The death of a spouse may leave an elderly individual feeling lost and wondering which way to turn for help. It’s an emotionally devastating experience, and an elderly person who’s spent a lifetime being responsible for others may feel as though everything has to be resolved right away. While there are some arrangements that need to be made soon, many of the more important financial decisions are best left for later, when your loved one is less emotionally vulnerable and thinking more clearly. Here are some ideas to help guide you both through the process.
Gather records
The first thing you’ll need to do is obtain the departed’s last will and any documents that will help you enact their final financial wishes. Insurance policy records, bank and brokerage statements, the birth certificate, Social Security number and copies of the death certificate will help you move things along and simplify what can be a tortuous process if you’re unprepared.
Benefits
One of the first things you’ll need to do is help your loved one file for life insurance benefits as the surviving spouse. The first step is to contact the insurance agent to file the claim and get the ball rolling. This is how you’ll procure the money your relative needs to manage his or her own affairs. Fortunately, it usually only takes a few days to process a claim, but don’t delay in beginning the process. Don’t forget your Social Security benefits, since your relative might be eligible for survivor, death (including the $255 lump sum death benefit) or retirement benefits. Your relative may be eligible for government benefits if they or the departed served in the military or worked for the government. Contact the Department of Veterans Affairs or the Federal Employees Retirement System to determine whether any government benefits are forthcoming.
If there aren’t enough benefits to help your loved one financially, you’ll also need to help him or her do some financial planning to help them get through the next few months (and beyond). For those who want to remain in their own homes, a reverse mortgage is a popular way for those over 62 years old to receive funds based on their home’s equity as either a lump sum or a line of credit. However, it’s important to do your research and talk to your financial advisor before making the leap into getting a reverse mortgage; ConsumersAdvocate.org notes that there may be cons in taking this route, especially because it could have a major impact on the value of their estate. If he or she is open to moving, downsizing to a smaller residence could be a huge financial windfall. They can earn a significant profit from selling their home, which can cover the cost of a new, less expensive residence as well as their ongoing living expenses.
Estate settlement
As the surviving spouse, your loved one is probably the executor of the estate. Make sure he or she understands what it means to carry out the terms of the will and settle the estate. Basically, estate settlement means making sure that all outstanding debts are paid and that anything to be bequeathed is distributed according to the details of the will. It’s an administrative function, but it’s very important to make sure that everything is done according to your loved one’s final wishes. If the decedent did not leave a will, the surviving spouse may automatically become the personal representative of the departed and will be obligated to fill these duties.
Get advice
Whether your loved one left a small or large estate, it’s advisable to meet with a lawyer, accountant and a financial advisor, professionals who can provide the kind of informed advice that can be extremely valuable with so much at stake. Unless you and your loved one have significant knowledge in this area, it’s a good idea to ask a friend or other family member to come along so that something important isn’t missed or misunderstood. If the couple has a preexisting relationship with these types of advisors, encourage the survivor to leave these intact until they have had a chance to acclimate to their new life. Making drastic changes now could be detrimental and may create issues if done prior to estate settlement.
New wishes
Now that your loved one is the sole owner of assets gathered during their marriage, a new will and testament should be drafted. This will ensure his or her property is distributed according to their own wishes when they join their spouse in death. A last will and testament is a legally-binding document that distributes personal and real property to the couple’s children, grandchildren, or beneficiary of choice. Without an updated will, the state where the surviving spouse resides will create one upon their death. Property owned outside of the testator’s home state will be subject to that state’s intestacy laws, the rules that govern property after death.
Funeral and short-term needs
Depending on whether your departed relative made funeral arrangements in advance, it may be necessary to deal with funeral expenses. If there’s a life insurance policy, the death benefit will probably cover most funeral expenses. If it’s a term life insurance policy, it may have expired before your relative passed away, which means it’s no longer in effect. Also check to make sure there aren’t any past due debts that need to be addressed as soon as possible. Otherwise, avoid making decisions about impactful, long-term matters like real estate or selling off the departed’s valuable possessions.
Remember that the best approach when a loved one dies is to begin by dealing with short-term financial decisions that need resolving right away. Delay making the most important decisions until you and your loved one have had time to think and seek professional advice, and make sure you have all the documentation necessary to process claims and resolve debts.
by Beverly Nelson