By Anna Byrne for Next Avenue
Nothing quite prepares you for the dark and debilitating grief of losing a spouse or life partner. The beginning of every widow or widower’s journey is about picking up the pieces and finding the strength to keep going even when your “other half” has passed.I know firsthand the kind of extreme sadness that can overwhelm you, as I became a widow after losing my husband when I was just 28.
This life experience taught me that life is unpredictable, underscored the importance of planning for the future and has inspired me to help others plan and navigate such loss.
The first year of being a widow or widower is about living in memory of a loved one, but the next chapter is about remembering to live your own life.
Through my own experience, and in working with hundreds of clients at my estate planning law firm, I’ve found that there are generally seven steps that can help you through the first year of being a widow or a widower. I lay them out below. As you take these steps, you will hopefully begin to feel more in control of your situation.
Step 1: Take Care of Immediate Things
In the beginning of this journey, the grief you feel may be debilitating and taking even the smallest steps might be difficult. The challenge is to take small steps forward, even though it feels impossible.
In addition to managing your grief, you will have to handle certain affairs immediately. Notifying family members, loved ones and family advisers will likely be one of the first things you must do. Decisions about organ donation and funeral arrangements will be the hardest.
If you had discussed the “what if” scenario with your life partner or that person had outlined wishes about funeral or memorial arrangements, you may already have a roadmap to follow. Otherwise, you will have to trust yourself to do the right thing. Just do your best.
Preserving your energy will be important, since the emotions early on are draining. Notifying family and friends of your partner’s passing might be something you can delegate to a close family member. This approach may also help minimize the emotions stirred from the onslaught of emotionally draining questions from well-meaning family and friends.
Step 2: Find and Organize Key Documents
The hard reality to face when losing a partner is that you may now be solely in charge of your finances. In most couples, one person handles the bills and accounts, so if the finances were handled by the deceased partner, this will be a particularly stressful time with many questions about what to pay and how to access the accounts.
As you process your grief, it’s important to look for and organize important documents such as a will, trust and life insurance policies into folders or piles. If you have used a family attorney to help create an estate plan, call him or her. Many attorneys retain their clients’ original estate planning documents in their vaults and have useful information to guide clients.
As you assemble these legal documents, don’t write on any and don’t remove any staples. These innocent actions can inadvertently create issues concerning the validity of the documents.
Step 3: Take Inventory
Once you have located and organized the estate documents, the next step is creating a full inventory of the assets. Using a checklist, pull together all financial documents pertaining to assets and debts owed by you and your life partner.
Gather bank statements, real estate deeds, investment accounts, retirement account statements such as from IRAs and 401(k)s, pension information, Social Security information, life insurance policies (check with your late partner’s employer to see if there are any group benefits), annuity contracts, mortgage statements, credit card statements and any other information pertaining to things of value.
Organize the statements and information in chronological order by type of accounts and institutions. Starting with tax returns is often helpful, since they typically itemize income, showing the banks and financial institutions where interest income and dividends are being generated.
I recommend you review several years of recent tax returns to ensure you have everything. If you and your partner had an accountant who prepared your returns, he or she may also have records and statements on file.
Since many people have switched to paperless statement delivery, you may want to check your late spouse or partner’s email accounts to see if any notices are being emailed. If you find accounts with online statements, print out the recent statements and add them to your files.
Step 4: Pull the Pieces Together
Next, it’s important to know what to expect as you move forward with the legal administration of your partner’s estate.
Each state has specific procedures to follow when there is a will and when there is not. Each state also has probate laws outlining the process for what must be done and when and who has the authority to handle the estate.
Probate is a court process for proving the validity of a will and carrying out its terms. The process exists so that once the court can confirm the will is valid, it can appoint the personal representative or executor named in the will who will collect, manage and transfer estate property. The probate court will ensure that the personal representative is acting lawfully and making distributions according to the terms of the will.
If there is no will, your partner’s state of residence intestacy laws will determine who can serve as the personal representative to manage the financial and legal affairs of the estate. These laws also outline who can inherit a person’s property (and in what order) if there was no will.
Certain assets, such as retirement accounts, annuities and life insurance policies generally pass outside of probate if beneficiaries are named on the accounts. To claim rights over these types of assets, contact the institution and ask it to send you beneficiary claim forms.
Joint accounts generally also bypass probate because the joint ownership includes a survivorship provision.
Taxes also need to be addressed during the settlement of an estate. In addition to income taxes, there may be federal and state estate taxes. Some states don’t impose estate taxes, so it’s important to ask your attorney or research this to find out.
Generally, as a surviving spouse, estate taxes are not likely. However, if you were not married or if you were part of a blended family where there were children from a prior marriage, the estate tax is something to address with your advisers.
Estate taxes are calculated based on the values of a person’s assets at the date of death, so knowing these values is critical. Under current law, assets passing through the estate receive what’s called a “step-up” in basis. The step-up rules adjust the tax base of assets to the market value at death, which reduces the amount of income taxable gain on the sale of assets like the family home and stocks. (As Next Avenue has written, there is some talk in Washington, D.C., about changing the estate tax laws and the step-up rules.)
To ensure you are properly handling this step, consult a tax adviser who specializes in estate-related tax issues.
Step 5: Build a Team of Trusted Advisers
Once you have organized all necessary documents, you may not know where to go from there. That’s why it’s a good idea to build a team of trusted financial and legal advisers to help settle your partner’s estate.
Your team should address all of the steps for completing probate and administering your partner’s estate.
Taking the time to vet attorneys and advisers to choose the best qualified professionals may help you avoid additional hardships down the road.
Step 6: Plan for Your Immediate Future
This step involves understanding what assets you had as a couple, the income available to you as the widow or widower and how to take care of your loved ones in your new stage of life.
Create a new household budget and think about your own financial objectives and retirement objectives. Also, share your income and expense information with your financial adviser.
Step 7: Plan Things for Your Loved Ones
Now is the time to ensure your own estate plan is in order to create peace of mind so your loved ones will have a clear roadmap for your wishes.
Start with updating or creating key documents that will kick in if you’re unable to make health or financial decisions for yourself: your health care proxy (also known as an advance health care directive) and financial durable power of attorney. Make sure they name people who you trust and who you believe can handle the responsibilities. (Next Avenue has free resources to help you do this.)
Your power of attorney should make it clear when the agent’s authority would begin and what your agent would have the authority to manage on your behalf.
These documents are state specific, so discuss them with your attorney.
Continuing the process, you should create a will or a revocable trust or update the one you have to outline your wishes. Here, you’ll designate who you want to be in control of your estate when you die and who will receive your estate.
It’s also helpful to create what’s known as a “Tangible Personal Property Memorandum” if you have lots of personal items you’ll want to pass to specific individuals.
Updating all beneficiaries on your retirement, annuity and insurance policies is essential, too.
Once you have all the documents in place to address disability, incapacity or death, communicate your wishes to your loved ones and let them know if they’ll play a role in your plan. Tell them where your documents are located, your wishes pertaining to health decisions and whom to contact if something happens to you.
Anna Byrne is the founder of the Eckert Byrne law firm, based in Cambridge, Mass., and an estate planning attorney with over 25 years of experience. A widow herself, she wrote the recently published book, “A Widow’s Guide,” to help women through the first year after losing a spouse.