Locally based CPA firm since 1956

By Kelly Compton, Chief Investment Officer – WCM Wealth

If you recall, last month I briefly touched on final arrangements and hit the treetops on pre-death planning. This month I want to go back to my story of helping folks post-funeral. After my nephew passed, in the weeks following the services, I helped the grieving widow close out several accounts that had no beneficiary listed and no joint owner. This required among other legal documents, letters of instructions from the surviving parents. Because they were divorced, this lead to some pretty uncomfortable moments between two grieving parents. By properly listing beneficiaries and some basic pre-death planning, these contentious conversations could have been avoided.

As I worked to close out accounts, auto-drafts, social media, return financed automobiles, etc., I discovered that obtaining extra copies of the various legal and required documents up front would have helped me be more efficient with my time. Through my experience and that of a few clients, survivors generally need more copies of documents than they anticipate. I utilized no less than a dozen copies of the obituary from the funeral home, Affidavit of Domicile, Letters of Testamentary and several copies of trust documents. Generally the funeral home will provide an official obituary and order the Death Certificates. Twelve may be a good starting quantity. The remaining documents will need to be obtained through your family attorney and other advisors.

I would be remiss if I did not caution you that once any bank or brokerage custodian becomes aware a person is deceased, the assets in the account are immediately frozen pending legal instructions. This can sometimes create a liquidity burden on the survivors. If the survivors will depend on assets that may be frozen, addressing this through a pre-death planning meeting with your CPA or Financial Advisor may eliminate future hardships. Also, the deceased person’s accountant may find it necessary to fill out IRS Form 1041, or establish a Tax Identification Number (TIN) in the name of the estate for the deceased. This is generally a case-by-case decision that requires the guidance of a qualified CPA.

One last word of caution: as a person who dishes out financial advice for a living, I suggest survivors should not make major financial decisions for quite some time after the death of a loved one. I recently read that the American Psychological Association suggests that folks need three years to fully grieve before their brain returns to normal decision making processes.

I believe that most folks have at least some partial gathering of the information mentioned so I will not dwell on the need to gather that information. Please make sure it is current and accessible to your survivors. I also want to point out that in the few days between death and burial, survivors generally must provide vital documents to the authorities and the funeral home. Partial lists of items that are necessary are; birth certificate, social security card, driver’s license and marriage certificate. The fine folks at Sunset Memorial Park and Funeral Home here in San Antonio have kindly provided a helpful guide to items for final arrangements. If you would like a copy, please email me at kcompton@wcmtexas.com.