Are you prepared if your spouse dies unexpectedly?

In many marriages, one spouse manages the finances and the other manages the day-to-day decisions and upkeep of the household. But what if your spouse tragically and suddenly dies? Would you know what to do? Having a checklist of important financial information is a good place to start.

Do you and your spouse have wills? Are they up to date? There are often unintended consequences if you don’t have a will or if your will no longer expresses your wishes. An estate plan should be reviewed every three to five years to ensure that what you want to happen when you die will be achieved. Without a will, state laws (intestate status) can decide what happens to your estate.

What about income? How will you stick to your budget if your spouse dies? Does your spouse have a pension? Is there a survivor’s benefit? Typically, a funeral home will notify Social Security of an individual’s death. The surviving spouse should always contact the local Social Security office to claim a portion of the deceased’s income.

Retirement accounts present other concerns. Do you know the beneficiaries? If a spouse is a beneficiary of a retirement account, the funds can usually be transferred into an existing account and withdrawn during the surviving spouse’s lifetime. Under current law, non-spouse beneficiaries only have 10 years to withdraw funds from an inherited IRA.

Owning a vehicle is often a nuisance after the death of one of the spouses. If the title to the car is in the sole name of the deceased, the survivor may have no choice but to go to probate court for permission to transfer or sell the vehicle, regardless of the value. of the vehicle. Sometimes it’s a good idea to title the vehicle to both spouses or name a beneficiary.

Many individuals hold life insurance policies. Do you have contact details for policies? Former life insurance companies may have been acquired by another company. The original company may no longer exist as long as the policy remains in force under the new company. Are the beneficiaries listed?

Carefully review how your nonqualified investment accounts are titled. If there is no co-owner or beneficiary listed, you may need to probate the estate. Adding a beneficiary is a simple task – and it’s important to do it before there is a problem. Some investment institutions have other designations such as “TOD”, transfer on death or “POD”, payable on death, which allow the immediate transfer of funds.

Often, a house is a couple’s greatest asset. The title to your home will determine your options upon the death of one of the spouses. If the house is held in joint ownership with right of survivorship, ownership automatically passes to the survivor. However, a house held as tenants in common means that half of the deceased’s interest will pass through their will under the supervision of the probate court. Under Connecticut law, in either case, you’ll need to get a lien release from the court to have clear title and, more importantly, to give the survivor a base raise of half the value of the lien. home, thereby minimizing capital gains when the survivor sells the property.

Everyone is concerned about property taxes. Under current federal law, there is a $12.06 million exemption. A surviving spouse can claim the deceased spouse’s unused exemption amount by filing a pro forma federal income tax return (Form 706). This “portability” gives the surviving spouse not only the estate tax exemption in place at the time of death, but also the unused additional deceased spouse’s exemption.

The unexpected loss of a spouse is profound and being surrounded by family and friends is an important support in times of bereavement. But gathering some basic information before there is a death can give you peace of mind if/when the unthinkable happens.

Christine M. Tenore is a partner at the Fairfield-based law firm, Eliovson & Tenore. She can be reached at www.connecticutelderlaw.com or 203-336-2566. The firm is dedicated to helping clients deal with a multitude of estate planning issues, including those related to finances, health, long-term care and special needs.

About Charles D. Goolsby

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