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We are often asked about the trials and tribulations of the market, up one day and down the next. However, market difficulties pale in comparison to the pain of losing a loved one. It is always difficult to lose someone, especially a spouse. Few things compare to the difficulty of losing one’s spouse, and that difficulty is often compounded by the immense pressure to make decisions at precisely the hardest possible moment. Many of these tasks require immediate attention, so it is important to take precautions to guard against making decisions while emotionally vulnerable.
Take some time to reflect. Don’t put your house on the market right away, don’t sell assets, give away money to children or charity or agree to move in with an adult child. Any of those decisions may make sense in time.
The first thing you should do is gather the documents you’ll need. It’s a great idea to do this ahead of time and make a list of documents and locations so that when the time comes, they are easy to find. Some things you will need are social security numbers, birth and death certificates and military discharge paperwork. The next document you’ll get is the death certificate. Get a few extra copies, because most accounts will require them.
Keep a joint checking account for at least a year so you can deposit any checks that happen to come in that are made to the deceased spouse or to both of you. Don’t be afraid to get some help, whether it’s from an accountant, lawyer, financial planner, trusted friend or adult child. If you are used to making major decisions with a partner, working with someone through the process will make it more natural. Don’t be afraid to ask questions, even if you think they are dumb.
Next, assess your cash flow. Make a list of your fixed expenses and a separate list of your discretionary expenses. Then, make a list of your income sources. Remember that the social security benefits you are receiving may change, as well as any pension benefits. Collect any life insurance benefits that exist. This may help to make up for any shortfall in your income.
The life insurance company may want to put the money in an account and send you a checkbook instead of sending you a check. This is fine, but if you want the whole amount, simply write a check for the entire amount as soon as you get it. They also may offer to give you the benefit as a lifetime income. Before you agree to this, get an opinion from a financial planner or other trusted friend. You’ll also want to consult with an attorney to find out what needs to be done to prepare the estate if you haven’t yet done so.
If you have done estate planning ahead of time, you will usually use the attorney who set the estate up for you.
If your spouse was employed when they passed away, you should check with their employer. You will be entitled to any unpaid salary and bonuses, sick days and medical savings. Many employers offer group life as a benefit, so check to see if that applies.
If you and your spouse were covered by the employer’s health insurance plan, you may have the opportunity to continue that coverage under COBRA. You will also want to find out about any retirement benefits, like a 401(k) or pension plan. All these still apply if your spouse was retired from the employer and had been receiving retirement benefits.
The stress of the death of a loved one is difficult, especially your spouse. Hopefully, a little preparation will make the financial aspects a bit less stressful.
Important Disclosure:
Mike Bergen is a Partner, Managing Director at Beacon Pointe Advisors LLC. The information contained in this article is for general informational purposes only. Opinions referenced are as of the publication date and may be modified due to changes in the market or economic conditions and may not necessarily come to pass. Beacon Pointe has exercised all reasonable professional care in preparing this information. The information has been obtained from sources we believe to be reliable; however, Beacon Pointe has not independently verified or attested to the accuracy or authenticity of the information. The discussions, outlook and viewpoints featured are not intended to be investment advice and do not consider specific investment objectives or risk tolerance you may have. All investments involve risks, including the loss of principal. Stock investing involves risk, including loss of principal. Consult your financial professional for guidance specific to your circumstances.
