A call Tim never forgot
Tim worked with a client he calls Louie. Again and again, Tim encouraged Louie to bring his wife, Elena, to their meetings. Louie's answer was always the same: "I handle the finances."
Then one day Louie's name came up on Tim's phone. Tim answered, "Hey Louie, great to hear from you." The voice on the line said: "Tim, this is Elena. Louie died four months ago."
Their home was already months into foreclosure. The money was there. The problem was that Elena didn't know how everything fit together or what to do next. Tim's office was able to help her address the foreclosure, find the life insurance and organize the retirement accounts.
A plan isn't successful just because you understand it. The person you love may someday have to understand it without you.
What changes when one spouse dies
- One Social Security check stops. The survivor generally keeps the larger of the two benefits.
- Pensions depend on the choice made at retirement. A pension with a survivor option keeps paying a spouse, usually in exchange for a smaller check while both are alive. A single life pension stops.
- Taxes can go up. After the year of death, a survivor usually files as a single taxpayer, so similar income can be taxed at a higher rate.
- Many bills stay the same. The house, the car, insurance and utilities rarely shrink by half.
Five things to do now, together
- Bring your spouse to every planning meeting. This isn't about permission. It's about understanding.
- Check the beneficiary on every account and policy. Beneficiary forms usually decide who gets the money, even over a will.
- Write down which income continues, which stops, and by how much.
- Make a list of accounts, documents and the people to call.
- Decide on Social Security together. The higher earner's claiming age can shape the survivor's income for decades. Read more.
The Legacy Binder
Every client receives one: accounts, assets, debts, beneficiaries, important documents, contacts, and where to find everything. On one of the worst days of someone's life, we don't want to send them on a scavenger hunt. Legacy isn't only what you leave. It's how clearly you leave it.
This page is educational. It is not tax, legal or investment advice, and rules change. We check the current rules against your own situation before you decide anything.