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Wealth Advisory & Planning

May 13, 2022

Navigating Life Transitions: Loss of a Spouse or Partner

The loss of a spouse or partner can be one of the most difficult challenges anyone can face. Mourning is a deeply personal experience, and navigating and adapting during this difficult stage can be overwhelming.

During this time, it is best to be positioned to make informed and well-considered decisions. To this end, we have identified key elements of the estate settlement process to consider following the loss of a spouse or partner. Your advisors can work with you to help you understand emerging responsibilities, as well as oversee details regarding the collection and interpretation of necessary legal documents.

Work with your estate administration team
Often a surviving spouse has been named executor of the deceased spouse’s or partner’s estate. If you are the executor, you will work with your estate administration team, which includes the estate attorney, corporate co-executor (if applicable), broker or other investment advisor, and accountant, to carry out the terms of the will and settle the estate. These duties will include notifying beneficiaries; identifying, valuing, managing and distributing the assets of the decedent; and filing any required tax returns.

Below are action items associated with the estate administration process — some are immediate, others take months to years to complete and many, if not most, can be handled by your professional advisors (estate attorney and paralegal, corporate co-executor, accountant):

  • Obtain the death certificate and request 10-20 copies.
  • File the will with probate court.
  • Identify all assets owned by the deceased and obtain statements for bank accounts, investment accounts, retirement plans (e.g., IRA, SEP, Roth), pensions and Social Security, 529 plans and other education savings accounts.
  • Set up an estate bank account to pay ongoing bills.
  • Establish date-of-death valuations for financial assets and complete cost basis step-up schedules for review.
  • Collect insurance policies, including home, umbrella, life, long-term care, health and auto.
  • Collect current beneficiary designations from documents, policies and investment service providers.
  • File for pension plan distributions, claim life insurance benefits and change Social Security benefit arrangements; determine if there are any veteran’s benefits.
  • Transfer IRAs and discuss whether a spousal rollover or an inherited IRA is the best option.
  • Identify experts who will value tangible personal property owned by the decedent.
  • Evaluate real estate ownership and titling.
  • Work with trustee and distribute trust assets, if applicable.
  • File estate tax return(s) and estate income tax return(s).

Create a new financial path
It could take a year or more for an estate to be settled. Consider using the interim to think about your immediate financial future and discuss options with your advisors. You may want to explore and create a plan for your lifestyle, legacy and philanthropic objectives. It is helpful to begin with these financial planning fundamentals:

  • Identify total assets and liabilities: Work with your advisor to create a balance sheet to determine your net worth (what you own minus any debts/liabilities).
  • Analyze current income and annual spending and understand that it will most likely evolve in the years following your loss. Identify sources of income, including salary, investment income and dividends, annuities, trust distributions, Social Security, retirement plans and IRA distributions:
    • Determine fixed versus discretionary expenses.
    • Assess special budget items such as tuitions, medical expenses, children with special needs or assistance to family member(s).
    • Evaluate annual spending and develop a budget, even if it is an interim budget and things sort themselves out.

Forward looking planning

  • Complete Glenmede’s Guide for My Family and Advisors.
  • Partner with your advisors to develop future lifestyle goals, such as spending needs, charitable goals and multigenerational planning.
  • Review your estate planning documents with your advisors and your attorney, including will, trust agreements, power of attorney, healthcare directives and beneficiary designations.
  • Review your current and future tax planning with your advisors, including income tax, gift tax and estate tax.
  • Work closely with your advisors to establish an investment plan, discussing time horizon, risk and liquidity needs.

Losing a spouse or partner is a life-changing event. Your Glenmede team can work with you through this life transition, helping you regain a sense of stability and confidence, for now and in the future.

For more information, please contact your Relationship Manager or visit us at Glenmede.com.

FIXED EXPENSES ARE CONSTANT EXPENSES SUCH AS INCOME TAXES, HOUSING (MORTGAGE, UTILITIES, PROPERTY TAXES, HOME INSURANCE, MAINTENANCE/RENT), TRANSPORTATION, MEDICAL INSURANCE, EDUCATION AND CHILDCARE. DISCRETIONARY EXPENSES ARE EXPENSES SUCH AS FOOD, CLOTHING, ENTERTAINMENT, TRAVEL AND GIFTS.

 

 

 

 

 

 

This material provides information of possible interest to Glenmede’s clients and friends, and does not provide investment, tax, legal or other advice. It contains Glenmede’s opinions, which may change after the date of publication. Information gathered from third-party sources is assumed reliable but is not guaranteed. No outcome, including performance or tax consequences, is guaranteed, due to various risks and uncertainties. Clients are encouraged to discuss anything they see here of interest with their attorney, tax advisor or Glenmede Relationship Manager.