After the Death of Your Spouse: Next Financial Steps for Surviving Spouses

 As a surviving spouse, you might find yourself overwhelmed by all the administrative and financial to-do items that you have to handle soon after the death of your spouse. There's a lot to do, much of which you've never done before. And you're supposed to get it all done while grieving.

This book, by Mike Piper, CPA, walks you through it, in plain language.

Many surviving spouses find themselves overwhelmed by all the administrative and financial to-do items that have to be handled in the months after their spouse’s death. There’s a lot to do, and they’re supposed to get it all done while grieving. And in many cases, the situation is made more difficult by the fact that the surviving spouse is not the one who regularly handled the household finances.

I wrote this book to walk people through it, in plain language. It’s the book I want my spouse to have, in case something happens to me.

Fortunately, some of these to-do items for surviving spouses are important but not urgent. And in fact, for some of these items, it’s best to wait. Many people report experiencing “brain fog” in the weeks or months following their spouse’s death. They find that they have difficulty concentrating and difficulty performing tasks that would normally be easy. Major, irrevocable decisions are best put off until this period is over, in cases in which it’s practical to do so.

That’s why the book is broken down into two parts: immediate next steps and intermediate next steps.

The book’s table of contents is as follows:

Part One: Immediate Next Steps

1. Learn the Terms (The Estate Administration Process)
2. Getting Organized
3. Notifying Necessary Parties
4. Initial Responsibilities as Personal Representative
5. Updating Your Own Estate Plan

Part Two: Intermediate Next Steps

6. Social Security Planning
7. Further Responsibilities as Personal Representative
8. Handling Inherited Retirement Accounts
9. Additional Options as a Beneficiary and Surviving Spouse
10. Tax Returns
11. Reassessing Your Own Finances
12. Reassess Your Portfolio
13. Finding Professional Assistance

Conclusion: What’s Next?

Appendix A: Does an Inheritance Create Taxable Income?

Appendix B: Social Security Widow(er) Benefit Math Details

Appendix C: Dealing with Trusts

 

Widow Brain: What To Expect After Your Spouse Dies & 9 Ideas to Help

Elliott Appel provides the following perspective and advice:

"Losing a spouse and becoming a widow is a life changing and emotional experience. 

Emotions come and go: anger, fear, sadness, grief, loneliness, pain, shock, guilt, worry, and more. 

Brain fog, or “widow brain” can appear, causing even more frustration. 

Let me begin by saying everyone experiences grief differently. Widow brain affects people differently. There is no uniform grieving process with a step-by-step timeline of what will happen. 

It’s a mish mash of time and emotions. Each person’s experience is unique. At the same time, there are commonalities people share that resonate with others. 

Let’s look at what widow brain is, what you could experience, how long it may last, ideas to help with widow brain, and wrap up with a few financial planning ideas to help make your financial life easier."

Details at: https://kindnessfp.com/widow-brain/

Claiming Social Security Widow(er)'s Benefits

 "Claiming Social Security Widow(er) Benefits: It's Complicated" by Joe Elsasser | October 07, 2020 describes why widow(er)s should consult an expert (in addition to a Social Security representative) to ensure they get the full benefits they deserve. Saying "it's complicated" is an understatement!

"the widow(er) benefit is calculated based on both when the deceased claimed Social Security and when the survivor claims."

"The benefit is limited to the higher of 82.5% of the deceased’s full retirement age (FRA) benefit or the amount the deceased was actually receiving at the time of their death. If the deceased was born between 1943 and 1954 and claimed benefits at age 62, and the surviving spouse reached full retirement age by the time of the deceased’s death, the surviving spouse will actually receive more than the deceased was receiving (82.5% of the deceased’s FRA benefit rather than 75%)." Different birth years mean different outcomes.

Elasser goes on to explain the options in more detail and offer some examples, convincing this reader that making the decision for the survivor about when to claim SS benefits merits very careful consideration with an experienced advisor.

Read: https://www.thinkadvisor.com/2020/10/07/social-security-widower-benefits-and-claiming-strategies-its-complicated/

Wives! Listen up! Read: Husbands ignore future widow's needs

"The amount of money a widow receives from Social Security can mean the difference between comfort and hardship."
"Husbands have a lot of control over how this will turn out. Each additional year they postpone collecting their own Social Security adds another 7.3 percent to the amount a future widow will receive every month from the program’s survivor benefit."
"But husbands can be a stubborn lot," according to research reported in the Squared Away Blog.
When researchers conducted an experiment with husbands they found that, regardless of how the information was presented, husbands failed to choose to delay their own SS benefits to improve financial security for their widows.
Read the blog post which contains a link to the research report: https://squaredawayblog.bc.edu/squared-away/husbands-ignore-future-widows-needs/

My comment: they probably aren't funding IRAs for their wives, either.

