What To Do When Your Spouse Dies
- Decisions to Make
- Legal & Financial Considerations
- Planning Ahead
Table of Contents
Grief and Decision Making
It is difficult to make decisions after your spouse’s death.
Most of the decisions that have to be made can be made beforehand,
with the help of your estate planning attorney and financial
advisers. Many people refuse to think about death.
It is normal to feel mentally paralyzed following your spouse’s
death. Most surviving spouses have trouble concentrating,
feel disoriented and desperate. They are easily overwhelmed
by the slightest problems or the simplest decisions. Grieving
can continue for a year or more. Your friends and family will
inundate you with well meaning advice - why don’t you sell
your home? You don’t need all that room. You should move closer
to your children/friends/relatives. You’d better get a job.
You should go back to school. You should pay off your mortgage
with your insurance proceeds.
Because you may have trouble concentrating and your judgment
tends to be poor or even irrational while you are grieving,
it is important to avoid making decisions for at least six
months and up to a year after your spouse’s death. It is particularly
important to avoid making decisions, which cannot be changed
during this time. If you have to make a decision, turn to
trusted friends and family members who are not as emotionally
affected by your spouse’s death and can give you sound, objective
advice. Consult experts for a thorough analysis of important
decisions.
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Disclaimers
There are a number of post mortem planning devices of which
you may avail yourself. The disclaimer is one of these vehicles.
However, it is ABSOLUTELY IMPERATIVE that you contact our
office within five days of your spouse’s passing AND take
NO STEPS TO TRANSFER OR RECEIVE the benefits from any asset
on which your spouse had an interest until one of our estate
planning attorneys has explained disclaimers to you.
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People and Places to Call
The following people and places should be contacted soon
after your spouse’s death:
- Immediate family
- Friends and relatives
- Hospital or organ bank (if you want to make anatomical
gifts).
If your spouse named a specific organization in a will or
Uniform Donor Card to receive an organ or tissue donation,
contact that organization.
Make an appointment to discuss funeral arrangements.
- Business associates of your spouse.
If your spouse died before completing work for a client or
customer, notify the person your spouse would recommend to
complete the work.
- Person holding your spouse’s power of attorney for property.
- Executor named in your spouse’s will.
- Your estate planning attorney.
You can wait until after your meeting with your estate planning
lawyer before calling these other people and places:
- The trustee of any trust benefiting your spouse (including
IRAs and self-employed retirement plans)
If your spouse was a trustee of a trust, the co-trustee or
successor trustee should be notified of your spouse’s death.
- The personnel department of your spouse’s current employer
and any former employers that had retirement plans.
Have them send you any wages, vacation pay, sick leave pay,
and other compensation they owed your spouse and any death
benefits payable to you (e.g., life insurance policy or death
benefits from a retirement plan).
- Labor union (if your spouse belonged to one).
Determine whether it provides any death benefits.
What benefits you and your children are entitled to are discussed
in "Finding Money to Pay the Bills". If you have
not been receiving Social Security benefits, you should bring
your social security number, your spouse’s social Security
number, your birth certificate, your marriage license, your
spouse’s most recent W-2 or self-employment tax return, and
your checkbook or passbook (if you want your benefits deposited
directly into your account). Also, bring your children’s birth
certificates and Social Security numbers if they are entitled
to benefits.
Obtain the forms that must be filed to collect life insurance
proceeds and change insurance policies to your name (if not
already in your name). Then schedule an appointment to discuss
the adequacy of your insurance. Ask your agent whether any
portion of the last premium paid for the life insurance policy
and any health insurance policy covering your spouse will
be reimbursed to you. For life insurance policies on the life
of your spouse, request Form 712.
Put accounts you co-owned with your spouse into your own
name. If you have no checking account in your own name, or
in the name of your revocable living trust, open one. If your
spouse was receiving any direct deposit checks (e.g., Social
Security) instruct the bank to return the checks to their
sender. If you do not have your own safe deposit box, you
should rent one. Ask your bank whether it provides any death
benefits (e.g., life insurance or insurance to pay off your
mortgage or other loans).
- Veterans Administration (if your spouse was a veteran).
The VA can provide help in paying funeral and burial expenses.
You and your children may also be entitled to monthly benefits.
See "Finding Money to Pay the Bills".
Other people and places should be called within the first
month following your spouse’s death:
Credit cards issued solely in your spouse’s name should be
destroyed immediately. Notify credit card companies of your
spouse’s death and tell them who will pay amounts owed (i.e.,
the personal representative). you may continue using credit
cards that you and your spouse both were authorized to use,
but the credit card company may ask you to fill out a new
application and may reduce your line of credit. If your spouse
purchased credit insurance, the outstanding balance will be
canceled at your spouse’s death. Check whether the credit
card company provides any death benefits.
If bills were addressed to your spouse, you may want to tell
the companies to change their billing.. If you are a woman
and have been using your husband’s last name, you may not
want to change your telephone billing and listing. Many women
do not want it known that they are living alone.
- State Department of Motor Vehicles.
If you co-owned a car with your spouse, contact you state’s
Department of Motor Vehicles and ask for the forms you will
need to transfer vehicle title to your name alone. To do so,
you will need an appraisal of your car. Go to the car dealer
and get a letter from them stating the value of the car.
- Real estate tax department.
If you co-owned you home with your spouse, and property tax
bills have been addressed to your spouse, contact the department
and have your name substituted. That way, bills and refund
checks will be sent to you, not your spouse.
