Financial

Contact a CPA to assess what your next steps should be. If your loved one had a CPA, contact them. If not, you may benefit from hiring one. Taxes for your spouse must be filed and paid in the year of his/her death. The estate may also have to file a tax return, and a final tax return will need to be filed on the deceased’s behalf. There may also be tax consequences to keep in mind when accessing money in bank accounts. Depending on your situation, you may be responsible for paying any taxes earned by the account once your loved one dies. Keep in mind, the tax burden could be significant on a well-funded investment account.

Depending on the circumstances, you and your children may be eligible for survivor benefits. This may include a one time lump sum death payment and/or monthly benefit payments for young children. Widow(ers) under age 65 are not eligible to receive a widow(er)’s benefit. You cannot accomplish this online; to report a death or apply for benefits, call 1-800-772-1213 or visit your local Social Security office. If the deceased was receiving Social Security benefits, you will also need to inform the Social Security Administration (SSA) that your loved one has passed to stop his/her checks from being issued. SSA will let Medicare know that your loved one has died. 

If your spouse served in the military, check with the Veterans Administration to see if you are eligible for any veterans benefits.

Notify all insurance companies, including health insurance and life insurance agencies. Contact providers to end coverage for the deceased on home, auto, property, and health insurance policies, and ask that any unused premium be returned.

For life insurance, you’ll need a death certificate and policy numbers to make claims on any policies the deceased had. Ask for links of hard copies of claim forms and instructions. The sooner you start, the sooner you may receive the benefits.

Change titles on all joint bank, investment, and credit accounts. If you shared a joint account with your deceased loved one, you’ll need to notify the bank that he/she has died. Most bank accounts carry automatic rights of survivorship, which means if your name is on the account, you have full access to the funds when your loved one dies. You will automatically become the sole owner on the date of your relative’s death. Most banks will require a death certificate to remove the relative’s name from the account.

Close any accounts that were only in your spouse’s name, or change the account holder information to now include yourself. If the deceased person was the sole owner of a bank account, the bank will release funds to whomever your spouse named as his/her beneficiary once the bank learns of the account holder’s death. Many banks let their customers name a beneficiary or set the account as Payable on Death (POD) or Transferable on Death (TOD) to another person. You’ll need to show the bank a death certificate to get the funds released. If the owner of the account didn’t list a beneficiary or POD, things get more complicated as you may need legal assistance to prove your right to inherit the funds. 

If your partner was the primary financial planner in the family and now the task falls to you, don’t panic. Here are some things to keep in mind to get you started. Keep good records, take notes, and log conversations. Organize all of the bills and create a budget. Planning financially for the longer term after the death of a spouse includes investing, securing your financial future, estate planning, retirement planning and investing, insurance, tax considerations, filing status, and taxes on retirement plan distribution, insurance proceeds, and benefits.

For more information, visit: https://firstbusiness.bank/resource-center/organizing-your-finances-after-your-spouse-has-died/

Hiring a financial professional can also help you update your financial plan based on the benefits you’ve received to help minimize any tax implications you may face or inadvertently trigger by inheriting your spouse’s estate. You can also discuss changes in the short term, such as a budget, and long term, including your retirement plan and investment options.

Notify credit agencies – To prevent identity theft, send copies of the death certificate to one of the three major credit bureaus: Equifax, Experian, or TransUnion. You only need to tell one of the credit agencies, and they will inform the remaining two institutions on your behalf.

Close credit card accounts – Contact customer service and tell the representative that you’re closing the account on behalf of a deceased relative who had a sole account. You’ll need a copy of the death certificate to do this too. Keep records of accounts you close and inform the executor of your spouse’s estate of any outstanding balances on the cards. Credit bureaus, as part of their regular reporting process, will also send card issuers an alert that your relative has died. But if you want credit accounts notified faster, contact them directly. Be sure to cut up your dead loved one’s credit cards so they aren’t lost or stolen.

If the credit card account is shared with another person who intends to keep using it, keep the account open but notify the issuing bank your relative has died so the deceased’s name can be removed from the account. Destroy any cards with their name on them to prevent theft and identity fraud.

Don’t forget to pay bills if they are not already set up for automatic payments.

The executor will be responsible for getting the funds to repay creditors, pay bills and divide funds according to your loved one’s will.

Disclaimer: Please note that we are not financial or tax experts, so individuals should always consult their CPAs as their primary source of information and assistance.