Dealing with the passing of a loved one is never easy, but it becomes more challenging when legal loose ends remain untied. In addition to navigating life without your spouse, you also need to make crucial financial decisions that can affect your future and the future of your loved ones.
Most couples maintain a contingency plan in case either partner passes unexpectedly. However, even in sudden, unexpected scenarios, there are steps you can take to handle finances and other legal tasks after the passing of your spouse. It’s a stressful and emotional time, but there are essential steps you need to take after your spouse passes away.
Here are five critical financial decisions you should prioritize.
1. Choose Who to Notify and When
While it’s not urgent to remove your spouse’s name from every bill or document immediately, you will need to decide when to handle the notification to relevant parties. Having proper documentation on hand will make this process simpler.
Because you and your spouse likely share multiple bank accounts, vehicle loans, mortgages, and other property, you will need multiple copies of your partner’s death certificate to confirm these changes. With this certificate, you can verify your partner’s passing to credit card companies, banks, utility companies, and the Social Security Administration. Make sure to keep a copy of your marriage certificate for paperwork purposes, too.
2. Decide Whether to Cash in Insurance Policies
If your spouse has an insurance policy with you or another family member as a beneficiary, notifying the company is an essential step after your partner’s passing. You may receive payments from the insurance company, or there may be other coverage through your spouse’s employer (whether current or former).
Starting the process as quickly as possible can help ensure your financial future. You’ll need to decide when and how to collect the benefits, however, and decide how to change your beneficiaries. Choosing a new beneficiary is necessary if your spouse was the sole beneficiary.
However, note that according to the Balance, life insurance death benefits may be subject to tax, so the amounts may vary from what your policy states. The decisions you make can also determine the final amount you receive.
3. Choose Whether to File for Social Security Benefits
If you or your late spouse received Social Security benefits, you need to decide how to handle those moving forward. Widows and widowers can begin receiving benefits at age 60. However, you may only receive either you or your spouse’s payment, not both, after their passing.
Find out which amount is higher and decide whether to delay your own filing or leave your spouse’s account to accumulate more money. You can always switch later, earning a higher payout by letting one account grow a few years longer.
4. Determine Whether to Consult a Professional
If you have a complicated financial situation, you may want to consult a professional for advice. A financial planning advisor may help you consolidate payments and save for your future, NerdWallet highlights. Other professionals, such as estate attorneys and accountants, can get your finances in order and make budgeting less stressful, but they do come at a cost.
5. Name an Advocate for Yourself
If your partner was your advocate for medical and other scenarios, you now need to name another party to handle those responsibilities. In each state, alternate decision-makers step up to handle medical and other choices when you cannot. If you have children or siblings, they may qualify as an advocate for you through “next of kin” guidelines.
However, each state varies in its rules regarding alternate decision-makers. You can choose who speaks for you in the event you cannot advocate for yourself. You can create a living will, power of attorney, or another advance directive to state your preferences for medical care and name your advocate.
Grieving is a process, and so is moving on financially without your spouse. However, by taking proactive financial steps, you can ensure your future while continuing to heal.