Navigating Finances After the Loss of a Spouse

Losing a spouse is one of life's most profound transitions—one that brings an overwhelming mix of emotions, responsibilities, and uncertainties. Amid the grief, financial decisions may feel like the last thing you want to face, yet they are essential to securing your future. The good news? You don’t have to tackle it all at once. With a step-by-step approach, you can take control of financial matters while giving yourself the time and space to heal.

Here are some key considerations to guide you through this period with clarity and confidence.

1. Settling the Estate

The first step is determining whether your spouse had a will. If they named you as the executor, you may need to initiate probate proceedings, and an attorney can help navigate the process. If there is no will, the estate will be handled under state intestacy laws, which dictate how assets are distributed.

2. Assessing Immediate Cash Flow Needs

In the wake of a loss, your financial situation may change. Consider these questions:

·         Will your household income decrease?

·         Are there outstanding debts that need immediate attention?

·         Should you adjust your expenses to reflect a new financial reality?

Developing a revised income and expense plan can help you avoid financial strain.

3. Reviewing and Updating Account Ownership

Certain assets may require title updates, including bank accounts, investment accounts, and property deeds. If you and your spouse owned accounts jointly, they may automatically transfer to you, but accounts in their name alone might require legal processing to access. Additionally, checking for outstanding life insurance policies or other benefits is essential.

4. Understanding Estate Tax Implications

While most individuals do not exceed the federal estate tax threshold ($13.99 million per person in 2025), it’s worth evaluating whether estate taxes apply. If your spouse’s estate falls under the exclusion amount, filing IRS Form 706 to preserve their unused exemption can be beneficial, as it allows for portability to the surviving spouse.

5. Social Security and Survivor Benefits

You may be eligible for Social Security survivor benefits, which can provide financial support. If your spouse was receiving benefits, you will need to notify the Social Security Administration and explore your eligibility for ongoing support.

6. Required Minimum Distributions (RMDs) and Retirement Accounts

If your spouse had a traditional IRA and had begun taking RMDs, the beneficiary must ensure the required amount is withdrawn by year-end. Depending on your age and circumstances, you may be able to roll the inherited IRA into your own or take distributions based on the inherited account’s rules.

7. Tax Considerations and Filing Status

Your tax filing status changes the year after your spouse’s passing. For the year of their death, you can still file as 'Married Filing Jointly.' If you have a dependent child, you may qualify as a 'Qualifying Widow(er)' for the following two years, which provides tax benefits similar to joint filing.

8. Reviewing Investment and Risk Tolerance

Your financial goals and investment strategy may need adjustment. If you inherited assets such as stocks, real estate, or annuities, you might receive a step-up in basis, which could reduce capital gains taxes if you sell inherited property.

9. Minimizing Identity Theft Risks

To protect against identity theft, cancel your spouse’s email accounts, social media profiles, and driver’s license. Notify credit bureaus, banks, and election boards to prevent fraudulent activity in their name.

10. Exploring Additional Benefits

·        If your spouse was a veteran, you may be eligible for VA benefits, such as burial assistance and survivor pensions.

·        If the death was accidental or work-related, workers' compensation or employer- provided death benefits may be available.

·        Review credit card and airline reward programs; some allow point transfers to surviving spouses.

Final Thoughts

Losing a spouse reshapes your world, and financial matters may feel like an added burden. But you don’t have to navigate this road alone. Remember, there is a network of support available to you, from financial professionals to estate attorneys and trusted advisors. Their guidance will help you make sense of the decisions ahead. Small steps—whether updating account ownership, reassessing cash flow, or securing survivor benefits—will add up over time, providing you with greater peace of mind.

Most importantly, be kind to yourself. Finances are just one part of this journey, and while it’s essential to address them, give yourself the grace to grieve and heal. Remember, taking care of yourself is not a luxury; it's a necessity. In time, you will find your footing again with a financial foundation that supports your new path forward.

WHWM is here to guide you in identifying your priorities, developing a plan, and making adjustments along the way. By choosing WHWM, you're partnering with our Founder and President, Stephen Bodwell. As a CPA and CFP® professional, Stephen is committed to helping you achieve your financial goals and aspirations. Don't hesitate to take the next step toward realizing your dreams. Schedule your complimentary, no-obligation 30-minute consultation with Stephen. 

Walnut Hill Wealth Management, LLC (“WHWM”) is a registered investment advisor offering advisory services in the State of Texas and in other jurisdictions where exempt. The information provided is as of the date indicated and is subject to change.