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415.472.1445 ext 306

Kathleen Nemetz
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Kathleen Nemetz, Certified Financial Planner (TM) Practitioner
Whether Expected or Totally a Surprise, Death Disrupts Family Finances
  
Checklists Can Help, As Can Trusted Friends and Family Members
 

 

 

The call came unexpectedly as of course they do. A friend was on the phone. She had just found her husband, in bed, deceased.  He had been home alone with a bad cold.  

 

The rest of the story is also unexpected. She and I were just 31. Her husband was 42. Married just two years, they already had a child and some bank accounts. She asked me to help with funeral arrangements, and helping her through the start of a lifelong process of coping.

 

What we discovered together has stayed with me for years.  In working with my friend, I learned how difficult finances can be after a sudden death of a spouse.  Particularly when few things were set up the way they should be.

 

I share this story, because I want to help my clients prepare for the unexpected twists and turns of life.  As well as deal with death when it unfortunately comes.

 

You're both healthy, how to plan

 

Consider carefully how to title bank and savings accounts. And make sure that beneficiary information is current. Keep wills and trusts handy and up to date.  Make sure that you carry enough insurance to replace your lost income or that of your spouse for a number of years.

 

In my friend's situation, she and I quickly learned that there was no will or trust established by her husband. And that all accounts were titled in his name only, with no payable on death provision.  Two of his three life insurance contracts named his mother, not his wife and child, as his beneficiaries. Credit cards were in his name only.

 

The only immediate access to cash that she had in the few days after his death came from the payoff of the single life contract naming her as the beneficiary. We learned she would have to file court motions regarding the rest of his accounts.  This was the case though the accounts were funded with salary earnings, a marital asset.  However, once the dust settled, she sat down with a financial advisor to budget, and to carefully conserve her assets for herself and her child.  She also established her own will, and retitled accounts to pay on death for the benefit of her daughter.

 

Should your spouse die

 

In the immediate hours and days following the death of a loved one, don't make any drastic financial decisions. Ask a trusted friend or family member to help make the necessary decisions around a funeral, and nothing more.  Contact your trusted legal and financial professionals when you are ready to discuss next steps.   This call may need to be made sooner, rather than later, if you have minor children.  Don't let unsolicited strangers into your life to discuss financial matters during this time, if ever.

 

Here is a brief checklist of other financial matters you will need to attend to:

 

  • Obtain at least 10 originals of the death certificate. You will need to give them to financial institutions and to insurance companies, to access joint accounts or those titled as payable on death to you, the beneficiary.
  • Make a list of important bills, and a schedule of paying them.  Share them if necessary with whoever is helping you administer your spouse's estate.
  • Notify mortgage companies and banks.
  • Close credit cards issued in the name of your deceased spouse.
  • Cancel the driver's license of your deceased spouse.  Identify theft problems may arise if the license is not cancelled.
  • Notify the nearby Social Security office, to either stop benefits already being paid or to qualify for increased personal benefits and a one time payment of $255 to the survivor.
  • Cancel Medicare payments for the deceased spouse.
  • Notify the employer, if your spouse was working. You may qualify for death benefits.
  • Stop health insurance payments for the deceased spouse.
  • Notify life insurance companies.
  • Terminate auto coverage in name of deceased spouse. You may also choose to sell the extra car.
  • Finally, send thank you notes to well wishers.  And take care of yourself.  Be kind to yourself during this time.

 

Within a year after your loss, you will need to file a last tax return for your spouse or a marital return reporting his or her income for the portion of the year he or she was still alive.  You should also engage in some financial planning to carefully review finances and decisions for the future.

 

Use your financial professionals as buffers for the people who will surely approach you during this transition to propose possibly unwise decisions.  These may include choices to pay off or to sell your home; to lend money to relatives or children; to purchase expensive new investment products; or to relocate out of state.

 

In the case of my friend, her careful work with a financial advisor allowed her to fund an Ivy League education for her daughter 16 years later.  We were all very proud .

 

 

 

Take Control. Don't Leave Finances to Chance.

 

 

Kathleen Nemetz, MBA, CFP, CDFA™ 

 

Financial Advisor

 

McClurg Capital Corp.
950 Northgate Drive Ste. 301
San Rafael, CA 94903

415.472.1445 x 306

knemetz@mcclurgcapital.com

CA ins. lic. 0E71423

 

 

 

 

 

 

 

 

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