A Financial Advice Checklist for Widows

Losing a spouse is tough both emotionally, as well as financially. You might be wondering how to plan for your future without your partner, or what will happen to their assets and yours. Well, that’s why the team from Merit Financial Advisors is here to help ensure you’re financially prepared for the future. As our loss of spouse specialists will tell you, every case is different. However, there are some things you can do to ensure you’re on the right track for the years ahead.

Understand How Your Tax Situation Will Change

Perhaps one of the biggest financial factors that can affect new widows will be their tax status, especially if they were listed as a dependent on their spouse’s income taxes each year. Unfortunately, a change in marital status will often mean that your taxes will increase and you’ll have to pay higher rates, in addition to losing certain write-offs and deductions you may have had previously. Losing a spouse can also even affect your Social Security income, as it may cause a change in your provisional income equation.

All this being said, it isn’t all bad news when it comes to filing your taxes as a new widow. In fact, the Internal Revenue Service does offer some leniency to those who’ve recently lost their partner. In the years directly after the death of your spouse you’ll be allowed to still file jointly the year your spouse passed and use “qualifying widower” as your filing status in the years to come.

Working with a professional wealth advisor is a good way to get an idea of how to move forward as a new widow. For example, some might recommend that a younger widow roll over her deceased spouses’ IRA or roll the IRA over in her own name to defer minimum distribution requirements.

Take Time to Assess Your Financial Situation

After losing a partner, there’s no reason for you to act immediately, especially where financial matters are concerned. First, take care of the immediate financial responsibilities like daily expenses and the bills, then make sure all of your insurance is in place. Afterward, take some time to assess what the next steps are. It’s not the time to make any major financial decisions, like selling your home, changing or quitting your job, selling off investments, or making important decisions about retirement plans.

You’ll likely be receiving part if not all of your deceased partner’s estate and it’s important to put these assets into the wisest investments possible. Consult a financial planning professional and set up a meeting to discuss your current assets, as well as your tax status and develop a long-term game plan for your finances.

Your Social Security Survivor’s Benefit

Another important thing to consider is your Social Security survivor’s benefit, which those who may not be working will greatly rely on. This is because the Social Security benefits of your partner will come to a halt when they die and many might be relying on this income to pay for everything from income taxes to mortgages. You will, however, still be able to collect your own Social Security benefits, and often these will include a percentage of your deceased spouse’s as well.

These things are important to think about because those who haven’t yet reached retirement age will be eligible to collect a Social Security survivor’s benefit while leaving their own Social Security assets untouched to be used at a later date. So, survivors could potentially hold out and live off this income until their retirement age then give themselves a financial boost once they hit 70 or thereabouts.

Updating Your Assets & Estate Plan

Another important aspect to consider when your spouse passes is updating your assets and estate plan for the future. You’ll accrue some or all of your spouse’s assets and they’ll need to be divvied up accordingly at the end of your life as well. Take a look at your assets and estate planning documents with a financial professional to see what, if anything, needs to be updated.

It also isn’t a bad time to consider updating your will or creating a living will and assessing the powers of attorney arrangement you have. You’ll also want to take a look at forms involving your retirement accounts and life insurance policy to ensure everything is in order. After doing all of this, contacting the proper financial institutions to alert them to your new situation is also important, this means calling the bank, any investment management firms where you held joint accounts, and other financial institutions.

At this point, it’s also necessary to check everything from loan statements to online banking profiles and make certain that your deceased spouse is no longer listed and you have sole ownership of your accounts.

Contact Merit Financial Advisors today for more financial advice for widows

Going through the loss of a spouse can be a trying time for anyone, which is why having a solid support system in place is extremely important. You’ll need time to grieve and heal, in addition to sorting out financial matters. That’s why enlisting the help of a financial professional early on can certainly have its benefits. They’ll be able to easily take care of more complicated financial matters and start creating a solid financial plan for your future while you focus on grieving and moving forward with your life.

In addition to the loss of spouse services provided by Merit Financial Advisors, we also offer solutions for those going through a divorce, as well as providing independent financial advisors for those in need.

To learn more about how we can help you develop a strong foundation for financial success, contact us online or call (866) 628-3508.

Opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Merit Financial Group, LLC an SEC registered investment advisor. Merit Financial Group, LLC, Merit and Merit Financial Advisors are separate entities from LPL Financial. Merit Financial Group and LPL Financial do not offer tax or legal services.