What Happens When You Die?

Sorry if I disappointed any who were expecting a spiritual exploration of life after death. Here I want to explore the process after you die. Where do all your assets go and who makes those decisions, and how final expense insurance helps protect your family.

Let me first begin with the shocking news: This process can take up to a year to complete.

The Process Starts with a Legal Pronouncement of Death

When you pass away, someone will need to make a legal pronouncement of death (not the certificate) in order to arrange your funeral. This can be from the medical team that worked to save you or was called to the place where you died. It can also be from a hospital or a hospice. It’s a legal determination that you are dead.

Make Announcements

Once you are legally pronounced dead, employers, family and friends need to be notified. If you were working at the time of death, contacting your employer may provide your family access to benefits and insurance information. Also, someone will need to make all the announcements to friends and family with phone calls, email, letters, and social media.

Funeral Arrangements

The planning for your funeral will begin. Many funerals are held within a week of death. Ideally you will have provided written instructions as to your final wishes. Otherwise, the family will have to try to recall conversations and piece together your funeral arrangements. This will be much more stressful during a time of grief, so having a written plan would be best.

Invitations need to be printed & mailed, obituaries written & published, flowers ordered, transportation for your remains arranged, decisions of whether to serve food, choose who will give eulogies…This is going to be a lot of work.

On average, a traditional burial funeral with transportation, casket, flowers, headstone, and a service will cost your family about $7,848 according to rememberingalife.com, but could easily go to $15,000 depending on options. There are a few places to save some money, but these figures are about the average.

Get the Death Certificate

Every state is different, so you should check with your local laws. In the state of Nevada where I’m based, death certificates are not public documents. You must have a reason for getting a certificate such as spouse, immediate family, legal relationship (attorney, etc.).

The certificate can be ready in Nevada between 2 and 7 days. In my county, Clark, the first certificate copy is $38 and each additional copy is $25. Most sources say your family will need at least 10 copies to give to various agencies, creditors, and insurance companies – $263.

The Job of Executor

Hopefully you have a Will. If you don’t, get at least a Will – preferably a Trust. A Will is relatively inexpensive and saves a lot of trouble for your family when you die. This is ideally where you name your executor to prevent the probate court from appointing someone you may not have wanted.

Executor: This is a BIG JOB with a lot of responsibility that will continue for about a year. When you choose this person, you should make sure they are up for the task.

• Meet with estate / trust attorney
• Contact a CPA to file the final income tax return with the IRS (yes, even after you’re dead, they still want their cut)
  • I don’t mess with the IRS, so there is no way I’d choose a DIY tax return
  • Tax authorities can come after your estate for up to a YEAR after your death
• Take your Will to probate (in NV, estates valued under $20k do not have to go through probate. Check your local laws)
• Inventory all your assets
• Tally up all your debts
• Cancel services (utilities, cell phone, etc.)
• Contact DMV to cancel driver’s license
• Close credit accounts
  • Creditors can take up to a year to file claims against the estate (check your local laws)
• Contact Social Security (stop checks, issue benefits to beneficiaries)
• Contact life insurance company(ies)
• Contact banks and other financial institutions
• Notify credit reporting agencies
• Close / delete / memorialize social media accounts
• Update your voter registration
• Handle all the probate court appearances to settle your estate

What is Probate?

Let’s leave this to another discussion. But, for now, you can read a great piece in Investopedia on this topic. Basically, it’s a process for establishing your estate’s assets and debts. Paying off the debts first. Then, if anything is leftover, it’ll be distributed to your beneficiaries.

Probate Legal Fees

Fees are generally a percentage of the estate. For instance, the first $15,000 will be at a rate of 4%, the next $80,000 at a rate of 3%, and everything else over $100,000 at a rate of 2%. An estate valued at say $150,000 could cost your family $4,100 in probate fees. Those fees don’t include the fees your family will pay to settle or sell real estate assets or to fight any contested matters.

Shocking Statistics

67% of Americans Have No Estate Plan

Read that again. 67% have no estate plan.

A basic Will can be drawn up from online services for very reasonable rates. There is almost no excuse to not have a Will. It’s not the most pleasant way to spend time, deciding what will happen when you die, but it is better than the alternative. That alternative is that some government bureaucrat will decide for you.

With a Trust, your assets can transfer immediately upon your death. If you own a home and / or have fairly significant assets, a Trust is something you should strongly consider doing sooner than later.

50% of Americans Have No Life Insurance

The numbers in 2022 on Americans with life insurance sunk to 50%.

If you’ve followed along to this point, you get the idea that your death will cost your family quite a bit of money. Money they are likely not prepared to spend.

Presently, the examples from this article total up to $12,211 without including any outstanding debts or real estate.

The Role of Life Insurance

Final expense life insurance helps protect your family, and should be a part of everybody’s financial plan. Life insurance is paid out to the beneficiary so they can cover these costs quickly and easily. They won’t have to worry where the money is coming from or wait for probate to finish to see if something is leftover.

Without Life Insurance, Your Family May Face Serious Financial Hardship

125,000 GoFundMe campaigns are launched each year by families that can’t cover the costs of a loved ones death.

Over 800 families open Fund the Funeral accounts trying to cover just the cost of the funeral home expenses – not accounting for all the other costs mentioned above so far.

Sadly, many of the GoFundMe and Fund the Funeral accounts are sitting at $0 raised after weeks of being published.

Families face bankruptcy, family infighting, and credit card debt – all while grieving a loved one’s death. All of it is completely avoidable with a small and affordable life insurance plan!

Life Insurance Does Not Go Through Probate

I’m an insurance agent, not an attorney. You should consult your attorney on legal matters.

Insurance benefits are paid out directly to the beneficiary from the insurance company. As of today, life insurance death benefits are issued tax-free to your beneficiary. Which also means, it doesn’t go through probate unless the beneficiary doesn’t exist at the time of your death, and in that case, the beneficiary becomes the decedent’s estate.

Final Expense Insurance Helps Protect Your Family

Rather than waiting for the courts to determine what money will be leftover to give your beneficiaries to pay for your funeral expenses, the beneficiary of your life insurance policy will get a check. Tax-free. They can immediately cover the costs associated with your funeral.

Final expense insurance helps protect your family. You can also use it as a way to provide a nice gift to your beneficiaries with a policy that covers more than your funeral that don’t have to go through probate.