Ensuring that your finances are in check after a loss is understandably difficult, but fortunately, financial planning for widows and widowers is a relatively straight forward process that can save plenty of time and money in the long run. Since making adjustments in these unfortunate circumstances will always come with a lot of questions, this guide will serve as a checklist for things you should consider, and routes you should take for your fiscal future.
Estate Planning For Widows and Widowers
It’s often a challenge to pinpoint exactly where to start when moving forward from a loss of a spouse or loved one. However, these tips are sure to inform anyone in these situations with the tools and guidance they need to safely and effectively handle all financial and estate planning for widows and widowers, specifically:
- Sit Tight For Now – It’s often advised for the newly bereaved to take a breath before making any new and substantial decisions. Of course, this time is a difficult one, and personal wellness will always be the top priority. Once your standard, daily/monthly financial situations are settled, only then is it the right time to move forward.
- Look For Assistance – The most important decision any widow or widower can make following a loss is to look for professional assistance. Since stress and other emotions from these situations can alter the way we make our normal financial decisions, leaving the heavy work for a financial or estate planner, attorney, accountant, banker, or other professional is a sure way to correctly make your important and unique decisions going forward.
- Assess Financial Needs – The loss of a spouse can greatly complicate our standard financial budgets and plans. When incomes shift, and retirement plans or 401ks become altered, it’s always a good idea to do a proper analysis of what your budget is, what savings are there, and how this new estate plan will work in sync with your current situation.
- Consider Survivor Benefits – When a spouse passes, the bereaved may choose to take his or her own personal benefit or the deceased spouse’s survivor benefit. The latter is determined by the deceased’s earnings, but other factors play a role including:
- If the deceased spouse waited to take benefits until full retirement age or beyond, the survivor benefit is equal to 100% of the spouse’s benefit.
- If the deceased spouse took benefits at a reduced rate before full retirement age, the survivor benefit is equal to the same reduced rate.
- The survivor benefit starts as early as 60 years old, but there may be a reduction in the amount.
Asset Planning For Widows and Widowers
When you’re inheriting financial assets from your spouse, it’s important to know how each one plays a role in your new estate situation. Some assets to uniquely consider regarding estate planning for widows and widowers include:
- Life Insurance – If your spouse had a life insurance policy, you should contact the company and take the appropriate steps to handling the benefits. In most cases, the beneficiary will not have to pay taxes on the death benefit.
- 401(k) or IRA – Sole beneficiaries of a spouse’s retirement account have some options to consider going forward. As a widow or widower, you can elect to roll over your deceased spouse’s retirement account, such as a 401(k) or IRA, to your own retirement account. However, these decisions may vary based on your spouse’s age, your age and whether your spouse had been taking required minimum distributions. You can also choose to leave the money with the 401(k) provider.
- Pension – If your spouse had a pension from a current or past employer, you may be entitled to receive some of those benefits as the surviving spouse.
Walser & Herman Law
If you’re a widow or a widower, looking for a reliable estate planner can be a difficult task. At Walser & Herman, we’re here to guide you through every step of arranging for and protecting your assets, with more than three decade’s worth of experience providing expert elder law, probate services, and estate planning for widows and widowers in Florida.
We know the ins and outs of surviving spouse rights in Florida, with a lasting commitment to ensuring that our clients can enjoy their lives without worrying about the future. Contact us today for more information regarding our financial planning for widows and widowers, or any of our other services.