Forbes’ recent article, “What To Do After The Death Of A Spouse,” provides a thorough list of topics to address upon the death of a spouse.
Paying Bills. See how the bills are being paid from joint bank accounts, your spouse’s, or your own account. The funeral home will usually inform the Social Security Administration. It is also important to notify current/former employers, since it is common to have employer-provided life insurance, stock options and other benefits that may require your attention.
Asset Titling, Beneficiary Elections, and Probate. Your spouse hopefully had a will. Assets owned by your spouse individually that don’t pass through a beneficiary designation, like on a retirement account or life insurance policy or through a transfer-on-death or payable-on-death arrangement, will likely go through probate. Get help from an experienced elder law attorney.
Retirement Accounts. If you’re the primary beneficiary of an IRA, 401(k), or other type of retirement account, work with your attorney to discuss your options. Surviving spouses have many choices after inheriting a retirement account.
Social Security. A surviving widow(er) who is at least full retirement age will typically receive 100% of the highest benefit you or your spouse was receiving. If you were both receiving Social Security, you’ll only get one check going forward (the highest one). You should also remove your spouse’s social security number from joint accounts and close any of their spouse’s individual accounts to avoid income tax complications in the future.
Consider Your Housing Options. Look at housing options, like whether to sell or keep the home, or downsize. Mortgages aren’t transferable, even if both your names are on the loan, so you’ll need to pay the mortgage off or refinance into a new loan supported by your assets and income as a widow(er). If you decide to sell your marital home, you’ll have two years from the date of death to sell and keep the full $500,000 federal gain exclusion for married couples.
Filing Taxes For The Year of Death. When a spouse dies, the surviving spouse may need to file taxes for both them and their deceased spouse for that tax year (by April 15th of the following year). Ask your attorney if you need to file a federal or state estate tax return (due nine months after death). Note that some non-retirement assets owned by your spouse will also be eligible for a step-up in basis to the fair market value at the date of death.
Reference: Forbes (April 20, 2023) “What To Do After The Death Of A Spouse”