Organizing Your Finances: Before and After a Personal Loss

By Holly Gallagher, CFP® AIF® PPC®

Life’s uncertainties can present personal hardships that not only affect us emotionally, but financially as well.

The death of a spouse or life partner is one of the toughest events to go through. Along with the emotional adjustment of continuing on without one’s best friend, there is additional stress involved in facing the relevant financial issues while still grieving. Even as the primary person handling the family finances, this loss can leave one overwhelmed with financial affairs.

There is a wide a variety of tasks that need to be addressed when a partner passes away. The following lists provides a framework to keep finances organized before and after this difficult time arrives.

Preparing now to minimize stress later

– Keep a list of insurance companies, policy numbers, and social security numbers on hand. Although you don’t need to produce the original insurance policy to file for a death claim, having a copy will help speed up the process.

– Store important documents in a safe location for easy accessibility. Such documents include the marriage certificate, wills and trusts, deeds, titles, military discharge papers, and children’s birth or adoption certificates. It’s important to have easy access to these documents to apply for dependent benefits. Note: Don’t store a will in a safe deposit box, as many states seal safe deposit boxes upon the death of the owner.

– Ensure that each spouse has a credit card account. Contrary to popular belief, if you are a user on an account opened by your spouse, the credit does not automatically transfer to you after he or she passes. Credit card companies have a policy of cancelling the account issued to the deceased, even if a spouse has a secondary card. To ensure that you will not be left without a credit card, you should either each have a card in your own name or have a joint account in both names.

During and after the loss

– Notify others and seek advice. In addition to calling family and friends, you should notify your employer and your spouse’s employer. You should also inform the funeral director and your attorney, insurance professional, financial advisor and accountant, so they can get started on paperwork and financial matters.

– Obtain at least 10 certified copies of the death certificate, either from the funeral director or from the state’s department of health or vital records, to file for various benefits and to change the ownership of investments.

– Make sure to continue to pay bills. It’s important to keep up with bills to avoid late charges.

– Cancel unwanted club memberships and magazine subscriptions.

– Retrieve your spouse’s belongings from his or her workplace. Collect any salary, vacation, or sick pay owed to your spouse and ask about continuing health insurance coverage and potential survivor benefits for a spouse or children.

– Check with the credit card, bank and loan companies regarding eligible death benefits.

– Contact your banker and broker to change any jointly owned accounts to your name. Joint accounts are not tied up in the probate process, but any accounts owned solely by your spouse will have to be transferred to an estate account.

– Discuss what to do with IRAs and employer retirement plans. Talk to your financial advisor about rolling over your spouse’s IRAs into your own IRA. If you are under the age of 59½ and intend to use the IRA for living expenses, you may decide to move the account to an inherited IRA to avoid early withdrawal tax penalties. You should also discuss whether your spouse’s plan offers a survivor annuity or lump-sum payout.

– Contact the Social Security Administration. You and any dependent children may be eligible to receive a small social security death benefit and survivor income benefits.

– Obtain tax identification numbers. Your spouse’s executor, your spouse’s trustee, or you will need to obtain tax identification numbers for the estate and for any formerly revocable trust; you will need to give these numbers to your bank and brokerage firm.

– Talk with your attorney and accountant before transferring accounts or distributing assets. You will have to file a final income tax return for your spouse, and you may or may not incur additional taxes at your spouse’s death.

– Take advantage of health insurance benefits. If your spouse had health insurance through work, you may qualify for COBRA benefits for up to 36 months in most states. You should also contact your own employer to find out if you are eligible for benefits following a change in status.

Addressing personal financial affairs

It is important to avoid making major personal financial changes for at least six months after a partner’s death or until you feel that you can make sound financial decisions. Take time to consider advice from your family, friends, and professional advisors. It’s important to have a trusted advisor look over any financial decision you are considering and to ask as many questions as necessary during this stressful time.

Holly Gallagher is the president of Horizon Financial in Traverse City. She offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser, and can be reached at 231 941-6669 or at