A Widow’s Guide to Finances
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Losing a spouse is one of life's more difficult transitions and there is much to do financially. Start by contacting Social Security about a spouse's death. Social Security should be notified as soon as possible when a spouse dies. In most cases, the funeral home will report the person's death to Social Security. Give the funeral home your spouse's Social Security number if you want them to make the report to Social Security. To report a death or apply for survivor benefits call 1-800-772-1213 between 8 a.m. and 5:30 p.m. Monday through Friday. A one-time lump sum death payment of $255 can be paid to the surviving spouse if he or she had been living with that spouse.
Survivor's Benefit from Social Security
The surviving spouse also may be eligible for a survivors benefit. Your survivors benefit amount is based on the earnings of the person who died. The more money a spouse paid into Social Security, the higher your benefits would be. The monthly payment you would get is a percentage of the deceased's Social Security benefit. It also depends on your age and the type of Social Security benefit you are eligible to receive. So be sure to reach out to Social Security for details. A widow or widower at full retirement age or older could receive 100 percent of the deceased spouse's Social Security amount.
Was your spouse a veteran? Contact Veterans Affairs at 800-827-1000. Alert them of your spouse's death and ask about survivors benefits. Your spouse's regular payments will be stopped.
Get Copies of the Death Certificate
Financial institutions, government agencies and insurance companies will need a copy of your loved one's death certificate. So get several copies.These can be obtained at the funeral home. Give yourself time to go through this task. You'll need to contact every single financial provider that your loved one had. You'll need to change all those joint financial accounts to single accounts. You'll need to contact insurance companies, changing the accounts to solo accounts and you'll need to contact as mentioned above Social Security and Veterans Affairs if your loved one served in the military. It can be a lot to tackle so take it one at a time. Put Social Security and Veterans Affairs at the top of the list because there may be survivor benefits available.
If you are on a spouse's employer plan, ask the company about remaining on the plan. If they offer to keep you on the plan, terrific. Your health care providers and benefits all stay the same. If not, you'll need to shop for a new health insurance plan.
To get the best deal, you'll want to compare health insurance plans from several different providers. SmartFinancial makes this easy to do. With SmartFinancial's help you'll be comparing health insurance rates in your area in no time. SmartFinancial has access to more than 200 insurance companies so you're bound to find the health care coverage and price that you are looking for.
If you have Medicare, your personal coverage remains unchanged after the death of a spouse. So that is a bit of normalcy in your life as a grieving spouse.
But there may be Medicare benefits to apply to. You may be eligible to receive Medicare benefits for a deceased spouse if that spouse earned 40 Medicare credits prior to their death and if you were married at the time of your spouse's death. Rather than Medicare, reach out to Social Security for more information about this benefit.
If your spouse has life insurance, you'll want to alert the life insurance company of his or her death. As a beneficiary, you will be eligible for the account's death benefits. This money can be used for a whole gamut of things such as mortgage payments. If it is a large sum of money, consider seeing a financial planner for advice in using it wisely.
If you have life insurance and your spouse was a beneficiary, you'll want to change the beneficiary to your adult child or children or even to your grandchildren. If you don't have life insurance, this is a good time to consider buying a policy in your own name. You may wish to choose a child or grandchild as a beneficiary. The death benefits could be used to supplement a grandchild's college fund.
Did you share a home insurance policy with your spouse? Alert the insurance company that your spouse has died. You'll be listed as single on the new policy and you may receive a higher rate. If you want to save some money, consider comparing plans using SmartFinancial. It's free and there are no obligations to find out what competing insurers may offer at a lower rate.
Reach out to your mortgage company and let them know that your spouse has died. Were you co-signers with your spouse? Your mortgage terms will remain the same as long as you make the monthly mortgage payments.
Were you the beneficiary on your spouse's retirement accounts? Now is the time to collect the money for these accounts. Will you add this money to your own retirement savings or do you have a more immediate need for the money? Weigh your options carefully.
Accounts to Cancel
Your spouse's credit cards will need to be cancelled, as will other items in your spouse's name such as magazine subscriptions and gym memberships.
Reach Out to Advisors
This is the time to reach out for expert advice. An attorney, a financial advisor and an accountant can help you with the legal and financial decisions you are grappling with.
An attorney can help you update your will, your living will and your power of attorney. Now that your spouse has passed away, you'll need to update these important documents.
An accountant can help you through a complicated tax situation. So if you need assistance with your taxes, reach out to an accountant for help. The first tax year after someone dies can be a tricky one. So don't hesitate to reach out for help.
A financial planner will assess your new financial situation and offer you advice going forward. If you are uncertain about managing your finances, talk to a financial planner for help. Did your spouse have a number of investments? Those are yours to manage now. Discuss them with a financial advisor. You may have a different risk tolerance than your spouse. And it may be time to make some adjustments.
Don't make any big financial decisions when you're deep in the emotions of grieving. Wait until your mind clears and your heart eases. Take things one day at a time. On a good day, tackle some financial and legal tasks.
Are you living in the home you once shared with your spouse and thinking about moving to a smaller space? Experts urge you to wait a year if you can manage that financially. Give yourself time to grieve. You've already gone through one big loss, losing your spouse, losing a long-time home would be another big emotional loss to contend with. So give yourself plenty of time before downsizing to a new place. You'll know when you are ready to make a move.
Here are few tips for when you are ready to begin cleaning out your old home. You want to take less stuff with you to your new place.
If you lived in your home for a while, you may have decades of stuff to go through. Gifting items to loved ones and donating items to charities are positive ways of letting go of many years' worth of stuff. Keep receipts for the charitable donations that you make. Those will come in handy at tax time. Ask that the receipt be itemized, dated and signed by the charity. And you may want to take a photo of the donated items as well.
Don't forget to recycle all you can. Paper trails pile up over the years. So shred and recycle as you go through your piles. If you have valuable items that you no longer have use for, you may wish to contact an auction house. There are companies that will help you clean out your house so if you feel overwhelmed feel free to enlist some help.
Relocating to Be Near Family
With your spouse gone are you missing your adult children more than ever? Are they far away? Before you move cross country to be near them, give yourself a breath. A cross country move is a big move and you've got a whole house to clear out first. If you're set on moving, go slow. Slow and steady decisions each step of the way are the way to go. When you move make sure to buy home insurance or renters insurance to protect your belongings.