You Financial Future
The death of a spouse is a life changing event in a person’s life. It is filled with fear and emotion that is unlike any other feeling. Sometimes this happens unexpectedly, and other times it occurs after a long health battle. Either way, it is important to take time when possible, making decisions. The funeral home will notify Social Security. In a couple, one Social Security check will go away. The good news is that it will be the smaller one. The bad news is most living expenses will not go down very much, and income taxes will increase.
The death of a spouse often brings financial uncertainty, especially if the deceased was the primary breadwinner. Widows or widowers may need to navigate complex financial matters, such as managing household expenses, dealing with debts, understanding insurance policies and planning for their financial future. This can be particularly daunting if they were not previously involved in managing finances. While family members can be helpful, remember there are times when professional help is necessary to understand all of the options.
After the death of a spouse, there is often a significant amount of paperwork and legal procedures to manage. This includes notifying relevant institutions, managing the deceased’s estate, settling debts, and understanding any inheritance issues. Widows or widowers may also need to address the practicalities of death, such as arranging funerals and dealing with property ownership changes. If the couple did advanced planning, fees and some other stresses might be minimized.
Probate costs can run between 3% to 7% of the cost of an estate. For a $500,000 estate, this can be as much as $35,000. Surviving spouses can take over many of the assets of their deceased without incurring this cost. Whether they have the ability to manage something such as a large investment portfolio is another question. It is extremely important that there are complete and accurate records available. Making sure that survivors understand their future financial picture and income is a must.
Ensuring that assets are titled properly can reduce some of the stress. Remember anything with a beneficiary designation will be distributed to whomever is listed, even if that is not the current desired outcome. That could include an ex-spouse. Always make sure that financial documents are updated after any life changing event.
Often, disputes start in families over distribution of things after a death. If there are specific items that you want certain people to receive, be sure and spell that out in advance. Living wills give guidance to family members about such things as life sustaining medical procedures you either want or don’t want at the end of life.
Once someone dies, survivors need to update things such as the power of attorney to make sure that loved ones can get information and help. Federal privacy laws restricting release of medical information could prevent an adult child from getting health information about a parent without a power of attorney.
Two other things you might want to do is list an in-case-of-emergency contact in your cellphone. Hospitals and emergency responders will look at this as “In Case of Emergency,” and notify that person about your situation. Another good idea is to create a grab-and-go envelope. This is a list of any medicines you are taking, any surgeries you have had and any allergies. Make sure someone knows where this information is because hospitals will need it if there is an emergency.