Allworth Co-CEO Scott Hanson shares four important must-dos if you become a widow or widower.
There are more than 15 million widows and widowers in the United States, and nearly four million of those are under the age of 65.1
I remember the first time I met with a client who had lost her spouse. I was young, diligent, and well-schooled, but still new to advising, and so I was a bit unaccustomed to talking about death.
I did my best. But my heartbroken client was facing an entirely new and unwanted reality with such courage and grace, that I’m still to this day touched by how she fought not to make me uncomfortable with her pain.
It was almost like watching someone physically pick up a part of themselves and put it aside so we could address the work at hand.
Since that day, and as I’ve gotten older and gained more experience and advised numerous people who have lost the love of their lives, I’ve been blessed to see a lot of courage and grace.
To be sure, processes around death are the most emotionally and professionally difficult, but it’s also an undeniable honor to be entrusted with such responsibility.
Which brings me to the topic at hand, which is to write today about some basic financial planning directives for widows and widowers. As the fourth installment in our series on financial planning, what follows are 4 things to do if your spouse dies.
1. Get multiple copies of the death certificate
There are a lot of things that must be done when your spouse dies. Fortunately, whether you're working with a mortuary, a funeral home, or a crematorium, they will help you with a couple of the more pressing logistical considerations you will have.
Officials who deal with the transition of the body at death will be able to get you 15-20 copies of the death certificate, and they will notify Social Security that your spouse has died.
In the aftermath of the death of a spouse, while your day-to-day life is going to be heavily involved with providing documentation to third parties, aside from your will, there is probably no single more important piece of paper than the death certificate.
You will be asked for it again and again.
That’s because you’ll need the death certificate for everything from filing an insurance claim to collecting money from your spouse’s retirement savings accounts, and more.
Be it a funeral home, or a crematorium, they will certainly address this issue with you. My goal here is to both illuminate its importance and to answer what is typically one of the first logistical questions the surviving spouse has, which is, how do I get the death certificate?
2. Purchase a notepad and a dedicated, expandable file
Unfortunately, just when you probably most want to sit still and do nothing, you’re called upon to perform tasks you likely have no experience doing, but which must immediately be done.
You’re in a fog, but there is no way around this, and few ways to sugarcoat it.
This seemingly minor decision can save you a lot of trouble down the line.
You’re going to be speaking to a rush of people, so buy a notepad and write down the information from every conversation. Use an expandable file (old fashioned accordion type) to keep the death certificates and the stack of other key pieces of information (insurance account numbers, credit card statements, Social Security checks and cards, a copy of the will, bank account numbers, etc.), that you’re going to be called upon to repeatedly produce.
In a practical way, the accordion file gives you an out-of-sight (and organized) place to store what are tedious tasks that double as physical reminders of the heartache, and taking accurate notes on a notepad not only relieves worry, legally, it’s among one of the most important things you can do.
3. Meet with your financial professionals as soon as you possibly can
I don’t say this lightly. Among the many times I’ve met with a surviving spouse, I doubt there’s ever been a single occasion where I wasn’t able to guide them through something vital but forgotten (a deadline, distribution, tax filing reminder, etc.) that immediately needed to be addressed.
All that, and your financial needs, your monthly expenses, investments, insurance needs, and even the basics of your actual financial plan, will all need to be updated.
The same goes for your accountant and your estate planning attorney. Meet with them (and certainly inform them) as soon as you possibly can.
You’ve probably been working with your advisory team for a very long time. In the unfortunate event that you become a widow or a widower, it’s moments like these that I believe you’ll understand precisely why.
4. Address the minefield that is Social Security
The creation of Social Security back in 1935 was so well intentioned.
But now, it's facing a funding crisis, politically charged, in need of a makeover, and, unfortunately, as it’s evolved into an all-too often insufficient and singular source of retirement income for millions of retirees, it’s difficult to fathom what it has become.
If your spouse has died and they were already receiving benefits, the Social Security Administration will issue a one-time death benefit in the amount of $255.
Yes… $255.
And, incredibly, if your spouse’s benefit for the month in which they died has already been paid out, the SSA will expect that it be returned. So, if you’re still receiving physical checks from the SSA after your spouse’s death, don’t cash them (as they will eventually want that money back).
If you have children that are minors, you should immediately make an appointment at your local SSA office (benefits for surviving children begin at the time of the appointment and not on the date of a parent’s death). There are also survivors benefit considerations for those who qualify. And, just so you're aware, this type of benefit cannot be applied for online.
(I should also mention that the pandemic has altered in-office hours and operations, so be sure to check with your local office for their current COVID procedures.)
Most importantly, speak with your team of financial professionals, and, if appropriate for your situation and, because it’s a bureaucratic mess, deal with Social Security right away.
Writing an article about retirement planning for widows and widowers is a difficult-but-important-reminder about the delicate nature of life. And, though I didn’t fully grasp it in my 20s, it’s at times like these, despite the emotional and logistical difficulty, that I know precisely why I chose to become an advisor more than 30 years ago.
1 https://www.kiplinger.com/slideshow/retirement/t021-s004-financial-moves-to-make-after-losing-a-spouse/index.html
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