When you’re grieving the loss of a spouse, the future can seem further away than ever. But taking steps to secure your finances can be part of your healthy healing process. Most financial professionals agree that you shouldn’t make big money decisions right away. But once you’ve tackled the more urgent concerns we addressed in “Facing Your Finances After Losing a Spouse: 4 Steps to Take Now, Part 1,” it’s time to explore bigger considerations that you’ll want to think about for further down the road.
Here are four things to keep in mind for the future after the loss of a spouse:
- Change ownership as needed on all insurance policies, retirement accounts and any other accounts where your money or assets are held. You’ll also want to update beneficiary info on these accounts. Take a moment to consider the beneficiaries on accounts you held previously, too. If your late spouse was named, you’ll need to decide whom you want to change it to.
- Claim your benefits. In part 1, we talked about the importance of gathering documents and information you’ll need to allow you to claim the benefits you’re entitled to—from Social Security and life insurance to retirement and pensions. Ultimately, you’ll want to consult with a financial advisor to ensure you’re making the best choices for your situation, but here are a few things to keep in mind:
- It may make sense to claim insurance benefits before retirement because processing, payment options and tax requirements tend to be less complicated.
- When it comes to Social Security, your survivor benefit should be the same as what your spouse was receiving, provided they waited until reaching full retirement age to collect. By the same token, if you collect Social Security benefits before reaching retirement age, your benefits will be permanently reduced.
- Don’t miss out on employment benefits if your spouse was working, including unpaid bonuses, vacation and sick pay, stock options, and flexible spending accounts. Contact the employer’s benefits administrator to find out more.
- If your spouse was retired and receiving a pension, notify the plan administrator of the loss of your spouse to find out what additional benefits may be due to you or if they will now be changed.
- Complete the estate settlement. If you need to settle your estate, a federal estate-tax return must be filed within nine months from the date of your spouse’s death to pay estate and gift taxes, if they are required. (The deadline may be earlier for state estate and inheritance taxes.) Keep in mind that you may be able to disclaim property, allowing assets to go directly to your children. This ensures they won’t count against your federal or state estate-tax exemption upon your death—but only if you don’t transfer the assets from your spouse’s name to yours.
And if you haven’t already, read “Facing Your Finances After Losing a Spouse: 4 Steps to Take Now, Part 1” to see what financial considerations should be addressed right away.
The information contained in this newsletter does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary r statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Bryan Sweet, Ty Totzke, Lynne Burgraff, Amber Knips and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.