How to Plan an Estate for a Surviving Spouse

It is difficult to think about anything beyond your grief after losing a spouse or long-time partner. However, it is crucial to understand there are important and timely decisions you need to make regarding your finances and personal estate plan. In truth, estate planning is perpetual as it accounts for changes in marriages, deaths, divorces, and births of children and grandchildren. Assuming that you have an up-to-date estate plan requiring no further action after the passing of a spouse can have disastrous consequences.

Your first line of defense to avert problems is scheduling a meeting with your estate planning attorney. It is not uncommon to discover assets you are unaware of, which allow for planning opportunities to transfer tax-free wealth. With the loss of a spouse’s income, uncovering these sorts of assets may also secure a widow or widower’s finances. You may also discover incomplete beneficiary designations, incorrect titling of assets, or an overlooked grandchild if they are newly born into the family.

Your estate planning attorney can also advise you of the decision-making deadlines inherent to your situation. There are some powerful wealth transfer tools available to a surviving spouse. For instance, a spouse may opt to disclaim interest in some of the decedent’s assets in favor of transferring them to other beneficiaries, but this must occur within nine months of the decedent’s date of death.

As a surviving spouse, you have an option to file a federal tax return for that year as a single individual or as a married couple, permitting you to receive the benefit of higher deductions as long as you do not remarry that year.

Regarding the decedent’s estate tax return, a surviving spouse may need to make a portability election maximizing the amount transferred estate-tax-free to the next generation. If the decedent had no revocable trust sheltering assets from the probate process, there are timelines to meet with the probate court. Many more scenarios exist but what is universally true is that a surviving spouse must prioritize assessing the estate plan and finances amidst their grieving.

After a spouse’s passing, much of the attention of legal services focus on administering the decedent’s estate or trust, yet so often, allotting time to develop plans to meet the legal needs of the surviving spouse is often overlooked.  There are circumstances when wills and trust configurations permit a surviving spouse a “second look” to see if their estate plan is still a proper fit for the spouse. Existing estate plan documents in the surviving spouse’s name require review as documents most often require a change of beneficiary or representative since the death of their spouse.

Aside from wills and trusts, some of the most basic estate planning needs for implementation or review moving forward with the surviving spouse’s documents include:

Durable Power of Attorney for Financial Purposes

This individual acts on your behalf for financial matters and is typically between spouses during your lifetime. The surviving spouse must identify another trusted person, replacing the decedent, as their power of attorney and decide if this power is only available in the event of incapacitation or at any time.

Advance Healthcare Directive

Again, if the decedent was your representative, you will have to select an agent in the event of incapacitation or an inability to communicate your health care decisions. There is a possibility of an alternate designation in your  Advance Heathcare Directive. If so, review the choice to ensure it is still appropriate or remove them and name a new health care agent. These documents are often on file with your primary care physician, so provide an updated copy to those who may have the old document and be certain they are aware of the change.

HIPAA Release Forms

Even if you have an Advance Heath Care Directive, you may still want other family members to discuss your health situation with medical personnel. Strict laws govern the release of your medical information. If you want additional individuals to access your medical records, you must sign a HIPAA release form. This strategy of an additional individual having access to your medical information is useful, particularly when you are still making your own decisions but prefer someone to discuss your medical situation with the doctors. Be sure your primary care provider has a legal copy of this form.

It is not uncommon for an estate planning attorney to understand the financial and legal situation more fully than a surviving spouse. Whatever your level of comprehension of the situation, it is paramount to review and make appropriate changes to best protect yourself as a widow or widower. It is a challenge to review all of this during such an emotional time, but do not delay in creating your best scenario moving forward.

We hope you found this article helpful. Please contact us today at 877-585-1885 to schedule a free consultation to discuss your legal matters.

Thanks for reading.

Christopher E. Botti, Esq., Certified Specialist in Estate Planning, Trust and Probate Law

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