How to Deal with Financial Affairs After the Death of a Loved one

Losing a relative or close friend is one of the worst things that can ever happen in your life, but it is something that tens of thousands of people face across the world every day.

The emotional turmoil and gaping holes that suddenly appear in your life are bad enough, but there are also many administrational and financial tasks that must be completed – because there can be serious ramifications if they are left. Here are some of the key tasks:

Assuming you have gained probate and a medical certificate, and registered the death, the next unfortunate task may be to arrange a funeral. Grants are available if you cannot afford the payments, which can pay for burial/cremation fees, funeral director fees, and more. Search for ‘grants for funerals’ online and it will bring up a host of options.

In an ideal world, the deceased person will have kept all their legal and financial documents in one place, but the world is rarely ideal. Certainly, if you have found a will, it might provide peace of mind. The main items to be dealt with are mortgage/rental agreement, utility companies, banks/creditors, employers, Government departments (for the purposes of pension payments, stopping benefits etc), and any other relevant bodies. This job can often be made much easier if you have access to the deceased’s email account and even social media, but this largely depends on the account provider. Government departments to inform might include HMRC, the Department for Work and Pensions, the DLVA and local council, but the Government ‘Tell us Once’ service can inform all of these departments in one go.

It might be that you stumble upon debts that the loved one owed, and what happens next depends somewhat on the type of debt; for example, if it’s a joint debt such as credit or a mortgage, this will need to be paid by the other party. If it is a secured debt, taking out a loan against an item, then you could lose that item – a home or car, for example – if payments are not upheld.

If you suspect other debts exist but are unable to pinpoint them, you could choose to advertise in a local newspaper to ask any creditors to come forward, or perhaps even social media. For all creditors, ask for an outstanding balance and if necessary a period of respite from payments, while you sort out the estate and debts.

The next stage is to ascertain if the dead person had any relevant insurance; life insurance (the conditions of which are constantly changing) could immediately wipe out all and any debts in one fell swoop. Finding the insurer may be just a case of combing through paperwork, which can be laborious and emotional but worth doing. You’ll need to provide documents to insurers, such as a copy of the death certificate, for the policy to pay out.

After that, it is a matter of prioritising the debts into a logical order, which will cause the least disruption. Losing the home is probably the first disaster which must be prevented, followed by the funeral and any costs associated with the estate. For each concern, contact the company and try to arrange a schedule of payment or renegotiated terms, as well as requesting that the deceased’s name is removed from official forms. Legal firms might only take payment when the will has been executed, which is an option worth exploring.

It is one of the most difficult things you will ever have to do but worth doing properly - if for no other reason but to make sure your beloved’s affairs are properly administered for your own peace of mind.