We all know it is coming – that at one point Till death us do part becomes a reality. What a sad time - someone dear to us has gone away, never to return, and will be missed greatly.
As a financial planner, I hope that the couple has already done the basic legal estate work, i.e. the proper documents are in place, so the transition of property can occur smoothly. For the surviving spouse I have this advice: Do nothing until you really need to.
In some cases, particularly after a long illness, the surviving spouse already has a good idea of what life going forward will be like. But it is still a shock. My counsel is to go through a cycle of birthdays, holidays and anniversaries without your loved one. Let it settle in that you are no longer married. In time, you’ll find your way forward.
And what is the way forward? How will I as a widow or widower lead my own life? Will I enjoy the lifestyle we lived together as a single person? Can I afford that lifestyle? Would I like to relocate? Downsize? Change cars? Participate in activities that my spouse didn’t enjoy?
As that first year comes to a close, the way forward will become more apparent. There is financial work to be done, for sure. IRAs and retirement accounts need to be dealt with. A rule of thumb here is to get (or leave) the money in the younger spouse’s account, to reduce required minimum distributions (RMDs). You may need to file a life insurance claim. This involves completing a form and returning it with a certified death certificate. You may need to re-title assets out of joint tenancy into just your name or that of a trust. All of this can be completed in due course.
The only hard deadline here is December 31st in the year following the year of death. The RMD from the deceased spouse’s retirement accounts and IRAs must be taken by this date.
Now here’s a second piece of advice: work with a financial adviser who has a fiduciary standard of client care. Not a salesperson, but someone whose professional ethics mandate that he or she make recommendations that are fully in your best interests. Take your time. There’s no rush. Do some cyber shopping at the CFP® Board’s Planner Search website. Interview a few people. Once you’ve found the right one, begin to lay down some plans, and move forward into a productive and fulfilled life of your own.