- College financial aid office (if your children are in
college).
Because of your spouse’s death, your children may qualify
for financial aid (or additional financial aid).
If your spouse belonged to a health club, contact the club
and ask for a refund of dues that have been paid in advance.
If you are not interested in certain magazines your spouse
was receiving, you should contact the magazines to cancel
those subscriptions and try to get a refund.
You many want to wait until after you have made funeral arrangements
before notifying people other than members of your immediate
family and close friends. That way you won’t have to make
a second phone call to give them information about the funeral.
Be sure to write down information about funeral arrangements
and keep that information by the phone. Don’t hesitate to
ask people to make calls for you. Most people will welcome
the opportunity to be helpful.
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Documents and Information to Gather
We will give you an "Administrative Checklist"
which will identify the documents and information you will
need to gather. You should locate the following documents:
- Will signed by your spouse.
The will should be read immediately since it should name
an executor. Although movies and novels suggest otherwise,
no formalities are required for you to read the will (i.e.,
your lawyers and relatives do not have to gather together
for the reading of the will). Don’t be surprised if you cannot
find a will. It should be in the safety deposit box.
- Trusts established by your spouse, benefiting your spouse
and for which your spouse acted as trustee.
- Life insurance policies owned by your spouse.
Do not throw away life insurance policies, even if you know
that the premiums have not been paid. the policies should
be read to determine whether coverage has continued despite
nonpayment of premiums, whether coverage can be reinstated
and whether any benefits may still be payable.
- Retirement plans (including not only plans provided by
your spouse’s current and former employers, but also IRAs
and self-employment plans).
- Business agreements involving your spouse and business
books and records.
- Uniform Donor Card (authorizing anatomical gifts).
- Financial instructions left by your spouse.
A properly prepared list of final instructions can tell you
where documents and records are located, what property your
spouse owned, what funeral arrangements your spouse wanted,
and all of the other information you will need.
- Birth Certificates for you and your spouse.
- Military discharge papers of your spouse.
- Marriage license
- Prenuptial agreement
- Divorce papers
- Birth certificates and adoption papers for your children.
- Deeds to property owned or co-owned by your spouse.
- Title to burial plot.
- Vehicle registrations for your spouse’s vehicles.
- Bank accounts
- Securities certificates and other evidence of ownership
of stocks and bonds
- Recent tax returns and W-2 forms.
- Loan documents (including mortgage).
- Other insurance policies, including health, property and
travel/accident insurance.
- Membership benefit statements for all clubs (including
auto club) and organizations to which your spouse belonged.
- Credit card benefit information
- Citizenship papers
- Appraisals of property
- Social Security card
You will have to obtain certified copies of the death certificate.
Photocopies of the death certificate may or may not be accepted.
Certified copies of the death certificate usually are needed
to collect life insurance proceeds and other death benefits
(e.g., Social Security benefits) and transfer title to property.
Your funeral director can help you obtain certified copies
or you can order certified copies from your local county clerk.
Most people start by ordering ten copies. Separate certified
copies of the death certificate may be needed for each life
insurance policy, each property transfer, and each death benefit.
Expect people to request the following types of information:
- Your spouse’s Social Security number.
- Names, addresses, Social Security numbers and telephone
numbers of all heirs and other beneficiaries.
- Names, addresses and telephone numbers of your legal and
financial advisors.
- Property owned by your spouse.
If you and your spouse properly planned your estates, you
should have easy access to all required documents and information.
If you have trouble locating required documents and information,
consider the following tips:
- Check your safe-deposit box.
If you own the box or co-owned it with your spouse, you should
have no trouble entering it. If you are not an owner, you
may have to obtain an affidavit to search it. If you think
your spouse had a safe-deposit box but do not know where,
contact the banks where your spouse did business and the local
state deposit association for help in locating the box. Check
your tax records and canceled checks for the name of the bank
paid rent for a safe-deposit box.
- Look where your spouse kept important papers (i.e., file
cabinet, desk, safe, briefcase, suitcase, or old shoe box).
- Look at old tax returns, records and financial statements
(if prepared). They should tell you what assets your spouse
owned.
- Ask your legal and financial advisers.
If you cannot remember their names, look through your checkbooks
and canceled checks. Check tax returns and other legal and
financial documents for their names.
If you think your spouse owned life insurance but you cannot
locate the policy or remember the name of your spouse’s life
insurance agent, look through your spouse’s checkbook and
canceled checks for premium payments. If you send a stamped,
self-addressed envelope to the American Council of Life Insurance
Policy Search, CLI, 1001 Pennsylvania Ave., N.W., Washington,
D.C., 20004), that organization will ask its members to search
their files. The search is free.
Your bank may have been named executor of your spouse’s will
or trustee of any trusts established by your spouse and may
either possess those documents or know where they can be found.
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Organ and Tissue Donations
You many be asked to donate all or some of your spouse’s
organs and tissues for transplantation, therapy, medical research,
or education. Your spouse may have made that decision for
you by signing a donor card or indicating his wishes in a
will. Most states have a donor card that can be attached to
a diver’s license. If your spouse has named a donee, contact
that organization and make certain that it will accept a donation.
If you want to know who would be interested in a donation,
contact a local hospital or organ bank.
