Survivorship: An Emotional and Financial Primer

Cour­tesy of USAA

Every­one deals with the death of a loved one in an indi­vid­ual way, but it’s dif­fi­cult to cope when soci­ety does lit­tle to pre­pare us for grief — and even sets a timetable for mourning.

“Most com­pa­nies expect you back at work after three days if a close rel­a­tive dies, and often give no paid time off if you’ve lost a close friend or even some­one as emo­tion­ally impor­tant as a grand­par­ent,” said Larry Bor­dovsky, a USAA finan­cial plan­ner who man­ages a team of cer­ti­fied finan­cial plan­ners TM prac­ti­tion­ers who have helped dozens of fam­i­lies through the estate-settlement process.

The truth is, three days might be enough time to plan a funeral ser­vice, but it’s not nearly enough time to cope with the finan­cial ram­i­fi­ca­tions of death, let alone the psy­cho­log­i­cal impact.

How you cope with death depends on a num­ber of factors:

• Your personality.
• Your rela­tion­ship with the indi­vid­ual you’ve lost.
• Your cop­ing skills.
• How the loss affects your daily life.
• The level of sup­port you receive from fam­ily and friends.

The Emo­tional Aspects of Grief

Grief is more than a feel­ing of loss; it’s a long-term process that includes a vari­ety of emo­tions such as sad­ness, despair, anger, iso­la­tion and even numb­ness. After a loved one dies, some peo­ple expe­ri­ence emo­tional and phys­i­cal symp­toms for two years or more.

That might seem like a long time, but often the loved one is some­one you relied on for sup­port and affec­tion, day in and day out. At first it might seem impos­si­ble but, given time, your grief will become less intense and you’ll start to enjoy life again.

Remem­ber: Don’t try to cope alone. Turn to friends or other fam­ily mem­bers, attend sup­port groups, and get involved in out­side activ­i­ties. If your grief doesn’t sub­side or seems to increase, con­sult your doc­tor; he or she may rec­om­mend a ther­a­pist who is trained to help you work through your grief, or pro­vide pre­scrip­tion med­ica­tion for sleep­less­ness or anxiety.

When cop­ing with loss, remem­ber that grief man­i­fests itself in many ways:

• Emo­tional symp­toms: anger, anx­i­ety, fear, panic or loneliness.
• Phys­i­cal symp­toms: headaches, hair loss, short­ness of breath or insomnia.
• Men­tal con­fu­sion, includ­ing the belief that your loved one will return or the sense that death is not real.

The Finan­cial Side of Loss

When some­one close to you dies, the imme­di­ate feel­ing is one of intense loss. But as aware­ness sets in, legal and finan­cial ques­tions begin to arise.

Bor­dovsky noted that it’s often wise to post­pone finan­cial deci­sions in the imme­di­ate after­math of death.

“Wait until you are emo­tion­ally pre­pared before mak­ing impor­tant finan­cial deci­sions, and con­sult friends and trusted fam­ily mem­bers before tak­ing action,” he advised. “For exam­ple, some spouses imme­di­ately rush to put the fam­ily home on the mar­ket. That can be emo­tion­ally painful for chil­dren, espe­cially younger chil­dren whose lives are already being disrupted.”

Often, one of the first issues addressed after the death of a loved one is deter­min­ing who will take the lead on finan­cial mat­ters. In most instances, that per­son is the execu­tor of the estate — the per­son named in the will who is respon­si­ble for car­ry­ing out its instructions.

“Usu­ally, the execu­tor will be the deceased’s spouse, child or another adult fam­ily mem­ber,” Bor­dovsky said, “But if the estate is par­tic­u­larly large or com­plex, it may be a pro­fes­sional, such as an attor­ney or cer­ti­fied pub­lic accoun­tant. It could even be an insti­tu­tion, such as a bank.”

