Unlike me, most of my friends still have their parents. Most of my friends have never had to write an obituary, or file a life insurance claim, or deal with probate court. The closest most of my friends have come to a mortgage is browsing homes they’ll never be able to afford on Zillow. Meanwhile, I inherited a mortgage, along with several guns, broken exercise equipment, cabinets full of expired pills and 34 decorative fish.
When my parents died, I was prepared for my grief — but I was completely unprepared for the legal and financial ramifications. I knew there would be a will or a trust or something (both, as it turns out), but I could only conceive of a will in terms of what I’d seen on TV. Someone dies, and then their friends and family, appropriately dressed in black, gather in a stately room while an elderly lawyer reads a list of who gets what. In reality, my dad’s will was in a cardboard box next to the Christmas decorations. He did have a lawyer, who answered almost none of my questions. I didn’t even know if I was asking the right questions!
While death is taboo in our society, I would argue money is equally, if not more, taboo. Though advertisements for banks and other financial institutions are ubiquitous, they rarely mention money itself. Instead, they either charm you with sappy visions of the future (adorable grandchildren playing outside who will presumably need to pay for college someday) or frighten you with alarming visions of the future (our neighbor Bob died last night — he was only fifty-five — we gotta get our sh*t together!). Or, in the case of credit cards, they mesmerize you with the many glamorous perks you can acquire, failing to note the debt you may accrue in the process.
For millennials, the only financial concept we’re likely to be familiar with is student loan debt (shout out to my dead parents for ridding me of that disaster — literally a debt I could never repay). And as for Gen Z? Gen Alpha? If millennials are struggling this much after well over a decade in the labor market, I can only imagine it’ll be worse for those who follow us.
The point is: When my parents died, they had all manner of mutual funds and stocks and I was like . . . what even is this? And how much is there? And is it going to cost me money to get their money? And am I going to have to pay taxes on this?
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Dealing with my parents’ financial affairs is the aspect of their estate that’s taken me the longest. In fact, I’m still tying up some loose ends. Partially it’s my fault, and partially it’s the system’s fault. But I’ve tackled enough of it to inform you that, sadly, ignoring Charles Schwab or J. P. Morgan Chase will not make the ghosts of these greedy American business magnates go away. Here are three tips to help you navigate the undead monetary mire.
Life insurance: because it sounds nicer than death insurance
Technically, they don’t call it death insurance because there are certain kinds of deaths it doesn’t cover, and it often includes other coverages unrelated to death. Technicalities aside: It’s insurance for when you kick the bucket. Presumably, you’ve already dropped a few thousand bucks on your parents’ burial/cremation/other and memorial, and there are unfortunately more charges to come. Crass as it may seem, you’ll want to get your hands on the payout sooner rather than later.
The first step is to locate the life insurance policy paperwork. Somewhere on that paperwork will be a number to call — ideally for a life insurance agent who sold the policy to your parents, but it may be a more generic customer service line. Either way, move to step two: Call the agent or company. My dad’s life insurance agent turned out to be not only his agent, but also his childhood friend — and I had no idea. So when I called him to break the news, he started crying. Not awkward at all!
The agent or customer service folks will walk you through all the other claim paperwork — and there will be lots of other paperwork. To receive the payout via direct deposit, you may need to attach a voided check. Good luck finding your checkbook. Many life insurance companies use PO boxes — and as I learned the hard way, you can only send mail to PO boxes via the United States Postal Service. FedEx and UPS won’t do it. You can also fax in the documentation. Good luck finding a fax machine.
Make copies of every single solitary scrap of paper!
As for the payouts themselves, in the case of a traditional life insurance policy, you will usually receive your payment in one lump sum. It is not taxable — hooray! However, your parents may also have set up a life annuity. Instead of a lump sum, you’ll receive a payment each month for a given period, and those payments do count for your income taxes. If you’re getting an annuity, the insurance company will make you fill out a W-4 tax form.
My parents had both regular policies and annuities. Best of both worlds, I guess? At least if this book doesn’t sell, I can still count on a check each month.
Crying all the way to the bank
I was nervous when I headed to the bank (or in my parents’ case, the credit union) to take over their accounts. I didn’t know the first thing about money — but more importantly, I didn’t look like a person who knew the first thing about money. Sure, let’s give control to this visibly upset young woman covered in tattoos and piercings, seems like a great plan.
It was fine, of course. People with bank accounts die on the regular. Banks are used to working with the surviving relatives, including those who are clueless or casually dressed.
It’ll be easier to go to your parents’ bank in person, however odious human interaction may be in the midst of your grief. You can either walk in or make an appointment and tell them what’s up. My parents? Dead. Their money? Mine, apparently. Help?!?!
Bank policies differ across the board, but chances are you won’t be given access to your parents’ accounts, per se. Instead, they’ll move the money into a new estate account to which you have access. Once this new account is on the books, you can set up online banking and order checks, which you’ll need to pay off any outstanding debts or bills. The bank may be able to give you some transaction records from the original account(s), which you can use to see which bills have been withdrawing directly from those funds; this info will come in handy when you’re trying to cancel or transfer utilities, credit cards, or other bills.
Your parents may have used different banks for different accounts. Mine had their main accounts at the credit union, but their mortgage was through a different bank. Since we live in the future (upside — the wealth of human knowledge at our fingertips, downside — Elon Musk’s whole deal), some banks and bank accounts now exist solely online; you’ll have to contact customer service instead of going in person, but the process should be roughly the same.
One other note: Your parents may have set up their bank accounts with a payable on death, or POD, agreement, which means when they die, the money in the account will automatically go to whichever beneficiary they named in the agreement without having to go through probate court. If that’s you, congrats! The money is now yours, no ifs, ands, or buts.
YOU DO NOT INHERIT YOUR PARENTS’ DEBTS!
Now is as good a time as any for an important reminder: You should NEVER use your own money to pay off your parents’ bills. That’s what the money in the estate is for. If there is not enough money in the estate to pay those bills, the creditors won’t get paid. Sucks to be them. Do not let any company trick you into thinking you’re personally responsible for your parents’ debts. Some unscrupulous companies may very well try, because unregulated late-stage capitalism is hell. Just say no.
Once you get through your parents’ estate, you can take a nice, well-deserved break — but not for too long. You have your own estate to plan! Seek out a lawyer, or make a will online. Consider the ridiculous hoops you’ve had to jump through in the aftermath of your parents’ deaths. You don’t want to put someone else through that, do you? You may think you have plenty of time, but your parents thought so, too. Not to be creepy about it or anything.
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