Managing financial affairs after a loved one passes away

Question

My father passed away recently and I am helping my mother sort out the finances. We are somewhat overwhelmed and don’t know where to start. There are ­debit orders going off at month-end. What documents do we need and what should we do first to make sure my mother can still pay her bills?

Answer

One of the hardest parts of losing a loved one is that practical life continues immediately while the family is still grieving. Debit orders continue running, bills still arrive and surviving spouses are often expected to deal with financial administration they may never previously have handled.

Although it can feel overwhelming initially, taking things step by step makes it far more manageable.

Start with the death certificate

The first priority is obtaining the death certificate. Usually, the funeral home assists with this process and can help to obtain a temporary death certificate fairly quickly. Later, the official death certificate is issued by the Department of Home Affairs.

Make several certified copies immediately because banks, insurers, retirement funds and investment companies, among others, will need this document.

Find the will

The next important step is locating the original signed will. This document determines who the executor is, how the estate will be administered and who inherits the assets.

Many people keep their wills with their financial adviser, attorney, trust company or bank. If no will can be found, the estate is dealt with according to intestate succession laws, which can create delays and complications.

Why bank accounts may be frozen

Families are often shocked to discover that bank accounts in the deceased’s sole name may be frozen once the bank is notified of the death. This happens because the deceased estate must now be administered.

Report the estate

The estate must then be reported to the Master of the High Court. This is the process that formally appoints the executor who will administer the estate.

The documents normally required include the death certificate, the will, ID and marriage certificate. Details of the deceased’s assets are also needed. Depending on the size of the estate, either letters of authority (for estates smaller than R250,000) or letters of executorship will be issued.

It’s important to understand that not all money is necessarily tied up in the estate process. The following may often pay out relatively quickly: life policies with nominated beneficiaries, retirement fund death benefits, funeral policies and some living annuities.

Get organised early

I generally recommend creating a single file containing all important documents and financial information. I have a template for a life file that I will gladly email to you should you need one. At a minimum, gather IDs, marriage certificates, banking details, policy numbers, investment statements and
the will.

This is also where a good financial adviser can be enormously helpful. In many cases, the adviser knows where the investments are held, which income streams exist and what liquidity may be available to support the surviving spouse in the short term. In addition, they can assist with claims, paperwork and coordinating with attorneys and executors.

If you are helping a surviving parent after the death of a spouse, focus first on the essentials: obtain the death certificate, find the will, identify immediate sources of cash flow and begin the estate reporting process.

Perhaps the greatest lesson in all of this is that one of the kindest things we can do for our families or those we leave behind is to organise our affairs before they ever need
to deal with them. DM

Kenny Meiring is an independent financial adviser. Contact him on 082 856 0348 or at financialwellnesscoach.co.za. Send your questions to kenny.meiring@sfpadvice.co.za

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.