Broker Check

Moving On: What to do Financially if Spouse Dies

by Howard Hook, CFP®, CPA

As published in New York Daily News “Money Pros” on May 9, 2014

Question: My spouse has suddently passed away. What do I need to do to get on track with my financial life?

Answer: The sudden death of a spouse is clearly a traumatic experience for the surviving spouse as well as family and friends. As such, it is not the best time to have to make financial decisions. Figuring out which decisions need to be made right away and which can wait can help relieve some of your stress.

Financial considerations for the funeral, wake or memorial need to be made quickly, typically within several days. While the best advice would be to have planned for and possibly even paid for these types of services ahead of time, this is rarely done. Asking another family member to accompany you when these arrangements are made can help ensure that they are handled properly. 

Once the funeral is over, other financial decisions will need to be made. If your spouse was still employed at the time of death, there may be decisions to be made regarding certain benefits you’re entitled to, such as continuing health insurance, group life insurance and retirement plan benefits. Some of these items, like continuation of health insurance benefits, contain time deadlines on electing to continue coverage.

There still may be benefits that you are entitled to even if your spouse had not been working at the time of death, such as continuation of retiree health insurance, if applicable, and retiree life insurance

Retirement accounts that you owned as well as life insurance on your life where your spouse was named as a beneficiary, must be updated to reflect a new beneficiary

Regarding retitling assets, professional legal advice should be sought before doing so as there may be opportunities to save taxes on larger estates, which may not be available if assets are retitled too quickly.

If you did not handle the financial affairs when married, the next steps can be intimidating. Paying bills, balancing the checkbook and filing income tax returns still need to be done, at a time when you are trying to cope with your loss. Certainly it is better to have planned for this ahead of time by sharing how to do these things, or by keeping a list of important information. This would include information needed to help pay bills, as well as a list of people who could help, such as your accountant, attorney and financial planner. 

If that is not the case and you are on your own, there are other resources available. Online tutorials can show how to balance a checkbook. There may also be local organizations that can provide you with information you can use to learn more. Finally, you should not be afraid to ask family and friends for help. Understanding that you do not need to make all financial decisions at once can allow you to move on with your life at your own pace during an extremely difficult and stressful time.