Are You Prepared If A Loved One Dies? | Neighbors Federal Credit Union

Are You Prepared If A Loved One Dies?


Are You Prepared If A Loved One Dies?

Death and money. It’s a topic no one wants to talk about. It’s also a situation we are usually the least prepared for. But, what happens to your finances when you or a loved one passes? When a loved one dies, it seems like money can be the least of your concerns. That’s why it’s important to prepare for these events before the inevitable occurs.

For an in-depth look at this matter, make sure to register for our Death and Money Financial Literacy course August 30 at our newly renovated facility.

But for now, let’s take a look at a few essential things you should know about when it comes to death and money.

1. What is the best way to ensure your funds go to the right people when you die?

A Payable On Death (POD) is an arrangement between a financial institution and member that designates beneficiaries to receive the client’s assets. The death of a client triggers the immediate transfer of assets. This is the best way to ensure your bank account funds go to the right place when you die.

2. If your spouse dies, what is the first step to gain access to their individual accounts?

The first step is to contact your financial institution. You must notify their financial institution of the member’s death, to proceed. And depending on different policies and procedures, the financial institution will advise the surviving spouse of the next steps. This process is simplified if they filled out a POD beforehand.

3. Why is it wise to establish a trust account?

A trust account that a financial institution or trust company holds funds for specific purposes such as to pay property taxes and/or insurance premiums associated with a mortgaged property. This prevents your leftover wealth from going to unintended beneficiaries and can prevent family issues after your passing. It also can protect your family from additional taxes.

Bonus: Can only family members be appointed by the Social Security Administration to represent a person receiving SSI benefits?

A representative payee can be any individual or organization appointed by the Social Security Administration that receives Social Security or SSI payments. You would usually do this for someone who cannot manage their own benefit payments.

If you would like any more information regarding this topic, make sure to register for our Death and Money Financial Literacy course.