Stableford Capital Insights

What No One Wants to Talk About When It Comes to a Financial Plan - Losing A Spouse

If you have not experienced the loss of a spouse yet, you likely know someone who has. Perhaps you’ve seen a parent or a friend go through the devastating grieving process. And then the dreaded time consuming and expensive probate process. The U.S. census estimates that there are 11.2 million widowed individuals across the country, most of them women and many left with stacks of paperwork and no financial plan.You may think it will be easy if you and your spouse simply leave everything to each other in a will. However, there can still be red tape and headaches. And sometimes deaths occur unexpectedly, before you’ve had a chance to legally plan things out. Whether your financial plan is shaky or rock solid, there are steps you must take to ensure your investments and future are protected.

How to Prepare and Organize Your Financial Plan Beforehand

A couple reviewing their financial plan on the internet

Often the best time to deal with loss is far before it’s even on the radar. Then you and your spouse can think clearly and create a financial plan together. A primary goal of planning ahead is for the remaining spouse to avoid the probate process.Probate is the legal process for a will to be reviewed for authenticity, or for an administrator to be appointed when a valid will does not exist. It’s the process of distributing assets and a way for the government to keep track of the legal owner of property and accounts, so that they can charge taxes accordingly. Without a legal, valid will, or with a complex estate, probate can take a long time. The longer the process, the higher the cost. Probate laws vary from state to state.There are a few things you can do now to help ease the burden of the financial plan transition after death.

  • Add spouse names to current accounts, either with full access to the account or as a transfer-on-death or pay-on-death beneficiary.
  • Make sure your spouse is listed as a beneficiary on accounts.
  • Consider adding secondary beneficiaries, in the case that you and your spouse pass at the same time.
  • If you want more control over assets upon your death, such as leaving specific assets to specific people or if you have a blended family, consider structuring your assets in a trust.
  • Set aside emergency money. The most common issue a widowed spouse faces is not enough cash on hand. Property, businesses and retirement accounts can be sold for cash, but that takes time and can incur taxes and penalties.
  • Create a power of attorney designation and list your spouse, so that he or she can make decisions if you are incapacitated.

10 Steps to Take After Losing a Spouse

Close up on elderly woman hands with golden wedding ring - loss of a spouse and no financial plan

Losing a spouse is one of the most difficult things you will likely go through in life, and thinking about transferring titles and accounts and money is the last thing you want to deal with while grieving. But if you haven’t taken the steps to prepare before, as accidents and events can occur unexpectedly, it’s important to know what must be done after to protect what you and your spouse have built together.

  1. Go slowly through the process and don’t make any big, irrevocable decisions. Making decisions and spending money too quickly can be one of the biggest mistakes surviving spouses make.
  2. List all assets and accounts of both spouses. Determine available cash. Try to also list out locations of each account, balances and how to access funds. This will make the process much easier and help you determine how many copies of your spouse’s death certificate you will need.
  3. Order copies of the death certificate, and round the number up. While you can always order more, it’s often easier to order them in bulk and keep them in a safe place. The Social Security Administration, mortgage company, credit card companies, banks and asset managers will need these copies to process the transition.
  4. Prioritize bills and payments. Some bills, like those from a hospital, may be more flexible than, say, your mortgage.
  5. Re-title all accounts and assets. This goes for checking, savings, retirement, home mortgages or deeds, vehicle titles and registration, etc. Focus on bank accounts first, as you may need access to money quickly to cover some of the transfer costs.
  6. Transfer and open new accounts. If accounts were solely in the spouse’s name and opened with his or her social security number, you may need to transfer the funds to a new account.
  7. For retirement accounts, check to see if the required minimum distributions have been taken and stay on top of that to avoid fees.
  8. Manage assets. After not having enough money, another common issue for widows is having too much money. Sometimes family, friends and even charities will take advantage if the assets are not managed.
  9. Rename the beneficiaries on all accounts.
  10. Update your will.

What to Look for in a Financial Planner: Empathy

As you are strategically planning for your family’s future or dealing with an unclear financial situation after a sudden loss, who you work with matters. Especially if you’re asking yourself, what is a financial plan?While experience and knowledge are always paramount, in this particular situation, empathy is what to look for in a financial

Senior couple meeting with agent or financial advisor to create a financial plan

planner. Someone who can gently and calmly guide you through the process, listen and understand your concerns, advising along the way but not lecturing or judging. Look for a financial planner who has experience and references working with those who have recently lost a spouse.Because Stableford Capital’s integrated advisory services include financial planning, asset management and tax planning, financial counselors can assist in every step of the financial process. To learn more about how to best prepare for or react to losing a spouse, contact Stableford today by calling 480.493.2300 or contact us online.

* The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought.
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July 8, 2024
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by Stableford Capital
Nikki Sutcliffe
Nikki Sutcliffe is Stableford Capital’s Director of Advisory Services. Prior to joining Stableford, Nikki worked at Charles Schwab for five years where she was an investment advisor and most recently as a financial planner. She started her career as a portfolio manager at Girard Partners and worked there for seven years while helping to grow the firm. Nikki graduated from Penn State University with a B.S. in Finance and earned her CERTIFIED FINANCIAL PLANNER™ designation in 2013.