This decision has to be made quickly because organs can be
preserved outside the body for only a limited time. You may
be able to donate tissues even though your spouse was considered
too old or disease-ridden to donate organs. If should not
cost you anything to make a donation. All expenses should
be paid by the organ procurement organization. If a hospital
or doctor charges you to evaluate an organ or tissue for donation
or to remove an organ or tissue, ask the organ procurement
organization to correct the error. Making a donation should
not delay your spouse’s funeral. Nor should it prevent you
from having an open casket. Your spouse should not be disfigured
by a donation.
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Medical Autopsy
You may be asked for permission to do a medical autopsy on
your spouse (at no cost to you). Autopsies usually are requested
if a person died unexpectedly or from a rare or heavily researched
disease. Medical autopsies can be useful for medical research.
In an autopsy, the body is opened and examined for information
about the cause of death. Some parts of the body may be removed
for further study. With clothing, you should not be able to
tell that the body has been autopsied.
In most states, an autopsy cannot be performed without your
consent if your spouse died of natural causes. It can be done
without your consent if foul play is suspected. You will want
an autopsy if you suspect that your spouse’s death was caused
by someone’s negligence. You will not want an autopsy if it
would prevent you from making an organ or tissue donation
(because of time delays). Be sure to check whether your spouse
left any written instructions about autopsies. If not, decide
whether you think your spouse would approve of being autopsied.
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Funeral Arrangements
Unless your spouse prepaid for a funeral, you will have to
make funeral arrangements. Be sure to check whether your spouse
left any instructions. Instructions may have been included
in your spouse’s will or in a separate letter. You do not
have to carry out your spouse’s wishes if they are unreasonable
or financially burdensome.
If your spouse did not specify how the funeral should be
conducted, you will have to decide what arrangements should
be made. Consider not only what you think your spouse would
have wanted but also what you can afford. You may want more
lavish arrangements than you can afford, out of respect or
guilt, but any spouse worthy of such affection would not want
you to jeopardize your financial security. You can provide
a dignified funeral at a reasonable price.
Funerals can take many forms. You can bury the body in a
cemetery plot or inter it in a mausoleum. You may also cremate
the body and then bury, scatter (unless prohibited by state
law), or inurn the remains in a columbarium or at home. Services
can also be held in the funeral home, a chapel or at graveside
services. You may have a clergyman or anyone else conduct
the service. The body may be present at the service, or the
service may be a memorial service with nobody present. The
casket can be opened or closed.
A good funeral director can provide great assistance and
make a difficult time less stressful for you. You may know
of a good funeral director from past dealings. If not, ask
your friends or clergy for recommendations. A nonprofit memorial
society in your area, for a one-time membership fee, may be
able to help you make arrangements with a funeral home for
an economical, dignified funeral.
Visiting the Funeral Home - Before making
a final decision, you may want to visit the funeral home.
Look around. Would you be comfortable holding a service there?
Some funeral homes are more comforting than others. Talk with
the funeral director. You want a funeral director who is warm,
honest and professional. Be sure that the funeral home can
provide the type of service you desire. Ask for a general
price list itemizing the products and services offered. You
are entitled to such a list under the Federal Trade Commission’s
Funeral Rule. Prices for products and services can vary considerably
from one funeral home to another. You will have to go to the
funeral home to make funeral arrangements. Invite someone
who is less emotionally involved to come with and help you
make decisions. If you want your spouse to be buried in certain
clothes or with certain other items (e.g., jewelry, glasses,
dentures, wig, toupee) bring the items to the funeral home.
If you would like to say something special in the obituary,
you should write it out before meeting with the funeral director.
Consider whether you would like mourners to contribute to
a charitable organization instead of sending flowers. You
local newspaper may or may not charge for the obituary.
Veterans - If your spouse was a veteran, take
your spouse’s discharge papers to the funeral home. Veterans,
unless they were dishonorable discharged, can be buried for
free in one of the national cemeteries. The Veterans Administration
(VA) will furnish a flag for the service and a headstone or
marker. If your spouse was receiving a pension or compensation
from the VA (or would have been entitled to compensation if
not for the receipt of military retirement pay), or if your
spouse died in a VA facility or contract nursing home to which
he or she properly was admitted, the VA will pay you up to
$300 to cover burial and funeral expenses. If your spouse
is not buried in a national cemetery and either qualifies
for the $300 burial allowance or was discharged or released
from active duty because of a disability that was incurred
or aggravated in the line of duty, you may be entitled to
up to $150 as a plot or interment allowance.
If your spouse died from a service-connected disability,
the VA will pay up to $1,500 of the funeral and burial expenses
(in lieu of the $300 for burial and funeral expenses and $150
as a plot or internment allowance). If your spouse died from
a service-connected disability or was receiving disability
compensation (or would have been entitled to disability compensation
if he or she had not been receiving military retirement pay
or a disability pension), the VA will pay the cost of transporting
your spouse to a national cemetery. However, the VA will pay
no more than it would cost to transport your spouse to the
national cemetery nearest your residence. Your funeral director
can help you apply for VA benefits.
Funeral Home Service - The funeral home will
pick up the body, obtain all required legal permits, fill
out the death certificate, make all arrangements for the funeral
service (e.g., contact the clergyman you want to conduct the
service, purchase flowers, provide music), prepare the body
for burial, and make arrangements with a cemetery for burial
or cremation. If you have not already purchased a cemetery
plot, a space in a mausoleum or a niche in a columbarium for
your spouse’s cremated remains, your funeral director can
help you select a site and make that purchase. If you are
not familiar with the cemetery or columbarium, you should
visit the site. Your funeral director can send an obituary
to your local newspapers, pay the honorarium to your clergyman,
and handle gratuities for the hearse and limousine drivers
and gravediggers.
