In this episode of Retire Your Way Radio, I share 7 steps for widows and widowers to manage the first year alone, based on estate attorney Anna Byrne's personal and professional experience.
"We're all put to the test, but it never comes in the form or at the point in which we would prefer, does it?"
That's a great quote from the movie The Edge with Anthony Hopkins.
No one wants to think about becoming a widow or widower, or about death in general, but if you are married, there is a high probability that one of you will be widowed some day.
In addition to the overwhelming grief that comes from losing a spouse, there are a number of details you will have to handle right away.
Anna Byrne became a widow at the age of 28. She also has professional experience helping others through the process as the founding partner of her own estate planning firm.
Using her personal and professional experience, Anna shares 7 steps for widows and widowers to manage the first year alone in an article from NextAvenue.org that I will be summarizing for you.
Listen to Episode 34 Here:
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Step 1: Take Care of Immediate Things
Some of this may seem obvious, but a list always helps, especially when so much emotion is involved.
Start by notifying family members, friends, and advisors. This may feel overwhelming, but you can often delegate the task of contacting family and friends to a close family member.
Using this approach will help to avoid emotionally-draining questions while you are just trying to keep moving forward.
Some of the hardest decisions will also be some of the first decisions you have to make, including the possibility of organ donation and making funeral arrangements.
If you have talked about these scenarios with your spouse, you may already have a plan to follow. If not, you just have to trust yourself to do the right thing.
Allow close family members to help you with these tasks, as they may be emotionally draining for you.
Step 2: Find and Organize Key Documents
You are now solely in charge of your finances, when you may have shared the responsibility or relied on your spouse entirely.
It’s important to look for and organize estate documents such as a will, trust, and life insurance policies. If you have used a family attorney, call them to see if they have the original documents in their vault.
Make note to NOT write on any documents or remove staples. These actions could lead to questions about the validity of the documents.
Step 3: Take Inventory
It’s time to create a list of all assets and debts owed by you and your spouse. Some examples include:
- Bank statements
- Real estate deeds
- Investment accounts
- Retirement account statements such as from IRAs and 401(k)s
- Pension information
- Social Security information
- Life insurance policies (check with your late partner's employer to see if there are any group benefits
- Annuity contracts
- Mortgage statements
- Credit card statements
Review recent tax returns to make sure you aren’t missing any institutions with income sources such as interest and dividends. Your accountant may also have this information.
With online statements, you may need to access your spouse’s email account to look for electronic statements.
Step 4: Pull the Pieces Together
It's important to understand your state’s process for handling the legal administration of your spouse’s estate.
Get familiar with your state’s laws and procedures regarding wills and probate, as they are all different. Probate is a court process for proving the validity of a will and carrying out its terms.
If there is no will, state laws will determine who can serve as a personal representative to manage the financial and legal affairs of the estate. Those laws will also determine who can inherit what property, and in what order.
Some assets can pass on to named beneficiaries outside of probate. Examples include:
- Retirement accounts
- Life insurance policies
- Joint accounts
It is also important to address income taxes and federal and state estate taxes. This is especially important to review with an estate tax advisor if you were not married to your partner or if you were part of a blended family where there were children from a prior marriage.
Step 5: Build a Team of Trusted Advisors
Choose legal and financial advisors to help settle your spouse’s estate. These professionals should address all steps of the probate process and the administration of your spouse’s estate.
Take the time to seek the best qualified professionals to avoid problems later on.
Step 6: Plan for Your Immediate Future
It’s now time to understand what assets you had as a couple and what income sources you have available to you as a widow or widower. Create a new household budget that considers your own financial and retirement objectives and how to take care of loved ones.
This process should include gathering a list of bills and contact information for each account. Having both spouses’ names on household bills, if possible, will make this transition easier.
Step 7: Plan Things for Your Loved Ones
This is a good stage in the process to make sure your own estate plan is in order so your loved ones will have a plan to follow that addresses your wishes.
Start with creating or updating documents such as:
- Health care proxy (also known as an advance health care directive)
- Financial durable power of attorney
- Will or revocable trust
Also, review and update all beneficiaries on your retirement accounts, annuity contracts, and insurance policies. You're going to want to do that frequently, You don't want to have the wrong person on an account if something has changed on your life, like a divorce. A beneficiary is going to take precedence over a will.
Once you have your own estate documents in place, communicate your plans with loved ones and let them know of any roles they have in the process. Make sure they know where documents are stored and who to contact if something happens to you.
Nothing can quite prepare you for the loss of a spouse or loved one. Hopefully these steps will help to provide some direction as you navigate a new stage of your life.
And if you are not in this situation, use these steps NOW to guide you to be prepared in the event that you or your spouse could be in this situation in the future.