After losing a spouse · Durham, Chapel Hill and across North Carolina
Your spouse died. Here is what has to happen with the money this month, and what can wait.
Most of it can wait. A few things cannot, and one choice about a retirement account cannot be undone once a form is signed. This page is the first 30 days, the first 90, and the first year, in the order a planner would want you to take them. It is written for the surviving spouse, and for the son or daughter helping.
The first 30 days: keep the lights on
Ask one trusted person to help with calls. Order certified death certificates (ask the funeral home how many). Gather the will, policies, statements and the marriage certificate. Call Social Security about survivor benefits and the $255 payment; do not spend a payment that arrives for the month of death. Pay the essential bills and list the automatic ones. Hold off on paying debts in your spouse’s name alone until you talk with the estate’s attorney. Do not sell the house or invest a large sum yet.
Days 31 to 90: the claims
File life insurance claims and take your time choosing a payout option. Contact pensions about survivor benefits. Make beneficiary claims on IRAs, 401(k)s, annuities and payable-on-death accounts, but read the retirement account form before you sign it. Ask whether your spouse’s year-of-death required distribution was fully taken. Meet an estate attorney if probate may be needed. Decide on health coverage and, if you are on Medicare and your income will drop, ask about Form SSA-44.
Months 4 to 12: taxes and your own plan
Retitle accounts, the home and vehicles as your attorney advises. Decide, with your tax professional, what to do with each inherited retirement account. Review withholding, gather records for the final joint return (generally due April 15 of the following year), and ask whether a Form 706 should be filed to elect portability within nine months. Then update your own will, powers of attorney and beneficiaries, and rebuild the budget on one income.
James Ustby, CFP®, APMA® · Wealth Advisor, LPL Financial
I help surviving spouses and the family helping them put the accounts, the claims and the income back in order, from eight Fidelity Bank branches in Durham, Chapel Hill and nearby. Verify me first: my CFP Board record and BrokerCheck.
Questions people ask first
- Do I have to decide anything about the money right now?
- Almost nothing. In the first month the money tasks are: order certified death certificates, make sure the bills that keep the lights on are paid, call Social Security about survivor benefits and the $255 payment, and tell the employer if your spouse was working. Selling the house, investing a life insurance check, or moving retirement accounts can wait, and usually should.
- What is the one mistake that cannot be undone?
- Signing a retirement account claim form before you understand the choice. A surviving spouse can usually treat an inherited IRA as their own or keep it as an inherited account, and the right answer depends on your age and when you need the money. Once the form is filed, some of those choices close. Read the form, then ask.
- What does working with you cost?
- The first conversation is free, thirty minutes, in person at a Fidelity Bank branch, by phone or by video, and you can bring your son, daughter or a friend. You leave with the three things worth doing next, in writing. After that I am paid through LPL Financial by planning fees, advisory fees, and commissions on insurance products, all disclosed in writing before anything starts.
- Can my adult child join the call?
- Yes, and many do. Bring whoever helps you with calls and paperwork. Nothing moves without you, and I never ask for account numbers or passwords on a first call.
Inherited an IRA from someone other than a spouse? The rules are different: start with the retirement lessons, or ask the question in the panel below and it will find the written answer.
Educational only, not individualized investment, tax or legal advice. Probate and property rules are state law; talk with an attorney. Social Security and Medicare decide your benefits. The author and LPL Financial do not provide tax or legal advice.
When you are ready
A second opinion on the first year, in writing.
Bring one statement and the list of what you have already done. You leave with the three things worth doing next, and nothing moves without you.
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This material is for general information only and is not intended to provide specific advice or recommendations for any individual. Neither LPL Financial nor its representatives provide legal or tax advice; please consult your attorney or tax advisor regarding your specific situation. No strategy assures success or protects against loss. Examples are hypothetical and for illustration only.