If your spouse died away from home, you can have a funeral
director in your community make arrangements to transport
your spouse back home. Because the transportation expenses
can be substantial and embalming will be required, you might
want to have your spouse cremated where he or she died and
then hold a memorial service in your community.
Caskets - Caskets vary in price from a few
hundred to thousands of dollars. They can be constructed from
a wide variety of woods (e.g., pine, redwood, oak, maple,
walnut, and mahogany), metal (e.g., steel or various gauges,
stainless steel, copper and bronze), and fiberglass. They
may be lined with a variety of fabrics (e.g., satin or velvet),
and their shapes may vary (e.g., they may have an elliptical
end, square end, scroll end, or octagonal end). They can be
constructed so that the entire body can be viewed or so that
the body can be seen only from the waist up. Seals may be
used to help keep out moisture.
Copper and bronze caskets tend to be the most expensive,
but the plushness of the lining can also affect the price.
Less expensive caskets may not be displayed by the funeral
home but can be seen upon request. If you do not see the color
you want, ask what other colors are available. You could consider
draping it with a pall (or a flag, if your spouse was a veteran).
Remember that caskets are designed to display the deceased
during the funeral service and protect the buried body. Although
caskets may retard decomposition, they will not preserve the
body indefinitely. Even an airtight casket will not guarantee
eternal preservation since there are bacteria that thrive
without air. You do not have to purchase a casket if our spouse
is to be cremated. Instead, you can purchase a plain wood
or cardboard container for the cremation. If you want the
body present at the service, you can rent a casket.
You may be asked whether you want to purchase a vault or
grave liner to enclose the buried casket. Vaults and grave
liners are used to prevent the earth over the casket from
sinking into the casket as it decomposes. State law does not
require you to have a vault or grave liner, but the cemetery
may require a liner. Liners are significantly cheaper than
vaults, but just as effective.
Embalming and Viewing - Embalming is designed
to make the body look presentable for the funeral. When a
body is embalmed, blood is drained and replaced by embalming
fluid, which retards decay. Some people confuse embalming
with mummification and think that it will preserve the body
for hundreds of years, but embalming retards decay only temporarily.
Unless the body is to be buried more than three days after
death, (and refrigeration in unavailable) or is to be viewed,
embalming probably is not necessary. Embalming may be required
by your cemetery if the body is to be entombed in an above-ground
crypt. If the body is to be donated for research, embalming
must be done under the supervision of the recipient. Otherwise,
the recipient may refuse the donation.
In most states, a body does not have to be embalmed unless
death was caused by a highly contagious disease, the body
will be transported a long distance, or the time between death
and burial will be lengthy. Some people object to embalming
on religious grounds (e.g., embalming is prohibited by Orthodox
Judaism, which considers it a desecration of death). If you
do not want the body embalmed, you should say so before the
body is transported to the funeral home.
You will have to decide whether you want the body made suitable
for viewing. The body may be prepared for viewing even though
no one actually will see it. To make the body suitable for
viewing, makeup will be applied, hair will be groomed, and
reconstruction will be preformed, if necessary. If your spouse
wore makeup, it will help the funeral director to know what
colors were worn. Do not expect your spouse’s face to look
the same as you remember it. The best cosmetic restorers can
produce a remarkable likeness but tend to make the person
look 10 to 20 years younger.
Viewing costs can be significant. If a body is to be viewed,
it will be embalmed, washed, dressed and made up with cosmetics.
You will have to rent a viewing room and hire and attendant.
Cost Itemization - Ask for an itemized written
statement of the products and services you have selected and
the price for each item before you sign a contract. You are
entitled to such a statement under the FTC’s Funeral Rule.
Look over that list and decide whether there are any products
or services that you do not want. Unless the statement says
that a particular product or service is required by state
law or by your cemetery (e.g., the cemetery may require a
gave liner), you do not have to purchase it. Check whether
the contract makes you responsible for paying funeral expenses
if your spouse’s estate does not have enough money. If you
suspect that your spouse did not leave enough money to pay
the bill, you may want to reduce the cost to an amount that
you can afford. Check what payment terms are available.
Pallbearers & Home Security - You will
want to ask friends and relatives to be pallbearers if your
spouse is buried. In choosing pallbearers, consider whether
they are strong enough to help carry the casket. If you are
concerned that your friends and relatives may not be able
to carry the casket, hire professional pallbearers from the
funeral home to help them.
It is advisable to have someone stay in your home during
the funeral. Burglars look at funeral notices to find out
when people will be away from home.
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Legal and Financial Advisers
You will want to contact our office so that we may help you
settle your spouse’s estate and get your own legal and financial
affairs in order. The time and expense will depend on the
size and complexity of your spouse’s estate, your knowledge
about financial and legal affairs, and the kind of advice
you need to help you with your own legal and financial affairs.
Fortunately, Illinois adopted independent administration of
estate in the 1980’s.
Lawyers - We will prepare and file required
probate papers for your spouse’s estate (and notify creditors,
make court appearances, and transfer title to property, if
required). We can also help you collect survivor benefits
and deal with creditors, as well as review your own will and
other estate planning documents. If you believe that your
spouse died because of someone else’s negligence, a wrongful
death action can be filed.
Accountants - Accountants can help you prepare
estate and income tax returns, save taxes, and make financial
decisions. Accountants may be qualified to offer a full array
of financial planning advice, including investment advice.
Like lawyers, they may be general practitioners or specialists.
