Blog Series: Life After Loss – Navigating the Business of Grief. Part 3: Handling Bills and Estate Obligations

Keeping Life Moving – Handling Bills and Estate Obligations

Grief, while deeply personal and emotional, carries with it a practical weight—the management of bills, debts, and the settlement of an estate. This part of the journey can feel like an emotional rollercoaster, where every step you take may feel like you’re running on empty. But you don’t have to navigate it alone. Let’s break it down together, step by step, so that you can keep life moving, one task at a time, while protecting your peace.

1. Identify and Prioritize Immediate Expenses

In the early days, it’s important to focus on bills that ensure the stability of the home and life you are trying to rebuild.

• Essential bills to keep up with: Mortgage or rent, utilities, car loans, and insurance premiums. These are the core expenses that maintain your daily existence.

• Pause unnecessary expenses: It’s okay to let go of subscriptions, memberships, or services the deceased no longer needs. This is the time to trim back and focus on what truly matters.

2. Managing Debt and Creditors

When a loved one passes, their debts don’t simply transfer to the family—unless you’ve co-signed. But the process of managing these debts can feel overwhelming.

• Notify creditors: Send a certified copy of the death certificate to credit card companies, mortgage lenders, and loan servicers. This official notice lets them know the status and begins the process of managing the debt.

• Estate responsibility: Debts are paid from the estate during probate. If the estate doesn’t cover them, those debts may go unpaid.

• Credit report: Take a look at the deceased’s credit report to ensure all debts and obligations are accounted for, so nothing slips through the cracks.

3. Settling the Estate Through Probate

Probate is the legal process that helps settle the estate of the deceased. While it can feel like navigating unfamiliar waters, understanding the steps can help you move forward with clarity.

• Start with the will: If there is a will, the named executor takes on the responsibility of ensuring assets are distributed according to the deceased’s wishes.

• Work with the court: File the will with the probate court and follow the court’s instructions to pay debts and distribute assets.

• No will? If there is no will, the court will appoint an administrator to manage the estate in accordance with state laws.

4. Handling Taxes

The reality is that taxes don’t stop with death. There are a few tax obligations to address in the wake of loss.

• Final income tax return: A final income tax return must be filed for the deceased for their last year of life.

• Estate taxes: If the estate exceeds a certain value (which varies by state), estate taxes may be applicable. This is where consulting a tax professional can give you guidance and peace of mind.

5. Taking Control of Your Financial Future

Once the immediate obligations are handled, it’s time to start focusing on the future.

• Reassess your budget: Life changes after loss, and so should your finances. Take the time to adjust your budget to reflect changes in income and expenses.

• Secure your assets: Update your will, insurance policies, and beneficiaries to ensure your own financial security.

• Set new goals: Whether it’s saving for the future, investing, or planning for retirement, it’s time to start charting your path forward. A financial advisor can help guide you in this process.

Helpful Resources

• Life Insurance Claims Assistance:

  National Association of Insurance Commissioners (NAIC): The NAIC offers resources for consumers to understand the life insurance claims process and find state-specific help.
  Visit NAIC for Life Insurance Claims Resources

• Financial Counseling Services:

  Financial Planning Association (FPA): The FPA connects individuals with certified financial planners who specialize in various aspects of financial planning, including managing loss and inheritance.
  Find a Financial Planner via FPA

• Probate and Estate Planning Guides: [Website link]

  Nolo - Probate and Estate Planning: Nolo offers free articles, books, and guides on understanding probate, estate planning, and legal obligations after a loved one’s passing.
  Visit Nolo for Estate Planning Guides

Disclaimer: This content is intended for informational purposes only and should not be considered legal, financial, or professional advice. Each situation is unique, and requirements may differ by jurisdiction. Readers are encouraged to seek counsel from qualified professionals, such as attorneys, financial advisors, or tax experts, to address their specific needs.