Financial Steps to Take Following the Death of a Spouse

There are few tragedies worse than losing a spouse. No matter the circumstances, you can be overwhelmed by feelings of loss and grief. On top of that grief there is the reality that your life goes on, although it will be very different from what it once was.

One important area of change is your finances. Whether or not you were the one primarily handling the household's finances, you're going to need to take control and make certain changes to reflect your new reality. Here are some steps to consider during this difficult time.

Avoid making major decisions while grieving

Some things can't wait and you may need to act immediately on some items, but allow yourself time to grief and gather yourself before making any major decisions. Lean on friends and loved ones for support and put your needs first. Rushed or half-considered decisions made in grief may have lasting financial implications.

Obtain copies of the death certificate

The first step is to obtain multiple copies of your spouse’s death certificate. You can obtain those copies from the funeral home or local government office.

A copy needs to be sent to the Social Security Administration (SSA). You can also send copies to your creditors, although they will ultimately get the notification from the SSA. Having extra copies on hand will make it easier to send them out when needed. You may also need to provide a copy to complete any insurance claims and close accounts in your spouse's name.

You'll also want to inform any relevant parties about your spouse's passing. This could include family, friends, employers, and social organizations.

Review the will

You will also need to execute the will. To do this, go to the court to get an order allowing the executor to carry out the deceased’s wishes. Executing a will means to carry out the actions required to liquidate the estate.

If you are unsure whether or not a debt is your responsibility after your spouse’s death, consult with an attorney. Don't agree to pay bills that aren't your responsibility. However, be aware that creditors will most likely attempt to seek repayment for your spouse’s individual debts from the estate, if there is one.

Notify financial institutions and update ownership

You'll need to close or modify any financial accounts in your spouse's name. This means contacting all banks, creditors, and investment firms where your spouse had an account. You may want to close or update the account to remove the spouse (in the event of a joint account).

Any assets in your spouse's name will also to be accounted for. Bank accounts, real estate, vehicles, and investments will all need to be updated and retitled so that ownership is in your name.

Keep your accounts in good standing

You may not have been responsible for all of the accounts and expenses in your life, but you are now. As a result, it's important that you understand what bills need to be paid. 

Review every account. Close the ones you don't need any more and make sure that the ones you need are paid on time. If there are expenses or debts that you can't afford, don't ignore them. Contact those creditors and try to find a solution. 

Apply for applicable benefits and claims

If your spouse had a life insurance policy, you'll like need to file a claim to receive the stipulated payout. The same goes for any other survivor benefits, including Social Security, pensions, and retirement accounts.

Again, you may need copies of the death certificate to complete these claims.

Reevaluate your financial plan

You'll most likely have to change your investment strategies to support your new circumstances. It's important to re-establish a safety net by continuing or starting to contribute to a retirement plan and a savings account. Consider setting aside an emergency fund of at least three months’ salary.

It's also time to completely rework your budget. Your income and expenses will be significantly different and your spending needs to reflect that. Most likely, your experience changed your financial priorities. What's most important to you? Let these priorities help shape your new budget.

Keep moving forward

There will always be more to consider and more work to do. Eventually, you may want to consult with a tax specialist to better understand the tax implications of everything that's happened. And working with financial advisor may ultimately be the best way to bring order to chaos and figure out a plan for how you want to live going forward.

But the most important thing is that you do keep moving forward. Take care of yourself. Take the help that is offered and ask for help when you need it. No part of this road is easy, but you will come out the other side. 

If you're feeling overwhelmed by financial decisions following a major loss, we're here to help. MMI offers free financial counseling 24/7, online and over the phone. 80% of MMI counseling clients report feeling immediate stress relief after just one session. Start today and get the help you deserve.