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.
Do Nothing Until You Really Need To
As a financial planner, I hope that the couple has already done the basic legal estate work — 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.
Find the 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, I promise you. 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) — the younger the account holder, the longer the life expectancy used in the calculation, and the smaller the required distribution each year. You may need to file a life insurance claim, which 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.
One Important Early Deadline
One important deadline to be aware of: if your spouse had already begun taking required minimum distributions, any RMD that the deceased had not yet taken for the year of death must still be taken by December 31st of that same year. This is often handled by the account custodian, but it should not be overlooked. An adviser can help ensure this is addressed properly.
A Second Piece of Advice
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 at plannersearch.org. Interview a few people. Once you’ve found the right one, begin to lay down some plans, and move forward into a productive and fulfilling life of your own.
Do you have questions about working with CameronDowning? Many of them are answered here.
