If you are reading this because you just lost your spouse, my sincerest condolences. After losing a spouse, it is normal to experience a wide range of emotions, and addressing your financial issues can feel daunting and overwhelming. However, it is important to handle a few necessary immediate financial issues to avoid potential problems down the road. Whether you are already financially savvy, or your spouse handled the finances and you are just starting off, taking these immediate steps will help you feel more secure and in control of your financial situation.
Notify your CFP® professional, Estate Planning Attorney, Tax Advisor, Insurance Agents, and spouse’s employer, of the death of your spouse and schedule appointments to meet with them. If you haven’t worked with a professional in one of these areas, speak to friends, family, and other trusted advisors for referrals. Prior to your appointment, ask the professional to send you a list of what you need to bring. During your meeting, request they walk you through any necessary actions and detail out their role during this transition period. Ask for a follow-up summary e-mail or letter of what was discussed, including a list of any follow-up action items.
Start to assemble important documents and continue to do so. Some items to gather may include your estate plan, bank and investment statements, bills, marriage certificate, your spouse’s birth certificate, social security card, military details (if applicable), and company benefits. Start a filing system to stay organized. Consider keeping a notebook and binder to store all notes in one central place. Ask for checklists from the professionals you work with to make sure there is nothing you are overlooking.
To keep your information secure and potentially prevent identity theft, contact your bank, investment firms, insurance companies, credit card companies, and the three major credit reporting agencies (Experian, Equifax and TransUnion) to inform them of your husband’s passing. You may wish to wait a few months before closing any accounts in case there are any automatic withdrawals or deposits. Inquire if you are able to be added to the accounts, if not already. This is also a good time to update passwords to avoid fraudulent access by others.
It is important to keep up-to-date on immediate bills while the estate is being settled or you could incur late fees, interest charges, have services stopped, or insurance policies lapse. Keep current on your mail, look through old records and check ledgers, and check automatic payments to make sure no bills are overlooked. Prior year tax returns are also a great resource for making sure you are leaving no stone unturned. Debts of your deceased spouse are to be paid from their estate so keep a list of the bills paid while the estate is being settled. For more information on the debts of a deceased relative, the Federal Trade Commission has information available here.
If your spouse handled the household finances, you may find addressing financial issues challenging. Ask the professionals you work with to take time during your meetings to educate you, and request they forward you any resources they feel you would find helpful. There are also many financial planning books and organizations dedicated to helping widows through this process.
After losing a spouse, you may find it difficult to think clearly and feel in a “daze,” which is normal. Finding a trusted family member or friend who is willing to assist you with tackling the financial issues for the next few months may be extremely helpful. See if they can attend meetings with you and also take notes. It will be helpful to have a second set of ears and an objective view. Be sure to find someone who doesn’t have a personal agenda and you feel confident will be looking out for your best interests.
There will be immediate expenses such as burial costs, final debts and bills that need to be paid immediately. Tap short-term accounts such as checking, saving, CD’s or money market instruments for these costs. If you are short on liquidity, develop a strategy with your CFP® professional to save these resources until liquidity becomes available. Keep any joint checking accounts with your deceased spouse open so you are able to deposit any checks addressed to him such as a last paycheck, pension, social security, or VA benefits. Work with your Insurance Agent to file claims for any life insurance policies to help provide liquidity.
It is important to contact your local social security office, the VA (if applicable), and your spouse’s employer (or former employer), to change any available benefits into your name. If your spouse had any retirement accounts such as 401(k), 403(b), IRA, etc. and you are listed as the primary beneficiary, consult with your CFP® professional before transferring these into your name.
If your primary beneficiary for any retirement accounts, life insurance policies, annuities, pensions, or other contracts is your spouse, it’s time to update. If something happens to you before you update your beneficiary designation and your spouse is listed as primary, the asset will transfer to the contingent beneficiary, if one is listed. Consult with your Estate Planning Attorney for guidance, however, before making any changes.
You may be feeling depression, denial, confusion, loneliness and many other feelings after losing a spouse; now is not the time to make major decisions such as selling your home, major investment allocation changes, or career changes. Give yourself time to grieve and don’t feel rushed to make major decisions too soon. During a state of vulnerability you could be easily persuaded by sales people or pushed into products or investment vehicles that are not appropriate for you. Take your time and ask friends and family to help with any major decisions.
The next few months (and years) will be a transition period in many different areas, including your finances. Get organized and recruit professionals, family and friends to help. Tackle the time sensitive items immediately but take time before making any major decisions. By taking these immediate steps to address financial issues, you will become more in control of your situation, and better educated and comfortable making financial decisions that may affect you for years to come.
More expert advice about Estate Planning
Laura Knolle is a CERTIFIED FINANCIAL PLANNER™ with Ballou Plum Wealth Advisors, LLC, a Registered Investment Advisory (RIA) firm in Lafayette. Laura is also a Registered Representative with LPL Financial (LPL). The opinions voiced in this material are for general information only and not intended to provide specific advice or recommendation for any individual. Financial Planning offered through Ballou Plum Wealth Advisors, A Registered Investment Advisor and a separate entity. Securities offered through LPL Financial, member FINRA/SIPC.
Photo Credits: morrbyte/bigstock.com; Check Man, Cross Man and Jump Man © ioannis kounadeas - Fotolia.com