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Death of a Spouse – What Else To Do

July 12, 2016

My previous blog gave useful information about getting your affairs in order. I want to follow up by addressing three remarks made to me about what I wrote.

“I am not going to fill out 40 pages”
Good comment, but shortsighted. The information exists but usually in a haphazard way and should be organized. Filling out the worksheet which I provided as a Word document shouldn’t be that difficult for the more knowledgeable spouse. Based on my personal experience filling out the worksheet it should take less than three hours. The tradeoff is that it will take much longer and not be as complete if an executor needs to search for that information as well as being pretty costly. I also found that by filling it out it forced me to review many of my affairs and I ended up consolidating bank and brokerage accounts; making decisions of who to contact about my hobby collections; speaking to certain people that I would want my wife to consult with; and it gave me a calming effect that I had things in order.

As to “40 pages” there is plenty of blank space for those that choose to print it and fill it in manually. Further, the worksheet tries to cover every conceivable situation and many items will not apply to most people. The worksheets also contain additional information that I feel would be helpful to know about and consider. Please start it and don’t be put off by the number of pages; not doing it would be off putting to your survivors.

“How do I start?”
There are a number of ways to start with regards to your financial affairs. For starters, your tax returns are a road map of many of your taxable accounts and mortgage debt. The backup data has tax statements showing the payer’s name, account numbers, and how the account is owned. That would be a great start.

Retirement accounts are more difficult to track down since they are not reported on the tax return if no distributions were made from them or contributions made into them. This is why completing the list is so important. One tip is that your current employer’s W-2 form would indicate the amount of the 401k payroll deduction for the previous year and whether the employee was covered by a retirement plan. IRA custodians now send out an annual form indicating the yearend balance in the account and the previous year’s contribution. Look for these with the tax data. I know many people get these statements, glance at them and then throw them away. If so, then this destroys the trail.

Reviewing the check book for the last couple of years can uncover payments that might be for the purchase of assets, life insurance premiums, annuity purchases, and retirement account contributions. The more check books and tax returns you have, the better, up to five years.

This is a start – not as good as having the completed worksheet, but a start. Good luck!

“Who to turn to”
“Who is turn to” is a complicated question and needs careful consideration. In many cases the person the knowledgeable spouse dealt with is someone they had a long term relationship with and has grown comfortable with, but is likely not as confident with as they would like to be, but they are “used to him.” That person would never be recommended as the go to person, but sometimes is chosen by default.

An alternative scenario is that the deceased handled everything themself and the survivor also has no one to turn to.

So called knowledgeable family members are usually not financial professionals versed in making decisions for others that include short and long term asset and cash flow management and balancing interests of current and eventual beneficiaries. Further the advisor will need good communication skills able to explain what they are doing and why and what it means to their client; and be able to issue clear reports and answerable if things do not materialize the way they were expected to.

A suggestion is for the spouses to choose someone or an organization that represents values they have and is qualified to handle investments and manage cash flow. If it is a new advisor, then open an account with a minimum amount and see how it goes with investment strategy and execution, cash flow, communications and availability.

Nothing will be perfect, but planning beforehand offers a much better chance of success than no planning and a willy-nilly helter-skelter try at finding someone after a death.

Final tip
A final tip for the survivor whether or not plans have been made is to do nothing for at least months while you get used to your new circumstances. Doing nothing cannot cause much harm and at worse only result in possible lost opportunities while acting precipitously could cause potentially irretrievable losses.

One Comment leave one →
  1. Gerard L Viola permalink
    July 12, 2016 5:03 pm

    Ed Excellent response. Jerry

    Gerard L. Viola, CPA, LLC 900 Pompton Avenue, Unit A-2 Cedar Grove, NJ 07009 (973) 857-8966

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