Managing a loved one’s finances after death can be a difficult task. We understand, and we’re here to help.
Quicken Loans has been helping families through financial challenges for more than 30 years. We’re here to inform you about the financial resources you may need to get through this difficult time.
Keep in mind, this guide isn’t meant to replace the valuable advice of a tax expert or a financial advisor. Please consult these professionals before making financial decisions.
Manage Funeral Expenses
Many families are unprepared when the time comes to make final arrangements for their loved ones. Choosing funeral arrangements can be a difficult and costly process. The following information is intended to help you explore your options so you can make the best choices for your situation.
Find Out if You’re Eligible for Assistance with Funeral Costs
Contact the Social Security Administration, the Department of Veterans A airs or your state’s health and human services department. Every little bit can help make funeral arrangements more affordable for you.
Set a Budget
Your budget should be based on the funds you have available from the resources mentioned above, life insurance or the estate. Prices for caskets and services vary greatly, so be prepared to shop around. (Don’t be afraid to accept help from close friends or family members.) Viewing, funeral ceremonies and a typical casket can cost $5,000 or more, excluding charges for a burial plot and fees a cleric may charge. Less expensive options include a graveside-only service or cremation, which can cost between $1,000 and $2,000. Plus, expect additional expenses, which can include travel accommodations, child and elder care, attorney fees and catering.
Look into Payment Plans
Contact funeral homes in your area to ask about payment plans.
Request an Itemized Price List
Ask for an itemized price list (required by federal law), and make sure you understand everything it includes.
Your Home Equity: A Valuable and Useful Asset
Consider the equity in your home as a possible source of funds for covering some of these unexpected expenses. If this makes sense in your situation, a Quicken Loans Home Loan Expert can help you decide what type of loan you need and how much you can borrow.
Paperwork fees can quickly add up as well. If your loved one had life insurance, you can cover some of these expenses when the payment comes. If you’re covering expenses out of your pocket, be sure to keep your receipts, and, if possible, get reimbursed from the estate.
Consider that lost income is another financial factor. Because your loved one will no longer receive a paycheck or social security payments, your total financial picture may change. Also, depending on your own employer’s policy, you may lose income if you take an extended leave from work.
Protect Yourself from Scams
Unfortunately, survivors are sometimes preyed upon by con artists. They obtain names from obituaries and send fake bills in the name of either the deceased or the survivor, hoping the bill will be paid out of confusion. If you receive an unfamiliar bill, contact the creditors to ask for a detailed explanation of the charges.
Protect Your Home and Your Family
In times of grief, people tend to put aside their financial demands at home. If there is a lot on your plate, it may be a good opportunity to accept the help of close friends or family. It’s important to protect your home and family at this transitional time.
Obtain Copies of the Death Certificate
You’ll need about 10 original copies of the death certificate to manage most of your loved one’s financial a airs. If you’re the next of kin or the estate executor, you can get the death certificate from the courthouse in person or by mail.
Find Financial Records
Locate all of your loved one’s bills and financial records. If this is difficult, try to locate payment stubs or a check register to get started. Last year’s tax return is another good place to find information regarding bank accounts, retirement accounts and other assets. Call the companies listed on the tax return for further information.
Make a List of Your Bills
It’s a good idea to make a list of company names, debt amounts and payment schedules. We’ve included a checklist at the end of this guide to help you get started and track your progress.
Accounts to Consider
- Credit cards
- Bank accounts
- Home equity loans
- Auto loans
Consult your tax advisor regarding how to proceed with existing joint accounts. This could protect you against blemishes on your credit score, or even from fraud.
Know Which Debts Are Yours
Unfortunately, when some people are grieving, they accidentally pay bills they don’t actually owe. That’s why you should have as much information as possible to protect yourself. It’s best to go over all of your loved one’s debts with a trusted financial advisor to find out which debts you’re responsible for repaying.
Manage Life Insurance, Pension Plans and Retirement Funds
If your loved one was still working, meet with the human resources manager at his or her place of employment as soon as possible to find out about any funds to which you may be entitled.
Plan carefully when managing the funds you receive. You may face the decision to pay o your existing mortgage or to keep your money in liquid investments. Check your mortgage documents carefully to see if you face a penalty for paying o your loan early. Quicken Loans never charges pre-payment penalties, but many lenders do.
Work with a financial planner to avoid making choices that could prove costly. Some people find a financial planner through a friend or family member’s referral. However, if you prefer to find your own financial planner and need assistance, contact the Financial Planning Association by visiting FPAnet.org or by calling (800) 322-4237.
Find Out if You Owe Estate Taxes
Many people don’t have to pay estate taxes, but this is something only your tax advisor can tell you.
Consult with Experts
Life insurance benefits, investments, retirement accounts and income from the sale of your home can have major tax, estate and investment consequences. Consult an expert who can help you avoid making rushed, and potentially costly, decisions. Again, contact the Financial Planning Association with questions.
Mortgage and credit issues require special financial expertise. Quicken Loans Home Loan Experts have experience, knowledge and more than 100 mortgage programs to fit your individual situation and help you successfully handle these difficult issues.
Pay Your Bills
During this time, your mortgage payment is likely the last thing on your mind. While every mortgage provider has a different policy, some may be accommodating should you send a late payment during this time of grief. An important step to take is to contact your mortgage company to let them know your situation. If you’re a Quicken Loans client, our client care specialists can help you when you call (800) 863-4332.
Protect your home and credit score by paying important bills in a timely manner. If you find yourself with limited resources, determine your bills that take priority. Here’s a list of critical bills you may want to consider paying first to protect your family’s financial future. (Feel free to use the checklist at the end of this guide to keep track of your progress.)
