Losing a loved one is one of the hardest experiences you’ll go through in life. Oftentimes, families are left scrambling. They’re trying to make funeral arrangements, figure out burial or cremation services, and pay on any medical bills their loved one may have accumulated through end-of-life care.
But what do you do when it comes to finalizing your loved one’s estate? It’s a question I get asked all the time as an estate planning attorney. It’s important to know what steps you need to take to make this process go smoothly during this time of grief.
When a loved one dies, the first and most important step is to not rush into making any decisions. That’s especially so when it comes to dealing with financial advisors. When a person dies, it gives the financial advisor the opportunity to set up new accounts and create new plans. It becomes especially difficult if you’re not familiar with the estate.
A Better Approach
Dealing with these accounts can be very complicated. So it can be easy to leave everything up to the advisor. But that’s not always the best approach. When a person passes, it gives the advisor the opportunity to start consolidating everything under his or her management and control.
This may seem like a great idea when recommended. But when everything gets consolidated into one bucket, you have all your eggs in one basket. Financial advisors typically get paid through commissions from annuities that are sold, or through a percentage by managing financial assets. In either case, the more money in that bucket, the more money the advisor makes.
While a person is alive, much of their wealth gets locked up in life insurance policies, or work-sponsored retirement accounts — accounts that advisors can’t get paid on. When a person dies, all of that money becomes available, allowing your advisor to earn management fees or commissions. With this in mind, advisors can be quick to lock it up in investments so they can get paid.
Review All Your Options
At the end of the day, finalizing your loved one’s estate is business for your advisor, so you want to be sure to review all of your options. Even though things need to get done in a timely manner, there is no rush to get this process completed, so be sure to take your time. You just lost a loved one, so you’re going through a range of emotions. You might be scared, lonely, and are now flush with an inheritance.
Allow yourself to grieve and process this passing, then compile a list of different options that you can review when you’re ready to finalize the estate. The decisions you make as you’re finalizing your estate have the potential to impact your life in a significant way, so you want to make sure you’re making a well-educated decision that is in your best interest.
Patrick Simasko is an investment advisory representative of and provides advisory services through CoreCap Advisors, LLC. Simasko Law is a separate entity and not affiliated with CoreCap Advisors. The information provided here is not tax, investment, or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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