What financial steps should a widow take in the first year

Purse Strings Approved Professional

Blog Series

What financial steps should a widow take in the first year?

HSA Heath Savings Account

You may be experiencing a range of emotions when your spouse dies. Unfortunately, these feelings don’t go away instantly, and when you start working with your finances, you may feel emotionally overwhelmed. What you are feeling is normal.

However, now is the time you must start pulling the pieces together so you can protect yourself and be your own advocate. It will also be helpful to have a trusted friend or relative help you through this period.

Get a notebook/journal and start writing everything down, because you will not remember having some conversations and certainly not the details. You will feel like you’re operating in a “fog” the first couple months.

Begin to organize information:
  1. Start a filing system for quick and easy retrieval of information.
  2. Create a calendar with important due dates.
  3. Keep a log in your notebook of actions taken, including the date and contact person.

 

Contact your professional team: attorney, tax preparer, financial advisor:
  1. Gather your estate documents like will, and trust.
  2. Talk to your tax preparer about pertinent tax issues for the current year.
  3. If you’re the executor of your husband’s will, manage the estate settlement process with the guidance of your advisors.
  4. Discuss your finances with your financial advisor.

 

Review your cash flow for the first year:
  1. Prepare a statement listing where money will come from and where it needs to go in the first six months to a year. Include a list of regular bills.
  2. Liquidate certain assets that don’t have a penalty such as certificate of deposits or annuities with a death benefit.

 

Collect benefits:
  1. Locate your spouse’s birth certificate, Social Security number, marriage license, military discharge papers, financial account statements and company benefits brochure you may need to collect certain benefits. Keep these papers in your organizational folders.
  2. File for Social Security benefits at www.ssa.gov.
  3. Contact your life insurance agent to start collecting benefits. Review payout options.
  4. Collect veteran’s benefits by contacting the Department of Veterans Affairs if your spouse was in the military.
  5. Rollover your spouse’s IRA into your own.
  6. Contact the HR Department of your spouse’s employer to collect unpaid salary, vacation pay, sick pay, bonuses, pension benefits, and other benefits due.
  7. Take a pension from your husband’s qualified retirement plan or roll it over to your IRA after reviewing the options and your financial circumstances.
  8. Contact the financial aid office if you have a child in college. They may be eligible for increased financial aid.

 

Adjust health and other insurance coverage:
  1. Make sure you have your own medical insurance coverage.
  2. Notify all insurance agents for auto, homeowners, liability, long-term care, and any other policies.

 

Review assets and liabilities:
  1. Create a financial net worth statement, a list of all you own and what you owe.

 

Complete the estate settlement:
  1. Change the title and beneficiaries on investments, life insurance, vehicles, safe deposit box, retirement accounts. When you’re ready to change the names on your credit card, send it in writing with a copy of the death certificate.
  2. Joint checking account should be left open for a year so you can deposit checks payable to your spouse.
  3. File an estate tax return if federal or state estate tax is owed. This is due nine months after death.

 

Take care of yourself:
  1. Consider joining a support group for widows or talk with a counselor.
  2. Remember self-care including exercise, yoga, meditation, massages, bubble baths, facials, and chocolate!
  3. Read a good book about widowhood. There are several good ones, including “For Widows Only!” by Annie Estlund.
  4. Keep in touch with your female friends.

 

Move forward with new goals and your new life:
  1. Create an updated financial plan focusing on short-term goals first. Keep it simple and manageable.
  2. Update your will and estate plan.
  3. Expand your social circles. Meet new people who know you as yourself and not as half a couple.
  4. Be careful about entering a new relationship too quickly. Be wary of guys looking for a “purse.” Keep your finances to yourself.
  5. It may not seem like it, but there is life after grief.

 

It’s ok to postpone major decisions during the first year when possible. You don’t need to rush, especially with your big decisions. You will be bombarded by well-meaning friends and family with their suggestions for what “the right decision” is. It can be very helpful to have a trusted friend help you think through some decisions you’ll make. For example, do you pay off your mortgage, or move in with your daughter?

You are at a very vulnerable time following your spouse’s death. Go slowly. Be gentle. Give yourself time to heal.

Linda Lingo

Linda Lingo

Financial Coach

I educate women to achieve financial freedom. Financial health and emotional wealth empower women for a successful, stress-free approach to money. Through inspiration and education, I guide women to understand their money mindset, define their values, establish money goals in alignment with their values so they can spend less, save more, implement their intentional money spending plan (budget), understand investments, build wealth, leave a legacy, and live the life they desire.

Financial To-Dos If Your Spouse Dies

Purse Strings Approved Professional

Blog Series

Financial To-Dos If Your Spouse Dies

HSA Heath Savings Account
Call your attorney

There are several legal and financial considerations once a loved one has passed. Work with your attorney to better understand the process and the laws within your state.

 
Contact the Social Security Administration.

Depending on circumstances, survivor benefits could be payable to you. This is not something you can do online. To report a death or apply for benefits, call 800-772-1213, or visit your local Social Security office.

 
Locate the will.

Generally, it’s filed with an attorney, or in a lockbox or safe deposit box. Contact the attorney for a reading and to settle the estate.

 
Notify your spouse’s employer.

Find out about benefits due to beneficiaries. Check on retirement or pension plans. If you or your children were covered through your spouse’s medical insurance, ask about continuing coverage. Notify your employer, too, since the death of a spouse may be a “life event” that could trigger benefit decisions.

 
Ask your spouse’s former employers.

Items to check on: life insurance policies, a pension, an old 401(k), or other benefits.

 
Check with the Veteran’s Administration.

If your spouse served in the military, learn what benefits might be due to you.

