Tag Archives: money-saving

Navigating Financial Changes After the Death of a Spouse

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.

Downsizing

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.

Image via Unsplash

Will Your Death Put Your Family in Debt?

The cost for a traditional type funeral plan can be substantial, a major expense comparable to purchasing an automobile, furniture, or even a home, but it is the least researched purchase made by most consumers. Generally speaking, consumers look at talking about funeral planning prior to death as taboo, and this type of thinking can cause overspending and other problems, including how to pay for the funeral plan without running up debt they cannot afford to pay back. I advise consumers to look at funeral planning like any other financial investment and include it in their retirement savings plan. Funeral planning and how to pay for it should be included in financial planning matters and should be offered by financial planners to their clients.

If a death occurs suddenly and without warning, such as due to an accident, then a financial burden can occur within the family. When death occurs, many times family members want the best funeral plan available to honor their loved one, possibly never thinking about how it will be paid for. They pay the funeral director, cemetery or other facility with a credit card or other financing option; then the bills come due!

The death of a family member could cause a negative financial situation for the survivors if the deceased did not have any life insurance, death insurance or money in an account such as a Totten Trust which could help pay for funeral and final disposition expenses. This is why it is so important to become as educated as possible about the funeral planning process prior to a death.  Visit funeral homes, get price lists, visit cemeteries and mausoleums and get their price information, so you can be as educated as possible about making a funeral arrangement either at need (a death has occurred) or pre-need (a death has not occurred or is not even anticipated in the immediate future) and stay within your particular budget.

Generally the funeral home will want full payment at the time of death. Even if the deceased had a prepaid funeral plan, paying for it in monthly installments, if death occurs before all the payments have been made, they will usually be due in full at the time of death. So this can be a challenge for many families who do not have cash available to pay off the amount due.  Also, the deceased’s assets and accounts may not be available to the family until the estate has been settled.

There are many ways to save on the cost of funerals, including direct cremation options. Please check out my website, www.askthefuneralexpert.com, and my article “Frugal Funeral Planning” for tips and suggestions.

Have questions about funerals and funeral planning for both humans and pets? Contact Mike at mikeboyd@askthefuneralexpert.com.

 

Dead People Can’t Pay!

I recently read an article about dead drivers being forgiven for traffic infractions including tickets, fines, and fees. The move is an effort to dispose of these type of traffic cases and give the courts more time to deal with living issues. Great idea!

I wonder, how many deceased drivers’ records are still considered active cases by the courts throughout the United States? Have a problem like this one? Try taking a copy of the death certificate for the deceased to the agency sending the bill to the deceased and see what can be done to resolve the issue. If the agency will not eliminate the case then suggest you give the agency the new address of the deceased (for example, the cemetery, mausoleum or cremation niche address) so that bills can be sent there to the attention of the deceased and see what happens.

Have questions?  Email me at mikeboyd@askthefuneralexpert.com.

Mike

Airline Death Refunds

Although airlines are not required to issue full refunds for a ticket paid for, then not needed because the person named on the ticket dies prior to the flight, the airline should issue a refund for good customer relations. Offering to issue a credit to the person named on the ticket will not work, as the person has died and cannot use the credit.

If you have experienced this problem and have not been able to receive a refund for the ticket price, please contact me with complete details, and I will contact the airline for you in an effort to get the money paid for the ticket refunded .

 There is no charge for this service.   Just email me at mikeboyd@askthefuneralexpert.com.

Mike

Totten trust

A method of financing a prepaid funeral plan is a Totten trust. A Totten trust is a “payable on death” bank account, naming a beneficiary. This beneficiary could be the funeral home who will provide services upon the owner’s death. The consumer has control over this type of account and can move out of the area or even cancel it without the fear of losing money placed in the account. This account sets aside money for funeral arrangements, so the consumer should discuss this plan with their funeral director, who may allow price protection on certain goods and services, knowing the funeral provider is named as the beneficiary of the account.

I suggest looking up “Totten trust” on the web for a detailed, consumer friendly explanation of this type of account. A Totten trust may only cover the funeral home part of the funeral plan. The final disposition part of a funeral plan including burial plot, mausoleum crypt or cremation niche may be considered extra. Always discuss these areas with your funeral provider, be careful when making these type of arrangements, get everything in writing and included in any contract you are considering signing. Have questions, e-mail me:  mikeboyd@askthefuneralexpert.com

Mike

Pre-Financing a Funeral

Pre-financing (prepaid) funerals require a great deal of investigation and understanding prior to making that type of financial commitment. With the amount of money required for this type of investment, it should be considered as part of your financial portfolio.

There are many things to understand before signing up for this type funeral plan, and please use a great deal of CAUTION!   For example:

What parts of the funeral plan are “price-protected”, or guaranteed to remain at the current contracted price? Items that are not price-protected against inflation may require more money invested into the funeral plan at the time of death, which could be months or years later, as it is a pre-financed plan.

Which items are classified as cash advances which are not price protected (guaranteed)? An example would be the cost of the death notice in a newspaper.

If you move to another area or change your mind and want to cancel the prepaid funeral or final disposition plan, find out how much money will be returned to you if you cancel the plan prior to death, and whether you will earn interest on it. This should be clearly defined in the pre-financed contract, along with how long it will take for you to receive the money back.

What happens to your money if the funeral home, cemetery or mausoleum facility is sold, goes out of business or bankrupt? Investing your money into these type businesses is not like putting money into a savings account at a bank. If the bank fails, your money is generally protected. It may not be so here! The prepaid agreement should clearly define this area so you know how your money is protected.

I will discuss Totten Trusts and how a bank account controlled by the consumer can help pay for funeral arrangements in a future blog.

Consider your options and contact me with questions, or to share your experiences in this area. I’m here to help!     Email mikeboyd@askthefuneralexpert.com.

Frugal Funeral Planning

Check out Mike’s article, just added to the blog today, “Frugal Funeral Planning”, which contains more money-saving tips for the frugal funeral shopper.  Just click on the Frugal Funeral Planning tab above.

Your questions and comments are welcome.  For permission to reprint this article, email Mike at mikeboyd@askthefuneralexpert.com.