Knowledge of estate planning is not simply for those creating an estate plan, but is important for anyone named as an heir or beneficiary, as well. One of the most devastating, confusing, and stressful times in your life comes when you lose a loved one, and in those moments you must also take on the responsibility of becoming a beneficiary. Having a knowledge of estate planning can ensure that you are fulfilling your loved one’s final wishes and minimize the stress that comes with being a beneficiary.
It can be difficult to know where to start or who to contact after you have lost a loved one. Here are seven steps that you can use as a roadmap to make certain that you are fulfilling your obligations as a beneficiary:
Collect critical documents
There are several documents that you will have to collect and organize after losing someone close to you. These can include multiple certified death certificates, insurance policies, and will or trust forms, beneficiary forms, tax returns, bank statements, social security number, and other important documents. Consider discussing with the testator where all of these documents can be found in order to make the collection easier later on.
Contact an attorney and other professionals
An estate planning attorney will be able to help guide you through the intricacies of fulfilling your responsibilities as a beneficiary. Be sure to get an attorney who specialized in the area and not a “jack of all trades.”
Forward mail and email
After the testator has passed away, set up the mail and email to forward to your address. It will make sure that you know about any accounts or subscriptions that the testator had, as well as generally keep you in the know.
Apply for benefits
You should also discuss with an estate planning attorney about applying for any benefits you may receive as a beneficiary. This applies to retirement accounts, life insurance plans, veteran’s benefits, employee benefits, and social security.
Rollover and update plans
Once the investment companies and retirement plans rollover the testator’s accounts to you as the beneficiary, you need to update the plan’s beneficiary listing to one of your heirs. You should also discuss transferring the title of any vehicles, boats, or real estate.
Review your plan
After the beneficiary accounts have been rolled over into yours, you need to reevaluate your own estate plan. It is important to look at the risk and exposure involved in the influx of wealth, and discuss with an attorney the best way to structure your assets. Reviewing tax strategies and investment strategies are also encouraged at this time.
File tax returns
One of the final responsibilities of a beneficiary is to file a final tax return for the deceased. If you are filing for your deceased spouse it is important to remember that this is the last year that you file a joint return. Because the tax rate is typically lower for joint returns, it is again important to discuss tax and investment strategies with an estate planning attorney in order to best protect your interests and inheritance.