Resolving Financial Accounts After Death

Unexpected financial issues and red tape often compound the emotional trauma of losing a loved one. If you don’t have access to their accounts with financial institutions via logins or are not listed on their accounts, resolving their finances can be an uphill battle. Here’s what to expect on the journey.

Joint account troubles

In order to settle your loved one’s affairs, you will need specific documentation, which starts with his or her death certificate. It’s advisable to have multiple copies. Even if you’re listed on an account, you might run into trouble after your co-account holder dies if it doesn’t benefit from the rules of automatic “rights of survivorship” or “tenants by the entirety” (verbiage used in some states referring to a spouse-shared account), according to The Balance writer Julie Garber. She notes that these rules allow you full access to the funds and transaction details. You need only supply the financial institution with an original death certificate. Once you become the primary owner of the account, though, be prepared that your access may come at a hefty price.

“You’ll become fully responsible for paying any tax that comes due on income earned by the account when you take sole ownership of the account after the date of death,” Garber adds.

The type of account — savings, checking or investment — will determine the price you have to pay.

If you’re not listed as a co-account holder on your loved one’s finances, you’re in for a bit of a waiting game. According to Investopedia writer Julia Kagan, until your loved one’s estate has been evaluated in court, any accounts that don’t have a listed beneficiary, co-owner, appointed trustee or are not payable-on-death accounts, will be in a state of limbo.

“The probate court will appoint an executor or administrator if one is not named in the deceased’s will. This person will have the authority to close the deceased accounts, and distribute the funds therein to heirs and creditors,” reports Kagan.

Checking account beneficiary

A standard checking account doesn’t typically require an appointed beneficiary. But, it makes the process of transferring money after death much simpler. Financial institutions understand the challenges family members face when handling their deceased loved one’s affairs so many are proactive about the process. By offering a checking account as a POD account, an account holder can appoint a beneficiary. This helps streamline the process for a trusted family member by allowing the beneficiary to keep the account out of probate court and by gaining quick access to the funds in the account, according to Investopedia writer Lisa Goetz. To be prepared, check to see if your loved one already has a listed beneficiary.

Online access

Many financial processes live only in the digital world, and accessing online accounts can be difficult if your loved one kept logins and passwords private. It’s important that if you feel overwhelmed about resolving your loved one’s accounts, to reach out to the financial institution or even enlist the assistance of a financial advisor on how to handle the process as efficiently as possible.

Handling financial affairs after a loved one dies is complex and takes time. Ask for help when you need it — whether from a financial expert, your family or friends, you’ll need support when resolving your loved one’s financial legacy.

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