| My dad was single when he passed away. Now | | | | circumstances. |
| his credit card company has called demanding | | | | Do I have to wait before I can collect the |
| payment of his bill immediately. Should I pay it? | | | | proceeds of my late spouse’s life insurance? |
| You can’t blame the credit card company for | | | | If you’re married and your spouse dies, file |
| trying to get to the front of the line, but they | | | | any necessary life insurance claims as quickly as |
| should know that you cannot start paying bills | | | | possible. No waiting period is required. Although the |
| immediately -- especially if your father’s funds | | | | value of the death benefit is counted as part of |
| are limited. The law generally requires you to wait | | | | the estate’s value for tax purposes, life |
| until all the bills have come in and then to make | | | | insurance payments pass to the beneficiary |
| disbursements according to the rules. The waiting | | | | outside of probate. Life insurance companies |
| period and rules vary by state. Unless proper | | | | usually pay routine death benefits within weeks. |
| procedures are followed, some creditors could be | | | | This money provides a necessary financial cushion |
| paid in full while others get nothing. | | | | for the survivor. |
| What happens if someone dies with more bills | | | | What happens to my 401k account when I die? |
| than they have money to pay them? | | | | If you designated beneficiaries when you signed |
| It’s not unusual for someone to die with | | | | up for a 401(k) account, they receive the money |
| more bills than cash. Even after cars and other | | | | in your account when you die. Otherwise, your |
| assets are sold, there may not be enough to pay | | | | estate automatically becomes the beneficiary. |
| off all the bills and debts. If the estate goes | | | | If your beneficiary is your spouse, he or she has |
| through probate, a court decides who get paid | | | | most of the same options that you would have if |
| first -- and how much. If the estate does not go | | | | you were leaving your company to take another |
| through probate, the executor must follow | | | | job. Your spouse can roll it over into an Individual |
| specific rules to liquidate assets and pay creditors. | | | | Retirement Arrangement (IRA) or withdraw it all |
| If there is not enough money to cover 100% of | | | | and pay income taxes on it. If your spouse |
| the bills, children and other family members are | | | | decides to roll it over into an IRA, the rollover |
| not generally required to pitch in the difference. | | | | should be direct from the employer to the IRA |
| Credit card companies and other creditors write | | | | account. This prevents deduction of any |
| off such losses every day. | | | | withholding tax. |
| What kinds of filing and paperwork fees must be | | | | If your survivor withdraws the cash and pays the |
| paid when someone dies? | | | | taxes, the Internal Revenue Service waives its |
| Filing and paperwork fees when someone dies can | | | | early withdrawal penalty regardless of the |
| quickly add up. You may have to pay the | | | | spouse’s age. Your spouse will probably not |
| mortuary or other institution that fills out the | | | | be allowed to keep the money invested in the |
| death certificate, and then you must pay the | | | | same 401(k) plan. |
| courthouse for each certified copy. If you file for | | | | A beneficiary who is not your spouse cannot roll |
| letters testamentary for a probated estate, you | | | | the money over into an IRA. |
| pay a fee; if you don’t go through probate, | | | | How do I obtain full title to joint tenancy property |
| you generally pay a fee to file an affidavit. | | | | after the joint tenant dies? |
| These fees are in addition to probate fees and | | | | When you own property in a joint tenancy with |
| lawyer bills. | | | | someone else -- for example, if you own a home |
| If you pay any of these fees out of your own | | | | with your spouse -- your joint tenant’s |
| pocket, be sure to track them carefully and, if | | | | interest in the property is automatically |
| possible, get reimbursed from the estate. | | | | transferred to you if the joint tenant dies before |
| How do I get a federal ID number for an estate? | | | | you do. To clear the decedent’s name off |
| You can get a federal ID number for an estate in | | | | the official records, you generally must file a |
| a matter of minutes, and you don’t need a | | | | death certificate and other documents, such as an |
| lawyer to do it. The IRS Web site has instructions | | | | affidavit, to establish yourself as the sole owner. |
| for applying for an estate federal ID number. The | | | | You can usually get the documents needed to |
| fastest way to get an ID number is to use the | | | | establish sole ownership from the attending |
