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Surviving a spouse: 10 steps to take financially

August 3, 2023 Article 4 min read
Jaime Eckels Wealth Management Jessica Caldwell Wealth Management
When a life partner passes, one of the most difficult tasks a surviving spouse faces is addressing financial matters. But following a set plan can make the task less onerous. Use this checklist to ensure important details aren’t left out.
Widow talking with a financial advisor.There’s truly no way to be prepared for the death of a spouse — emotionally or financially. Even if your spouse communicated their wishes and left behind organized access to all of their information, it still can be an overwhelming time for you and your family. Prioritize self-care and take the time you need to grieve and be with your loved ones. When the time is right, start to address these financial next steps:

1. Gather all important documents needed to start the estate settlement process 

This includes wills, trusts, death certificate, marriage certificate, insurance policies, bank statements, investment account details, and your most recent tax returns.

2. Meet with your trusted advisors

Call your financial, legal, and tax advisors to help guide you through the various financial decisions you need to make. You’ll be surprised how many of the “to-do’s” they can take off your plate.

  • Financial advisor: Hopefully your financial advisor has an updated balance sheet that lists your assets and liabilities, noting how each is titled. If you don’t have a personal balance sheet, consider building one as you gather the relevant documents so that nothing gets missed in the process. Your financial advisor can also help prepare the paperwork to update your IRA beneficiaries and step-up the investment cost basis where appropriate.
  • Attorney: Your estate planning attorney can provide you with the most current copies of your spouse’s estate planning documents (i.e., will or trust). They can also work with you to update your own estate planning documents to ensure that your current wishes are properly reflected.
  • CPA: Your tax preparer can guide you through expected tax changes and confirm what additional reporting requirements may be needed, such as a trust return or an estate tax return.

Your financial advisor can also help prepare the paperwork to update your IRA beneficiaries and step-up the investment cost basis where appropriate.

3. Evaluate your emergency reserve

Assess your immediate cash needs to ensure that you have enough liquid assets to cover the funeral costs and pay outstanding bills, on top of the recommended emergency reserve of three to six months’ worth of living expenses.

4. Notify your spouse’s current and prior employers

There may be benefits due to beneficiaries and retirement/pension plans to be distributed as well. If your spouse was still working, you should also ask about continuing medical insurance coverage for yourself and any other dependents. It’s important to notify your own employer as well since your spouse’s passing could trigger a “life event” that could affect your own benefit elections

5. Contact the Social Security Administration

They can help determine if you or your children are eligible for survivor benefits. If your spouse was collecting social security, they’ll need to know about your spouse’s passing to ensure payments and spousal benefits are handled properly.

6. Prevent fraud and identity theft

Contact all three major credit bureaus (Equifax, Experian, and TransUnion) so they can issue a “Deceased — do not issue credit” to ensure that no new credit is taken out in your spouse’s name.

7. Collect life insurance benefits

If you were the life insurance beneficiary, you’ll want to work with the carrier on next steps to expedite the payout of your benefits. You’ll also want to make sure that you have adequate life insurance coverage for yourself, especially if you have dependents.

8. Update account titling

Make sure to remove your spouse’s name and Social Security number on joint accounts or joint trust accounts, then close any accounts or credit cards that were in your spouse’s name only. If you have a joint bank account, it may make sense to leave it as it is for six months since there may be checks in your spouse’s name that will need to be deposited. FDIC insurance provides coverage for accounts with the deceased spouse named for six months from the date of death. You’ll also want to update ownership documents and property titles on autos and real estate.

9. Consolidate retirement accounts

If you were your spouse’s primary beneficiary on their retirement accounts, roll over their 401(k) plans and IRA accounts into your own qualified accounts. Ensure you coordinate any applicable required minimum distribution requirements from their accounts as well.

10. Revisit your financial plan and your budget

Review your existing plan and make any necessary adjustments to reflect your new circumstances. You should reevaluate your goals, budget, income sources, and investment strategy to ensure they align with your current situation and long-term goals.

It’s important to address your own physical and mental well-being while navigating the financial aspects of your new situation. Don’t rush the big decisions and understand that this process will take time, no matter how well-organized things were prior to your spouse’s passing. Remember that you aren’t alone and there are resources available to help you.

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