Life After... The Death of Your Loved One
BY PETER GAERTNER
All of us are dreading the day that we find out that our husband, wife or other life partner/loved one has passed. In an instant, life as we know is about to change. Before us, in an emotional phase of grief and uncertainty, are all the things we may have never done before and are asked to do now, which can be very overwhelming, exhausting, and possibly unknown. While death is part of life, here at Affinity Wealth we sympathize with you and are honored to be considered “extended family” or close “family friends” for many of our clients – especially during this difficult time. It is precisely during these daunting and challenging times, that a team of financial professionals could provide an objectively helpful, and less emotional, solution. I am not only referring to financial planning, but to assist with other challenges that may come up, regardless of how solid an estate plan was crafted in the first place. While this article is surely not covering every aspect of what one may encounter, I wanted to outline the common themes that we have helped with during major life transitions, and in a format that may be helpful for others when the time comes as well.
Death certificates: Unless your loved one dies in a hospital or nursing home with a medical professional present (the institution will handle it for you), the funeral home may be able to assist you. Alternatively, you could reach out to the Bureau of Vital Statistics as they keep records for the most recent 40 years. It’s a good practice to request multiple copies – half a dozen is not too many – as some companies may require originals to assist you, and you will want to keep a few yourself as well.
Arrangements: While it is surely difficult to hear this kind of news, you will also have to be on the giving end by notifying family, friends, employer, etc. of the passing. Proper and timely arrangements with either a funeral home, cremation or donation company will have to be handled right away, based on the deceased’s wishes. Crafting up an obituary can oftentimes be best accomplished with the help of another family member or very close friend to assist you.
Social Security: You will have to notify the social security office (800-772-1213) and inform them of the passing. Depending on whether/how you both have filed, you may be entitled to survivor benefits. For exact numbers or estimates, it’s important to consider either one’s timely and untimely passing in the comprehensive strategy.
Work Pension: Should your spouse have been receiving a work pension, or is entitled for a future benefit of one, and should you be listed as beneficiary of such, you will need to reach out to the (former) employer’s HR department to notify them of the event and provide a death certificate as well. Depending on the previous election (beneficiary and payments selection), you may be entitled to a benefit as well.
Life Insurance Benefits: Whether it’s through an employer or an insurance company, you will need to be aware of what policies were in force at the time of death and reach out to each respective claims department. They will also ask for a death certificate from you and should make any necessary death claims forms available to you as well.
Cancel/notify/change: There are of course other things to do and some can certainly be accomplished by friends or family members: DMV, passport, memberships, subscriptions, social media accounts, email accounts, changing the name on bank accounts, credit cards, utilities, TV and internet.
Update of estate plan: While usually not necessary right away, you may also want to consider reviewing and updating your estate plan in the year following the death. Beneficiaries should be updated right away to reflect your wishes and preferences, but even your legal documents such as, Power of Attorneys, healthcare directive, last will and testament should be reviewed and if necessary, updated by a qualified individual in case you do not have any contingencies listed
Tax situation going forward: Connect with your CPA and financial advisor as soon as possible, especially if it is late in the year. You are usually entitled to file as Married Filing Jointly one last time for the calendar year that you lost your partner. Unless you care for minor children or elders, you will likely file as Single in future years. This of course may change your tax rates and you may face a “tax surprise” during the first return that is filed as Single, all depending of course where your income is coming from and what your withholdings are. Please do review your tax situation carefully with your CPA and financial professional and have them review whether anything could be entertained during the last tax year that you are able to file as MFJ (e.g. additional IRA distribution to pay down debt, provide necessary income, Roth conversions at lower current rates than expected to be once in single filer brackets).
This is of course not a topic that anyone enjoys reading about because it will hopefully not happen to you for many years, but we all know that death is inevitable. After seeing many clients of mine going through this process, I felt it only appropriate to share part of our approach with you today. A surviving spouse has many of the same questions that the couple had when it comes to retirement planning. But, at the heart of it all, the main difference and question that they absolutely must have answered is: “Will I be okay?”. It is my and my team’s sole mission to ensure that you and your loved ones are taken care of – in good and in bad times. That is my commitment and promise to you and it all starts with having a financial plan in place.