Death of Spouse or Parent Financial Playbook
First 48 hours
Secure their home and assets. Lock the house. If you have a key, change the locks or secure valuables. Notify the bank to freeze the deceased's accounts. This prevents disputes and protects the estate.
Locate the will and beneficiary documents. Do they have a will? Life insurance? Retirement accounts? A safe deposit box? Ask the family attorney (if they had one), contact their bank, and check with their employer. These documents determine what happens next.
Get death certificates. You'll need multiple certified copies — apply through the county health department, funeral home, or vital records office. Get 10-15 copies. They're inexpensive and you'll need them for banks, insurance, Social Security, and creditors.
Notify life insurance companies. If they had a policy, the beneficiary (you?) needs to file a claim. This is how dependents are often supported. Policies typically pay within 30 days of paperwork.
Notify Social Security and payroll. Contact Social Security to report the death. If they were still employed, notify the employer. If they were receiving Social Security, that stops immediately and overpayments must be returned.
Set aside money for funeral costs. A modest funeral costs $3,000-$5,000. A full funeral can exceed $15,000. Ask if they pre-paid. If not, the estate pays, but you may need to advance money from your own pocket initially — funeral homes demand payment before the estate settles.
First month
File the will in probate court (if there is one). If they had a will, it goes through probate. This is public court process that validates the will and gives you authority to act as executor. It takes 3-6 months (or longer). Talk to a probate attorney; they typically charge $1,500-$3,000 to handle it.
If no will (intestate), the estate goes to court anyway. State law determines who inherits. You'll still need an attorney to navigate this. If the estate is small ($50,000 or less in most states), simplified procedures apply.
Use the Crypto Estate Planning and Digital Assets guide to locate digital wealth. Do they own Bitcoin? Have brokerage accounts? PayPal? Digital assets need to be found, secured, and transferred — they won't pass automatically like a house.
Understand inherited assets and taxes. Using the Inherited Stock Capital Gains Calculator, if they owned stocks or real estate, your cost basis is the value on their death date (a huge tax break called "step-up in basis"). If you sell inherited property soon after, you owe little or no capital gains tax. This is complex; use a CPA.
File their final tax return and estate tax return (if applicable). If they owned more than the federal estate tax exemption ($13.61 million in 2024, but dropping to ~$7 million in 2026), an estate tax return is due. A CPA can help. Most small estates don't owe estate tax, but the paperwork may still be needed.
Read the Crypto Estate Planning and Family Financial Disputes After Inheritance guides. The first helps you find hidden assets; the second addresses conflicts between beneficiaries (common and costly).
First year
Settle the estate with your attorney. This means: collect all assets, pay all debts and taxes, then distribute the remainder to beneficiaries per the will. It takes time and paperwork, but it's essential to do correctly so no one contests it later.
File the required probate paperwork and court hearings. Your attorney handles most of it, but you sign documents and appear at hearings. Plan for this time commitment and expense ($1,500-$5,000 legal fees for a straightforward estate).
If inheriting the house: Decide: keep it, rent it, or sell? The Rent vs Buy Calculator can help you model the financial impact of renting it out. Remember: inherited real estate may owe property tax on the new (stepped-up) basis, so your tax bill might be lower than before.
If inheriting retirement accounts: Inherited IRAs and 401ks have special rules. If you're the spouse, you can roll them to your own IRA. If you're a non-spouse beneficiary, you usually must take distributions over 10 years (SECURE 2.0 rules). Talk to a tax advisor — mistakes here are expensive.
Read Generational Wealth and Inheritance Planning to think about protecting what you inherited. If this is wealth passed down, you now have the opportunity (and responsibility) to preserve and grow it for the next generation.
Resolve family disputes with clarity. If there are multiple beneficiaries, use the Family Financial Disputes After Inheritance guide. Document everything in writing. These disputes can destroy families and drain the estate in legal fees.
Update your own estate plan. If you inherited significantly, your will and beneficiaries need reviewing. You probably have more assets now than you did before; make sure your wishes are documented.
Frequently asked questions
Do I owe income tax on an inheritance?
No, inheritances are generally not taxed as income to the beneficiary. However, any income the inherited assets generate (interest, dividends, rent) is taxable going forward. Also, if the estate itself owes estate tax, it's paid before distributing to beneficiaries.
What if they had debt?
The estate must pay debts before distributing to beneficiaries. Credit cards, mortgages, medical bills all come out of the estate first. This is why probate matters: it ensures creditors are paid in order. You personally are not liable for their debts (with rare exceptions like a mortgage you co-signed).
How long does probate take?
Usually 3-6 months for a simple estate with a valid will. Complex estates can take 1-2 years. Costs range $1,500-$5,000 for attorney fees, plus court fees (usually under $500).