The following is a post from guest writer, Sara Bailey. You can find more information from her at www.The Widow.net.
Navigating Financial Changes After the Death of a Spouse
In an ideal world, family could take ample time to grieve after the death of a loved one. Unfortunately, surviving spouses must handle a variety of important financial matters in the weeks following a husband or wife’s passing. From keeping the lights on to saying goodbye to a home, here are some of the most important matters surviving spouses must contend with after their partner’s passing.
Organizing the Bills
If your spouse handled the finances or financial duties were shared, collecting information on all household and personal bills should be an early step after your spouse’s passing. Find out which bills are on automatic payment and which you must pay manually. In addition to paying all bills that are due, you’ll need to switch accounts in your spouse’s name to your own.
If you discover your bills are more than you can manage in your spouse’s absence, consider how you can adjust your budget. Reducing household expenses can cover small shortfalls, but if the gap is large, you may need to take a larger step like selling your home. During this time, it might help to hire a financial planner to ensure you’re making the right choices and taking the proper steps. However, it’s important to find someone you can trust with your finances.
Updating Estate Plans
If your spouse features in your estate plan as a power of attorney, health care proxy, guardian, or beneficiary, update these appointments promptly. You may feel unsure of who to name as a health care proxy or power of attorney now that your spouse is gone. Rather than choose the person closest to you, ask someone you trust to honor your wishes. Forbes offers additional advice for choosing a person to serve in these important roles.
In addition to naming a proxy and POA, surviving spouses must update beneficiary designations or risk a costly mistake. Beneficiary designations override wills in court, so if you update your will but not beneficiary forms, your assets will likely have to go through probate. CNBC advises surviving spouses to update beneficiary designations with IRA, 401(k), and 403(b) plans, life insurance policies, 529 accounts and any other account that transfers on death.
Reviewing Insurance Policies
Find paperwork for life, health and other insurance policies and notify companies of your spouse’s passing, filing claims as needed. You’ll need to provide copies of the death certificate. If you had health coverage under your spouse’s policy, you may be able to continue coverage under COBRA. However, you’ll be responsible for the whole premium without the employer cost share. If that’s not available or cost-effective, shop for insurance on your state’s marketplace. In addition to health insurance changes, your life insurance may no longer be needed without a living spouse or dependent children. Weigh whether your policy is worth keeping or if you should sell it to help with living expenses, including medical care you may need later in life. If you decide to keep your life insurance policy, update the beneficiaries to reflect your spouse’s passing.
Living alone comes with risks. A senior living alone is responsible for maintaining and financing an entire property, and the extra labor increases the risk of falling while home alone. Social isolation in itself is a health risk, with effects like increased risk of depression, stroke and cognitive decline. Many seniors benefit from moving to a lower-maintenance home near friends and family after a spouse’s death. While it’s difficult to leave a longtime home, maintaining safety and social connectedness is paramount. If moving isn’t an option, hired help such as house cleaners and personal care attendants can ease the burden of living alone.
When you’ve shared a life for years, it’s difficult to adjust to living and managing finances alone. It’s common for spouses to divide areas of expertise, but when one spouse passes, the surviving partner is left to fill in the gaps. If you’re struggling to answer these big questions alone, know that professional guidance is available.
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