Handling Sorrow with Grace
When a loved one passes, financial matters are likely the furthest thing from your mind. But careful preparation can ease stress and allow you time and space to grieve. Legal matters are difficult to handle when mourning the loss of a spouse or parent. Understanding the claims process and inheritance procedures ahead of time will help you avoid making an emotional decision, as well as reduce the chances of a costly mistake.
When a family member is noticeably on the decline and is approaching death or a high level of incompetence, verify and ensure guardians, trustees, fiduciaries, and/ or executors are aware of roles and responsibilities and secure important documents in a centralized location.
Other planning techniques to consider:
Joint convenience checking account
Durable power of attorney
Funded revocable living trust
Standby revocable living trust combined with a durable power of attorney
Supplemental needs trust
AFTER-TAX INVESTMENT HOLDINGS:
Steps you'll need to take in the Death Claims process are determined by whether or not beneficiaries are named. Read or download our checklist for your scenario.
(IRA, 401K, 403B, 457, PENSIONS)
When the death of the owner is before the Required Beginning Date (RBD), the date that you begin to be forced to take distributions from retirement accounts;
Spouse is sole beneficiary
(4 options)
Roll assets into personally owned IRA
Transfer assets to an inherited IRA
Distribute assets using the 5-year rule
Take a lump-sum distribution
When the death of owner is after the Required Beginning Date (RBD) options are:
Spouse is sole beneficiary
(3 options)
Roll assets into personally owned IRA
Transfer assets to an inherited IRA
Take a lump-sum distribution
Non-spouse beneficiaries
(3 options)
Transfer assets to an inherited IRA
Distribute assets using the 5-year rule
Take a lump-sum distribution
Non-spouse beneficiaries For those whom the original account owner died January 1, 2020, or after:
(2 options)
Transfer assets to an inherited IRA and in most cases be required to distribute all assets from the inherited IRA within 10 years following the death of the original account holder.
Take a lump-sum distribution