Accountants can call themselves (CPAs) if they have passed
a national examination administered by the American Institute
of Certified Public Accountants and have worked at least two
years for a public accounting firm.
Enrolled Agents - Like accountants, enrolled
agents may help you prepare estate and income tax returns,
and may represent you in any proceedings before the IRS. To
qualify as enrolled agents, individuals must have passed a
written examination testing their competence regarding the
federal tax laws and are required to take continuing professional
education courses to renew their enrollment.
Financial Planners - Financial planners can
help you establish realistic financial goals (e.g., save money
to purchase a home, retire, or pay for your child’s education)
and develop strategies to reach these goals. They will look
at your current financial situation, recommend ways to manage
your income better, and help you select investments. They
can help you decide what types of insurance you should purchase
(e.g., health, property/liability, disability, and life) and
help you plan your estate so that a maximum amount of money
can be transferred to your loved ones.
Financial planners will work with your accountant and lawyer.
They may work with insurance agents/brokers and stockbrokers
or investment advisers, or they themselves may sell insurance
and handle investments. Financial planners may charge you
a flat or an hourly fee for their help, may be compensated
by commissions they receive from the insurance and investments
they sell, or may be compensated by a combination of fees
and commissions. Before dealing with a financial planner,
ask our office for a recommendation of an organization that
offers planning and high quality products and that will make
recommendations based on investments that are best for you.
Insurance Agents or Brokers - Insurance agents
and brokers can help you determine your current insurance
needs. They may recommend that you purchase additional coverage
or advise you to drop unnecessary coverage. They can help
you find policies that will give you the most coverage and
best service for the least amount of money. Insurance agents
represent one or more insurers; they do not represent you.
Insurance brokers are independent middlemen not tied to a
particular insurance company. They may or may not represent
you.
Stockbrokers or Investment Advisers - Stockbrokers
and investment advisers can help you invest your money. Stockbrokers
receive a commission each time you buy or sell an investment.
Investment advisers (including investment advisers for mutual
funds) usually take a percentage of the money entrusted to
them as their fee. If you know what investment you want to
purchase or sell and do not need investment advice, you can
save money by having a discount broker make the trade. Ask
our office for a recommendation of a reputable stockbroker
or investment adviser, how well their recommended investments
have performed and compare that performance with national
averages, such as Standard & Poor’s index of 500 stocks,
over the same period of time. You should be able to obtain
information about national averages from the stockbroker or
investment adviser or your local library. Be skeptical of
quoted investment returns. Does the quoted return take into
account all investments recommended by the adviser or only
the ones that have done the best? Does it reflect investments
recommended to former, dissatisfied clients? Have fees and
expenses been deducted from the quoted return? How risky were
the investments? Will the adviser take your risk tolerance
into account?
If you already have established a good relationship with
a legal/financial adviser, you probably will want to continue
working with that person. However, you should determine whether
that person is experienced in the matters you need help with.
For example, the lawyer who did a good job with your house
purchase may not be knowledgeable about probate and estate
planning.
Meet with people you are considering hiring and determine
whether you can be confident that their advice will be good
and in your best interest. Are they knowledgeable about the
matters you need help with? Do they listen to you and treat
you with respect? Would you feel comfortable telling them
about your finances and personal affairs? Do you trust them?
Ask what their fees are and have them estimate how much it
will cost for the work you want done. Ask whether whey have
any conflicts of interest that would prevent them form giving
objective advice.
To have a good working relationship with any financial adviser,
it is important to communicate your concerns. If you feel
uncomfortable with a recommended course of action, say so.
If you don’t like the way your adviser is treating you, say
so. Give your adviser a chance to convince you that his or
her recommendation has merit or offer alternatives that you
might like. Give your adviser the opportunity to measure up
to your standards. If you still are not happy, feel free to
change advisers. Remember: you have to live with the results
of their advice and actions.
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Probating the Estate & Paying Taxes
Your spouse’s last will has to be filed with the probate
court. Illinois requires you to file the will within 30 days
of your spouse’s death.
Probate is the legal process whereby a court assures itself
that a will is valid (or that there is no will) and oversees
distribution of probate property to creditors and rightful
beneficiaries. Property that your spouse owned individually
or as a tenant in common with have to pass through probate.
Not all of your spouse’s property will have to pass through
probate. Some types of property pass automatically to someone,
without having to go through probate, by contract or operation
of law. The following types of property will pass to designated
beneficiaries without having to go through probate:
- Property owned in joint tenancy with right of survivorship
(if property is so owned, those words should appear on the
title to the property). The property will pass to the survivor.
- Life insurance proceeds (unless the proceeds are payable
to your spouse’s estate or the named beneficiary has died.).
The proceeds will be paid to whoever was named as a beneficiary.
- Property held by a trust established during your spouse’s
lifetime (i.e., "living" or "intervivos"
trust).
- Trust property is distributed according to the provisions
of the trust.
- IRA and other retirement plan benefits (unless your spouse’s
estate was named or the named beneficiary had died). The
benefits will be paid to whoever is named as a beneficiary.
- U.S. savings bonds that are co-owned or payable to a beneficiary.
The bonds can be redeemed by the co-owner or the beneficiary.
An executor or administrator usually will be appointed by
the probate court to manage and distribute your spouse’s property.
A person will be referred to as an "executor" if
he or she was nominated by your spouse’s will. Anyone else
appointed by (or some the probate court will be referred to
as an "administrator times as an administratrix"
if the person is female). Executors and administrators collectively
are referred to as "personal representatives". No
personal representative may have to be appointed if your spouse’s
probate estate is small enough to qualify for simplified probate
proceedings.
