Widowhood 101

Background
Financial planning is traditionally all about planning ahead. You make careful decisions beforehand to try and influence outcomes. When it comes to death, financial planners recommend drafting the applicable estate planning documents, ensuring your beneficiaries are up-to-date, checking on the titling of what you own, lining up your circle of professional advisors, etc, etc. The process is dry, most often uneventful and a bit removed.

But, death happens and when it does, even the best planning can leave you feeling unprepared or anxious. This is particularly true if the person who passed away was the one who normally handled the finances.

A New Existence
Becoming a widow or widower is wrenching. It often feels sudden even if the death was anticipated. There is way too much to think about. Friends and family are a blessing, but they need your attention even while they are there to help you. It is also an incredibly lonely time as you struggle with learning to live without a lifetime partner.

So what to do first and what do you do next to manage all of the new demands placed on you?

First
This is the time when your professional circle – the individuals that you have carefully cultivated - can be of most assistance to you. Use them fully. The circle most often includes an estate planning attorney, your financial planner/wealth manager and your accountant. Death is a time when you temporarily pass control to trusted advisors. They will walk you through what needs to be done and help you establish a timetable that you can handle.

Next
Know what to ask whom.

Below is a partial list of responsibilities that will be shared by your advisors. Most widows/widowers have some responsibility as the executor of their partner’s estate or at least work closely with the executor.

Estate Planning Attorney

Reviews the decedent’s estate planning documents with you –wills and trusts included.

Helps you identify the assets that are part of the decedent’s estate. This includes a detailed accounting of all of the decedent’s investments, real estate property, life insurance policies, annuities, tangible assets, etc.

Arranges probate of the will including settling of any claims against the estate and provides the proper executor certification.

Files any estate tax returns on the state and/or federal level, if applicable. (Most assets pass directly to the spouse as part of the marital exemption and do not generate estate taxes. Partners do not have this benefit. Some estates – due to their complexity – may require filing even if no taxes are owed.)

Accountant

Files estate income tax returns until the estate is settled.

Continues as your personal income tax advisor.

Assists on simple estates that do not require all of the services of an estate planning attorney.

Wealth Manager

Updates the cost basis information for assets under the advisor’s care.

Re-titles the accounts – IRAs, joint accounts – and opens new accounts as directed by the Will or any Trusts. Ensures the rules for IRA distributions are followed.

Manages investments consistent with the preservation of assets until the time of distribution.

Executes instructions for final distribution of investment assets and assists on distribution paperwork for annuities, life insurance and retirement plans.

Most importantly: Establishes a new financial plan for you to ensure that your income needs are met and that your own estate is adjusted to reflect new goals and desired outcomes.

Working Together
All of your advisors should be working closely together for the benefit of you and your family. Ensure that they know of each other’s presence and give permission for them to talk to each other.

Settling an estate can be complicated and fraught with emotion. It can also be very demanding on your time and energy. Utilizing your trusted advisors well can help ensure that the process goes smoothly and that you have more emotional energy for adjusting to life as a widow or widower.

StrategicPoint Working with You
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