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How to prepare for the death of a parent

Young man and senior woman
Maskot/Getty Images/Maskot

Losing a parent can be disorienting, and you might find you need to deal with logistical issues on top of the emotional stress. Caring for yourself and loved ones during a difficult time is the top priority. You can potentially ease the burden if you consider how to prepare for the death of a parent. By understanding the road ahead, you can help things go more smoothly, leaving you and your family with less to worry about.

Sometimes, you can anticipate death, such as when parents have a terminal illness. A silver lining of difficult situations like these is the opportunity to spend quality time together and accomplish tasks. While your parent's comfort and your family's well-being are most important, your parent may want things to go smoothly for survivors. As a result, they might be eager to get their affairs in order.

Getting organized can help. Checklists and other resources can help you stay on top of tasks as emotional experiences can strain your mental abilities.

What should you do to help prepare financially for a parent's death?

A good place to start is by speaking with an estate planning attorney or your financial advisor to discuss next steps. It's wise to review any documents, such as wills, trusts and medical directives. Make sure the executor or personal representative is up to the task of administering your parent's estate. If that person is not the best option anymore, it could be time for an update.

Review beneficiaries and insurance policies

It's also critical to review beneficiary designations on all assets, including retirement accounts and life insurance policies, to make sure they're up to date. Those instructions can help assets move quickly and efficiently, and there may be tax benefits when using designated beneficiaries. Don't forget to evaluate transfer on death (TOD) or payable on death (POD) instructions. Small steps can help you avoid probate, making things easier for everybody and to help maximize your loved one's estate.

If your parents have life insurance policies with an accelerated death benefit, weigh the pros and cons of taking money early. Those extra funds might help keep your parents as comfortable as possible, including caregiving necessities. Likewise, you can help with travel costs for loved ones to visit and say farewell.

Prepare for final expenses and celebration of life

If possible, discuss your parent's final wishes or review the will and any other instructions, so you can have a memorial that's meaningful for everybody.

The average cost for a typical funeral is around $7,800, but costs can run higher depending on where you live and what your parent's final wishes are. You have options to prepay, use life insurance or pay at the time of the funeral. Funds might not be available from life insurance policies right away.

You can also preplan a service, if your parent wishes, so that it honors them. Consider establishing a list of people who will need to be called when your parent dies and a calling tree to make sure friends and family will be notified of the date and location of the memorial. They may need to take time off and arrange travel, so the more notice, the better.

Gather wills, trusts and financial statements

The logistics of settling somebody's estate can be intimidating. That's especially true during an emotionally challenging time, so take it step by step. Start by gathering wills, trust documents and information about the decedent's assets and liabilities. Check with your parent's estate planning attorney and financial advisor to ensure you're aware of the latest copy of any documents, as things could have changed over time.

Start by accounting for everything from financial assets to real estate and personal property. You'll also want to understand any debts, as the estate might need to pay off creditors before distributing assets. Additionally, consider researching benefits (such as Social Security or pension income) you may need to address. It can also be helpful to have personal records handy, such as the decedent's birth certificate, Social Security number and marriage documentation, if applicable.

One of the most important documents is the death certificate. You often can get these documents through your funeral home, and it's wise to order a few more copies than you think you'll need. You (or the estate's executor) might need to provide certified copies of the death certificate to manage assets and complete tasks.

Locate and gain access to financial accounts

When someone dies, it can be difficult to manage their accounts. In many cases, the executor or personal representative may need to provide court documents to get access to accounts. Start the process of getting authorization as soon as possible, so you can take action when needed.

Accounts are often frozen after the death of an account owner. As a result, you won't be able to sell assets or distribute funds from individually owned accounts. But once the court appoints an authorized representative, that person can proceed with settling the estate. So, be prepared to provide a death certificate, affidavit of domicile and other items. Banks and other financial services institutions can explain their requirements, so don't hesitate to contact them and ask.

Once an executor has access to accounts, they can learn more about the decedent's assets and liabilities. Eventually, the personal representative or executor can pay off creditors and distribute assets to heirs.

Next steps in preparing for the death of a parent

Eventually, the executor will complete distributions and satisfy any creditor claims. At that point, check with your estate planning attorney to learn about any final tasks that might be required. You may also need to file a final tax return for the estate, so be sure to ask your CPA before assuming the process is complete.

Review your own financial plan in the coming months if things have changed. As a hypothetical example, whether you took time away from work for caregiving or you inherited assets, your finances may have changed. Likewise, if you listed your parent anywhere in your estate plan (as beneficiary or a guardian for a minor child, let's say), it's critical to update those documents soon.

That said, it's often wise to avoid making major financial decisions immediately after the death of a loved one. Take some time to adjust to life without your parent in it, and take action after the worst pain has passed and you have more clarity. In some cases, that process could take several months or more.

Use your support system

Remember, you don't have to do all of this alone. Nobody knows exactly how to prepare for the death of a parent ahead of time, since every family's emotional, financial and logistical situation is unique. An outside perspective can potentially help you avoid missing important details, and financial advisors often provide checklists and other tools that help things go smoothly. Most importantly, take care of yourself during this time. It's normal for these tasks to feel draining.

In times like these, lean on loved ones for emotional and operational support, and consider asking a financial advisor for further assistance.

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Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional. Use when disclosure is incorporated into the content of the piece: While Thrivent does not provide specific legal or tax advice, we can partner with you and your tax professional or attorney.
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