Priority Bills That Need Immediate Attention
- Mortgage or rent
- Real estate taxes
If you’re remiss in paying these debts, your life could get out of control very quickly. Consider refinancing your mortgage to lower your monthly payments. A Quicken Loans Home Loan Expert can show you loan programs that can better suit your budget.
Other Critical Bills That Need Attention
- Health insurance
- Essential utilities
- Credit cards
- Car loans or leases
- Income taxes
Pay any taxes you owe that aren’t automatically deducted from your paycheck. Always file a federal income tax return, even if you can’t afford to pay the balance you owe. Consult your tax advisor on these matters to find out whether you should file as Head of Household.
You may be able to put the following payments on hold while your finances settle. Discuss these bills with your financial advisor:
- Student loans
- Attorney, doctor and hospital bills
- Debts for which you have a legal reason for non-payment
For more information, visit LawHelp.org. Then, select your state to be directed to free legal information and referrals.
Protect Your Credit
Your credit rating is vital to your ability to make almost any significant financial transaction. Landlords, mortgage lenders, banks, insurance companies and employers rely on your credit records to determine whether or not to do business with you.
Credit Cards and Bills
You might consider converting joint accounts to your name only. To protect your credit rating, be sure to pay any bills for which you’re responsible on time, using the guidelines we’ve listed for you in the “Protect Your Home” section.
Protecting your status as a homeowner in this particularly vulnerable time is critical to your overall credit score. To make sure your status is secure, you’ll need to know the following things:
- Whose name is on the title and deed of the home? Contact your county assessor’s o ice for this information.
- Who is the lender on the mortgage? This information can be found on mortgage documents or payment coupons.
Consult your financial advisor about jointly held property. You may want to get the mortgage changed to your name only, or even refinance the mortgage to obtain needed funds. Quicken Loans can help you with that.
What if Bills Weren’t in Your Name?
If your loved one had most or all of the bills in his or her name only, you’ll need to establish your own credit. Find out how in the “Establish Your Own Credit Rating” section.
Guard Against Identity Theft
Unfortunately, changing accounts can make you vulnerable to identity theft. When someone has access to your Social Security number, credit card numbers and other information, he or she can make unauthorized charges, obtain accounts or loans in your name, or commit tax fraud.
Quicken Loans offers a guide that teaches you how to protect your identity and your credit. Download the Zing Education Guide to Protecting Your Identity.
Maximize Your Cash Flow
The death of a loved one can significantly change your financial status, especially if your loved one was employed and his or her earnings contributed to the household finances.
Create a Budget
Many people find it useful to make a list of monthly expenses and compare it to their adjusted monthly income. To get started, you’ll need to track all of your income and expenses for a month. Be sure to include all purchases – even the small ones. Write them down in a notebook or keep your receipts. Make a list of categories, and include how much you spend in each category for the month. Don’t forget to include money that you save each month to help you meet your future goals. Be realistic about your budget so that it’ll be easy for you to follow. When you add up all the expenses and compare the total to your income, you’ll be able to see what next steps you should take.
You might need to reduce or eliminate expenses if there’s a change in your household income. Look at various strategies, from small (turning o lights in unused rooms, for example) to major changes (switching to a more economical car). You might be surprised at how much you can save just by taking small steps.
Boost Your Income
Consider a Loan if You Need to Bridge the Gap
Establish Your Own Credit Rating
Find Out Your Credit Score
Repair Your Credit Score if Necessary
- Pay your bills on time.
- Pay off debt, rather than moving it from credit card to credit card.
- Don’t open accounts you don’t need.
- Don’t max out your credit cards.
Build Your Credit Score
- Open checking and savings accounts in your name.
- Apply for a credit card. You only need one or two, from a gas company and a department store, for example. Then make small purchases regularly and always pay your bills on time.
- A year or so after you have made faithful payments on a credit card, apply for an installment loan (i.e., an auto loan, personal loan or mortgage).
Plan for the Future
When faced with the death of a loved one, planning for the future is probably not on your mind. When you feel the time is right, take a longer-term view of your situation to ensure a solid financial future. At Quicken Loans, we want to help you have the financial resources you need to move forward.
Be Proactive with Financial Planning
- Define your financial goals.
- Create a new financial plan for your needs. For help making a financial plan, contact the Financial Planning Association at FPAnet.org or (800) 322-4237.
- Explore your career or job options, including retirement.
- Re-examine your investments.
- Create an estate plan for yourself.
Never Stop Learning: Count on Quicken Loans for Life
Your Quicken Loans Home Loan Expert is not only here to help you manage your home financing today, but will also help you achieve your long-term goals. After all, life changes, and your mortgage should change with it.
As a service to our clients, we will keep you informed on industry trends and new home financing options after your closing. We’re always tracking current mortgage rates, and we’ll alert you if the market ever moves to benefit you in any way.
Any time you have questions regarding home financing, we encourage you to contact your Home Loan Expert. Quicken Loans will continue to give you the service you deserve for the life of your loan.
We’ve also provided a checklist that you can use to make sure all your bases are covered. You can view the guide below or download and print a copy of “Managing Your Finances After the Loss of a Loved One.”
Keep in mind, this guide isn’t meant to replace the valuable advice of a tax expert or a financial adviser. Please consult these professionals before making financial decisions. And of course, if you have any questions you’d like to ask, we’re here to help.
If so, subscribe now for tips on home, money, and life delivered straight to your inbox.