Financial Steps to Take When a Spouse Dies

When a spouse passes way, the emotion and magnitude of the loss turn our world upside down. This profound change can also affect our finances. All at once, we are faced with the heavy burden of responsibilities that can place us under a lot of pressure. The steps outlined below will help you see that your financial matters remain in good order.

The first steps.
Locate as much documentation as you can. Hopefully, your spouse kept his or her documents where you can easily find them – either at home, in a safe deposit box, or in your My Life & Wishes account.

• Contact family members, friends, and your spouse’s current or former employer to tell them of your spouse’s passing. Your spouse’s employer should connect you with the person overseeing the company’s employee benefits plan or human resources department.
• If your spouse owned a business, check to see what plans are in place for its short-term continuation. Will a partner or key employee take the reins for the time being or the long-term?
• Arrange payment for funeral expenses.
• Gather/request as many records as you can find to document your spouse’s life and passing – birth and death certificates, a marriage certificate or divorce decree (if applicable), military service records, investment, insurance, and tax records, and employee benefit information (if applicable)

The next steps.
Next, it’s time to talk with the legal, tax, insurance, and financial professionals you trust.

• Consult your attorney. If your spouse left a will, the will should be looked at as a prelude to the distribution of any assets and the settlement of the estate. His or her written wishes should be reviewed.
• Locate your spouse’s insurance policies and notify the insurance agent of your spouse’s passing. The agent will work with you to 1) get the claims process started, 2) help you reevaluate your own insurance needs, and 3) review and perhaps alter beneficiary designations.
• Notify your spouse’s financial advisor so that his or her funds may be properly distributed according to the beneficiary forms for his or her accounts. Please note that the beneficiary forms commonly take precedence over bequests made in a will. If there is no beneficiary form on file for the account, the assets are often distributed to a surviving spouse or the deceased spouse’s estate.

Survivor/spousal benefits.
These important benefits may help you to maintain your standard of living after a loss.

• Contact the Social Security Administration regarding Social Security spousal or survivor benefits.
• If your spouse worked in a civil service job or was in the armed forced, contact the Veterans Administration about survivor benefits.

Your spouse’s estate.
To settle an estate, several orderly steps should be taken.

• You and/or your attorney need to contact the executor, trustee(s), guardians and heirs relevant to your state and access the appropriate estate planning documents.
• Your attorney can also let you know about the possibility of probate.
• The executor for the estate should obtain an Employer Identification Number (EIN) from the IRS.
• Any banks, credit unions, and financial firms your spouse had a financial relationship with should be notified of his or her death.
• Your spouse’s creditors will also need to be informed. Any debts will need to be addressed, and separate credit may need to be established for you.

Your own taxes and investments.
How does all this affect your own financial life?

• Review the beneficiary designations on the IRAs, workplace retirement plans, and insurance policies that are in your name. With the death of a spouse, beneficiary designations will likely have to be revised.
• Consider your state and federal tax filing status. A change in status may significantly alter your tax picture.
• There may be tax implications surrounding any charitable gifts you and your spouse have recently arranged or planned to make.
• If you jointly owned some assets, it is time to retitle them. In addition to real estate, you may have jointly owned bank accounts, investments, and vehicles.

Things to think about when you are ready to move forward.
With the passage of time, you may give some thought to the short-term and long-term financial and lifestyle consequences of your spouse’s passing.

• Some widowed spouses ponder selling a home or moving to be closer to adult children in such circumstances, but allow some time to pass before making such a decision.
• Your own retirement planning needs. Certainly, you had an idea of what your retirement would be like together; to what degree does your spouse’s passing change that idea? Will potential sources of retirement income need to be replaced?
• If you have minor children to take care of, will you be able to sustain the family lifestyle on a single income? How do your income sources compare to your expenses?
• Do you need to address college funding in a new way?
• If your spouse owned a business or professional practice, to what extent do you want (or need) to be involved in it in the future?