Death is inevitable, and if you have a partner, one of you is highly likely to pass away first. This will leave the surviving spouse with financial tasks and decisions to make. Some of these tasks are critical and the surviving spouse needs to do them fairly quickly, all while grieving the loss of their partner in life.
My first recommendation is to prepare for the inevitable. Simplify your finances by decluttering the number of accounts you have, and make sure both of you are also partners in your financial matters so the other isn’t left clueless. This also protects both of you in case of cognitive decline. Make sure your spouse knows your wishes, and write them out in the appropriate estate planning documents, such as a will.
After the Death of a Spouse is the single best guide I’ve seen explaining next financial steps for surviving spouses. It’s a new book written by Mike Piper, a CPA and adviser with a knack for explaining complex matters simply in very short books. Recognizing the grief of the surviving spouse, Piper prioritizes the tasks into two buckets — one for time-sensitive tasks and one for what can wait a bit.
Step one is to learn some basic terms of the estate administration process and get organized. You are likely the personal representative, meaning it’s your job to administer the estate. To do this, you’ll need several important documents. Be sure to get five to 10 original death certificates: Financial institutions and others will need to see them before they can do anything for you. But don’t stop there. You will need bank and brokerage statements, veteran’s discharge papers and tax returns. I’ve found that often the tax return helps you to discover accounts you never even knew existed. It’s critical to take notes as you gather these documents. You need to quickly notify certain parties of your spouse’s death. The list includes financial institutions, the IRS, Department of Motor Vehicles, Social Security, the spouse’s employer and others. Cancel accounts for recurring services or products in your spouse’s name if you are not using the service or product.
As the personal representative, you may need to have a court officially make the appointment, and you will have a fiduciary duty to assure that all creditors get paid before assets are distributed. You’ll also need to collect any funds that are due to your spouse. You will likely need to obtain a tax ID for the estate from the IRS. Take an inventory of all material assets and liabilities. Finally, you may need to update your own estate plan, since your late spouse probably had a role in your previous plan.