If no one was nominated by your spouse’s will or no will
was left, you probably will be appointed as personal representative.
You are not obligated to accept appointment, but your involvement
can help protect your interests.
Creditors have to be notified of your spouse’s death, and
they must be given time to file their claims. After the claims
period has ended, the personal representative may start paying
the creditors. If money is left over after the creditors have
been paid, then the remaining property can be distributed
to the persons named in your spouse’s will (or, if no will
was left, the persons designated as beneficiaries under state
law). You and your children may be entitled to living allowance
while the estate is being settled.
For over a decade Illinois has eliminated the requirement
of supervised probate. If our firm drafted your spouse’s will,
the total probate expense (assuming no request for supervised
probate) will cost less than $1,000.
Paying Taxes - Various tax forms may have
to be filed by the personal representative. A federal estate
tax return will have to be filed if the value of your spouse’s
gross estate (including both probate and non-probate assets),
plus the amount of taxable gifts made by your spouse, exceeds
the unified credit (i.e., $650,000 in 1999, increasing to
$1,000,000 in 2006).
Federal and state income tax returns will have to be filed
not only for the year your spouse died, but also for the year
before if your spouse died before filing a return for that
year.
For example, if your spouse died in February, you will have
to file income tax returns for the year your spouse died and
the year before your spouse died.
Federal and state income tax returns (depending on how much
income is earned before the estate is settled and whether
the state has a state income tax) also may have to be filed
for your spouse’s estate because it is treated as a separate
tax entity. If your spouse established and trusts, the trustee
will have to file federal and state income tax returns for
the trust income. Some states impose an inheritance tax on
people who inherit property. An accountant or other tax expert
will be able to help you fill out and file and required tax
returns.
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Your Legal Rights to Your Spouse’s Property
You may be entitled to more of your spouse’s property than
your spouse bequeathed you in the will. Illinois gives surviving
spouses the right to one half (1/2) of their spouse’s property,
even if the deceased spouse’s will says otherwise.
You may be entitled to a surviving spouse’s award (and your
children may be entitled to a child’s award) in addition to
amounts bequeathed by your spouse’s will unless the will says
otherwise.
If you do not want to receive certain property, you have
the right to refuse it by signing a written disclaimer.
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Bills You Shouldn’t Pay and Other Don’ts
Before paying a bill, you should determine whether it is
your debt, your spouse’s debt, or a joint debt. You are responsible
for paying your own debts and joint debts. You are not responsible
for paying certain spouse’s debts. If you are not sure how
a debt should be characterized, contact us.
Your spouse’s debts are the estate’s responsibility (i.e.,
estate debts). If is important to understand that the estate
is considered a separate legal entity. Estate debts are paid
by the personal representative from estate assets. If you
are the personal representative, you have to pay estate debts
from the estate checking account. Do no pay estate debts with
money from your personal checking account.
Loan agreements signed by both you and your spouse are joint
debts. So are charges on credit cards that you are authorized
to use. Property taxed are a joint debt if you and your spouse
both owned the property. Household expenses are joint debts.
Hospital bills, funeral expenses, and legal fees incurred
because of your spouse’s death are estate debts. Check whether
any debts were covered by insurance.
Credit life insurance will cancel your spouse’s unpaid balance
on credit cards. Mortgage insurance will cancel the unpaid
balance on the mortgage. Your spouse’s health insurer should
pay a good portion of any medical expenses. Make sure that
any debt you pay is valid and for the correct amount. If you
have doubts whether a charge is valid, contact the company
for further information. Checks payable to the spouse should
be turned over to the personal representative. Such money
is considered part of your spouse’s estate. If your spouse
was receiving Social Security benefits, benefits paid to your
spouse for the month your spouse died and subsequent months
will have to be repaid if your accept the benefits.
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Safe Deposit Box
If you are a signatory on your spouse’s safe deposit box,
you may remove anything from your spouse’s safe deposit box.
You may remove and retain your own property from the safe
deposit box. You will turn over your spouse’s property to
your spouse’s personal representative.
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Finding Money to Pay the Bills
If you had joint accounts with your spouse, you should have
immediate access to funds in those accounts. Other types of
property owned in joint tenancy (i.e., stocks and bonds) may
not be sold by you until title is transferred into your name.
You may be entitled to the following benefits:
- Life insurance proceeds.
- Your spouse’s employer may provide survivor benefits from
a life insurance policy and/or a retirement plan.
- Your spouse’s union may provide survivor benefits.
- Former employers may provide survivor benefits.
- Social Security will give you $255 as a one-time death
benefit.
You may receive Social Security survivor benefits if you
are age 60 or older (50 or older if you are disabled). You
may receive survivor benefits at any age if you are taking
care of a child under 16 or a child who is disabled. Unmarried
children are entitled to benefits if they are under 18 or
if they are under 19 but attending elementary or secondary
school full time. Disabled, unmarried children may receive
benefits even though they are 18 or older if their disability
started before they turned 22. If your spouse was receiving
Social Security benefits, those benefits will stop. No benefits
will be paid for the month your spouse died. Do not expect
to receive any money from Social Security for two or more
months. The first check will include benefits payable from
the date your spouse died.
- If your spouse was a veteran (and not dishonorably discharged),
the VA will help you pay funeral and burial expenses (what
aid is available was discussed in "Funeral Arrangements".
