Addressing Family Finances After the Death of a Loved One

The unfortunate death of a spouse (or former spouse) can be a complicated time for multiple parties due to a variety of reasons. Whether or not one’s death was expected, the period of grief can leave many loose ends and questions for those left behind. Personal finances and Social Security can be complex to navigate through without the added stress of a family member passing. However, rest assured that navigating these aspects after the passing of your loved one doesn’t have to be a confusing process.

There are several steps to remember when addressing finances after the death of a family member, and our Trust and Investments team is here to assist you throughout the estate administration process.  

Reporting a Death to the Social Security Administration

Once a loved one has passed, you must notify the Social Security Administration (SSA) as soon as possible. In most cases, the funeral home that your family makes arrangements with will address this process. However, it’s always a good idea to double-check with the SSA to ensure they’ve been notified appropriately. If you are working directly with a select funeral home to report a death, it is important that they have the deceased family member’s social security number on file. To report the death of a loved one directly to the SSA, you can contact the Administration by phone at 1-800-772-1213 (TTY 1-800-325-0778) or schedule an appointment to visit your local Social Security office in person. It is important to note that you cannot report a death to the SSA online.

Gathering Necessary Documentation

If your deceased family member was self-employed or employed in a job where he or she paid Social Security payroll taxes, you may be eligible to receive Social Security benefits. How much you receive in benefits depends on your loved one’s lifetime earnings, how many other family members in your family are receiving benefits, and what beneficiary category you fit into.

In order to determine eligibility and benefit amounts, the SSA will ask that you provide several pieces of documentation. These could include W2s, marriage certificates, birth certificates, etc. It’s a good idea to have these materials together when starting the process of applying for survivor benefits. The SSA website can tell you exactly what documents you’ll need to apply in most situations, so it’s best to look ahead of time to be prepared. This will help the process be as smooth as possible once you go to claim benefits.

Applying for Benefits

If you aren’t already receiving any benefits yourself, you’ll need to do this sooner rather than later to ensure you can start receiving survivor benefits. While this may not seem pressing after the passing of a family member, you’ll want to apply as soon as possible because payments aren’t retroactive, meaning the SSA will only pay from the time you applied regardless of when your loved one passed away.

Once these steps have been taken, you can begin to figure out what, if any, survivor benefits you may be entitled to. Benefits are based on a number of factors as well such as:

• Your relationship to the deceased.
• Whether or not you yourself are already collecting Social Security benefits.
• Whether or not you will be receiving ongoing benefits or a lump-sum payment.

If you were the spouse of the deceased and living in the same household, you may receive a one-time death payment of $225.

There are also several instances in which you may be entitled to your deceased loved one’s full monthly payments from the SSA following his or her death. These include:

• A widow or widower age 60 or older (age 50 or older if disabled).
• A widow or widower of any age caring for the deceased’s child who is under the age of 16 or disabled.
• An unmarried child of the deceased who is either:
  • Younger than the age of 18 (or up to the age of 19 if they’re a full-time student in an elementary or secondary school).
  • Age 18 or older with a disability that began before age 22.
  • A step-child, grandchild, step-grandchild, or adopted child under certain circumstances.
  • Parents, age 62 or older, who were dependent on the deceased for at least half of their support.
  • A surviving divorced spouse, under certain circumstances.

With this information, be sure to additionally contact the SSA if your loved one was already receiving benefits from another deceased family member so that the Administration knows to stop those payments. Legally, you are obligated to return the payment for the month of another’s death, and any months moving forward that you receive payment for. If a loved one had established a direct deposit for this process, please contact us today so we can help ensure that the funds are returned properly to the SSA and that no future payments are received.

If your loved one was already receiving Social Security benefits, those will automatically convert to survivor benefits for eligible relatives once a death notice is reported. As a best practice, it’s important to contact your local Social Security office to confirm that the correct benefit amount was received to avoid any confusion. With this collective information, it is essential to note that you currently are unable to apply for benefits online. Applying for benefits can only be completed by calling the SSA at 1-800-772-1213 (TTY 1-800-325-0778) or scheduling an appointment to visit your local Social Security office.

Available Resources

The process of untangling finances and Social Security benefits can seem like an impossible task during a time of grief, but it doesn’t have to be. The SSA and your local Social Security office are available as resources to assist you with navigating the appropriate steps during this trying time. Our friendly and experienced Trust and Investments team is also here to help provide assistance. Contact us today for more information.