We are all ready for this pandemic to be over after dealing with several waves…
There’s so much to do when a loved one passes away, and it’s hard to focus when you are grieving. Still, there are several tasks that need to be taken care of immediately.
Some of the things that need to be done when someone passes, especially if they are receiving Social Security benefits, have to do with finding out what benefits are available to the spouse. If the spouse who passed had a higher benefit than the surviving spouse, this is especially important to help maintain the household income. Protective measures need to be taken to prevent identity theft, which is a common problem today.
nj.com’s recent article, “A to-do list for widows, and how to protect the identity of a dead loved one,” says that when a loved one dies, there’s a lot you can do to protect their identity.
As to the widower’s Social Security benefits, he’s entitled to the greater of his benefit or her benefit, whichever is higher. It’s good reason to plan your Social Security benefits for when you retire.
While some say it doesn’t matter if a deceased person’s identity is stolen, it can be an issue. There are several things you should do when someone dies.
First, the executor should contact Social Security and inform the agency of the wife’s death. Next, contact the three credit bureaus to also tell them, and ask that they put a freeze on her credit. To do this (and most of the other actions here), the executor will need copies of the death certificate and letters testamentary to wrap up the finances. The executor should then inform the wife’s attorney and/or tax preparer, as well as all her investment custodians and financial institutions.
If she had a non-qualified (non-retirement) account, there should be a step-up in basis on at least 50% of the account and possibly 100%, depending on the circumstances. In either case, the executor should obtain the fair market value of each of the investments as to the date of death right away. This should be immediately mentioned to both the accountant and the attorney. Make certain that the investment custodians increase the cost basis, as needed. If there’s an IRA, there are options, and for a spouse, the account can be treated as a rollover IRA or an inherited IRA. Note that an inherited IRA requires minimum distributions annually but doesn’t impose a 10% penalty on withdrawals.
If the spouse who died had a will and any trusts, review them with family’s estate planning attorney, so that the assets can be properly distributed. You should also review life insurance policies and other accounts. You’ll also need to gather information about whether or not any changes will need to be made to withholding or estimated tax payments.
Contact your financial advisor to alert them to the passing, and see if you need to sign any documents regarding changing the ownership and title on accounts.
Reference: nj.com (November 6, 2018) “A to-do list for widows, and how to protect the identity of a dead loved one”