As per the report of the Census Bureau, in the US, there are 2.8 million widows and 800,000 widowers. They all have lost their partners at a young age. Some of them have lost their earning spouse even before securing life after retirement.
Nothing is more painful in your life than the spousal death. The loss of life can't be compensated by any means. You may feel like what to do next, especially when you lose your spouse before securing your financial future. This state can be devastating for the spouse who has to survive. According to the financial experts, whether you are heading towards retirement age or not, it is important to start securing your financial future from an early age. This will help you to set up financial stability later on when you will lose a spouse or face other emergencies.
Otherwise, after the death of an earning spouse, you have to make some important financial moves to overcome this uncertain financial phase.
Here are some financial moves to consider after losing a spouse.
It can be overwhelming to handle all financial matters in the weeks or months after the demise of your spouse. But, many such financial matters can't be postponed. You should take initiative to manage your finances.
Thus you should break or categorize the task by important, less important, and urgent. Breaking the financial tasks into categories can help you to sort the necessary task during this tough time.
To make the task less stressful, it is important to find out all the paper works and records so that you can get the benefit without delay. You should also determine your immediate needs first so that you can apply for the benefit as per your need.
Dismiss any subscriptions, Car leases, mobile-phone contracts, or services that belong to your spouse only following the right procedure.
You need to notify the Social Security Administration about the death and order 15 to 20 copies of the death certificate. Thus, you have to contact the funeral director for the certified copies to send them for retitling the mortgage and changing owner names on all financial accounts.
You have to provide a copy of your spouse's death certificate to apply for Social Security benefits. To do so, you need to work with your spouse’s employer as well. Because, the employer of your spouse needs to distribute life insurance including final pay and retirement savings.
You have to consider the efforts to claim any benefits or compensation that you are entitled to.
To claim any policies you and your spouse own, you need to contact your life insurance agent. If the health insurance was provided through your spouse’s employer, then you need to know whether or not you’ll be covered automatically. You may need to obtain a new life insurance policy as well. So, contact the concerned insurance officer to discuss the matter and claim your benefit.
If your spouse was employed, then you need to inform the employer about the demise. Thus, they can process the final paycheck and other compensation. You can also inquire about any assets or benefits that you are entitled to.
Remember, you can get the survivor benefits if your age is 60. So, don't forget to apply for Social Security benefits on behalf of your spouse. You need to contact the Social Security Administration to know if you can receive a portion of those benefits.
The surviving spouse of a US war veteran is entitled to receive the survivor benefits. Thus, you should inform the Veterans Affairs Administration with your spouse’s VA number and dates of active service.
After the death of your spouse, you may have to revisit your daily financial to-dos. You need to create a new list of all bills or other financial obligations as well like the utility, credit card, rent or mortgage, and other bills.
If your spouse used to handle all the monthly bills, then the bills are now your responsibility. First, you need to check how many bills you need to pay every month. You can maintain a file where you can keep all the paid bills and unpaid bills. Find out the checkbook or online banking accounts to know if you have to make payments for recurring payments. Also, make a list of monthly expenses like utility cost, grocery, medicine, gas, contributions to retirement accounts, debt payments, credit card payments, etc.
If you have found out the access to your spouse’s email account, check for electronic notifications of due payments.
You should assess the financial situation after losing your spouse. This will help you to understand your current income and how much you can afford to spend on living. So, formulate a list of monthly expenses and income. Don't forget to add the salary of your current job (if any), any Social Security benefits, pensions (if any).
If you find any shortfall, then you need to draw the deficit amount from the savings accounts to maintain your current lifestyle. If you don't have enough savings, then you may have to find out income sources to manage your living cost and other mandatory financial obligations.
Once you find out all the documents of wealth and assets, you need to transfer these into your name. You can also update the title to assets. This will help you to reduce legwork in the future.
Find out your spouse's will and make a copy of it. If your name is there in the will as executor of the estate, then you need to contact the attorney to understand the matters. If your name is not there, then also you need to be there while the settlement of the estate is going on to avoid any financial loss.Settling the estate is important and it may take a few months. Thus, you have to begin earlier to avoid any complications.
You need to take the initiative to preserve your spouse’s personal property like personal items, gifts, furniture, antiques, artwork, clothing, photographs, jewelry, or mementos that were promised to a child or another relative. After that take the initiative to deliver the assets to the person to admire the desire of your deceased spouse.
You have to consider the tax filing and tax reduction policy very seriously. If you haven't done tax work before, you may have to consult with a tax professional for advice and help.
As you are the surviving spouse, you need to file tax returns, including federal and state final income tax returns, and fiduciary income tax returns. You can also deduct the income tax if you have a dependent child or step-child.
There are many ways you can reduce the tax after the death of a spouse. Your tax professional can help you to implement the different tax strategies that are beneficial in your condition.
You can disclaim the assets within the 9 months of your spouse's death. Your tax advisor can ask you to “disclaim” to turn the assets into a tax-advantaged trust or to the children. Know the deadline for disclaiming assets in your state as the deadline varies from state to state
After the death of your spouse, you may have to find reliable child care now. Look in your local yellow pages under child care or under social services for help. In many areas, you can find out the Child care information and referral centers to know the information about day-care. The child care center will refer you to the day-care based on your need. You will also be provided advice on state licensing regulations and choosing quality daycare.
If your spouse has died with huge credit card debts or medical bills, then you need to find out the ways to repay the debt as soon as possible. You can talk to the creditors or hospital authority to settle the debt. You can also enroll in a debt management company to manage the debt easily.
Lastly, losing a spouse is no doubt painful. You may not be in a mental state to think about financial matters during this sad time.
But, you have to sort out some financial matters early so that you need not face financial complications later.
Thus, it is recommended to settle all the financial matters or at least appoint a financial advisor/analyst to understand the financial complication on your behalf. Also, if your current income is not enough to manage your livelihood, you need to find a job, manage your spouse's business, or other source of income to survive the rest of your life peacefully.