The death of a loved one is a natural part of our lives. Sadly, most of the time, their passing comes as a surprise and we fail to manage their assets properly. The best way to deal with this type of situation is to be prepared. Below are some of the first few things you need to do upon the death of a close family or loved one.
Sorting the will
The first thing you can do is to find out if the deceased has written a last will. Usually, last wills and testaments contain details such as who executes them, what are the person’s assets and who are the beneficiaries of those assets. Wills are legal documents which means that they must be followed and respected.
For some people, executing a will can be an arduous process. Hence, you can consult a lawyer to better understand the will and manage the assets of the deceased properly.
Finding out the assets
If the deceased did not leave behind a will, the best thing to manage their asset is to find out the assets they have left and their corresponding value. Some of the assets you may find are land properties, bank accounts, savings, pensions, jewelry, and many more.
Aside from finding out their assets, it is also important to know how much debt they owe. Some debts worth noting are mortgages, credit cards, and loans. You may also want to include in your computation the funeral costs. It is most likely that the funeral cost will be covered by the assets left behind by the deceased.
Collecting the deceased’s assets
Once you have found out the assets of your deceased loved one, you can collect these assets in several ways. If the assets are financial, you can access and collect the contents of your loved one’s bank accounts by being the executor. You can be an executor by being appointed by a probate court.
When the court and the bank have granted your executorship, you can collect the financial assets of your loved one. You should open a separate bank account for these assets so that these would not mix with your personal assets. This will help you manage the assets for distribution and for dealing with debts and taxes.
Dealings with debts and taxes
If your deceased loved one has outstanding debts, these can be paid using his or her estate. However, this is not always the case, for example, when the estate is insufficient to pay off the debts. You may also be responsible for paying the debts in certain circumstances including being a co-signee of the obligation, among others.
Meanwhile, an estate tax is a tax you should pay when the assets of your deceased loved one get transferred to you. In the U.S., estate tax exists when the value of the assets of your deceased loved one surpasses the lifetime tax exclusion amount. This amount varies per year, so take note of the most updated value when you finally collect the assets and deal with the taxes.