How Your Wealth Manager Can Help
Coping with the death of a spouse is one of the most difficult experiences a person can go through. In addition to the overwhelming grief and loneliness, the surviving spouse may experience financial uncertainty — especially if the deceased spouse had primary responsibility for managing the household finances.
Clients of ours are fortunate in that they don’t have to go through this difficult time alone. At Creative Planning, our wealth managers are here to help ensure clients’ finances are well cared for, both immediately following the death of a spouse and long into the future.
If you’ve recently lost a spouse, following are several steps you should take immediately as well as additional steps that can wait a while.
Consideration #1 – Whom do you need to notify?
Aside from family and friends, you’ll need to notify others of your spouse’s death in order to avoid potential financial fraud.
- Start by obtaining 10-15 copies of the death certificate.
- Depending on the laws of your state, you may need to obtain a certificate of appointment to act as a personal representative of your spouse’s estate.
- Notify the three major credit bureaus (Experian, Equifax and TransUnion) of your spouse’s death and request a copy of their credit report.
- Secure digital assets, such as online subscriptions, social media accounts, cell phones, credit card points, etc.
- Prevent unauthorized account activity by notifying all banks, investment companies and credit card issuers.
Consideration #2 – Do you have access to all financial accounts and insurance policies?
Work with your wealth manager to ensure you have access to all applicable financial institutions where accounts are held as well as any insurance policies in place. Begin the process of transferring accounts and collecting on applicable insurance policies.
- Contact financial institutions about joint accounts to update ownership and beneficiary designations. Determine how to transfer assets and accounts held in your spouse’s name to yours.
- Update titles on your home and vehicles.
- Update beneficiaries on insurance policies (including life, health, homeowners, umbrella and auto).
- Consider rolling over your spouse’s retirement accounts. If you’re the designated beneficiary, you should be able to complete a direct rollover to a qualified account in your name.
Consideration #3 – What is your current financial situation?
Following the death of your spouse, it’s important to gain an understanding of your cash flow and expenses in order to identify any potential budget shortfalls. If you don’t already have one, start by making a list of your assets and liabilities to gain an understanding of your overall financial health.
Assets:
- Checking, savings and investment accounts
- Retirement accounts
- College savings accounts
- Home, vehicle and land values (if applicable)
Liabilities:
- Mortgage
- Consumer debt
- Student loan debt
- Car loans
Review your bank account statements to identify what bills need to be paid and when. It’s wise to wait a few months before taking your spouse’s name off your checking account in case you’re scheduled to receive any additional payments in their name.
Consideration #4 – How are your emotions impacting your decisions?
Everyone handles the death of a spouse differently. You may be overwhelmed with grief and unable to function, or you may be laser focused on making arrangements and preparing for the future as a way to distract yourself from your grief. Keep in mind that regardless of how you cope, you’re likely experiencing a period of emotional turmoil.
During the period immediately following your spouse’s death, you may be tempted to make major life decisions, such as selling the house you shared, moving across the country to be closer to family or making a major career move. However, you may end up regretting these grief-driven decisions once the immediate shock of losing your spouse has passed and you begin to settle into your “new normal.”
It’s wise to wait for at least a year before making any decisions that would significantly impact your life going forward. You have enough to deal with following the death of your spouse. Give yourself time to think through what the next stage of life looks like for you.
Consideration #5 – What less-urgent tasks do you need to tackle?
Once the dust has settled and you’re emotionally ready to move forward, your wealth manager can help you tackle the following important but less-urgent issues.
- Update your financial plan – Your new financial situation likely requires you to make some changes to your financial plan. Your wealth advisor can help incorporate any changes in your income and expenses, insurance benefits, Social Security spousal payment, etc. into your overall financial plan. He or she can also help you update your goals if they’ve changed since your spouse passed away.
- File insurance claims – Check with your spouse’s former employer(s) to determine if any insurance or pension payments are due to you. Reach out to any private insurance companies where you held policies. Also, remember to update the beneficiaries on any accounts held in your name.
- Update your estate plan – Review the following estate planning documents to determine if any changes should be made.
- Guardian designations for minor children
- Trusts
- Designated trustees
- Healthcare proxies
- Powers of attorney
- Will
The death of your spouse can leave you feeling emotionally drained and overwhelmed. It can be especially stressful to manage your finances during this difficult time. At Creative Planning, we understand. Our teams are here to support your financial needs as you focus on more important matters. For help planning for your financial future following the death of a loved one, schedule a call with a member of our team.