Widow(er)s get help for the IRS

Widow(er)s are eligible to file a joint income tax return with your deceased spouse for the year the death occurred (assuming you have not remarried). Also, for the next two years, you may be eligible for special benefits as a "qualifying widower" See IRS Publication 501 for details. https://www.irs.gov/forms-pubs/about-publication-501

About Publication 501 | Internal Revenue Service www.irs.gov Publication 501 discusses some tax rules that affect every U.S. citizen or resident who may have to file a federal income tax return. It covers who must file, who should file, filing status, exemptions, and the standard deduction. This publication discusses some tax rules that affect every person who may have to file a federal income tax return.

Click on the Publication 501 link in the website to get a PDF. It says it's for filing 2017 returns but the website indicates there are no recent changes. See page 9 of the PDF for "Qualifying Widower" status.

"This filing status entitles you to use joint return tax rates and the highest standard deduction amount (if you don't itemize deductions) for the two years following the year of spouse's death.

So you can file a joint return for the year the death occurred and then use "qualifying widower" status for the following two years.

Widowhood Resources

One of the hardest experiences in life is losing a spouse and when it happens unexpectedly it can be especially difficult to deal with the financial upheaval and required paperwork.  a good place to start is with the book:

Moving forward on your own: Financial Guidebook for widows (reviewed in the August 14, 2011blogpost: http://fpwusu.blogspot.com/search/label/widowhood

Other helpful resources include:

A Guide for the Newly Widowed by: AARP Outreach & Services, May 6, 2005

http://www.aarp.org/relationships/grief-loss/info-2005/newly_widowed.html

Final Details: Claiming Benefits by: AARP Outreach & Service, from: AARP, January 2008. http://www.aarp.org/relationships/grief-loss/info-01-2008/final_details_claiming_benefits.html

Final Details: A Checklist by: AARP Outreach and Services, November 15, 2004

http://www.aarp.org/relationships/grief-loss/info-2004/final_details_a_checklist.html

Widowhood: Help In Coping And Understanding http://www.essortment.com/widowhood-coping-understanding-35939.html

Widowhood - Losing a Spouse

http://womensissues.about.com/od/widowhood/Widowhood_Losing_a_Spouse.htm

The ABC’s of Widowhood (book) http://abcsofwidowhood.com/

Widowhood - How to Handle the First Few Weeks After the Loss of a Loved One

http://ezinearticles.com/?Widowhood---How-to-Handle-the-First-Few-Weeks-After-the-Loss-of-a-Loved-One&id=1424725

Surviving Middle-Aged Widowhood (blog) http://survivingmiddle-agedwidowhood.blogspot.com/

Depression After Losing a Spouse http://www.livestrong.com/article/106306-depression-after-losing-spouse/

The Anguish of Losing a Spouse http://well.blogs.nytimes.com/2010/04/05/the-anguish-of-losing-a-spouse/

Health & Well-being: losing a husband or wife  http://www.videojug.com/interview/losing-a-husband-or-wife-2

How to Survive Losing A Spouse http://www.articlesbase.com/self-help-articles/how-to-survive-losing-a-spouse-134884.html

Coping with unwanted change: losing a spouse http://www.unwantedchange.org/Templates/uc/Content.aspx?id=826

Financial guidebook for widows

Widowhood can be a devastating life event.  Friends and family members may offer to help but we often feel helpless in providing support. Providing the widow with a copy of this book may be the most valuable help you can offer. 

Kathleen Rehl’s book, Moving Forward on Your Own: A Financial Guidebook for Widows.

Quotes below are from the web page which also provides ordering information for this award winning book: http://www.kathleenrehl.com/

“A husband’s death is possibly the most devastating event a woman will experience. She may wonder, “Am I going to be able to make it on my own?” She may feel overwhelmed and not know what to do next.

“This guidebook helps widows begin to feel more secure about their financial matters, serving as a catalyst to assist women make progress after a spouse's death. It integrates basic financial information with self-reflective exercises to encourage self-confidence about money issues. Written in an easy-to-understand manner, it's presented in a beautiful format--to help heal a woman's soul while gently focusing on money matters.

“Widows transitioning into their new financial life may use this book on their own or with the guidance of a professional. Grief support group members can use this book together. Or, it may be given as a gift to a family member or friend who is widowed.”