| Online Application. You will get the number online, | | | | physician or hospital that recorded the death, or |
| and then you will receive confirmation in the mail | | | | they may be filed at the courthouse. |
| in about two weeks. | | | | I’m single, and I hold a large certificate of |
| Don’t be confused by the fact that the Web | | | | deposit in joint tenancy with my two children. |
| site refers to an Employer Identification Number | | | | When I die, how will the CD be divided? |
| (EIN). You use the same form that people use to | | | | Your children will automatically hold interests in the |
| set up a business; you identify it as an estate on | | | | CD as joint tenants. At that time, they need to |
| the form. | | | | make some important decisions. |
| What’s a death certificate, and how do I get | | | | They can close the account and split the |
| one for someone who has died? | | | | proceeds so that upon their own deaths, their |
| A death certificate is an official document that | | | | half-shares pass to their own families. That may |
| looks similar to a birth certificate and has much of | | | | be the most efficient and fair way to manage the |
| the same information, plus information about the | | | | money. |
| person’s death. | | | | If they keep the CD as joint tenants until one of |
| It is filed at the courthouse of the county where | | | | them dies, the entire account becomes the |
| the person died and is used to prove that a | | | | property of the surviving child. |
| person is deceased. Information such as the | | | | If I inherit savings bonds with the beneficiary |
| cause of death is also used for statistical | | | | listed as "pay on death," do I have to cash them |
| purposes. | | | | immediately? |
| When someone dies, the physician or coroner fills | | | | You don’t have to sell the bonds right away. |
| out the Medical Certificate of Death, a family | | | | In fact, it’s probably a good idea to keep |
| member or funeral director submits a Statement | | | | inherited bonds unless you need the cash or if |
| of Death, and the death is registered. | | | | you can sell the bonds and reinvest the proceeds |
| As the next of kin or estate executor, you can | | | | in something with a higher rate of return. Before |
| get the death certificate from the courthouse, | | | | you cash the bonds, you will have to provide a |
| either in person or by mail. You will need the | | | | death certificate for the original owner. |
| certificate to collect life insurance, close accounts | | | | My wife and I are both drawing Social Security |
| and otherwise deal with the affairs of the estate. | | | | checks. What happens when one of us dies? |
| My husband recently died. How should I handle the | | | | When both marriage partners are receiving Social |
| bills that are coming addressed to him? | | | | Security payments and one dies, the survivor is |
| First, make sure the bills are legitimate. It’s | | | | entitled to receive the greater of 100% of the |
| hard to believe, but con men scan obituaries and | | | | late spouse’s monthly benefit or his or her |
| send phony bills to either the deceased or the | | | | own monthly benefit. |
| survivor, hoping the bill will be paid without | | | | This means that you will be able to choose |
| question. If you receive an unfamiliar bill addressed | | | | whether to continue collecting the same monthly |
| to your husband, write the creditor and ask for | | | | benefit that you have always received, or start |
| an explanation. Don’t pay a bill until you’re | | | | collecting the amount that your spouse received |
| satisfied that it is legitimate. | | | | when he or she was alive. So, if your |
| If you have a good cash reserve, you may have | | | | spouse’s monthly check was $1,100 and |
| no trouble paying all your and your husband’s | | | | yours is $600, you would choose to collect |
| bills. If you can’t pay all the bills now, make an | | | | payments under your spouse’s plan so you |
| itemized list and decide which bills must be paid | | | | could receive $1,100 a month. |
| and which can be delayed. Pay mortgage | | | | Who can apply for survivor benefits from Social |
| payments, utilities, and health and property | | | | Security? |
| insurance premiums first. If money is short, or if | | | | If your spouse dies while receiving Social Security |
| you are waiting for your finances to be settled, | | | | payments, you are eligible for "survivor" benefits. |
| consider writing to the creditors and explaining | | | | In addition to monthly checks, the Social Security |
| your situation -- that you know you owe them | | | | Administration will give you a one-time $255 |
| money and plan to pay it, but you will have to | | | | payment to help meet burial or other expenses. |
| work out a plan based on your changed | | | | |