There are a list of things to do and these include notifying credit bureaus, reporting the death to Social Security Administration, and selling the house. If you aren’t sure about any of these, you can always consult a financial professional. Some of these tasks are critical and the surviving spouse might need to do them quickly, all while grieving the loss of their partner in life.
Prepare for the Inevitable
My first recommendation is to prepare for the inevitable. There are steps you can follow to close credit cards after a spouse has died. This will help you avoid identity theft, unwanted charges, and fees. Creating a list of all the accounts your deceased loved one had is a good idea. The bank or credit card company can be contacted to close the accounts. It is a good idea if there are recurring fees, such as phone bills and monthly subscriptions, to transfer them to another account.
A letter mentioning your intention to the bank to close the account is a good start. Make sure to include the deceased’s name, account number, date of birth, you might even need to send them a copy of the death certificate. One other item you might include is to put a credit freeze on your spouse’s credit reports. I’ve heard that people will read obituaries and then start opening accounts in the deceased’s name.
Step one is to learn some basic terms of the estate administration process and get organized. You are likely the personal representative, meaning it’s your job to administer the estate. To do this, you’ll need several important documents. Be sure to get five to 10 original death certificates: Financial institutions and others will need to see them before they can do anything for you. I asked for 8 myself after my first husband died. But don’t stop there. You will need bank and brokerage statements, veteran’s discharge papers and tax returns. I’ve found that often the tax return helps you to discover accounts you never even knew existed. It’s critical to take notes as you gather these documents. You need to quickly notify certain parties of your spouse’s death. Here’s more things to do; contact financial institutions, the IRS, Department of Motor Vehicles, Social Security, the spouse’s employer, and others.
Have a lawyer make you the personal representative, you may need to have a court officially make the appointment, and you will have a fiduciary duty to assure that all creditors get paid before assets are distributed. You’ll also need to collect any funds that are due to your spouse. You will likely need to obtain a tax ID for the estate from the IRS. Take an inventory of all material assets and liabilities. Finally, you may need to update your own estate plan, since your late spouse probably had a role in your previous plan.
Critical but Less Time-Sensitive Tasks
Social Security is typically a key source of your income. If your spouse had the higher benefit, you are likely entitled to receive that benefit, but your own monthly check will stop. You may be entitled to other benefits as well, such as a widow(er) benefit or a benefit if you have a disabled child. If your spouse had an IRA, you are probably the beneficiary and can either roll it into yours, keep it as a separate inherited IRA or even disclaim it if, for example, you want it to go directly to the kids.
Determine the Care You Might Need in the Future
Before you make a move, you should consider how much care you’ll need now that your spouse has passed. Assess mental and physical health if you are active and still maintain in the home, you may just need to move near a child so they can look in on you in the future.
Sell your home
It can be difficult to manage financial matters after the death of a spouse. Reassessing your own finances are some things you should keep in mind. The first is to organize your finances. This will help you keep track your assets, liabilities, investments, and other financial information. Your income may be lower, but your expenses may be as well. After totaling your assets, examine how much you can spend. I call this the safe spend rate. Look at the entire portfolio and assess the risk you need to take. Make sure your costs are low and that you are diversified.
Another option is to plan your future. It is possible you may not want to make big decisions right away. It is important to consider what you will do in the future with your money.
Get in touch with a financial professional
You have a lot to do and, understandably, you may need help. If you need an attorney, find one that specializes in estate planning and administration. You may need a CPA or other tax professional to assist as well as a financial planner. Ask others who they turned to and interview them. Even death doesn’t escape taxes, and you will likely have to file a final tax return in addition to a return for the estate itself using that tax ID discussed previously. If you have a child living with you, you may be able to file your return for the next two years as a qualifying surviving spouse, which gives you a lower tax rate than filing single. If you are using a financial planner, make sure you understand and agree with the investment strategy they propose. Many so-called planners regularly surf the obituaries and are salespeople in disguise.
I understand that the financial tasks of dealing with the death of a spouse can be overwhelming at a time when you want to grieve. Be forgiving to yourself as this is likely the most difficult time in your life.