You and your children may be eligible for a monthly benefit
(dependency and indemnity compensation (DIC) if your spouse
died in service or from a service-connected disability.
If your spouse died from a non-service-connected cause but
was receiving (or entitled to receive) compensation for a
service-connected disability that was rated totally disabling
for at least 10 years immediately preceding your spouse’s
death or for at least five years from the date your spouse
was discharged from active duty, you will be paid benefits
as if your spouse’s death were service connected. Benefits
other than DIC may be paid for a non-service-connected death
if your spouse had at least 90 days of active service (including
at least one day of wartime service) or was receiving (or
entitled to receive) compensation or retirement pay for a
service connected disability.
- Whether you and your children are eligible for these non-DIC
benefits depends on your assets and income.
Unmarried children are eligible for benefits if they are
under age 18, they are at least 18 (but under 23) and attending
a VA-approved school, or they are permanently incapable of
self-support and their disability began before they turned
18. You will be entitled to additional benefits if you are
in a nursing facility or require the regular aid and attendance
of another person to care for your basic needs or you are
disabled and permanently house-bound. Check whether our spouse
had veteran’s life insurance and whether your state provides
benefits for veteran survivors.
- Professional, fraternal and other types of organizations
that your spouse joined may provide death benefits.
- An accident insurance policy (e.g., flight insurance,
auto club policy, or travel insurance offered by credit
card companies) may provide medical and death benefits if
your spouse died in an accident.
- Workers’ compensation, if your spouse’s death was work
related.
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Making Ends Meet
Check whether your spouse purchased any mortgage or credit
life insurance policies to cover debts, (e.g., mortgage, credit
card balances). If so, the debt will be considered paid in
full at your spouse’s death.
If you are short of funds while waiting to receive various
survivor benefits and money from your spouse’s estate, you
should consider which bills have to be paid first and which
ones can be delayed. You will want to make house payments
(including utilities) first. Health and property insurance
premium payments also should be given priority. If you cannot
make your car payments, you may want to sell the car and use
cheaper transportation rather than miss a payment and have
the car repossessed.
Before selling any property, you should consider what alternatives
you have for raising cash. For example, you may be able to
pledge the property as collateral for a loan. You also should
consider the tax consequences of the sale.
Depending on the tax consequences, it may make more sense
to sell one type of property instead of another. For example,
if you have an investment that has declined in value, its
sale may reduce the taxes you have to pay. If you sell an
investment that has increased greatly in value since you purchased
it, you will have to pay tax on the appreciation (and lose
a good investment). Your tax adviser can explain the tax consequences
of selling any property.
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Watching Out for Con Games
You should be alert for the con games that people try to
play on grieving widows and widowers.
In one type of scam, a con artist may call, tell you that
your spouse ordered a product or service (perhaps a gift for
you) and ask you when he or she can deliver the merchandise
or perform the service and pick up your cash payment. In another
type of scam, the con artist or accomplice may arrive at your
doorstep with a C.O.D. package containing an inexpensive item
(many times a Bible) or will come to your house and want to
start performing some service. Tell the person that your spouse
has died and that you cannot accept anything that your spouse
has ordered. If the person will not go away, give the person
your lawyer’s name and tell him or her to file a claim against
your spouse’s estate.
Be wary of someone who professes to be a city inspector,
claims to find something seriously wrong with your home (e.g.,
with the plumbing, furnace, electrical wiring, or air conditioning),
tells you that something vital must be shut down, and offers
to have a friend fix the problem quickly and cheaply.
Verify that the person really is a city inspector. Call the
city (using the telephone number in the phone book, not some
number offered by the "inspector").
You may hear from a sales representative who claims that
your spouse was about to purchase an investment that the sales
representative is hawking. If you do not recognize the person’s
name, hang up the phone. All bills should be scrutinized to
make sure they are valid and the correct amount. Con artists
have been known to read obituaries and notices to creditors
in newspapers and send out fake bills.
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Re-evaluating Your Insurance Needs
You should contact your insurance adviser for help in reviewing
and reassessing your insurance needs. Policies not in your
name should be changed to your name subject to any documentation
to the contrary.
If you were covered by your spouse’s health insurance from
work, check whether you can continue that coverage. Businesses
employing 20 or more persons are required by the Consolidated
Omnibus Budget Reconciliation Act (COBRA) to permit an employee’s
surviving spouse and dependent children to continue coverage
for up to 36 months. If your spouse was covered by your group
policy at work or you had an individual policy, notify the
insurer that you should no longer be paying premiums to cover
your spouse. If you are eligible for Medicare and have little
income, check whether Medicaid will pay your Medicare premiums,
deductibles, and co-payments.
The amount of property insurance that you need may have changed.
You no longer may need insurance for your spouse’s car or
boat or other property (e.g., jewelry). If so, contact your
insurance agent or insurance company to cancel the coverage
and obtain a refund for premiums paid in advance. If you never
had disability or long-term care insurance, you may want to
purchase such policies.
Your life insurance needs may also have changed. More or
less insurance may be required to provide for your loved ones
after your death.
Transferring your policy to a life insurance trust may save
estate taxes. You should be concerned about the financial
health of your insurance companies. Your insurance adviser
can tell you how insurance companies are rated by Best (top
rating A+), Standard and Poor’s (top rating AAA), Duff &
Phelps (top rating AAA), and Moody’s (top rating AAA). Such
information also may be available in your local library.
