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Important Financial Planning Steps for Recent Widows and Widowers by Anita Srivastava

Updated: Jan 15, 2019

Losing a spouse is emotionally draining and can make it hard to focus on financial matters. Yet not addressing them often just increases the stress. This article discusses the steps recent widows and widowers will want to take to help them organize and prioritize their finances.

The loss of a spouse may be one of the most difficult experiences any of us face in life. And while the emotional burdens may be high, the financial costs of inaction or misguided action could be significant. That’s why it’s critical to identify and eventually address certain important financial matters.

The First Step: Know Where You Stand

Statements and contracts are the essence of financial control, so you should quickly make every effort to gather as much documentation of your current financial condition as possible. Use this checklist as a guide to help ensure that you are building a comprehensive picture of your circumstances:

  • Your spouse’s will and trust documents, and any statements of intent that may have been drawn for executors, trustees and guardians;

  • Your spouse’s death certificate (certified copies are most useful. Your funeral director or family attorney can usually help obtain them from the local medical examiner or clerk’s office);

  • Property and vehicle documents, including title certificates, deeds, and lease contracts;

  • Bank, investment, and retirement account statements;

  • Credit card, mortgage, and installment loan documents;

  • Insurance policies;

  • Federal, state, and local tax documents.

Immediate Action Items

The federal government has three different retirement benefit programs – the Social Security Administration (for most people except railroad employees and many federal workers), the United States Railroad Retirement Board, and the Federal Employees Retirement System.1 You are expected to notify all relevant agencies when your spouse passes away and you are required to return all federal pension payments made after passing. Since most federal pension benefits are paid by direct deposit, the receiving bank should be able to handle the necessary payment returns once notified.

The next immediate step is to be sure that ongoing family financial obligations continue to be addressed in a timely manner. This includes mortgage and rental payments, utilities, subscriptions, insurance premiums, tax payments, and the like. Automatic payments that had been made from accounts controlled individually by a deceased person are generally terminated once the paying agency is notified of the death; automatic payments made from joint accounts should continue unabated.

The last necessary step to take right away is to notify institutions responsible for your late spouse’s payments, benefits, and assets. This group could include banks and trust companies, life insurance and annuity providers, stockbrokers, investment custodians, retirement plans, pension administrators, and IRA trustees. Some of these may require certified copies of death certificates to effect important changes. As a fraud-fighting move, you should also consider notifying the credit reporting agencies and requesting them to include the notices in their future reports on your spouse.

Things to Do When You Are Ready

Many important decisions can be deferred (for days, weeks or sometimes months) until you feel ready to calmly evaluate your choices. You will face required minimum distribution rules for your late spouse’s retirement accounts, but except for those, you can take all the time you want to decide which assets to keep and which to sell. You should also take your time before buying any new insurance or investment products. Eventually, you’ll want to be sure that you’ve got a financial program and an asset allocation that fit your needs and objectives. And when you are ready to develop that plan, let me help you weigh your options carefully.

Sources: 1. Social Security Administration, United States Railroad Retirement Board, and Federal Employees Retirement System.

~Anita Srivastava is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley in Ridgewood, NJ. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives.

Article by Wealth Management Systems Inc. and provided courtesy of Morgan Stanley Financial Advisor.

The author(s) are not employees of Morgan Stanley Smith Barney LLC ("Morgan Stanley"). The opinions expressed by the authors are solely their own and do not necessarily reflect those of Morgan Stanley. The information and data in the article or publication has been obtained from sources outside of Morgan Stanley and Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. Neither the information provided nor any opinion expressed constitutes a solicitation by Morgan Stanley with respect to the purchase or sale of any security, investment, strategy or product that may be mentioned.

Morgan Stanley Financial Advisor(s) engaged Ridgewood Moms to feature this article.

Anita Srivastava may only transact business in states where she is registered or excluded or exempted from registration Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where Anta Srivastava is not registered or excluded or exempt from registration.

© 2014 Morgan Stanley Smith Barney LLC. Member SIPC. CRC 1013340 [09/14]

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