Very often losing a loved one is emotionally challenging. For some people, it is possibly the most challenging thing they will endure in their lifetime. Making matters worse, there is an added stress from the mountain of financial and administrative details that must be attended to. Payment for the funeral, the deceased’s bills, and the ongoing bills that they are no longer able to help with, all fall onto your shoulders.
Given these responsibilities, it is crucial to identify and understand your financial resources. In this article, we will briefly go over many ways financial help may be available to you after you lose a loved one. For more information on managing the turmoil that occurs after a loved one dies, refer to my newest book “Death’s Red Tape.”
Veterans, military service members, and their dependents may be able to receive veteran benefits. They can be buried in a national cemetery for free or receive a sum of money to be used towards the funeral and burial. They may also be able to receive other benefits such as a ceremonial American flag, headstone, or presidential memorial certificate.
Social Security Survivor Benefits
Social security survivor benefits vary depending on many factors. To determine the descendant’s insured status, the deceased must have worked for a specified minimum time. A survivor can be the surviving spouse, a divorced survivor, unmarried children, or dependents. Survivors may be eligible for a one-time death payment of $255 if they were living with the deceased or monthly income survivor benefits.
The spouse may be entitled to additional benefits separately from social security benefits. They could receive funeral benefits through the deceased’s insurance policies or employee benefits. If they were employed by the government they could receive benefits from the Federal Employee’s Retirement System (FERS), the Civil Service Retirement System (CSRS), or the state government. These benefits could include death payments, burial expenses, pension income, health benefits, education assistance, loans, and more.
If the deceased had life insurance, the survivor has a few options for how they would like to receive the death benefit allowed to them. Most often, people choose to receive it as a lump sum. The other options include income provisions so the life insurance company will pay the principal and interest on a schedule, accepting it as a life income option so you have guaranteed income for life, or you can choose the income interest option which the life insurance company will hold the proceeds of the policy and pay the interest earned.
If you are the survivor of someone who has recently passed, you may check with their employer to see if they offer employee benefits. They may still be owed some of their salary or can be reimbursed for accrued vacation and sick pay. You also could be entitled to their worker’s comp benefits. The deceased may have had an FSA, medical spending amount, or reimbursement account that you can receive.
Depending on the deceased’s health coverage, the survivor may be able to receive additional health coverage benefits. COBRA provides health coverage for those who were covered under the deceased’s insurance. You also could be a candidate for the Affordable Care Act if you lost coverage when your loved one passed away. Also, if the deceased had an HSA, their account could cover their medical costs if there were any before they passed.
There may be fixed or variable deferred annuities that will determine the amount allowed to you or other survivors. If the deceased had annuities, then you should talk with your financial planner to see if the contract had a death benefit or guaranteed income feature. If they do, then they may provide additional monies.
After a loved one passes away, there are many moving parts to contend with. To help with the financial burden, insurance policies, employers, the government, etc could provide benefits to help cover the cost of the funeral and to help the survivors to continue to pay for things moving forward. It’s important to meet with your accountant and lawyer to discuss the financial benefits available to you to help relieve some of the stress.
With the assistance of the right financial planner, accountant, and attorney, you may be surprised by how many financial benefits you discover. They can also provide you with the guidance and advice needed to settle your affairs and begin to rebuild your future.
- Colgan, Mark. Death’s Red Tape. N.p., 2022.