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Carrie Schwab-Pomerantz, CFP Headshot

What Financial Steps Should You Take When a Spouse Dies?

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Dear Carrie,

I'm 65 and my husband just died suddenly. He handled our finances and I'm feeling overwhelmed by this new responsibility. What should I do first?

-- A Reader

Dear Reader,

I understand your feelings during this stressful time. There's so much to think about and adjust to, and there are a lot of practical issues that have to be handled. However, I caution you to take it slowly. Of course, you have to deal with immediate details such as getting copies of the death certificate and locating financial and legal documents, but don't rush into any big financial decisions. Grief can muddy your thinking, so give yourself some time.

And realize that you don't have to do everything yourself. Now's the time to reach out. Consult with your estate planning attorney, executor or trustee, or other trusted advisors. If you have friends or family you can turn to, don't hesitate to ask them for help -- at least for moral support.

Then, with your support system in place, you can start to get a handle on your finances and feel more in control.

Start with an overview of what you have.

The first step is to look at what you own and what you owe. The easiest way to do this is to create a simple net worth statement. Basically, you just need to make two lists.

First, list your assets -- things like your home (the current market value), bank and investment accounts, and retirement savings. Next, list your debts -- things like a mortgage or a car loan. Then subtract your debts from your assets.

This will give you a good idea of your general financial situation.

Get organized.

To make it easier on yourself -- and easier to share information with someone who's helping you -- take some time to get organized. Create a simple filing system for things like bank, brokerage and credit card statements, receipts, insurance policies -- anything you may need to refer to periodically.

You might also set up a system for paying bills so you don't miss any due dates. For instance, if you have a computer, using online bill pay through your bank and setting up automatic payments for regularly recurring bills is an excellent way to stay on top of things.

Update information on personal accounts and property.

It's also important to contact your banks and credit card companies to change joint loans, accounts and credit cards to your name only. You may have to provide a death certificate to do this.

You should also review and update beneficiary designations on your own retirement accounts, annuities and insurance policies; update health and life insurance records as needed; and update titles on all property owned by your late husband. Your attorney can help you do this.

Contact the Social Security Administration.

A widow or widower at full retirement age (FRA), as defined by the SSA, qualifies for 100 percent of a spouse's benefits. (If you're younger than your FRA, benefits are reduced by age.)

If you're currently collecting Social Security based on your husband's work record, this should happen automatically once you report his death. However, if you're not yet collecting benefits, or if you're collecting on your own work record, you'll need to apply for survivor benefits and provide specific information (for example, a death certificate, your marriage certificate and Social Security numbers for both of you). As a survivor, you are entitled to receive whichever is greater -- a benefit based on his work record or your own.

The SSA will work with you to ensure that you receive the maximum benefit you're entitled to. You can find more on how to apply for survivor benefits at ssa.gov or by calling 800-772-1213. You can also contact your local Social Security office.

Get actively involved in your financial life.

I know it's not easy, but it's very important that you now take an active role in your financial life. For instance:

  • Set short- and long-term goals. This is a lot more meaningful than simply working with numbers.
  • Develop and stick with a budget. If you know you have enough to live on, you'll be more confident you can manage on your own.
  • Build a financial safety net. If you can, keep enough assets in cash to cover two to three year's expenses.
  • Reevaluate your investment portfolio. Talk to a financial advisor to make sure you're taking on the appropriate amount of risk for this point in your life.
  • Review or create your estate plan. Talk to your family about your wishes.

Take it one step at a time.

I know that handling these details can be confusing and time consuming, but you don't have to do it all at once. Create a timetable for yourself, outlining which task you'll accomplish each day or each week.

One other note of caution: You're at a vulnerable time so be on the lookout for financial scams. Never give out personal or financial information to someone you don't know well.

Again, turn to family or trusted friends and advisors for help during this transition. Once you have the practical details under control, hopefully you'll feel more confident and able to move forward both emotionally and financially.

Looking for answers to your retirement questions? Check out Carrie's new book, "The Charles Schwab Guide to Finances After Fifty: Answers to Your Most Important Money Questions."

Read more at http://www.schwab.com/book. You can e-mail Carrie at askcarrie@schwab.com. This column is no substitute for an individualized recommendation, tax, legal or personalized investment advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner or investment manager.

COPYRIGHT 2014 CHARLES SCHWAB & CO., INC. MEMBER SIPC. (0514-3005)

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