Managing accounts after a loss

When someone passes away, their family may be left with a lot of questions. From figuring out whether to sell the house to understanding what the person wanted for their funeral, there are a lot of loose ends to tie up and tasks that need to be handled. Coming on top of grief over their loss, this can be overwhelming and stressful, and many families find themselves wondering where to start.

While there are obviously many small details that need attending to in the immediate aftermath of the family’s loss, one of the first questions that may arise is what to do about all of the accounts, memberships, and subscriptions their loved one left behind—many of which may still be billing for recurring payments or even charging them directly to a still-working credit card. The family may be wondering which of these should be canceled and which should be transferred to someone else’s name. And for the ones that can be closed, which are most important to cancel quickly, and how does that process actually work? 

How to manage the deceased’s accounts

For a family looking for guidance on these topics, a good place to start is to put all of the accounts into categories: financial accounts, credit card accounts, mortgages and other secured loans, utilities, email, social media, and other digital accounts, and memberships and subscriptions.

In order to find all of the accounts, it may be necessary to go through the person’s papers, to monitor their mail, and to check their email and their computer if possible. While it isn’t the end of the world if the family misses an account or two, as closing bank accounts and canceling credit cards will take care of most recurring payments, it is still a good idea to track down as many as possible and cancel them or transfer them.

Financial accounts

The most important accounts to take care of are financial ones, such as bank accounts, investment accounts, and the like. These accounts will need to be closed, and the assets within them transferred to new owners. Many such accounts have a payable-on-death (POD) designation, in which the owner will have named a beneficiary to receive the assets in the account when they pass away. (For investment accounts, this is usually called transfer-on death or TOD instead.) The named beneficiary can simply bring their own identification and the death certificate to the financial institution to have the assets transferred into their own accounts.

This is also the case with financial accounts such as 401(k)s and IRAs, pensions, and life insurance payouts. The named beneficiary or beneficiaries can claim them directly.

If an account was jointly owned, the ownership often comes with a ”right of survivorship,” meaning the joint owner or owners take full possession after another owner’s death.

If, on the other hand, the account was solely owned, without a beneficiary, then the account will be frozen when the death certificate is presented to the financial institution. Nothing can be done with the assets in it until probate starts and an executor or administrator is appointed for the estate. Then this representative can go to the bank with proof of their appointment and transfer the funds into an account for the estate.

• Credit card and other debt accounts

Credit card accounts should be closed as soon as possible to avoid any interest, late fees, or possible fraudulent charges. The family should make sure the credit card is not a joint account before canceling it; joint accounts can continue to be used, though the credit card company should be notified of the joint holder’s passing.

To cancel a sole holder’s account, they should call the credit card company. In most cases they will ask for a copy of the death certificate to be sent.

It’s also recommended to send a copy of the death certificate to the three credit reporting agencies to freeze the person’s credit. If the deceased owes student loan debt, medical debt, or the like, these institutions should be contacted and informed. In most cases these debts will be canceled, but they may need to be paid as part of probate.

• Mortgages and other secured debts

Mortgages, car loans, and other debts that are paid on a piece of property over time are known as secured debts, because the asset itself is the collateral on the loan. If it is not paid, the bank can repossess the property as repayment. Depending on what the will states, or what the family wants to do with these assets, it is usually a good idea to keep up with monthly payments on these loans until their new owners can take possession. The estate can pay them, or the person who will eventually be the new owner can.

• Utilities

While some utility accounts can be closed immediately, it is worth considering whether they will be needed in the coming months. If the person owned their home, the family may need to keep paying certain bills even if the house is vacant, in order to maintain it in good condition for sale. They may also consider transferring phone and cell phone accounts rather than canceling them in order to keep the numbers active. This can be useful for finding other open accounts, as well as notifying more distant acquaintances who may not have known about the death.

Insurance policies should be closed, and if there are any unused premiums left, they should be returned. A new insurance policy will need to be taken out, even if the house will be left vacant.

• Email, social media, and other digital accounts

The majority of such accounts do not involve fees, and so there may be no urgency to close them. Most companies have a simple process for closing accounts that can be found on their websites.

If the family needs access to these accounts or the contents of the accounts, this is a much more complex problem. If their loved one left them the passwords or they can easily find them, then they can access the accounts directly. Otherwise, the family can request the needed access or content from the digital service provider, but these companies take privacy very seriously, and must weigh that against the needs of the family. This process can be challenging and doesn’t always work out in the family’s favor.

Social media accounts don’t necessarily need to be canceled — most have an option to “memorialize” the account, which preserves it as a memorial to the person but can no longer be logged into.

• Memberships and subscriptions

In this day and age, almost everyone has dozens of membership and subscriptions: gym memberships, memberships in cultural organizations, streaming television accounts, dating sites, subscriptions to magazines and newspapers, and many more. There’s a lot there to cancel.

For accounts with monthly charges, it’s important to cancel them as soon as possible. Canceling the credit cards will effectively stop the payments, but some of these companies will continue to send bills or even phone calls to try and collect until they are informed of the death. Some of these cancellation processes are easier than others. Canceling magazine subscriptions is usually relatively straightforward, while memberships to private clubs or gyms are often a challenge to cancel. They may require several forms of proof, and even then some will insist that the remaining charges on yearly contracts be fulfilled. While these demands can generally be ignored, as they do not stand up in probate court, it is good for the family to be prepared for a challenging interaction.

No matter how many subscriptions the deceased had or how many groups they were a member of, it’s important to dig as deep as possible, go through their desk, computer, files, and find whatever might be there that needs to be managed, so in case there are questions later on, the family can rest assured that things were handled correctly and there are no loose ends. The process can take several weeks, but luckily the most important ones can be done quickly with the right paperwork. And for this, the best advice anyone can give the family is: Get a lot of copies of the death certificate, as almost every institution is going to ask for one.

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.