Paying a loved one’s bills

Staying on top of bills for the estate

The estate will cover most, if not all, of your loved one’s outstanding bills.
Regularly checking your loved one’s bank statements can help you track down and cancel unnecessary monthly payments.
Active accounts that are needed for the upkeep of your loved one’s home and property should remain open and these bills paid.
Some debts like federal student loans are forgiven and do not need to be paid.
Monthly mortgage payments must be paid, either by the person who will eventually inherit the house, or by the estate or a member of the family, who can later be reimbursed.

Losing someone you love can come with responsibilities you had not anticipated or that you do not know how to handle. It may be a lot to deal with right now, but there are a few important financial and practical considerations to keep in mind to ensure the proper handling of your loved one’s financial situation and give your family peace of mind.

One of the most immediate responsibilities is taking care of any bills your loved one had under their name. There are a few steps you can easily take to make sure nothing falls through the cracks.

Locating active accounts

Everyone organizes their finances in their own way. Your loved one may have let you know how they set things up, in which case you may already have an idea of what to look for and where.

If you do not know your loved one’s financial commitments, look for a safe, folder, computer file, or email account where they may have stored essential documents. Consider asking a close relative if you do not know how to access their records.

The most important things to seek out are rental agreements, credit card statements, utility bills, or mortgage statements. If no one can help you locate these documents, consider doing the following:

For utility bills in a rental: Call the landlord to see how utilities are organized in the building. Some buildings use a portal to pay off utilities as a group, while others require the tenant to create individual utility accounts with third-party providers. The landlord can help you identify those for the person’s unit.
For utility bills in an owned property: Go through bank statements to identify any recurring payments to utility companies. This will enable you to list all active utility accounts: trash, electric, water, gas, heat, etc.
For credit cards and bank accounts: First, write all three of the credit bureaus (Equifax, Experian, and TransUnion) by certified mail to notify them of your loved one’s passing and to receive a full credit report. You will need to include certain documentation, including a death certificate. The credit report will allow you to identify any credit cards, mortgages, student loans, or vehicle loans the person had.

After gathering all the information regarding your loved one’s bills, the next step is to map out a payment schedule. This will help you tackle one bill at a time and not overwhelm yourself with unnecessary stress.

Not only will knowing the payment due dates allow you to stay organized and calm, but it will also provide you with some visibility as to what the cancellation dates are for accounts that no longer need to remain active.

Settling outstanding bills

Once you have located all the accounts, identify where the money to pay the bills will come from. If your loved one was financially independent, all their assets, including financial ones, became part of their estate at the time of their passing, and the estate is typically responsible for paying off bills.

While some immediate bills may need to be paid out of pocket, either your own or that of a beneficiary or heir, all money borrowed to cover these expenses needs to be reimbursed from the estate account when a legal probate process proceeds.

If you are the estate executor, you are responsible for tallying all of the expenses the estate may need to pay while you wait for probate to start, such as immediate fees to maintain a property. Once probate begins, you will need to pay off your loved one’s bills with estate assets. You can do so with a probate checking account. Keep in mind that the estate is legally required to pay off any debt before distributing inheritances.

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Do not overwhelm yourself by trying to tackle all your loved one's bills at once – prioritize the most urgent ones now and set aside others for later.

Also, check if any of your loved one’s relatives or close friends co-signed on any accounts or loans. If that is the case, they may be responsible for paying off those bills going forward.

If there were no co-signers and your loved one had more debt than assets, then you are dealing with an insolvent estate. State law will determine which bills are a priority and which are not. Be careful to wait until you know about all the bills and which take priority before paying any of them off; should you pay low-priority debts first, you may be held personally liable for paying off the rest.

In the case of federal student loans, these debts are fully forgiven and are no longer owned by anyone.

Accounts related to the house

If your loved one lived in an apartment or house that nobody in the family plans on moving into, consider canceling active accounts such as phone, cable, and internet to avoid receiving additional bills. Nonetheless, some accounts, such as gas and electric, water, garbage pickup, cleaning, and landscaping, may need to be left open so that you and your family can keep the property in good condition and maintain its value.

Most utility companies will require proof of your identity and your relationship to the person to cancel their account. In most cases, you will need to provide a death certificate as well.

If you or another beneficiary plans to stay in or move into your loved one’s home, or if it was left to one of you in the will, that person should transfer all utility accounts over to their name—the sooner the better.

To do so, call each utility company to transfer the account. You will need to have your driver’s license and billing address ready, and determine a date that makes sense for all accounts to be transferred over to you.

Managing mortgage payments

Navigating mortgage payments is a bit more complicated. The mortgage must continue to be paid both before and during probate, until the house is transferred to its beneficiary or beneficiaries, who will then take over or refinance the mortgage. This eventual beneficiary can choose to begin paying the payments now, or the estate or someone in the family can cover them for now and be reimbursed.

If for any reason none of these options work, in order not to fall behind on your loved one’s mortgage payments and jeopardize their home, you may need to either sell off other assets, or sell the home itself.

Settling bills is burdensome, no matter the situation. Remember to handle your loved one’s accounts one at a time. Do not overwhelm yourself by trying to tackle all of them at once. Make a list of priorities and ask for the support you need to get you through this administratively difficult time.

You may be eligible for free bereavement support. Empathy can help with everything from funeral planning to estate administration, with step-by-step guidance and real-time expert support. Many people get free premium access to Empathy as a benefit with their life insurance claim. We partner with New York Life, Guardian Life Insurance Company, Bestow, Lemonade, and other leading carriers. When you make your life insurance claim, talk to your representative about whether Empathy is a benefit they offer.