 
Notify all insurance companies, including life and health.

Ask them to send claim forms and instructions (or online links.) It can take weeks to receive funds, so try to get started as soon as possible.

 
Change all property titles.

Remove your spouse’s name and update insurance policies, such as auto and homeowner’s.

 
Change titles on all jointly held bank, investment, and credit accounts.

Close accounts that were in your spouse’s name only or change the account holder information.

 
Send a letter to all three major credit bureaus.

Get a copy of your spouse’s credit reports so you are aware of all debts. (The three major credit bureaus are Equifax, Experian, and TransUnion.) Ask to have a notification in the credit report that says “Deceased—do not issue credit,” so new credit is not taken out in their name.

 

Notify your accountant/tax preparer.

Taxes for your spouse should be filed for the year of death, and any taxes should be paid.

Since there could be complicated issues, it may be best to have a tax professional help you.

 
Call the financial aid office if you have a child in college.

Depending on the school and your financial situation, your child may qualify for more assistance.

 
Work with a financial professional.

A financial professional can help you update your financial plan based on benefits you have received, create a budget for your new income and expenses, revisit your retirement plan, and weigh any decisions about cashing out investments.

Gigi Verrey

Gigi Verrey

Vice President, Wealth Management

My mission is to understand you & your priorities. To take the time, to ask hard, smart questions and to listen carefully, then to understand, in great detail, exactly where your wealth stands today, and where you’d like it to be tomorrow. We create a recipe, gather ingredients and monitor success.

Financial steps widow first year

Ask An Expert

Ask an Expert – What financial steps should a widow take in the first year?

Jason Conger Financial Advisor

Answered By

Linda Lingo

Money Coach

Linda@LindaLingo.com

Question

What financial steps should a widow take in the first year?

Answer

You may be experiencing a range of emotions when your spouse dies. Unfortunately, these feelings don’t go away instantly, and when you start working with your finances, you may feel emotionally overwhelmed. What you are feeling is normal.

However, now is the time you must start pulling the pieces together so you can protect yourself and be your own advocate. It will also be helpful to have a trusted friend or relative help you through this period.

Get a notebook/journal and start writing everything down, because you will not remember having some conversations and certainly not the details. You will feel like you’re operating in a “fog” the first couple of months.

 

Begin to organize information:

1. Start a filing system for quick and easy retrieval of information.
2. Create a calendar with important due dates.
3. Keep a log in your notebook of actions taken, including the date and contact person.

Contact your professional team: attorney, tax preparer, financial advisor:

1. Gather your estate documents like will, and trust.
2. Talk to your tax preparer about pertinent tax issues for the current year.
3. If you’re the executor of your husband’s will, manage the estate settlement process with the guidance of your advisors.
4. Discuss your finances with your financial advisor.

Review your cash flow for the first year:

1. Prepare a statement listing where money will come from and where it needs to go in the first six months to a year. Include a list of regular bills.
2. Liquidate certain assets that don’t have a penalty such as certificate of deposits or annuities with a death benefit.

Collect benefits:

1. Locate your spouse’s birth certificate, Social Security number, marriage license, military discharge papers, financial account statements and company benefits brochure you may need to collect certain benefits. Keep these papers in your organizational folders.
2. File for Social Security benefits at www.ssa.gov.
3. Contact your life insurance agent to start collecting benefits. Review payout options.
4. Collect veteran’s benefits by contacting the Department of Veterans Affairs if your spouse was in the military.
5. Rollover your spouse’s IRA into your own.
6. Contact the HR Department of your spouse’s employer to collect unpaid salary, vacation pay, sick pay, bonuses, pension benefits, and other benefits due.
7. Take a pension from your husband’s qualified retirement plan or roll it over to your IRA after reviewing the options and your financial circumstances.
8. Contact the financial aid office if you have a child in college. They may be eligible for increased financial aid.

Adjust health and other insurance coverage:

1. Make sure you have your own medical insurance coverage.
2. Notify all insurance agents for auto, homeowners, liability, long-term care, and any other policies.

Review assets and liabilities:

1. Create a financial net worth statement, a list of all you own and what you owe.

Complete the estate settlement:

1. Change the title and beneficiaries on investments, life insurance, vehicles, safe deposit box, retirement accounts. When you’re ready to change the names on your credit card, send it in writing with a copy of the death certificate.
2. Joint checking account should be left open for a year so you can deposit checks payable to your spouse.
3. File an estate tax return if federal or state estate tax is owed. This is due nine months after death.

Take care of yourself:

1. Consider joining a support group for widows or talk with a counselor.
2. Remember self-care including exercise, yoga, meditation, massages, bubble baths, facials, and chocolate!
3. Read a good book about widowhood. There are several good ones, including “For Widows Only!” by Annie Estlund.
4. Keep in touch with your female friends.

Move forward with new goals and your new life:

1. Create an updated financial plan focusing on short-term goals first. Keep it simple and manageable.
2. Update your will and estate plan.
3. Expand your social circles. Meet new people who know you as yourself and not as half a couple.
4. Be careful about entering a new relationship too quickly. Be wary of guys looking for a “purse.” Keep your finances to yourself.
5. It may not seem like it, but there is life after grief.

It’s ok to postpone major decisions during the first year when possible. You don’t need to rush, especially with your big decisions. You will be bombarded by well-meaning friends and family with their suggestions for what “the right decision” is. It can be very helpful to have a trusted friend help you think through some decisions you’ll make. For example, do you pay off your mortgage, or move in with your daughter?

You are at a very vulnerable time following your spouse’s death. Go slowly. Be gentle. Give yourself time to heal.