Losing a spouse is difficult. The transition can be helped immensely if key records and documents, along with instructions about necessary financial, legal and other arrangements, are left for the survivor.
Here is a list by category of the things a surviving spouse will need:
• Contact list: Names and contact information for the funeral home, Social Security Administration, Medicare, current or former employer, life insurance agent, attorney, accountant, financial planner and credit-card companies.
• Important documents: Life insurance policies, will, trust agreements, pension and retirement account documents (more information below on survivor pension rights and beneficiaries), recent tax returns, funeral instructions, titles, deeds, mortgage and loan agreements, lines of credit, latest investment and retirement account statements, latest loan and credit card statements, key account logins/passwords for computer access.
• Bill paying instructions: I recommend the spouse who handles the bill-paying function request that the other spouse handle this function periodically. Bills that have to be paid each month should be kept in a specific location known to the other spouse. Bills that are automatically paid each month from a financial account should be documented. Bills that could fall into this category are various loans, insurance premiums, cable service, credit cards, auto policies and others. There are some bills, such as property taxes, that are generally due once a year. Such items should be documented.
• Automatic investments/payments: Any automatic monthly investments, such as to mutual funds, should be documented. The surviving spouse may wish to discontinue some or all such investments. The financial institution should be informed to discontinue any life insurance payments for the deceased spouse.
• Short-term cash sources: Funds that are available for the short-term cash needs of the surviving spouse should be identified, such as savings accounts, money market funds and lines of credit.
• Retirement and investment accounts: It is crucial that the surviving spouse know about assets he/she will be inheriting. Handling IRAs, for example, is important. If the surviving spouse is not knowledgeable in this area, recommendations should be documented regarding whom the surviving spouse and other beneficiaries should work with. It could be a financial adviser, attorney or mutual fund representative. Records should be retained regarding beneficiaries. Beneficiaries documented will take precedence over any wishes specified in a will.
It is not unusual for one spouse to make all or most of the investment decisions. If the surviving spouse has not been involved, it is crucial that he or she be provided reliable sources to make decisions. One approach is for the spouse who has been making the decisions to document recommendations. For example, he may recommend an immediate annuity with insurance proceeds, specifying a trusted insurance agent. Other possible sources are a financial planner, attorney, mutual fund adviser, stock broker or trusted relative.
• Pension/life insurance: When individuals retire with a defined-benefit pension plan, they generally have the option to provide pension income to the surviving spouse. It is crucial that this information be documented and known to the surviving spouse to ensure pension payments continue. If the employer/former employer provided life insurance that named the surviving spouse as the beneficiary, this information should also be documented.
• Future assets: The deceased spouse may have been named as a beneficiary in other wills or trusts. This should be documented, so the surviving spouse knows about assets that may be available.
Elliot Raphaelson welcomes your questions and comments at firstname.lastname@example.org.