The funeral is over. Your family and friends have left, returning to their day-to-day routines. The world has slowly started turning again. Amid the pain of losing your spouse, you must find a way to carry on even though your world has been turned upside down. Many of the decisions that you made together now rest on your shoulders alone. As the days slip by, important financial decisions must be made, many that carry implications for your future as a newly single woman.
The first task is to confer with your trusted advisors and prioritize the most immediate financial tasks. Avoid making any major life-altering decisions when you are in a state of emotional flux – it may be tempting to shake up your life in the wake of such a major loss by buying a new sports car or selling your house and moving across the country to live near your kids, but this isn’t the time to act impulsively. It’s better to take your time and consider all your options and go about your day-to-day routine as much as possible before making any major changes.
As you move into your new life, this is no time to go it alone. Even if you’re a strong, fiercely independent woman by nature, do yourself a favor and take advantage of the help that’s available. Working with your trusted advisors, tackle the decisions that need to be made immediately. Then, once those are taken care of and you’re in a better place, you can move onto the decisions with long-term financial implications.
Important advisors such as your attorney, financial advisor and accountant are available to answer questions and support you during this difficult time. They each have a role to play in assisting you in taking care of your late husband’s estate and other pressing matters. Here’s how they can help:
Attorney: Your attorney will guide you through the probate process. As the executor of your late husband’s estate, it may be tempting to try to handle everything yourself, especially if you’re in the legal field. Let your attorney manage the process so you can focus on moving forward with your life. Additionally, your attorney will be able to make modifications to your estate planning documents, including updating your will, your living will and powers of attorney to reflect your new circumstances. Once the immediate decisions are made and you’re feeling better, your attorney can evaluate your estate planning documents and recommend any further changes that might be necessary to keep those documents current.
Certified Public Accountant: The death of a spouse can render an already complex tax situation even more complicated, so your CPA is a welcome partner in this process. He or she can help you determine which benefits are taxable and which aren’t. When it comes time to file taxes, your CPA can help you maximize deductions and plan for all of your upcoming tax obligations, which may include estate taxes and returns for living trusts. Make an appointment with your CPA within the first month or so after your spouse’s passing. That way, you will be able to meet the tax filing deadlines for the estate, which are different than the regular Federal tax filing deadline of April 15th.
Financial Planner: The third member in your team of professionals is perhaps the most important when it comes to helping you create a comfortable and confident financial future. Your financial planner can assess your current financial situation and the impact of your husband’s passing on your financial situation going forward. As your partner in managing your finances in a proactive manner, your financial planner can craft a financial strategy or update any existing financial plans taking your goals and dreams into account in a holistic fashion. Consider your planner as a coach, support and accountability partner as you move into a new stage of life.
With your trusted advisors at your side, here are the most immediate financial priorities to deal with:
1. Probate the will
If you have been named the executor of the estate, you must probate the will. This is done by filing a Petition for Probate of a Will with your county of residence. Depending on the complexity of the estate, the entire legal process can take a few weeks to several years to successfully complete. Keeping your attorney in the loop from the beginning can help you keep the process on track.
2. Deal with life insurance
There are two potential sources of life insurance coverage to pursue: insurance you and your husband bought through an insurance agent and any employer policies that might exist. In the first case, contact your insurance agent regarding your husband’s passing. The agent can help you navigate the necessary paperwork to get things moving in the right direction. Don’t be surprised if the insurance agent encourages you to invest the death benefit into another product; the product most commonly suggested is a variable annuity. While this may seem tempting as way to gain more income in retirement via an annuity payout, do some due diligence before making this decision. Inquire about any deadlines that exist for investing the death benefit and then make an appointment to see your financial planner to discuss options. If your husband was employed, check with the human resources department at his employer to see if he had any life insurance there.
