Dealing with death is never easy and always comes too soon for those we love. Putting your estate in order can allow your loved ones to transfer your assets in an orderly, timely, and tax-efficient manner in order to minimize their burden after you pass and allow you disburse your assets as you intend. Here are some other factors to consider if your spouse passes away.
Are Your Cash Flow Needs the Same?
After a loss, your lifestyle needs, including income and spending, will probably change. It’s possible that your sources of income may change and important to consider how these factors might impact your budget and other aspects of your financial situation.
You may need to look into ways to provide a continued cash flow to sustain your lifestyle, as well as issues pertaining to handling your spouse’s IRA, pension, and other benefits. Your income, personal budget, investments, and other financial decisions may all be impacted in the aftermath of a loss.
Was Your Spouse Receiving Social Security Benefits or a Pension?
If your spouse was receiving Social Security benefits or a pension from a previous employer, you may be eligible to collect survivor benefits, have payments that will stop, or payments that could be reduced.
Depending on your spouse’s employer and career history, you may be eligible for certain benefits on their behalf. And if your spouse was a veteran, you may be eligible to receive death and burial benefits, as well as other survivor benefits.
Are You Aware of All of Your Spouse’s Property and Assets?
Your spouse’s employer may offer a life insurance policy that you can collect after your spouse’s passing. You may also be eligible to collect credit card points, airline miles, unclaimed property, safe boxes and other assets your spouse had accumulated throughout their life.
How is Your Tax Situation Impacted?
Taxation on your assets may look a little different after your spouse passes away. You home is one area where you need to research your tax benefit through selling (you can qualify for the $500,000 housing exclusion if you sell within two years of your spouse’s death). For property owned jointly with your spouse, expect to receive a step-up in basis adjustment for each joint property. Additionally, if you filed “married filing jointly”, you may continue to do so for the year your spouse passed away.
Are Your Risk Tolerance and/or Investment Objectives Different?
As a newly single investor, your investment needs may be different than they were when you and your spouse invested jointly. Perhaps your retirement figures require adjustment or your risk tolerance has changed. Regardless of your specific situation, it’s important to look for ways in which your future financial plans may be impacted by the loss and to strategize a plan for moving forward.
Do Other Special Situations Apply?
Sometimes, there are unique situations that further impact your estate planning needs. If your spouse was a business owner, you will need to make accommodation for their business assets and close or transfer accounts to the proper parties.
You will also want to take a second look at assets and make proper accommodations for out-of-state properties and other accounts with unique needs. Lastly, you may wish to reduce the risk of identity theft by closing your spouse’s online accounts, canceling their driver’s license, and notifying official parties of their passing.
We’re Here for You
There is never a convenient time to deal with loss, but you don’t need to navigate these unknown waters alone. Contact Puckett & Sturgill Financial Group today to learn more about our estate planning services and how we can lend a helping hand during challenging times.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.