Your emotions are running deep, and all you want to do is grieve. Yet there are decisions to be made; financial matters to tend to. Where do you begin?
First of all, take a breath. Little can be done until you receive the death certificate, which can take weeks, and many issues are not urgent. In fact some areas are best postponed and dealt with when emotions are less raw. (See the section later entitled “Things You Can Put Off until Later.”)
Do you have a trusted friend or family member who could help you? Details of the tasks involved can be overwhelming. Emotions can cloud your ability to make decisions and the sheer activity of settling the estate can be physically challenging. An extra pair of eyes and hands can bring a welcomed peace of mind.
Gather important papers.
- Death certificate. Obtain at least five certified copies, which are provided by the funeral director. Some companies want certified copies; others are satisfied with regular copies.
- Insurance policies.
- Marriage certificate. Some companies will ask for a copy of this document.
- Military discharge papers. If you cannot locate these, write to:
Department of Defense
National Personnel Record Center
9700 Page Blvd.
St. Louis, MO 63132
- Will and/or Trust. Depending upon the complexity of these documents, you may want to solicit the assistance of an attorney to assure the provisions are properly executed.
- List of current assets and liabilities. If you do not have a current list, you will need to compile one. This list will include assets from brokerage and bank accounts, annuities, mutual funds, retirement accounts, real estate held for investment purposes as well as the value of your home and personal property such as vehicles, jewelry, collectibles, etc. (A sample of one is available on this website by clicking on the link Balance Sheet.)
- Children’s birth certificates and Social Security numbers. If you have dependent children, you will need this information to apply for Social Security benefits.
Apply for benefits.
Make copies of everything you send. Documents can get lost or misplaced. Also set up some sort of tracking system for the paperwork. (One is available on this website under Estate Paperwork Tracking Form.)
- Insurance proceeds. Contact your local agents if possible. Otherwise, get in touch with the company. Find out what paperwork is necessary to collect benefits from life insurance and accidental death policies, mortgage insurance policies, credit card protection policies, and from employer-provided policies.
- Social Security benefits. If your spouse paid into Social Security, you may be entitled to several benefits.
- One-time death benefit of around $250 towards burial expenses. Your local Social Security office or funeral director can assist with the paperwork.
- Survivor’s benefits for you or children. You may be eligible for survivor’s benefits if:
- If you are over 60 years old.
- If you are a disabled widow under 50 years old or
- If you care for dependent children under 16 or disabled.
Contact your local Social Security Administration office, call 800-772-1213 or check online at www.ssa.gov.
- Veteran burial benefit. Survivors of veterans are eligible to receive a lump-sum payment of $300 for burial expenses and a plot interment allowance of $300. (Burial in a national cemetery is free to a veteran, his or her spouse, and dependent children.) Veterans are also eligible for a headstone or grave marker at no charge. The funeral director can help you apply for these benefits or you can contact the regional Department of Veterans Affairs office.
- Employee benefits. If your spouse was employed at the time of death, there may be benefits such as:
- Accumulated sick and/or vacation leave.
- Life, health, accident insurance benefits.
- Death benefits associated with your spouse’s professional organization or union.
- Pension plan. (See information below regarding retirement accounts.)
- Workman’s compensation benefits, if your spouse’s death was workrelated.
Begin to settle the estate.
If your spouse had a will and you were designated as the personal representative or executor of the estate, the estate may have to be probated. (Check your state’s law for its minimum estate amount.) This process includes:
- Filing a petition with the court after death along with a fee for the probate process.
- Proving that the will is valid.
- Informing creditors, heirs and beneficiaries.
- Disposing of the estate in accordance with the will.
If there is no will, the court will appoint a personal representative (usually the surviving spouse) and the estate will be distributed according to state law. Assets held jointly with someone else are transferred to the surviving owner outside of probate and outside of the will. Insurance proceeds and retirement accounts also pass to the beneficiary outside of probate.
Evaluate short term income and expenses.
Your income and expenses have just changed. A Cash Income & Expenditures Statement can give you an idea where you stand financially so you can determine what adjustments need to be made in the short-term to meet your monthly obligations. (A sample is available on this website.)
Change ownership and update beneficiaries.
- Bank and investment accounts.
- Your life insurance policies.
- Annuities and retirement accounts, including employer retirement plans and IRAs. Depending upon the type of retirement account, decisions in this area can be complex. It is recommended that you consult with a professional advisor such as a Certified Financial Planner™ or CPA or Enrolled Agent to explain the shortand long-term implications of the various distribution options.
- Credit cards. Cards issued in the name of the deceased spouse only should be cancelled. For those credit cards held in both of your names, notify the institution that your spouse is deceased and to list the card in your name only.
Ask for professional help. There’s nothing wrong with asking for help from a professional advisor. In fact, their expertise can save you time and perhaps costly mistakes.
Things you can put off until later. What a difference a year makes. These are non-critical, more emotionally driven decisions that can wait.
- Selling your possessions or giving them away.
- Buying things.
- Giving money away or makings loans to others.
- Evaluating insurance needs.
- Estate planning.
- Retirement planning.
There are few more challenging times in life than dealing with the death of a spouse. However, following these steps to get your financial affairs in order, and surrounding yourself with family and friends can make the process less overwhelming.