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Financial Steps to Consider After Losing a Spouse

| April 17, 2018
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After the funeral has concluded and friends and family have all gone home, the real impact of losing your spouse often hits. Even though your world has been turned upside down, you must find a way to carry on, and decisions you used to make together will now fall squarely on your shoulders. Usually, there are important financial decisions to make that will have an impact on your future.

You may have heard this before, but it’s really important to try not to make any major life-altering decisions while you are still grieving. This is not the time to act impulsively.   If you have professional advisors you trust, consult with them and they can help you prioritize the most immediate financial tasks you need to do. Set other, less important decisions aside for now. You need some time to heal. 

Here are the three trusted advisors that will likely help you:

Attorney: Your attorney will guide you through the probate process. If you are the executor of your spouse’s estate, there will be lots of detailed steps to take and your attorney can coach you on those steps.

Certified Public Accountant: Your CPA can help you determine which cash flows are taxable or not, maximize deductions, and plan for upcoming tax obligations, which may include filing additional tax returns. Talk with your CPA within the first month after your spouse’s passing to make sure you will be able to meet important filing deadlines.

Certified Financial Planner (CFP®): Your financial planner can assess your current financial situation and help you re-define your goals and craft a financial strategy to help you meet them. 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 your spouse’s estate, it is your responsibility to probate the will. This is done in your county of residence by filing a Petition for Probate. Your attorney can help you prepare this. This legal process can take a few weeks to several years, depending on how complex the estate is. If you have done good estate planning in recent years, it’s possible there will be few assets subject to this court process.

2. File claims for life insurance

Life insurance is usually obtained through an insurance agent or an employer. In the first case, you will need to contact the agent to navigate the necessary paperwork to file a claim for death benefits. Word of caution: don’t be surprised you are encouraged to invest the proceeds in something else right away. It’s best to hold on this decision until you have discussed your best options with your financial planner. For life insurance obtained through an employer, contact the company’s human resources department to determine how to obtain & file death benefit claim paperwork.

3. Apply for Benefits

Depending on your age and your spouse’s history, you may be entitled to one or more of the following benefits: a one-time Social Security death benefit, Social Security retirement benefits, Veteran’s Administration (VA) benefits for military veterans and employer benefits, if your spouse was still employed when he/she died. 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 local Social Security office to apply for these benefits. If your spouse received monthly disability payments from the military, you may be entitled to continue those monthly payments. Contact the VA to discuss what benefits are available to you. Finally, if your spouse was employed at the time of death, the employer’s human resources department should be able to explain any employee benefits to which you may entitled as the surviving spouse.

 It is very likely that your spouse’s Social Security or VA benefits were stopped as soon as the death certificate was issued, but in case not, if you receive any monthly payments after the month in which he/she died, it’s best not to spend them. Set them aside and contact Social Security or the VA to determine how best to return them.  

4. Retitle Accounts

Your jointly-titled bank and investment accounts should be re-titled into your name, or if appropriate, the name of your revocable living trust. Your financial institutions will be able to advise you on the process for updating the ownership on these accounts. Make sure you to include copies of the death certificate to facilitate these requests in any correspondence.

5. Update Loans, Bills and Financial Obligations

Refer to your check register, your online banking activity and/or files of bills/loans, and make a list – by owner - of all the regular payments made. This should include a list of accounts solely in your name, solely in your spouse’s name and those held jointly. This will create a “roadmap” for your next steps. 

Then, contact all the businesses where you have joint accounts to arrange to have your spouse’s name removed from these accounts. Contacting them by phone directly helps to clarify any specific procedures you need to follow. You may need to follow that conversation with written correspondence including a copy of the death certificate. Finally, for accounts listed solely in your spouse’s name, contact those vendors to let them know this account is now subject to probate and will be handled by the estate. Provide your attorney’s name and number in case there are questions. Try to do this within one billing cycle – so you don’t incur late fees.

6. Cancel Payments

There are some payments you should be able to cancel outright: gym & professional memberships as well as subscriptions. Most can be terminated without any further obligation in most cases. Call customer service, notify them of the death and follow up with written documentation as necessary.

Longer-Term Decisions

After you’ve addressed these immediate financial concerns, there will be some longer-term decisions to make. You should take a look at your investment portfolio for possible changes you may need to make. You’ll need to decide if you should move or continue living in the home you shared with your partner. Or you may want to make some big purchases, such as a new car, or remodeling your home. Eventually, you will need to update your own estate plan and life insurance policies. These are all important topics to 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 to help you manage your affairs. It’s critical to avoid making quick decisions that could compromise your long-term financial security and confidence. 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.

At SRQ Wealth, we understand this process thoroughly and want you to know we are here to help you - or a loved one - deal with these issues when necessary in order to help relieve that stress and burden at such a sensitive time.

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