Episode 85: Dealing with the Death of a Spouse

Today’s Prep:

While it’s unpleasant to think about, preparing for what happens when one spouse dies is a critical component of your financial plan. David has worked with several surviving spouses and shares what’s important to focus on when it comes to your financial plan during that transition.

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Equipping Points:

In this episode of Cover Your Assets KC, we’re going to talk about the difficulty that you face financially after losing a spouse. What can you do to prepare before a spouse passes? We’ll discuss everything from reduced income for the surviving spouse, the probability of a higher tax bracket, what to do from an estate planning standpoint, and then financial matters you’ll be looking at for the first time.

Having a good plan is key to understanding what will happen when your income is reduced. How will that impact your pension or Social Security? What kind of back-up income do you have in place? How does that then change your tax brackets? Even if you have less income, remember you’ll be filing as a single person instead of a married couple.

When it comes to estate planning, what do you need to address fairly soon after one spouse passes? You have several documents that will need updating as well as your beneficiary designations. Is everything set the way you want?

Finally, when you’re married, your risk tolerance may be a compromise between your feelings on risk and your spouse’s. After one spouse dies, your desired exposure to risk may be different. Working with an advisor may help you to set up a portfolio with the right amount of risk given your situation.

[1:45] What are the financial difficulties following the death of a spouse?

[4:03] – What kind of income will the surviving spouse receive?

[8:10] – How will your tax brackets change?

[12:51] – What are the estate planning matters you need to address?

[16:04] – Is your exposure to risk still appropriate?

Today’s Takeaway:

“Finding a good advisor if you don’t already have one, an estate planning attorney, and maybe a tax advisor are critical to making sure you’re still on track after becoming suddenly single.”

– David Dickens

Additional Resources:

PODCASTHow to Prepare for Early Retirement 

PODCASTDo You Really Need Life Insurance?


More From David:

The host: David Dickens

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