BEREAVEMENT

When a loved one passes, financial matters are likely the furthest thing from your mind.
But careful preparation can ease stress and allow you time and space to grieve.

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handling sorrow with grace  

Legal matters are difficult to handle when mourning the loss of a family member or friend. Understanding the claims process and inheritance procedures ahead of time will help you avoid making an emotional decision, as well as reduce the chances of a costly mistake.


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before death

When a family member is noticeably on the decline and is approaching death or a high level of incompetence, verify and ensure guardians, trustees, fiduciaries, and/ or executors are aware of roles and responsibilities and secure important documents in a centralized location.

Other planning techniques to consider

  • Joint convenience checking account 
  • Durable power of attorney
  • Funded revocable living trust
  • Standby revocable living trust combined with a durable power of attorney
  • Supplemental needs trust
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death claim process
(After-tax investment holdings) 

Steps you'll need to take in the Death Claims process are determined by whether or not beneficiaries are named. Read or download our checklist for your scenario, here.

DEATH CLAIM PROCESS  
(FOR ANNUITIES NON-QUALIFIED)

Deferred contracts

  • Lump sum distribution
  • 5-year rule
  • Keep the annuity
    • Terms of contract likely to change
    • Maintains tax-deferral
  • Annuitize
    • Single life
    • Joint & survivor
    • Period certain
    • Life with cash refund
    • Life with period certain
  • Annuitized contracts
  • When no principal remains there is nothing left to inherit in some instances - single life option election
  • Remaining principal can be taken as a lump sum when a cash refund option was elected
  • Income (100% or a portion of it) is continued when survivorship and period certain is elected

  

INHERITED RETIREMENT ACCOUNTS
(IRA, 401K, 403B, 457, PENSIONS)

When the death of the owner is before Required Beginning Date (RBD):

Spouse is sole beneficiary
(4 options)

  • Roll assets into personally owned IRA
  • Transfer assets to an inherited IRA
  • Distribute assets using the 5-year rule
  • Take a lump-sum distribution

When the death of owner is after Required Beginning Date (RBD) options are:

Spouse is sole beneficiary
(3 options)

  • Roll assets into personally owned IRA
  • Transfer assets to an inherited IRA
  • Take a lump-sum distribution 

Non-spouse beneficiaries
(3 options)

  • Transfer assets to an inherited IRA
  • Distribute assets using the 5-year rule
  • Take a lump-sum distribution

Non-spouse beneficiaries
(2 options)

  • Transfer assets to an inherited IRA
  • Take a lump-sum distribution