If your spouse dies first, you are not alone. According to the National Center for Health Statistics, nearly one-third of all married couples in the United States are at risk of being widowed.
Losing your spouse is one of the most challenging events in life, and consequently, no one likes to talk about it. However, planning for life after we pass needs to be done, not just for the peace of mind of the one that passes, but especially for the spouse left behind.
Planning Ahead is Your Best Option
When planning for the future, you have the most options while your spouse is still living. As long as your spouse is still legally competent, you can continually update your estate plans, trusts, wills, and beneficiaries. So don't worry about planning too early and needing to make changes later.
Having a conversation with your spouse about what should happen if one of you dies first is essential. This may include setting up joint bank accounts and designating beneficiaries for insurance policies and retirement accounts.
Here are some specific things to consider when planning for a spouse's death:
- Financial Accounts - By planning ahead, you can ensure you'll both have access to investment, retirement, and savings accounts if one of you passes. Create a list of assets, including digital assets, and what is needed to access these accounts when planning your future. Be sure to include your credit cards, as many spouses only learn after death if credit cards are in their or spouse's name.
- Social Security – If both of you are drawing social security benefits, the remaining survivor can elect to keep the higher benefits in the future. If benefits haven't been claimed, you can take the survivor benefit for your spouse's work history or your own, based on which one is higher. This can be changed later if the other use becomes higher.
- Be Careful About Your Spouse's 401k and IRA – If you are in your 50's, you can roll your spouse's accounts into your own. However, don't hurry on the 401k. You can make a withdrawal from their account without penalty, but it will be taxed as income. Ask your estate planning attorney what they recommend for these accounts.
- Filing Taxes – The IRS will allow a surviving spouse to file taxes jointly the year your spouse passes. Since tax rates are better for married couples, consider taking advantage of this option.
Planning ahead for the death of a loved one is never easy to think about. Still, it is something that you should do with the help of an established, trusted professional.
Experienced attorneys who work with widows or widowers can provide the guidance needed so that when the time comes, you are adequately prepared and can put your focus where it needs to be and not on worrying about your financial future.
If your spouse does pass before you, it is essential to contact your attorney to start taking the next steps for your future. They will be able to help you put the plan in motion and provide support during such a devastating time.
We are here to help you protect what you have for the people you love the most. Contact us to learn how we can help.