Financial Steps to Take After the Death of a Partner

Losing a partner is an emotionally overwhelming experience, and dealing with financial matters during this difficult time can feel extra daunting. Taking the necessary financial steps can help ensure stability and reduce future concerns.

We’ve built a comprehensive financial list of what we’ve seen that will help reduce some angst and overwhelm, at least financially, when a spouse passes away.

1. Reach out to your trusted advisor

Grieving is a personal and ongoing process—not only are you losing a partner and someone you lean on, but you are now in charge of what some can see as a never-ending list. Managing finances after losing a partner can be complex, and you don’t need to figure it all out on your own.

As we’ve worked with clients through this, we have found what hiccups can come and resources that are helpful in the process.

We are your partner in this, and when the time comes, we are here to build a new plan forward or refine your existing one, guide you along the way, and at minimum, make you feel more comfortable with your financial situation moving forward.

2. Obtain the death certificate

The death certificate is a crucial document required for settling legal and financial matters. Request multiple copies from the funeral home or the vital records office, as different institutions will need one.

3. Locate important financial documents

Having these documents organized and accessible can help you navigate the legal and financial complexities that arise during this difficult time. The documents can provide necessary information for executing their wishes, accessing benefits, and addressing any outstanding debts or obligations.

• Will, trust, and estate planning documents

• Bank and investment account statements

• Life insurance policies

• Property deeds and vehicle titles

• Tax returns

• Social Security and pension statements

4. Notify relevant institutions

You will want to notify several institutions that need to be informed about your partner’s passing as it is applicable to the situation.

Employer (if not retired) – You may be entitled to their final paycheck, life insurance, retirement funds, or unused vacation time. If you were covered under their employer’s health insurance, you may need to explore options for continuing coverage, such as COBRA. Updating company records ensures payroll and tax documents are processed correctly, and contacting their HR will help you understand what steps to take and what benefits you may receive.

Social Security Administration (SSA) or other pension providers – Notifying them of your partner’s death is essential to ensure you receive any eligible survivor benefits, to prevent overpayments on their benefits, and to keep their records accurate for future claims.

Banks and Financial Institutions – This will be important to update account ownership and manage any joint accounts. This ensures that the correct person has access to the funds and can make decisions regarding the account.

Also, informing the financial institutions where your spouse’s retirement or investment accounts were, will begin the process to transition into your name if you are listed as the beneficiary.

Insurance Companies – Informing the life insurance company of your spouse's passing will initiate the claims process for any death benefits owed to you or your beneficiaries.

5. Assess immediate financial needs

To assess your short-term financial needs after your spouse passes, start by reviewing your finances, including current income, savings, and accessible financial accounts, to understand your available funds.

Next, identify your essential monthly expenses, such as housing, utilities, groceries, and debts, along with any immediate costs for funeral arrangements or medical bills.

6. Handle joint accounts and debts

You will want to notify any banks or institutions for bank accounts, credit cards, or mortgages and loans to ensure you have access to what you need and will want to update the account ownership and consider closing any accounts or cards that are no longer necessary to simplify everything as much as possible.

Specific to medical bills and debt, gather all relevant documentation and contact the healthcare providers to inform them of your spouse's passing. Review the insurance coverage to understand what expenses are covered, and consider negotiating the bills for a reduction or payment plan if you're unable to pay in full.

7. Settle the Estate

If your partner had a trust, the named executor will manage the estate distribution of assets, property, and items as wished.

If there is no trust, everything that does not have a direct beneficiary listed will likely go through probate, where a court will oversee the distribution of assets according to state law. Consulting an estate attorney can be helpful in navigating this process and understanding the timeline.

8. Review and update legal documents

Update the beneficiaries on your life insurance, retirement accounts, and pensions. Review and revise your will, trust, power of attorney, and healthcare directives as needed.

Depending on how your existing property is listed as owner, you will want to adjust this to match your current situation. If you are unsure, a good place to start is your County Recorder’s Office to know exactly how it is listed.

9. Address tax implications or changes

We’ll start by saying that if you don’t currently work with a tax professional, consulting with one is a good idea to help you understand the different elements of preparing your taxes after a partner passes.

Filing Status: You may be able to file as a qualifying widow or widower for up to two years after your spouse's death, which generally offers a higher standard deduction and more favorable tax rates.

Estate Taxes: If your spouse's estate exceeds the federal estate tax exemption limit, it may be subject to estate taxes, requiring the filing of an estate tax return.

Inheritance Taxes: Depending on your state, you might be responsible for inheritance taxes on assets you receive from your spouse’s estate.

Retirement Accounts: If you inherit retirement accounts, such as IRAs or 401(k)s, there are specific tax rules regarding distributions that you should be aware of to avoid penalties.

Social Security Benefits: If you are eligible for survivor benefits from Social Security, those benefits can have tax implications as well.

Losing a partner is an incredibly difficult experience, and managing financial responsibilities in the aftermath can feel overwhelming.

While there are many steps to take, you don’t have to navigate them alone. Lean on your trusted advisors—whether financial, legal, or tax professionals—to guide you through this transition and ensure your financial future remains secure.