You can protect family assets after a tragic loss by protecting the estate from improper claims and investigating insurance and other sources of recovery. You can also preserve evidence supporting financial claims and challenge financial decisions that could unfairly reduce inheritances.
According to the CDC, the average life expectancy for the US population was 79.0 years in 2024. We can all hope to live to this age, or beyond, but unfortunately, life has its ways of being cut short, often before we'd expect.
There's already so much to handle after a tragic loss, including strong emotions such as grief. Add in things like unexpected funeral expenses, and it can be a tough financial time, too.
What Happens to Medical Bills After Someone Dies?
Medical bills don't just disappear when someone dies. Unpaid medical debts are typically handled through the deceased person's estate. The estate may include:
- Bank accounts
- Investments
- Real property
There are also important tax considerations. For example, the IRS allows certain unpaid medical expenses to be treated as deductions on the deceased's final income tax return. They can be used as deductions against the taxable estate, too.
This makes it important to keep the following:
- Medical invoices
- Insurance statements
- Payment records
- Reimbursement information
How Can You Protect Family Assets After a Tragic Loss?
There are certain steps you must take after your loved one's passing to ensure that your family assets are safe. These are the key actions you should consider.
Protect the Estate From Improper Claims
Protection of family assets begins with determining exactly what the estate owns and what it owes. The executor or personal representative should gather:
- Account statements
- Property records
- Loan documents
- Insurance information
- Tax records
Don't just assume that every bill received after a death automatically represents a valid personal obligation of a surviving relative, either. In many situations, the deceased's estate is responsible for legitimate debts, not their family members.
It's important to review claims and consult an attorney to ensure that you're not paying things unnecessarily.
Investigate Insurance and Other Sources of Recovery
There may be your loved one's existing assets after their death, but financial recovery goes beyond that. You should identify:
- Life insurance policies
- Accidental death benefits
- Employer-sponsored benefits
- Retirement accounts
- Survivor benefits
If your loved one died due to an accident or negligence, then talk to a wrongful death lawyer in Greenville. They can give you fatal crash legal help and assist with a legal claim for damages. These can address things such as lost income and legally recognized harm.
Just make sure to preserve relevant evidence beforehand. Even one piece can make a significant difference in your case.
Preserve Evidence Supporting Financial Claims
If your loved one's death resulted from another person's action, then you may be entitled to accident compensation. You'll need to preserve evidence to help determine whether financial recovery is available. Relevant records include:
- Medical records
- Accident reports
- Photos
- Correspondence
- Employment information
- Financial statements
- Insurance documents
- Contracts
- Electric communications
- Statements from witnesses
A lawyer can help you determine which records should be preserved, as well as if you need formal requests for documents. Put all of these together in a centralized and chronological file for an easier time.
Challenge Financial Decisions That Could Unfairly Reduce Inheritances
Part of protecting family assets is having good debt protection after loss. You and other surviving family members should review:
- Significant transactions
- Distributions
- Property sales
- Payments made from estate accounts
Keep an eye out for things such as unexplained withdrawals, distributions that don't follow the will, transfers of property, and undisclosed conflicts of interest. Bring these concerns up with an estate attorney, and request appropriate documentation, too.
In addition, keep communication and financial records organized. Should there be legitimate disagreements, they'll be easier to resolve, and you can create a cleaner record as well, should court intervention happen.
Frequently Asked Questions (FAQs)
What Is the Best Way To Raise Money for a Funeral?
The best way to raise money for a funeral is to use a combination of contributions from loved ones, a crowdfunding campaign, assistance from charities or religious organizations, or benefits through an employer. The right combination will depend on the family's financial circumstances and available resources, as well as the expected funeral costs.
Before you ask for money, though, it's beneficial to establish a realistic budget first. You should also find out if the deceased had prepaid funeral arrangements or an insurance policy that covers final expenses.
Are Funeral Expenses Medical Expenses?
No, funeral expenses aren't considered medical expenses; the IRS specifically excluded funeral and burial expenses from deductible medical expenses on Schedule A. This distinction matters because it's common for surviving loved ones to encounter both in the same period.
You should know that funeral expenses may have a different treatment for federal estate tax purposes. Funeral expenses paid from the estate can be deductible when determining the taxable estate on Form 706.
What Counts as Funeral Expenses?
Funeral expenses refer to the costs that are associated with carrying out a person's final disposition and related ceremonies. This can include:
- Funeral home services
- Preparation of the body
- A casket or urn
- Enbalming
- Cremation
- Burial
- Cemetary charges
- A burial plot
- Grave opening and closing
- Certain memorial or service expenses
Do note that funeral expenses are separate from other costs that may come after someone's death. For example, you may have to pay:
- Legal fees for administering an estate
- Accounting expenses
- Asset preservation
Certain court costs may also qualify as estate administration expenses. The executor or personal representative should keep invoices and receipts and consult with an estate or tax professional to see how specific expenses should be classified.
Be Prepared for What Comes After a Tragic Loss
Going through a tragic loss is never easy, especially if it's unexpected. There may even be anger associated with the death, especially if it was caused by another party.
Knowing what to do to protect family assets can be beneficial, though, as grief can cloud your mind. Combine these strategies with assistance from an experienced attorney to ensure you've covered all your bases.
This article was prepared by an independent contributor and helps us continue to deliver quality news and information.
