This was submitted by a wise woman who knows about grief, and has helpful, necessary information for your financial future.
How to Approach Your Finances After the Death of a Spouse
Few things are as devastating as the loss of one’s spouse. It leaves a void that’s impossible to fill. And beyond the emotional turmoil, there’s also the potential for financial upheaval, making it even harder for the surviving partner to cope.
Indeed, while money matters might be the last thing you want to deal with at this time it’s, unfortunately, a necessary step in moving on with your life. At the very least, it might even provide a much-needed distraction from the grief. It’s also a good idea to enlist the support of your loved ones so they can help tick off all the items on your list.
First thing’s first—organization is essential following the loss of your spouse. This is because there’s inevitably a deluge of financial decisions that have to be made, which can get overwhelming fast. By getting organized, you can handle concerns systematically and efficiently, as well as determine what gets the highest priority.
At the most basic level, you’ll need to gather records and paperwork, including your spouse’s death and birth certificates and proof of your marital or civil union. This is a very important task as these documents will figure prominently in your next steps.
Assess healthcare coverage.
You may have made sure both you and your loved one had sufficient healthcare coverage to handle medical expenses—possibly even additional coverage for vision, dental, and prescription medication from Medicare Advantage plans. Review your policies and confirm whether you need to make any adjustments. It’s also important to duly report your spouse’s passing, a process that will require Social Security information, so make sure you have that information on hand, too.
With all the documents and information sorted, your next step should be to safeguard your spouse’s assets, as well as your joint ones. This will, of course, require some legwork on your part, so it may be prudent to get help from a trusted family member or financial advisor throughout the process.
For starters, you’ll need to know your options regarding your late partner’s retirement accounts, especially if you’re the named beneficiary. Ditto with other investment and bank accounts. While the movement of assets largely depends on state laws, more often than not, an advisor can give you a clear direction of your options, so make sure to take your current finances and tax situation into consideration before making decisions.
In the same way that you need to ensure that your spouse’s assets should flow where they should, so should you ensure that you claim benefits and compensation that are due you following your spouse’s death. These claims run the gamut from Social Security to life insurance. It’s important, therefore, to make contact with government agencies and in question, as well as have the paperwork on hand to lodge your claims.
It’s also a good idea to contact your partner’s place of employment, too, even if they were no longer actively working at the time of their death. This is because most companies usually have group life insurance policies in place, as well as pension and other savings plans you may be entitled to.
Plan for the future.
After losing your spouse, you may not be able to handle all the responsibilities of caring for your current home. If this is the case, a downsize may be in order. While downsizing will have less maintenance-related responsibilities, a smaller home could allow you to save on rent or your monthly mortgage payments as well. Before buying a new home, take into account your monthly expenses, annual income, and how much you can put down.
After all is said and done, you may be well-placed to make plans of your own, too, by prepaying your funeral. A prepaid funeral plan can be a wise choice, especially if you have specific end-of-life wishes of your own that you wish to have honored. Not only that, but it also eases the financial burden on your family.
Alternatively, you can also consider other avenues to cover your funeral expenses such as purchasing a final expense insurance policy. Opening a designated joint savings account for this very purpose with a trusted loved one is also a good idea.
No doubt, life goes on, even after a great loss—and so do financial responsibilities. By taking it one step at a time, you’ll find that there is, in fact, life after death and, with luck, financial freedom.
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