by Andrew Petty
In the midst of deep grief and sorrow, it can feel overwhelming for a newly bereaved spouse to face the many responsibilities and decisions they have to make. If you’ve recently lost a spouse, there are likely financial matters that must be considered to ensure your financial house is in order and you avoid late fees and penalties. Here’s a short list of financial considerations for widows and widowers.
Get organized. As the surviving spouse, you’ll need several documents in order to finalize your partner’s financial affairs. When you receive your spouse’s death certificate, be sure to make several copies as you will need to provide it as proof of death when closing or changing ownership of accounts. You will also need your spouse’s Social Security number, your marriage certificate, life insurance policies, bank accounts, creditors and a copy of your spouse’s will or estate plan. Gather these documents and any associated paperwork and set up folders so you can more easily keep track of everything.
Settle the estate. If your spouse has a will, it’ll determine the distribution of property. When there is no will, then probate court will decide who gets what. The laws regarding community and separate property (typically property owned by the spouse prior to marriage and/or inheritance) vary by state. The larger the estate, usually the more complicated the settlement. Consult an attorney who specializes in estate laws for complex cases.
Transfer ownership or close accounts. You’ll need to notify banks, loan companies and other creditors of your spouse’s death by producing a death certificate and providing other identification. If your spouse owned an IRA, you’ll need to determine whether it makes sense to roll over the assets into your own IRA or keep them where they are. If you are named a beneficiary on a life insurance policy or an annuity, you may have choices as to how you receive those assets. Consult a financial advisor to learn more about your options.
Pay the bills. It can be difficult to face a task as mundane as paying bills when you’re experiencing a personal tragedy. If you are unable to pay some of your bills immediately, contact your creditors and explain your situation. Ignoring bills will lead to late fees and may damage your credit rating.
File taxes. As a surviving spouse, you are responsible for filing taxes for your deceased husband or wife. You need to file in order to receive a refund if taxes were overpaid during the year or to pay up if taxes are owed. Failure to file may result in penalties or even a lien on the estate. The IRS provides instructions on how to file on behalf of a decedent. When in doubt, consult a tax professional.
Sort out finances. If you’re newly widowed, know that you don’t face your financial decisions alone. A trusted professional can help you look at your overall financial picture and determine next steps during this difficult time.
Andrew R. Petty, CRPC®, APMA®, CLTC®, is a Private Wealth Advisor with Nona Wealth Advisors, a private wealth advisory practice of Ameriprise Financial Services, Inc. He offers fee-based financial planning and asset management strategies and has been in practice for 19 years. To contact him, please call 407-249-4006, visit his website at https://www.ameripriseadvisors.com/team/nona-wealth-advisors or stopover at his office at 10917 Dylan Loren Circle, Suite A, Orlando, FL 32825.
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