What Issues Should I Consider If My Spouse Passed Away

Categories: Checklists, Life Events

Will your spouse’s estate exceed $11.4 million or will your combined estate exceed $22.8 million?If so, consider the following:You may have a federal estate tax liability due.Remember, proceeds from a life insurance policy owned by the deceased and values of retirement accounts are included in the gross estate. To maintain portability of unused exemption, you must file IRS Form 706 no later than 9-months after the date of death.If there is an estate tax liability, do you expect the value of the assets to decline over the next six months?If so, consider electing the alternate estate valuation by filing IRS Form 706. Could there be property and assets not yet identified?If so, consider the following:Consider looking at the “points” feature on credit cards & “miles” with airlines to see if they are transferable.Check for safety deposit boxes but be sure to follow probate rules before opening.Search state agencies and unclaimed property sites that are run by many state treasurers.Do you need to update your own estate plan? Are there digital assets that should be preserved? Will your cash flow needs change?If so, consider developing a new income and expense plan.Was your spouse receiving Social Security?If so, consider the following:You may be eligible for survivor benefits. Reference “Am I Eligible for Social Security Benefits as a Surviving Spouse?” flowchart.If you are receiving a government pension based on earnings that were never subjected to Social Security taxes, you may be subject to a Government Pension Offset.Was your spouse over the age of 70.5 or were they taking RMD at the time of their death?If so, you may have to take the remaining RMD amount for the current year before the end of the year.Are you under the age of 59.5 and want cash?If so, consider opening and maintaining an Inherited IRA to access the assets penalty free even if you are under age 59.5. Reference “Should I Inherit My Deceased Spouse’s IRA?” flowchart. Was your spouse receiving a pension?If so, payments may stop or be adjusted for survivor benefits. CASH FLOW ISSUES © fpPathfinder.com. Not to be reproduced, redistributed, or retransmitted in whole or in part. All rights reserved. Used with permission. Updated 2/15/19. YES NO Do any accounts require ownership of the account to be updated?Did your spouse pass away without a will?If so, you or a family member will likely need to be appointed executor and the estate will be subject to the state’s intestate rules. Do you have more assets than you need to maintain your lifestyle?If so and acceptable contingent beneficiaries have been named, you may wish to disclaim these assets to shift them to other beneficiaries. This must be done within 9-months of the date of death. (continued on next column) ESTATE SETTLEMENT ISSUES YES NO Was your spouse employed at time of death?The employer and union may provide group life insurance and/or compensation related to their employment.Was your spouse a veteran?If so, you may be eligible for death & burial benefits, survivor pension and other benefits. (continued on next page) INSURANCE ISSUES YES NO ESTATE SETTLEMENT ISSUES (CONTINUED) YES NO 2019 · WHAT ISSUES SHOULD I CONSIDER IF MY SPOUSE PASSED AWAY? Was the death accidental or work related?If so, consider the following:Some financial institutions and professional associations may offer a small lump-sum benefit.The employer/union may offer additional death benefits. You may be eligible for worker’s compensation and/or death benefits.Some life insurance policies have an “accidental death” provision for higher benefits.Did you and your spouse have a child under age 18 or a child permanently disabled?If so, you and/or the child may be eligible for Social Security benefits.Could there be any life insurance owned by your spouse that has not been identified or claimed? INSURANCE ISSUES (CONTINUED) 2019 · WHAT ISSUES SHOULD I CONSIDER IF MY SPOUSE PASSED AWAY? © fpPathfinder.com. Not to be reproduced, redistributed, or retransmitted in whole or in part. All rights reserved. Used with permission. Updated 2/15/19. YES NO Did you and your spouse own your home?If so, the primary residence can be sold within the first two years after your spouse’s death and the $500,000 housing exclusion will still be available to you.Did you own property jointly with your deceased spouse?If so, you will receive a step-up in basis. Reference “Will I Receive A Step-Up In Basis For This Inherited Property?” flowchart.Have all your spouse’s prior taxes been paid (not including any estate taxes)?If so, contact the IRS and your state’s taxing authority to pay any taxes or to check if any back taxes are due.Did you file as Married Filing Jointly?If so, you can continue to file as MFJ in the year your spouse passed away. (continued on next column) TAX ISSUES YES NO Does your spouse have stock options, grants, or restricted stock units (RSUs)?If so, consider how it will impact your tax liability and your cash flow planning.Has the change in circumstances altered your investment objectives or risk tolerance?If your spouse was a business owner, does a plan need to be developed to transfer/sell the business?If you or your spouse have annuities or other illiquid assets, do they need to be reviewed to understand options? INVESTMENT & ASSET ISSUES YES NO Do you need to reduce the threat of identity theft?If so, cancel your spouse’s email accounts, cancel social media accounts, notify credit bureaus, cancel driver’s license, notify election board.Are there any state specific issues that should be considered (including out-of-state property or estate tax liability)? OTHER ISSUES YES NO Do you have a dependent child?If so, you may be able to use the Qualifying Widow(er) tax filing status for the two tax years following the year your spouse passed away. TAX ISSUES (CONTINUED) YES NO
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This checklist covers 29 of the most important planning issues to identify and consider for a client, whose spouse has recently passed away.  It’s structured as follows:

  • Cash Flow Issues
  • Estate Settlement Issues
  • Insurance Issues
  • Tax Planning Issues
  • Investment & Asset Issues
  • Other Issues


Updated 2/15/2019.