9 things to know about sorting out a loved one’s estate

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When a loved one dies unexpectedly, handling their estate can be stressful, especially if their affairs weren’t in order. When my sister died, I was left to pick up the pieces and clues of her and my brother-in-law’s financial life to form a complete picture.

To keep from being overwhelmed, I formed a to-do list and made progress one step at a time. I learned very quickly that some things were easy to sort out, while others required far more paperwork, headache, and stress than I ever could’ve imagined.

If you find yourself in this situation, here are eight things you need to know.

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1. Bring everything out of the woodwork

Everybody has piles of mail and papers somewhere, and these are the best first clues when looking for a loved one’s accounts. You can find a lot of important account information in those piles. It can be an unpleasant task, but it’s a necessary one.

When embarking on this journey, the biggest clues are in the mail. Whether it’s an electricity bill or a retirement account, most companies will send notices on a monthly or quarterly basis that give you details about the account number and who to contact.

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2. Forward mail

I went to the post office and had my sister’s mail forwarded to me. It’s better to start out with more information about someone’s finances and then pull back if it’s not relevant.

If you have documentation showing you’re the executor or have power of attorney, you can easily have mail forwarded by giving the post office your forwarding address.

Keep an eye on the mail for one year. This is the maximum mail cycle for accounts that send yearly statements, so you can be confident that you’ve received notices from all the companies that hold assets or debts.

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3. Check bank statements

You can comb through bank statements to see if any random deposits were made into an account. For example, you may not have a statement for a retirement account—and therefore you don’t know it exists—but you may see a withdrawal you don’t recognize leaving a bank account. This withdrawal would have information attached to it that you could track down and then use to see where the money was deposited.

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4. Find electronic statements

If your loved one received statements electronically, their account information may be in an email account that you don’t have access to. Look for email logins, so you can check your loved one’s inbox. Bills could become overdue or insurance could go unpaid, and you may not know until you get a phone call.

If possible, it’s best to have a list of all accounts and passwords ahead of time. In order to be proactive, I recommend people print and file one statement annually. Even this small amount of information is so much better than going in cold with nobody to ask.

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5. Search for unclaimed assets

Another avenue to find assets is the state’s database for unclaimed assets. When property or assets go unclaimed, they are turned over to the state. Each company that holds an asset will first attempt to contact the beneficiary before reporting it as unclaimed, so it can take years for these assets to show up at the state department.

Look for a Division of Unclaimed Property on each state’s Department of the Treasury website. Search in each state the deceased lived in, and to check back each year.

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6. Look for hidden treasure

Be careful not to throw out items that could be useful. Not everything you find will be a “good asset” that holds a lot of wealth, but it’s always worth looking into.

Different generations handle money differently, and this influences how people invest and where they put their assets. For example, people who went through the Great Depression tend to be less trustful of banks and financial institutions.

My clients have found keys to lock boxes, paper bills stuffed in the pages of books, and I have even heard stories of diamonds hidden in a rolled-up newspaper.

It’s important to check everything before tossing items or papers.

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7. Know what to throw out

There’s no need to keep old statements and bills as long as you have the most recent statement to reference. It’s recommended to keep the most recent seven years of tax returns, but it’s not necessary to hold on to the last 20 years of tax paperwork.

You’ll use these statements to identify what institutions to look into, and where your trails begin. Once you’re in contact with the institutions that are connected with your loved one’s estate, you’ll be able to access all the necessary account history.

You can let the older paperwork go.

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8. Identify top priorities

The first documents to address are bills for insurance or utilities that the survivors might still need. This includes medical, life, property, and casualty insurance, as well as electricity, water, and gas bills. You don’t want power to get cut off in mid-January’s freezing cold, or have survivors lose their medical insurance.

Property and casualty insurance can sometimes be reinstated if the policy lapses, but health and life insurance policies can’t be put back in place once you stop paying the premiums. It’s important to know whether they’re needed before you let them go.

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9. Prepare for debt

When a loved one dies, their personal consumer debts are paid with assets from the estate, so the county’s commissioner of accounts may require the executor to wait one year to close out the estate, so that if a debt surfaces, the money is still there to pay it. If there’s not enough money in the estate to cover a debt, the debt is typically dismissed.

Jointly-owned debt, such as a credit card in both spouse’s names, transfers to the surviving owner. Joint debt can go unnoticed when, for example, a spouse doesn’t pay attention to the couple’s finances, and discovering debts like this can come as a shock.

Jennifer Luzzatto is the author of Inheriting Chaos with Compassion, from which this article was adapted. She is a Chartered Financial Analyst, a Certified Financial Planner, and a NAPFA registered financial advisor. In 1999, she founded Summit Financial Partners. She lives in Richmond, Virginia, with her daughter and their dog. This article was adapted from her book

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