order copies in advance, you may request copies from the vital records office in your state. Handling the death certificate is an important step when thinking about what to do when someone dies.
Finding Wills and Trust Documents
Once the memorial service has been handled, it will be necessary for family members to locate any wills and trust documents stating the deceased’s wishes for their estate. Sometimes you even need the will to see if your family member had any requests regarding their memorial that family members weren’t aware of. Every family is different about how they might have handled wills and trusts.
Sometimes, attorneys are used and they hold the documents and notify family members of their loved one’s bequeaths at a designated time and place. Other times, wills and documents are kept in a safe deposit box and one family member has been trusted as the co-signer on the box to obtain the documents when they are needed. There are some who have provided their spouse or children with a copy to be referenced upon death.
Once you locate the will and trust documents, family members will need to transfer assets as the will and trust indicates. This is where you will need a copy of the death certificate and will to show bankers, government offices, and other institutions that you have the legal right to transfer ownership of assets based on the deceased’s wishes.
Filing a Life Insurance Claim
A majority of adults have some type of life insurance policy. It could be a small whole life insurance policy (final expense insurance), term life insurance policy or even a paid-up life insurance policy. Regardless of the type of life insurance policy, the process is the same.
There are a few steps to filing a claim and some variables based on the type of insurance policy held and how long the policy has been in effect. There are several steps to filing the life insurance claim properly. Typically, the beneficiary listed on the life insurance policy is the person who files the life insurance claim.
Step One– Obtain a copy of the death certificate and contact the insurance agent or company
Step Two– Complete the needed paperwork to start the claim. The agent or insurance company can help you fill out the paperwork thoroughly so that nothing is missed that would delay the claim being processed. It is important to file the claim as soon as possible to expedite funds being paid out.
Step Three– The insurance company evaluates the claim being filed. There are a few categories that a claim falls into.
For a life insurance policy that has been in effect for more than two years with a cause of death that is considered natural causes, the life insurance claim will be accepted and death benefits paid out within 7-30 days, depending on the carrier. Life insurance companies are motivated to pay quickly because they are liable for interest due against the death benefit being paid out if they take too long to pay. Some companies even pay within days which families greatly appreciate.
Another category the claim can fall into is a life insurance claim for death by natural causes for a policy UNDER two years old. For life insurance policies less than two years old, the death benefit can take between 6-12 months to be paid. This is because most policies have a contestability period when the insured dies within the first two years. The insurance company is given time to investigate that the applicant gave accurate information on the life insurance application and that there weren’t medical conditions that weren’t reported that contributed to the insured’s death. Even if the misrepresentation wasn’t intentional, inaccurate information on a life insurance application can result in a denied claim.
While this is a rare occurrence, it is important for family members to prepare financially that the life insurance death benefit can take longer to receive if their loved one died within two years of taking out the policy. The only exception to this is employer provided insurance where the insured has received their life insurance as part of their benefits package and no health questions were asked and therefore no fraud could have been perpetrated. Another consideration that the insurance company will investigate within the first two years is death caused by suicide. Some policies have an exemption clause for suicide within the first two years so the life insurance companies have a right to investigate cause of death within that first two-year timeframe.
The last claim category to consider is one where the insured’s death was due to causes that are not natural. Primarily this would be when death was due to a homicide. In this case, the insurance company may delay paying the death benefit if the beneficiary is a suspect in their family member’s death. In this situation, the insurance payout can be delayed until official authorities complete their investigation.
Step Four– Upon claim approval, the life insurance benefits are paid out to the beneficiary or beneficiaries listed on the policy. It is important to keep that information up to date if family situations change. In the event that there is no beneficiary names or that the beneficiary has died, the life insurance benefit is paid into the estate and would be distributed according to the laws of the state where you live.
There are two ways the life insurance monies can be paid to beneficiaries.
Lump Sum– The most common way for the claim to be paid is as a lump sum. This means the entire death benefit is paid to the beneficiary at one time in one payment.
Installments or annuities– Some life insurance policies have an option for the beneficiary to receive payments from the life insurance benefit rather than receiving the entire payment at once. This may be a good option for those who will be using the life insurance payout to pay monthly living expenses and by receiving payments, it ensures their living expenses will be provided for without risk of running out of money.
Legal Details When Someone Dies
Aside from the funeral, death certificate, wills, and life insurance, there are other things on a list of what to do when someone dies. If it is a spouse who dies, the surviving spouse needs to have all assets that were held jointly transferred into the surviving spouse’s name. It is easier in the long run to do the paperwork needed to handle the details early on rather than running into trouble with an asset being held in two names several years down the road.
Another consideration is any assets, accounts, or credit cards held solely by the deceased. Those will need to be transferred or cancelled as needed. Sometimes arrangements can even be made with debtors to reduce debts owed or even eliminate them if the estate can’t pay for them. The first year that taxes are filed after a spouse dies will be a transitional year when the surviving spouse should consult an accountant to see how filing taxes needs to be handled that first year.
If a surviving spouse is eligible for pension benefits from their deceased spouse’s employer, they will need to contact the employer to file the needed paperwork to put the benefits into their name. It is a good idea to order numerous copies of the death certificate for this reason. There are many occasions when the surviving spouse will have to document the death to file paperwork.
For those who have lost a parent or other family member, many of the things a spouse does, family members must do as well. The biggest differences for children and family members are the assets held jointly, pension benefits, and filing taxes. Aside from that, children and family members still must go through legal channels for transferring assets, accounts, and cancelling debts.
It is hard enough to lose a loved one let alone thinking of what to do when someone dies and trying not to miss any of the important details that must be handled. Getting organized with a list and having a support system of friends and family and using the wisdom of those who have gone through it before is a good way to be sure you get through that difficult time.