Gen­er­ally, an executor’s imme­di­ate duties include:

• Arrang­ing the funeral or memo­r­ial service.
• Pay­ing any out­stand­ing debts, includ­ing a spouse’s credit card bal­ances if you live in a com­mu­nity prop­erty state.
• Dis­trib­ut­ing remain­ing assets to heirs and com­plet­ing tax returns.
• Fil­ing the will and ini­ti­at­ing pro­bate or con­tact­ing an attor­ney to do this for you
• Request­ing a dozen or more copies of the death cer­tifi­cate (there is a charge for these as well) and send­ing them to the decedent’s credit card com­pa­nies, bank­ing and finan­cial insti­tu­tions and orga­ni­za­tions in which he or she was a member.

Bor­dovsky said, “Every time you change the name on an account, on a title, on a loan — or even close out a loan or debt — you’ll have to pro­vide a cer­ti­fied copy of the death certificate.”

Life insur­ance and com­pany benefits

Pro­bate can some­times be a lengthy process, with dif­fer­ent states enforc­ing dif­fer­ent rules about how long claims may be made against the estate. For­tu­nately, life insur­ance is not sub­ject to pro­bate rules and fil­ing a claim is usu­ally fairly straightforward.

“Once the claim is sub­mit­ted to the insur­ance com­pany, it can take as lit­tle as a week for ben­e­fits to be paid,” Bor­dovksy said. “That means that the pro­ceeds can be used to pay for funeral costs and other imme­di­ate needs, such as car or house payments.”

If the deceased was employed, there may also be com­pany ben­e­fits due to the estate, such as group life insur­ance pay­ments. Make an appoint­ment with the com­pany ben­e­fits man­ager to dis­cuss any poli­cies or accounts your loved one might have owned through an employer. In addi­tion to life insur­ance, there may be a pen­sion fund, a flex­i­ble spend­ing account and 401(k) bal­ances to consider.

Again, be cautious

Bor­dovsky cau­tioned sur­vivors to be care­ful when han­dling funds accrued in retire­ment and 401(k) accounts.

“Don’t be in too much of a hurry, because deci­sions don’t have to be made imme­di­ately,” he said. “For exam­ple, a widow or wid­ower should think care­fully before rolling funds into their own accounts. If the money is left in the spouse’s name, they could draw on it as a ben­e­fi­ciary. If it’s rolled over, there might be with­drawal penalties.”

Bor­dovsky urged sur­vivors to con­sider seek­ing expert legal help — some­one expe­ri­enced in tax plan­ning, sur­vivor­ship and estate plan­ning, adding, a cer­ti­fied finan­cial plan­nerTM can help them review their assets and lia­bil­i­ties and begin think­ing about changes they’d like to make, “such as new invest­ments,” he said.

What you can do to help your loved ones

One of the best gifts you can give your loved ones is the tools that will help them sur­vive after you are gone. Make a will and keep it updated. It doesn’t have to be long or com­pli­cated, and it is your way of mak­ing deci­sions and giv­ing direc­tion — even from beyond the grave.

Bor­dovsky rec­om­mends keep­ing the will in a lock box, along with all of the other infor­ma­tion that will make set­tling your estate and plan­ning your funeral eas­ier for those you leave behind. In addi­tion to your will, the box should contain:

• Names and phone num­bers of fam­ily mem­bers and friends to be con­tacted in the event of your death.
• Names and phone num­bers of your finan­cial plan­ner, tax con­sul­tant, attor­ney and doctor.
• Copies of your credit cards, front and back, as well as bank account and check­ing account infor­ma­tion, safe deposit box loca­tions and keys, and invest­ment account details.
• Copies of impor­tant doc­u­ments, such as your driver’s license, Social Secu­rity card, mar­riage and birth cer­tifi­cates, deeds, life insur­ance poli­cies, mil­i­tary records and car titles.

“By keep­ing all of your impor­tant finan­cial and per­sonal infor­ma­tion in one place, you will spare your fam­ily the trou­ble of hav­ing to hunt for the items they need,” Bor­dovsky said. “If they don’t know where your accounts are, they could spend days call­ing banks and insur­ance com­pa­nies. Some of your accounts might not even be found for weeks or even months.”

Cer­ti­fied Finan­cial Plan­ner Board of Stan­dards, Inc. owns the cer­ti­fi­ca­tion marks CFP