Though we can plan for the financial and legal impact of losing a spouse, it is undoubtedly one of the most devastating emotional events in a person’s life. Beyond coping with grief and making your way through even the simplest day-to-day tasks, widowed spouses must address a number of timely financial matters. In particular, the first year after the death of a spouse requires a great deal of attention to the estate planning and settlement process.
Here are some estate planning and administration considerations for the surviving spouse:
Wait to Make the Big Decisions
In the midst of grief, making objective decisions can be challenging. Unless outside circumstances require it, create a “decision-free zone” for financial matters. Attend to the daily necessities of paying bills, but avoid making any large financial decisions. Selling the house or other assets may end up making sense long-term, but don’t rush the process unless absolutely necessary. Emotions, though natural after the loss of a loved one, rarely mix well with financial decisions. Don’t be afraid to give yourself time to process loss before dealing with financial considerations.
Settle the Estate
Surviving spouses commonly act as the executor of the deceased’s estate. In this case, the surviving spouse must manage the estate settlement process, including: filing required state and federal tax returns, obtaining copies of the death certificate, notifying financial institutions and fulfilling other executor duties. Though many people can manage the emotional strain of settling the estate, you may consider using a neutral third-party to assist with executor duties if your grief seems overwhelming.
Review Options for Inherited Retirement Accounts
Surviving spouses have the option to rollover an inherited IRA into their own account . The rules around making withdrawals from an inherited retirement account can be complex, so consult with a financial advisor to determine the best path. However, once the surviving spouse decides what they want to do with the inherited IRA or other retirement account, they should update beneficiary designations as necessary.
Update Your Own Estate Plan
Many couples create their estate plans together, so surviving spouses must often adjust the terms of a joint estate plan. If there was no estate plan prior to the death of your spouse, creating an estate plan becomes even more critical. A financial advisor can work with you to create an updated estate plan that will accomplish your goals, such as giving assets to the next generation or including charitable giving into your estate plan.
Life after the loss of a spouse can be very stressful and complex – particularly when handling financial matters. Contact a Fifth Third Bank financial advisor for assistance.
Fifth Third Bank does not provide tax or legal advice. Please consult your tax adviser or attorney before making any decisions or taking any action based on this information. This information is provided for educational purposes only and does not constitute the rendering of tax or legal advice.
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