This is part 1 of a 2 part article series discussing unexpected loss.
The old saying goes that two things in life are guaranteed, death and taxes, yet so many avoid planning for either. Recently, I had a family friend that was faced with dealing with the unexpected loss of her spouse. With a young family and job to keep afloat, I couldn’t help but worry if she knew the additional full time job she was going to encounter handling all of the items that come with the passing away of any loved one.
Whether or not you have prepared for the loss of a spouse (more on that in my next article), this stage will be overwhelming and the list of to-do’s will seem long and monotonous.
Your first thought may be that money isn’t the first priority when you lose a loved one, and you’re absolutely right, but an engaged financial advisor or CERTIFIED FINANCIAL PLANNER™ professional should be able to assist you in your next steps. Reviewing your spouse’s estate documents, pursuing life insurance proceeds and discussing your loved one’s final wishes will require serious attention. With your advisor working to spearhead these conversations, you will have more time grieve and focus on your family. Here’s a list steps you may consider next:
- Notify the insurance companies. To claim life insurance benefits, you should contact your insurance agent or check the company’s website to find out exactly what documentation you will need to provide. Additionally, if your spouse carried health insurance through his or her employer, you will need to contact the human resources department to determine how long coverage will continue, so that you can plan accordingly. Check in with the insurance companies that carry your home, auto, and other policies. These policies may need to be updated, and some may no longer be necessary to carry.
- Inform Social Security and Medicare. One to two months after death, you’ll want to let the Social Security Administration know about the passing of your loved one. Social Security benefits are a crucial area to pay close attention to after the death of a spouse. Keep in mind that this isn’t just for those over 65. If your spouse earned 40 credits (10 years of work) towards Social Security, you and any children you have under the age of 18 could be entitled to monthly survivors benefits.
- Cancel all credit cards and identifications. You’ll want to contact and cancel all credit cards your loved one may have had as well as identification documents like passports and driver’s licenses. Identity theft after death, now termed “Ghosting”, has become unfortunately common and identity thieves exploit the time between an individual’s passing and the cancellation of this information.
- Update your beneficiary information and reassess your finances. Long term, you will need to start to plan for what life looks like now that your life circumstances have changed. Your advisor should work with you to decide what debt, if any, should be paid off, how funds should be invested to save for the future, and guide you towards getting your financial life back in order. You’ll also want to update the beneficiary information on any retirement accounts and life insurance you may have.
While dealing with the unexpected death of a spouse or loved one is never easy, working with the right person or team can make your next steps to your new normal easier. If you don’t currently work with an advisor, or if your advisor isn’t taking the time to discuss these things with you, I recommend adding a CERTIFIED FINANCIAL PLANNER™ professional that you trust to your to do list.
Published in the Victoria Advocate
Sara Potts is a CFP® Professional and Operations Manager with KMH Wealth Management, LLC.