Organizing Your Finances After the Death of a Spouse


There are 13.6 million widows1 in America. If you are facing a recent loss, you are not alone.

The grieving process is complicated and involves many overwhelming emotions. The support of close friends and family is considered critical during this time, as is sorting through complicated feelings. Your main focus should be on funeral arrangements, comforting, and re-framing your memories.

Financial matters, however, are much better attended to sooner than later. Funeral costs need to get covered, and your monthly bills have to get paid.
If you are wondering how to get your finances in order, here are some solid places to start. It will take some of the burdens off of your stress-plate so you can begin concentrating on what is important.

1. Organize Your Files

There are a number of significant issues that will need to get sorted through once you lose your spouse. As bills and important letters come to you, an organized system for documents can help you to know what’s going on.

Keep separate folders in a box or drawer for different documents. You may need them for estate matters, insurance, government benefits, and tax information. All of these will need attending to after you lose your spouse.

Each time you receive an important letter or document put it in the file. You should also copy any letter or information you mail out and file it away as proof.

2. Obtain Necessary Documentation

As you begin financial planning, you will find that you will continually need to supply the death certificate, your marriage certificate, and your birth certificate. Keep these handy so that you can begin applying for any funds you may be entitled to. Please be aware that a “certified” death certificate is generally required, not a photocopy.

Your spouse may also have information about bills and other money owed on electronic records. Make sure you know their passwords before beginning. If they had a safe deposit box, be sure to retrieve important information from it.

Contact your spouse’s employer and life insurance policies to find out about any immediate funds you may be entitled to. If your spouse’s health insurance policy was yours as well, find out if you are still eligible for coverage through the company or COBRA. You may need to obtain a new insurance policy.

Make sure that you have the most recent copy of your spouse’s will. If your spouse made you the executor, you may need to contact your attorney for help. This should get done right away. If you and your spouse had a joint will be sure to discuss updating the will with your attorney.

3. Start With Short-Term Expenses

Your immediate expenses should be your first priority. Most life insurance claims2 take only a few days, and you should begin receiving funds just after that. However, insurance companies have 30 days to address claims and longer if the policy was recently purchased.

Consider funeral costs and any immediate living expenses you have. If you do not have emergency cash saved up, you may need to pay bills on your credit cards until your insurance claim is paid.

Any debts owed by your spouse are usually handled as part of the estate settlement process. Be sure to keep up with mortgage and utility payments in order to maintain a good credit rating.0

Any credit cards held exclusively by your spouse should be canceled, and you should continue making payments on any joint credit cards. Be sure to notify credit card companies of your spouse’s death.

Any joint bank accounts or investments should pass directly to you. You will need to change the accounts into your name. Any accounts that were solely in your spouse’s name may need to go through probate, or determined by a court court before they get passed to you.

4. Taxes and Social Security

If you are over sixty years old, you can begin applying for Social Security Benefits, as well as benefits from the Department of Veteran’s Affairs if your spouse served in the armed forces.

You will need a birth certificate, death certificate, and marriage certificate in order to apply for social security benefits.

A tax accountant working with a financial planner can help you make wise investment decisions for the future. They may, for example, recommend that you leave your retirement assets in your spouse’s account.

Based on your circumstances it may be more beneficial to roll your spouse’s 401K into your own account or take out a lump-sum distribution. The best way to preserve your assets will depend upon your unique situation.

You may have to file new tax returns after your spouse dies. You are allowed to file tax returns as a surviving spouse for up to two years after your spouse dies. You will pay less than you would as a single or head of household.

Your tax professional may also recommend “disclaiming” your assets by diverting them into a tax-advantaged trust or putting them in the name of your children. You are usually only allowed to file for disclaiming for nine months after your spouse passes.

5. Keep A Journal

Your time of grief can be overwhelming, and you don’t want to forget important conversations because you were preoccupied.

Keep a simple notebook and pen by your phone, and make a note of anyone you spoke to about financial and business matters after your spouse died. This way, you will know who you consulted with and have a written account of your conversation. It can be beneficial to include the date and time of the call in your records.

Be sure to contact any clergymen and extended family about your spouse’s death. Give folks a chance to extend their comfort while keeping your affairs in order.

How To Get Your Finances In Order After Loss

After losing a spouse, it is easy to get overwhelmed by your new responsibilities. When you are aware of how to get your finances in order, you can begin approaching matters in a logical, respectful way. It can help make your transition easier and your life more manageable.

For more help with personal finance, contact us today.

 

1 “Widow Facts”, Marilyn Murray Wilison Creators Syndicate, August 18, 2017

2 “Life Insurance Policies: How Payouts Work” Gina Roberts-Grey Investopedia, August 11, 2019

 

Although AXA Advisors and its financial professionals do not provide tax or legal advice or services and you should consult with your personal advisors regarding your specific situation, the financial professionals with Dayton and Sydney can work with your tax and legal advisors to help ensure the decisions you are making during your time of grief are appropriate for your current and future needs.

About Dayton & Sydney

Dayton & Sydney Wealth Strategies Group is a financial advisory company built on a legacy of hard work and customer service. As an elite producer group of AXA Advisors, we use a solid, innovative and long-term approach to help you accomplish your biggest dreams.

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