The death of a beloved spouse is a difficult time. In addition to mourning their loved one, the surviving spouse must attend to financial matters related to the passing. This to-do list helps surviving partners wrap up their loved one’s affairs and care for their own financial future after the death of a loved one.
1. Collect Documents
After the death of a loved one, closing accounts and filing for survivor benefits requires a number of documents, including:
- Death Certificate
- Marriage Certificate
- Tax File Number
In addition to these documents, collect paperwork related to your spouse’s assets and debts, including bank accounts, insurance policies, real estate, investment accounts, and other financial paperwork.
2. Apply for Survivor Benefits
If you are the named beneficiary on your spouse’s life insurance, file a claim quickly so proceeds can be used to pay for funeral and medical expenses related to the death. You may have to choose between a lump sum payment and installment payments. While installment payments can provide a steady income, a lump sum may be necessary to pay for immediate expenses such as a funeral. While the average cost of an adult funeral ranges from $7,000 to $9,000, it is possible to design a beautiful memorial at just about any price point. After the death of a loved one, you will need to assess your finances to make the appropriate choice for your situation.
3. Access Entitlements
In addition to insurance, a variety of different entitlements may be available upon death to a surviving spouse or children. If your spouse was eligible for Social Security or disability, you may be entitled to a one-time death benefit or survivor benefits. If he or she served in the armed forces, a veteran’s death benefit may be available. You should also check with past employers and professional organizations to determine whether any death or survivor benefits exist.
4. Assess Your Finances
Once you’ve applied for benefits and entitlements and have accounted for all your household’s financial accounts, it’s time to make a budget for your financial future. Sit down with a trusted financial advisor to determine how much money is available to you and how best to budget the funds for your remaining years.
5. Consider a Downsize
If your assessment reveals that your finances are insufficient to afford your lifestyle and health care needs, look for ways to free up funds. For many older adults, their home is their most valuable investment.
While it’s painful to sell a home you shared with your loved one, selling your home may be the best strategy for increasing your financial health or paying expenses related to your spouse’s passing. It also offers the benefit of decreased home maintenance and allows seniors to purchase a home closer to the city center where they have access to important amenities including transportation. Downsizing may also help you move on emotionally.
Before putting a home up for sale, assess its market value and estimate the net proceeds from the sale. Comparing your home to recently sold homes that are similar in age, size and neighborhood is an effective way to approximate its resale value. For a precise appraisal, talk to a real estate agent with experience in the local market.
There’s a lot to handle after a loved one passes away. While it’s important to attend to these financial tasks quickly, don’t neglect your personal needs during this challenging time. Reach out to your loved ones for emotional support and assistance handling your spouse’s affairs. If you’re struggling to cope with your grief, support groups are available to help you navigate your emotions and come to terms with your loss.
Author Bio: Jim McKinley is a retired banker who enjoys helping people make the most of their hard-earned money. He runs the Money With Jim blog to provide readers of all ages with information on budgeting, first time home buying, savings, and insights on a number of financial topics. Learn more about Jim here.