By Jeffrey Buonforte, CERTIFIED FINANCIAL PLANNERTM
It is important to re-evaluate your personal finances after the loss of a spouse. Be assured that Lakeland Bank has a team of experts available to guide you through this often difficult and emotional process. Below are some of the financial tips that we provide to our clients.
: Assemble a financial support team.
This may include an estate planning attorney, a financial advisor
*, an insurance professional, and an accountant. These are the trusted individuals who will help protect your assets and prepare you for the future.
: Gather together your financial documents.
Divide them into two piles: “now” and “later.” These include the death certificate, wills, social security cards or numbers, powers of attorney, company benefit and retirement statements, life insurance, military discharge papers, car titles or payment books, safe deposit box, mortgage statements, loan documents, and bank account statements. If you’re unsure of your assets, check your most recent tax return for a list. Then, put aside any documents that can wait in terms of payment. Those will go into the “later” pile of documents. If you need help, enlist a family friend or someone from your financial support team.
: Address the “now” pile.
Transfer accounts into your name. Cancel memberships held by your spouse. Notify Medicare and other health insurance companies that you will no longer pay your spouse’s premiums.
: File a claim for benefits for social security and life insurance.
Don’t wait to apply for survivors’ benefits from Social Security
because sometimes benefits are paid from the time you apply and not the date that your spouse died. You should also file your life insurance claim as soon as possible to have access to that money. For life insurance, you may be given choices on how to receive the money. For example, a life insurance company could place your funds into its own money market and send you a checkbook. Be careful to ensure the funds are deposited in a federally insured account
(FDIC) or take measures to understand what having your funds in a non-insured account will mean to you.
: Check with your spouse’s employer to determine if the company owes you money.
If your spouse is still working at the time of death, the company may owe you your spouse’s unpaid salary and bonuses, accrued sick pay or vacation pay, leftover funds in medical spending accounts, and pension benefits. If your spouse was already receiving a company pension, contact the company to alert them of the change.
: Roll over your spouse’s 401-K or IRA into your own retirement account.
This ensures that taxes will continue to be deferred. Otherwise, you will be taxed when you use the 401k funds for income.
: Your income and expenses may change so it is important to review and revise your budget.
Determine if your spouse has any debt. You may need to pay off the debt before you and other beneficiaries will be able to receive an inheritance. Set up a system to pay your bills, even if you must recruit a family member to help you stay on track. Always pay mortgages, utilities and health and property insurance first. If cash is low, contact your creditors and explain your situation. Since the death of a spouse almost always results in reduced income, take steps where possible to pare down expenses. Choose from one of these budget templates
to create your new household budget.
: Change the beneficiaries on your life insurance and will.
You will want to indicate the new heirs for your will. For life insurance, this is a good chance to reassess whether you have the right insurance, or enough insurance. If you are the sole provider, consider investing in disability insurance in case you can no longer work. If you have dependent children, make sure you have enough to cover them in the event something happens to you.
: Watch out for con artists.
There are people who watch the obituaries to identify recent widows and widowers. They may pose as insurance agents who falsely declare that a life insurance premium was delinquent and ask for thousands of dollars to be able to release the funds. Or con artists may try to sell you something that seems too good to be true. If someone is trying to rush you into a decision, beware. Widows and widowers are especially vulnerable to these types of scams.
: Postpone any major financial decisions for six months to a year.
Wait to sell the family home, make a major investment, or loan money to family members or friends. During the grieving process, it’s hard to make decisions that are not based on emotion. Time will provide a more objective perspective that will allow you to make the best financial decisions for the years to come.
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*Securities are offered through Essex National Securities, LLC, member FINRA & SIPC. Insurance products are offered through Essex National Insurance Agency, Inc. Neither are affiliated with Lakeland Bank. Products are not guaranteed by the bank, not FDIC insured, not a deposit, not insured by any federal government agency, and may lose value including loss of principal.