Dealing with money after someone dies can feel brutally practical at exactly the moment families are least able to face it.
But breaking the process into clear steps can help families and executors work out what needs to happen first – and what can wait.
Register the death and find the will
The first step is to register the death. In England, Wales and Northern Ireland, this usually needs to be done within five days, while in Scotland it’s eight days.
Families should also order several official copies of the death certificate, as banks, insurers, pension providers and other firms may need to see one before they can close accounts, transfer policies or process claims.
Ian Futcher, financial adviser at Quilter, says: “In the immediate aftermath of a death, the priority should be to notify key institutions and secure an overview of the deceased’s financial position.”
Notify banks, insurers and pension providers
Once the immediate paperwork is underway, families should start notifying financial providers.
“Families should begin contacting banks, pension providers, insurers and any investment firms to notify them of the death,” says Futcher.
“Some organisations may have a ‘tell us once’ service, where if you have multiple accounts with a business then you only have to go through the process once. This step should freeze accounts, helping prevent fraud or unauthorised access.”
Executors will need to understand what the person owned and what they owed.
That may include current accounts, savings, investments, pensions, property, vehicles, jewellery, valuables, credit cards, loans, mortgages and unpaid bills.
Doing this early will help avoid delays later – though it’s clearly a tough job, particularly if the deceased job-hopped or did not openly explain their financial positions.
Check through paperwork and online documents (Getty Images)
“It is also important to establish a clear list of assets and liabilities early on,” says Futcher. “This forms the foundation for the probate process.
“One of the most common issues is failing to locate all accounts and policies. It’s not unusual for individuals to hold multiple pensions, old workplace schemes or smaller savings accounts that can be overlooked.”
Check pensions, life insurance and work benefits
Pensions and life insurance can be especially important because they may provide money to beneficiaries outside the estate.
Futcher says: “With pensions, it’s important to check nominated beneficiaries and whether expression of wish forms are up to date, as this can significantly influence how benefits are distributed.
“Life insurance policies should be identified and providers contacted promptly, as these can provide an early source of funds. In addition, employers may offer death-in-service benefits or other support, which can sometimes be overlooked if families are unaware they exist.”
Home, bills and direct debits – and don’t ignore debts
“Empty properties can present both financial and practical challenges,” says Futcher. “Insurers may impose restrictions on cover if a home is left unoccupied for a prolonged period, so policies should be reviewed and the insurer notified where necessary.
“At the same time, it is important to keep essential bills, such as utilities and insurance, up to date to protect the property. Meanwhile unnecessary direct debits can be identified and stopped to avoid ongoing outgoings.”
It’s also vital that executors make a list of debts, including mortgages, loans, credit cards, overdrafts and unpaid household bills, and tell creditors that the person has died.
(Getty Images/iStockphoto)
Futcher says: “Outstanding debts should be logged early. These will need to be settled from the estate, but creditors should be informed of the situation to avoid unnecessary pressure during what is already a difficult moment.”
Families should also be aware that probate can take time, which may create short-term cashflow problems.
Futcher adds: “People also often underestimate how long probate can take, which can lead to short-term cashflow issues, particularly when it comes to covering funeral costs or ongoing household expenses.”
Keep clear records
Good record-keeping can make a difficult process far easier, particularly if there are several beneficiaries or a more complex estate.
“Families and executors should retain copies of all correspondence, statements, valuations and receipts, particularly those relating to account closures and estate expenses,” says Futcher.
“It is also helpful to keep a clear audit trail of decisions made and actions taken. This not only supports the probate process but can help avoid disputes later, particularly where estates are more complex or involve multiple beneficiaries.”
While many families avoid talking about death and money, having basic information in one place can save relatives months of stress.
Futcher adds: “Having an organised record of assets, liabilities and communications ultimately makes what can be a complex process more manageable.
“Ideally, much of this would begin prior to any death occurring. A lot of the pain and time can be reduced if families speak with one another, understand the estate, what money is where and where the person would like that money to go.”
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