Making financial order after death of a spouse

There is no lonelier man in death, except the suicide, than that man who has lived many years with a good wife and then outlived her.

Calculating taxes (photo credit: INGIMAGE)
Calculating taxes
(photo credit: INGIMAGE)
Apparently, my column last week about how to make financial order after the loss of a spouse, struck a nerve with readers as I received a fair share of feedback, and many mentioned issues that I neglected to discuss. I thank you for all the feedback and just want to make clear that it’s hard to fit in everything that needs to be done in 800 words so I’d like to continue last week’s discussion for a few additional necessities.
The first few tips are, actually, important to take care of while everyone is still alive.
Phone numbers
Especially if your spouse handled all money matters, it’s very important that while everyone is still alive and well, to make order of all professionals that you use. I know this may be old fashioned, but buy a notebook and write down the contact information for the family lawyer, accountant and financial advisor. Then, print out a recent statement from all bank, brokerage and retirement accounts, as well as any current insurance policies. Don’t rely on online statements. The most common problem I see after the death of a spouse is that the survivor needs to start trying to get into online access for all these accounts, and it can be very difficult.
Make a will
I am not a lawyer but it’s very important to write a will. Israeli inheritance law ensures that all relatives of the deceased will benefit from the inheritance money but tragically, I have seen situations where the parent and the children weren’t on great terms, and the elderly parent didn’t get enough money in the inheritance to be able to make ends meet. The way to split the money fairly and in a more personal manner must be done through a will.
Sign an “arichut yamim” bank form
Many people don’t realize that unless you sign the arichut yamim form, a joint account in an Israeli bank will be frozen when a spouse passes away and this would lock the surviving spouse out of the account until inheritance issued are settled. I can’t stress the importance of making sure that this form gets signed. It’s important to note that certain US brokerage firms have a similar form that needs to be signed in order for the survivor to have access to funds.
What to do first?
Set up meetings with your accountant, lawyer and financial adviser. These professionals have loads of experience in dealing with the various issues that may arise and they can help guide you through this process.
Suddenly, there is a lot on your plate and you don’t even know where to start. Here are some important issues to deal with sooner rather than later.
1 – Re-title all accounts – You will need to remove your deceased spouse from any joint account. I strongly urge that when re-titling accounts it’s important to add either a joint account holder or give power of attorney to someone, usually a trusted child, otherwise, in the event of a catastrophic event that limits your ability to make decisions, your money will be frozen and if you need a large sum of money for medical issues or for a caregiver, you will be out of luck. If you have another person on your account, they can see to it that your money can be accessed in times of trouble.
2 – Life insurance – Start the process to collect your benefit from any life insurance policies. Call your agent who will guide you through the benefit process.
3 – Probate the will – Call your lawyer and have them walk you through the process. If all is in order, it doesn’t take too long, perhaps a couple of months but if there are complications and someone challenges the will, be prepared for a long process that could take years to resolve.
4 – Benefits – Contact Social Security or Bituach Leumi to inform them of the death. If your spouse was receiving benefits they will be stopped at once, and you can apply for survivor benefits.
As I wrote last week, the death of a spouse is emotionally devastating, but you need to continue living your life. By implementing these tips, you can start taking control of your financial situation, which to some degree will help enable the healing to begin.
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.
Aaron Katsman is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and in Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, FSI. For more information, call (02) 624-0995 visit www.aaronkatsman.com or email [email protected]