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Inheriting Accounts

By Portage County Business Council

By LouAnn Schulfer, AWMA®, AIF®
Accredited Wealth Management AdvisorSM
Accredited Investment Fiduciary®

I had a conversation with a funeral director recently about the overwhelming feelings people have when they lose a loved one.  The loss itself often feels too much to bear.  Shortly thereafter comes the realization that there is so much to do in so little time if pre-planning the funeral and final arrangements had not been done.  Then there are all the tasks of settling the estate.  He and I agreed that an important message that people need to hear is that when you lose a loved one, you do not have to rush through things.  As important, you are not alone in the process.  The funeral director will methodically help you through the logistics of final arrangements, and many will point you in the right direction with other operations as well, such as how to notify social security and ordering the death certificates that you’ll need.

We have helped numerous beneficiaries through the process of claiming their assets as well as what to do with the money, even if the accounts had not been previously affiliated with us.  The process can seem complicated and deciding what to do with the sudden amounts of money from different types of accounts certainly is a big decision not to be taken lightly.  Here is brief summary of getting started.

First, gather recent statements for accounts.  You do not need the original policy to file a death claim with a life insurance company:  knowing the company and policy number is enough to begin the process.  Second, phone calls are made to notify the custodians of the money that the account holder has passed.  Accounts will be restricted, and the inheritance process can begin.  Whether it’s life insurance, investment accounts or bank accounts, each company has their own specific forms, documentation needed and instructions for filing the beneficiary claim.  Often this seems arduous and even frustrating to family members or beneficiaries who feel so worn down already.  Know that these processes are for good reason:  companies want to be certain that they are paying out these large sums of money properly.

Before you receive assets, review your options.  As an example, there are different ways for a spouse to inherit their husband or wife’s Individual Retirement Account.  You may wish to combine the money with your own IRA assets, or you may wish to keep the account separate as a beneficiary IRA.  Your age, your spouse’s age, your current and future financial circumstances are used to determine which is the better option for you.  A beneficiary IRA can later be titled into your own IRA, but once an IRA, the assets can not be retitled as a beneficiary IRA.  Generally speaking, it is not a wise tax decision to withdraw retirement assets that have not already been taxed in large sums when other options are available.  If you need funds to settle the estate, look to other sources first.

Life Insurance proceeds are often large sums of money.  What was the purpose and intent of the policy?  Was it to replace income?  Pay final expenses?  A gift?   Have a plan for the proceeds, including how to invest the money that is intended for use over longer periods of time.  Take the time that you need and do not rush through the process.  The decisions that you make today can mean the difference between whether or not your plan is fulfilled for your tomorrows.

LouAnn Schulfer is co-owner of Schulfer & Associates, LLC Wealth Management and can be reached at (715) 343-9600 or

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor.  Member FINRA/SIPC.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for an individual.