What financial-related tasks need to be addressed upon the death of a spouse or significant other?

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First, it must be recognized that there is no way to truly be prepared for the death of a spouse or partner.  In addition to the emotional toll, the financial decisions about what to do when our loved one dies can be overwhelming. 

It is easy to understand why a surviving spouse or partner could be unprepared or have little interest in addressing such tasks while mourning the loss.  From the phone calls that will need to be made to the documentation and financial-related paperwork that will most likely need to be signed, there are many areas that will need your attention – during a time where it will be difficult to give any attention. Just knowing how and where to start this process and what items to prioritize can feel overwhelming.

Addressing these issues can be intimidating for many, especially in situations where the spouse who passed away was the one primarily responsible for managing the couple’s financial affairs.  Rather than taking the route of postponing such tasks until a later date, it is important that financial-related matters are taken care of sooner rather than later. 

From a timing standpoint, if paperwork for changes such as updating beneficiaries or retitling assets isn’t completed in a timely manner, the situation can also become more complicated and bring added stress down the road, which is the last thing that the grieving individual needs.

Financial Tasks Checklist:

To provide assistance, here is a simple checklist highlighting some essential steps to take and issues to consider when managing financial affairs during this very difficult time:

  •  Request death certificate copies:  Get 10 to 15 copies of the death certificate from the funeral director or health care provider.  These will likely be necessary when amending and updating financial and legal accounts, as well as estate planning documents.

  •  Contact Social Security:  Whether your spouse was receiving Social Security benefits or not, notify Social Security Administration (1-800-772-1213) about the death.  You may be eligible to receive survivor benefits along with the lump-sum death payment.

  •  Consult a financial advisor:  Seek guidance from a trusted financial advisor to help you with addressing those important financial-related tasks that need to be addressed and provide ideas and options that are best for you.  The advisor can also provide advice on those complex financial matters and subsequently create a customized financial plan for you (including advice on investments, insurance, tax and estate-related issues).  In addition, the advisor can also help you to avoid financial scams and possible solicitors who sometimes prey upon new widows and widowers.

  •  Gather important documents and a list of assets:  Collect all financial statements and documents, including those for bank and investment accounts, insurance policies, wills, trusts, and property deeds.  Don’t forget to inventory possible digital assets and cryptocurrency-related accounts as well.

  •  Address probate and estate administration issues:  Whether your spouse had an estate plan in place or not with a will, trust and/or powers of attorney, you might need guidance on initiating and completing the probate process, settling debt/liabilities and distributing assets, among other tasks.  Consider consulting with an experienced, local estate planning attorney.

  •  Update legal documents:  In conjunction with those issues addressed above, update your own legal documents, such as wills, trusts, powers of attorney and health care directives to reflect your current wishes and situation with the assistance of an estate planning attorney.

  •  Notify financial institutions:  inform banks, credit unions, investment firms and other financial institutions about your spouse’s passing.  This will initiate procedures to help prevent any risk of unauthorized access to the accounts.

  •  Contact your spouse’s employer:  If your spouse’s workplace provided retirement, health insurance or life insurance benefits for your family, contact the human resources department about settling the current policies and receiving those benefits.  Ask your spouse’s former employers about possible retirement and insurance benefits as well.

  •  Review joint accounts and retitle assets into your name:  If you have joint loans, credit cards or bank accounts with your spouse, contact the institutions to understand how the account will be affected.  You will likely also need to retitle assets and transfer property ownership (i.e. the deed on your home, the title on your car(s) through your local Department of Motor Vehicles/DMV, etc.).  You may also need to close certain accounts.

  •  Check beneficiary designations:  Review beneficiary designations on retirement accounts (IRAs, 401(k)s, etc.), insurance policies and other assets to ensure that they are updated.

  •  Review life insurance policies:  Contact your spouse’s life insurance provider to better understand the policy’s terms and how to file a claim, if applicable.

  •  Contact your spouse’s pension company, if applicable:  Depending on the pension plan option originally selected by your spouse, you may be eligible to receive benefit payments.

  •  Contact your child’s college/university:  If you have a child in college, notify the school’s financial aid office and inquire if there are any survivor benefits (tuition waivers, scholarships, etc.).

  •  Check into Veteran’s benefits, if applicable:  The Veterans Benefits Administration has information on benefits and services available to surviving spouses of veterans.

  •  Understand your debt and liabilities:  Determine the extent of your spouse’s debts and liabilities and work with creditors to make appropriate arrangements for repayment, if necessary.  Also, inform credit bureaus (Equifax, Experian or TransUnion) that your spouse is deceased and determine whether any accounts held in their name should be closed.  Gather a copy of your spouse’s credit report and review it for possible unknown debt accounts (U.S. News, Aug. 2021).

  •  Evaluate your own financial needs:  Assess your overall financial situation, including your sources of income and bills/expenses, and put together a basic balance sheet with an inventory of what you own (assets) and what you owe (debt/liabilities). Consider utilizing a budget spreadsheet to better understand your monthly cash flow needs and future financial obligations.

  •  Get a handle of tax issues:  Understand the tax implications of your spouse’s passing, including estate and income taxes, and potential tax deductions or credits related to the death.  Consider hiring a CPA to provide guidance on tax-related matters, including filing of income and estate tax returns.

  •  Close your spouse’s email accounts and delete or memorialize social media accounts:  This can help to deter possible financial scams as mentioned above.

  •  Complete an unclaimed property search for the decedent:  This can be done via www.missingmoney.com or on your state’s unclaimed property website (Kiplinger, Feb. 2023).

 Along with these financial-related items in the checklist above that will need attention upon the death of a spouse, it is equally important to understand a few of the things that you should not do.  Included amongst those would be:

1.       Never make big decisions that you are not required to make.  For example, you likely do not need to immediately make a decision to retain or sell the house and move to another location.  You should take time to adjust to your new situation and not make snap decisions while you are likely not of a clear mind.

As many of us on the Clearwater Capital team have previously stressed, it is never wise to let your emotions drive any financial decision.  A very emotional experience such as the passing of a spouse is a time where big financial-related mistakes on issues that are not thoughtfully evaluated can occur.

2.       Do not make major purchases.  This is often a time when a person will spend more money than normal.  Sometimes that is due to a lack of focus on finances, and sometimes it is due to wanting to “live for today”.  Whatever the reason, the period after the passing of a spouse is a very important time to get a handle of one’s financial situation and start to develop a responsible plan going forward.

3.       Do not be quick in giving away money, valuables and your “stuff” in general.  As mentioned above, gaining a better understanding of your financial situation with assistance from your trusted financial advisory team should be a main priority.  Before giving any of yours or your deceased spouse’s possessions to family and friends, you need to adequately assess whether these gifts make financial sense, but also whether making such gifts might unintentionally cause family stress.

As you can see, there are many financial issues that will need to be addressed during this difficult time.  Handling those efficiently and unemotionally, but also in a timely and thoughtful manner, is very important.

In order to reduce the burden and stress involved with having to handle everything that needs to be done on your own, I recommend that you engage a trusted advisor who can assist you.  In particular, consider a fiduciary for this role who will always place your interests first.

The experienced advisory team at Clearwater Capital Partners can provide guidance on those numerous financial-related tasks listed above, in coordination with your estate, tax and other trusted advisors, in order to help make handling all of this less stressful for you.  It goes without saying that nothing can replace your loss, but having the right team in place can help you make well-informed financial decisions and perhaps provide you with peace of mind during this time.