Financially Planning for the Death of a Parent
The death of a parent is something most people experience at some point in their life. It can be both emotional and stressful, as you may be grieving their death while handling end-of-life expenses. That said, financially planning for the death of a parent before it happens can alleviate some of this stress when it does. Here are some tips to consider.
Collect Important Documents
Before a parent dies, it’s crucial to gather wills, trusts, and other documents related to the assets of their estate. Once these documents are collected, keep them together in a safe location you can access. In addition to financial records, it’s wise to collect birth certificates, Social Security cards, and other documents you may deem important. You never know if you’ll need them after your parent’s death. It’s also a good idea to obtain several copies of their death certificate, as you may need them to manage your parent’s assets after they die.
Access Financial Accounts
Similarly, it's important to gain authorization to your parent’s financial accounts before they die. Doing so after their death can prove challenging. Ensure you know where these accounts are located or what financial institutions they’re associated with. Financial accounts you may need to access include checking, savings, credit cards, investments, retirement, and others. If you wait until after their death to access these accounts, you may need court documentation.
Review Beneficiaries
Before the death of a parent, review their beneficiaries on life insurance policies and retirement accounts. Ensuring that your parent’s beneficiaries are up to date now can help assets move more efficiently after their death. Reviewing them also ensures you know where money in their estate is going. While reviewing your parent’s beneficiaries, it may be a good time to review beneficiaries on your accounts. Additionally, it’s important to review your parent’s payable on death (POD) or transfer on death (TOD) account instructions, if applicable.
Plan for Final Expenses
If you can, discuss your parent’s wishes regarding a funeral service or celebration of life event before their death. According to the National Funeral Directors Association, the average cost of a funeral in the United States is about $8,300, so planning for said memorial is crucial. Many funeral homes allow you to prepay for a service or use money from a life insurance policy. If you plan on paying for your parent’s memorial service at the time of their funeral, consider having them open a savings account specifically for this purpose. Gulf Winds offers a variety of savings accounts, including our Special Share Savings Accounts that can be used to save for just about anything. Dividends are earned daily and compounded monthly, all you need to do is save.
Evaluate Bills and Finances
When a parent dies, it’s important to review their upcoming bills. Pay these bills in the order of their importance and cancel services that are no longer needed. It’s also a good idea to see if a parent pays for subscription-based services, like streaming platforms or software accounts. As stated, be sure you know how to locate a parent’s important financial documents. You may not only be required to pay their bills, you may be obliged to file their final tax return the year after their death.
Secure Assets
After the death of a parent, make sure their assets are secure. This includes both digital and physical assets, from bank accounts to personal belongings. If there are any valuables in your parent’s home, place them in a secure location, like a safe deposit box. Gulf Winds offers safe deposit boxes at our 9 Mile, Blue Angel, Creighton, Milton, Atmore, and Brewton branches. It may also be wise to change the locks on your parent’s home in case anyone outside your trusted circle has a spare key.
Staying financially stable is dire after the death of a parent. While adjusting to this new chapter in your life, it’s important to adjust your budget as you see fit. You may have received an inheritance, or you may need to alter the beneficiaries on your insurance policy. Whatever your situation may be, don’t make any immediate major financial decisions, and give yourself time to adjust.
Hunter Morrison
About Hunter Morrison
Hunter has freelanced for various print and radio publications across Northwest Florida, including The Bay Beacon, Navarre Press, Inweekly, Crestview News Bulletin, and WUWF. He was also the Editor in Chief of the University of West Florida’s student newspaper, The Voyager. In 2023, Hunter moved to Kenai, Alaska to take up a news reporting position with KDLL Public Radio. For fun, Hunter enjoys cross-country skiing, hiking, photography, thrifting, traveling, and looking for the best Thai food around.