3. Apply for Benefits
Depending on your age and your husband’s history, there are likely some benefits you are entitled to; these benefits potentially include a one-time Social Security death benefit, Social Security retirement benefits, Veteran’s Administration benefits for military veterans and employer benefits, if he was still employed. If you are over age 60 at the time of your spouse’s death, you may be entitled to survivor benefits in addition to a onetime death benefit from Social Security. In this case, visit the Security office to stop the benefits he received and apply for new benefits for you. If your spouse received monthly disability payments from the military, you may be entitled to continue those monthly payments. Contact the Veterans Administration to discuss what benefits are available. Lastly, if your spouse was employed at the time of death, you will need to make an appointment with the human resources department of his company to discuss any employee benefits to which you may entitled as his surviving spouse.
If your spouse was receiving a monthly payment from either the Social Security Administration or the Veteran’s Administration at the time of his death, do not continue to cash the payments after his passing. The government will likely take those payments back eventually so either hang onto the checks and don’t cash them or if the money is direct deposited, open a separate account where you can hold the money until it has to be paid back. Whatever you do, don’t spend the money. Notify the agency involved immediately of his passing to set the process in motion to stop those benefits from continuing to be paid.
4. Retitle Accounts
Contact your bank, financial institutions and investment management firms to have all your jointly held bank, brokerage and investment accounts retitled. In most states, joint accounts are considered to be “Rights of Survivorship,” but you should confirm this before making any changes. Your financial institutions will be able to advise you on the process of renaming these accounts. Make sure you to include copies of the death certificate to facilitate these requests in any correspondence.
5. Review Loans, Bills and Financial Obligations
Refer to your checkbook, online banking profile and/or files of bills and loans, and make a list of all the bills, expenses, loans and other financial obligations you have, separating items by ownership. This should include a list of accounts solely in your name, solely in your husband’s name and those held jointly. Once that list is complete, you’ll have a roadmap of your next steps. There should be little to no change in the handling of the accounts and expenses in your name only unless you need to make temporary payment arrangements until the estate is fully probated.
Next, contact all the businesses where you have joint accounts to arrange to have your spouse’s name removed from these accounts. It’s best to make these contacts by phone to clarify any specific procedures you need to follow. Follow up that conversation up with written correspondence including a copy of the death certificate for verification. Finally, notify any businesses or service providers with accounts solely held in your late husbands’s name. Let them know that their account is now subject to probate and will be handled by the estate and provide your attorney’s name and number in case there are questions. Try to handle these matters as soon as possible – definitely within one billing cycle – so you don’t endanger your credit report and credit score with late payments
6. Cancel Payments
Fortunately, there are some payments you may be able to cancel outright. These include gym memberships, professional journal subscriptions and club and professional association memberships. These dues can be terminated without any further obligation in most cases. If the company is local, go and speak with a manager personally. If it is not, call customer service and notify them of the death and follow up with written documentation and a copy of the death certificate if necessary.
7. Consider the Long Term
After you’ve taken care of the immediate financial concerns, you need to look at some of the long-term decisions you’re going to have to make. Eventually, you will need to update your own estate plan and life insurance policies. You will need to take a look at your investment portfolio and make some decisions about the direction you want to take. You’ll want to decide if you want to move or continue living in the home you shared with your partner. Perhaps you’ll want to buy a new car, take a cruise to Europe or remodel your home. These are all important things to consider and potentially discuss with your trusted advisors.
A Final Word
The loss of a spouse is one of the most stressful events in life. At such a difficult time, it’s important to take care of yourself and rely on your trusted advisors – your attorney, CPA and financial planner – to help you manage your affairs. It’s also vital to avoid rash decisions that could compromise your long-term financial security and confidence. By working with your advisors to create a temporary plan of action, you can be assured that the most important matters are taken care of as you work on getting the estate in probate and taking care of other more urgent matters. As the estate begins to settle and the inheritances are distributed, you may have significant amounts of money to invest. Your financial planner can help you understand your options and how they fit into your financial plan. That way, you can secure your financial future and avoid any unnecessary risks or sacrifices to your current lifestyle.
Reprinted with permission by Russ Thornton
For more information, visit WealthcareForWomen.com
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