Financial Steps in the First Year After Losing a Spouse
In the first year after losing a spouse, the financial priorities are to cover the next few months, collect what you are owed, retitle what is now yours, and put off big decisions until you are ready. Very little has to happen in the first weeks. This page lays out what tends to come first, what can wait, and where an advisor fits.
What needs attention in the first month?
- Get 10 to 15 certified copies of the death certificate; most institutions require one.
- Locate the will, any trust documents, insurance policies and recent account statements.
- Make sure the bills that keep the household running (mortgage, utilities, insurance premiums) are paid from an account you can access.
- Notify the employer, Social Security and any pension provider.
- Keep a list of every call and every form. It helps more than it sounds.
What benefits may be available?
Life insurance proceeds, including group coverage through an employer; Social Security survivor benefits (eligibility depends on your age and situation, and a one-time death payment may apply); pension or annuity survivor options; employer benefits such as unpaid salary, unused leave and retirement plan balances; and veterans' benefits where they apply. Each has a claim process and its own paperwork.
What happens to retirement accounts?
A spouse named as beneficiary of an IRA or 401(k) has choices most other heirs do not, including treating the account as his or her own or keeping it as an inherited account. The right choice depends on your age, when you need the money and the tax picture, and it is generally not reversible, so it is worth a conversation before you sign.
What can wait?
Selling the house, moving, investing a lump sum from insurance, paying off the mortgage, and making gifts to children. A common guideline is to make no major, irreversible financial decision for six to twelve months unless something requires it. Parking insurance proceeds in a safe, accessible account while you decide is a reasonable interim step.
How do taxes change?
You can usually still file a joint return for the year of death. In following years your filing status changes, which can change your tax bracket, your Medicare premiums and the tax on Social Security benefits, even if your income does not change much. This is a conversation to have with your CPA before the next filing season.
How does a financial advisor help?
We build a list of every account, policy and benefit, help with the claim forms and retitling, set up the interim cash plan, and then, when you are ready, update the plan for one income, new goals and new beneficiaries. We coordinate with your attorney on the estate and your CPA on the return. We do not provide legal or tax advice.
Talk with us
Call 770-250-7588 or use the Contact Us page. If it is easier, bring a family member or friend to the first meeting.
This material is for general information only and is not legal or tax advice. Benefit eligibility and tax rules depend on individual circumstances and change over time.