When a Spouse Passes Away

I frequently advise surviving spouses about legal and financial matters after the death of a spouse. It is always a very difficult and emotional time. To give proper advice, I review the Trust document and any amendments, as well as asset statements. Actual statements are needed, and not just computer “screenshots”. Statements show the account title/owner. Accounts may be held in the Trust name, in only one spouse’s name, held jointly, or in other ways. Determining the necessary steps is dependent upon how title is held – so actual statements must be reviewed.
There are many kinds of Trusts – some require a “division” of assets upon the death of the first spouse, and some provide for “specific gifts” to people or charities. Each trust is different, and must be followed exactly as written.
Beneficiary designations must be reviewed and updated after a spouse passes away. Retirement accounts naming the surviving spouse as the beneficiary means that the spouse can have a “spousal rollover” of the IRA, but the survivor must update the beneficiary designations.
Life insurance is collected by the beneficiary, which may be the surviving spouse, the Trust, or someone else. Often times, the beneficiary designation was never updated by the deceased spouse, and names a parent, a former spouse, or some other individual – this causes a big problem.
The goal is for everything to go smoothly with no hurdles. But problems do occur, and they are typically avoidable with some planning before a death. Getting affairs in order is not only for our inevitable passing, but also for illness and incapacity. If you have not yet gotten your affairs in order, it’s definitely time!
For more information, please contact the McNamara Law Firm at (661) 287-3260 or visit www.theMcNamaraLawFirm.com.