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Revising Your Financial Goals & Strategies
Your spouse’s death will require you to revise your financial
goals and strategies. If you never have taken time to set
financial goals and develop strategies for achieving those
goals, now is the time to start. Your financial objectives
may change following your spouse’s death. Goals you wanted
to achieve as a couple may not be important to you as a single
person. For example, retirement in a warm climate may have
sounded good when your spouse was alive, but you may not want
to live there alone.
The strategies you use to reach your financial objectives
are bound to change. You no longer can count on income that
your spouse was earning. You may receive a large sum of money
from your spouse’s life insurance and retirement plans, and
your tolerance for taking investment risk may be different
than your spouse’s.
You may receive more money than you ever dreamed you could
possess. You may feel like you’ve won the lottery. You may
think you have no more financial worries. But you’re probably
wrong. Even large sums of money, like hundreds of thousands
of dollars in life insurance proceeds, can be dissipated unless
properly managed. What should you do with any large sums of
money that you receive? Your best bet, at least until you
feel up to handling financial matters, is to put the money
in a safe investment, e.g., savings accounts, certificates
of deposit (but do not deposit more money than the federal
government will insure), money market funds, or Treasury Bills.
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Insurance Proceeds
If you are entitled to life insurance proceeds, you may be
asked how you want those proceeds paid to you. Subject to
any contrary documents, you should choose to receive the proceeds
in a lump sum, not in installments (including accrued interest)
over your lifetime or for a fixed number of years.
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Retirement Benefits
You may have a variety of payment options with respect to
benefits payable to you by your spouse’s retirement plan (unless
payments started before your spouse’s death). Your choice
is complicated by tax considerations. Retirement plan benefits,
unlike insurance proceeds, are subject to income tax when
they are received. If you withdraw the benefits in a lump
sum, you will have to pay income tax on the amount withdrawn,
except to the extent that you roll it over into your own individual
retirement account (IRA). Money deposited in your own IRA
will not be subject to federal income tax until you withdraw
it. You can withdraw money at any time you want and you are
not required to make any withdrawals until April 1 in the
year after you turn 70½. If you leave the money in your spouse’s
retirement plan, you will have to start receiving payments
by the end of the year in which your spouse would have turned
70½. You will not have as much flexibility in making withdrawals
as you would with money in your own IRA. You also will not
have as much control over how the money is invested.
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Money Management
If your spouse made most of your family’s financial decisions
for you and your spouse never paid much attention to how much
money you were spending or how much it cost you to live, you
may feel intimidated by the prospect of having to take sole
responsibility for watching your spending and investing money.
However, help is available. Financial planners and accountants
experienced in financial planning can help you analyze your
spending habits, establish financial goals, and develop strategies
to achieve those goals by saving more money and investing
what you have at the greatest return for the risk you are
willing to take. Once you and your financial planner analyze
your current financial situation, you should decide what you
want to spend money on (i.e., your financial goals) and how
you should invest what you have (and additional savings) to
accumulate enough money to meet your objectives.
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Reworking Your Estate Plan
You will have to rework your estate plan after your spouse’s
death. If you have named your spouse as your beneficiary in
your will, trust, life insurance policy, and retirement plan,
you should choose someone else. If you have children under
18, you will have to nominate a guardian (or guardians) to
take personal and financial care of them until they become
adults. If you nominated your spouse as your executor or as
a trustee, you will have to choose someone else.
If your spouse made it easy for you to settle his or her
estate, you should want to do the same for heirs. If your
spouse did not plan properly, you should want to do things
differently.
Prepare a letter of instruction listing the following types
of information:
- Location of your personal papers.
- Location of your legal and financial documents and records.
- Description of your assets and debts. Be sure to identify
valuables that your heirs may not realize are valuable.
- Location of your safe deposit box (and key).
- Names, address, and telephone numbers of your employer
and legal and financial advisers that you consult.
- Funeral arrangements that you desire.
- Whether you want you body autopsied.
- Whether you want to make organ or tissue donations; if
so, fill out a Uniform Donor Card.
- Who you want to receive various personal effects.
- Names, addresses and telephone numbers of all of your
relatives and any non-relatives named as beneficiaries.
- Location of keys and combinations to locks.
- Hiding places.
- Consult one of our estate planning attorneys and have
that person help you plan to manage your personal and financial
affairs should you become disabled and maximize the amount
of money you pass to your loved ones after your death.
Some of the estate planning documents that you will want
include:
- Will - A will should be drafted even if you plan to keep
your assets out of probate. You need a will to appoint an
executor and guardian and dispose of any property that is
not included in your trust or owned in joint tenancy or
tenancy by the entirety.
- Living Trust - Property transferred to a living trust
(i.e., a trust you establish during your lifetime) will
potentially avoid probate upon death and/or guardianship
proceedings upon disability.
- Durable Power of Attorney for Property - The durable power
of attorney for property authorizes someone to handle your
financial affairs during periods in which you are unable
to do so.
- Durable Power of Attorney for Health Care - The durable
power of attorney for health care authorizes someone to
make health care decisions on your behalf if your are unable
to make them yourself.
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A FINAL WORD
This information will help you perform the tasks and make
the decisions required after your spouse’s death. With each
task you perform and each decision you make, your self-confidence
will grow, and gradually you will gain control over your life.
Remember that you do not have to go through grieving alone.
Consider joining a group of widows and/or widowers affiliated
with your church or synagogue or hospital or other community
organization. Professional counseling is available from private
therapists and through community organizations.
