Why Couples and Widow(er)s Should Meet with a Financial Advisor

School of Saving and Investing

A widow appearing distressed and speaking to her financial advisor about her will, estate plan and financial plan following her partner’s death.

Losing a spouse can be devastating, both emotionally and financially. It can be especially stressful if your spouse handles the financial decisions. After a spouse dies, you could be left with a host of new financial issues – not to mention mounds of paperwork. You could also experience challenges like a loss of income or a higher tax liability.

New financial challenges can be difficult to navigate on your own and can add to your anxiety in an already troubled time. Partnering with an experienced financial advisor as soon as possible can help reduce this anxiety, whenever the worst comes to pass.

A Financial Advisor Can Help Couples Create an Estate Plan

No one wants to consider losing their spouse prematurely. But, having a plan in place can greatly reduce the financial stress that your spouse will go through after your death. A financial advisor can be instrumental in helping you create this comprehensive estate plan.

When you think of an estate plan, a will is often the first thing that comes to mind. While maintaining a will is an important piece of your estate plan, there are other things that you can do to make sure that your partner is taken care of after your death.

With the help of an experienced financial advisor, you can create a comprehensive list of assets and liabilities that will need to be moved into your surviving spouse’s name. This can ensure that your spouse has access to the assets they will need to supplement their income without the added stress of searching for accounts.

You can also take steps to ensure that your spouse will receive the highest possible income after your death. This could include planning for how to maximize Social Security benefits as well as ensuring your assets are invested in a way that maximizes income while minimizing unnecessary risk.

A Financial Advisor Can Help Widow(er)s Adjust Income and Investments to Match Their New Situation

After a spouse dies, your income needs and risk tolerance could change. For most widow(er)s these changes require an update to their financial plan to account for the new situation.

A widow(er) may see lower discretionary spending after their spouse dies but spending on necessities is not likely to change drastically. However, income could be much lower in a single earner household. This can create an income gap which your advisor can help you overcome.

You may also find that your risk tolerance changes after your spouse passes away. With only one group of accounts, you could find that you are more averse to taking risks with your money. On the other hand, you may find that you need your assets to generate more income to cover your monthly expenses. An experienced advisor can help you weigh the pros and cons of changing your asset allocation to meet either of these goals.

A Financial Advisor Can Help Widow(er)s Adjust Their Estate Plan

If you planned to leave your assets to your spouse, you will need to update your estate plan as a widow(er). A financial advisor can help you ensure that your beneficiary designations are up to date and your will is current, so your family can avoid the probate process.

You may also have concerns about how estate tax will impact your beneficiaries. A financial advisor can help you estimate if this tax will apply to you and create strategies for mitigating it.

A Financial Advisor Can Help Widow(er)s Manage Life Insurance Proceeds

When you inherit a large sum of money, like from a life insurance payout, you will probably consider paying down your outstanding debt with those funds. A financial advisor can help you decide if this is the best course of action.

If you choose to invest your life insurance proceeds to supplement your income, an experienced advisor can help you choose which type of account to open. They can also help you choose investments that match your goals and your risk tolerance.

A Financial Advisor Can Help Widow(er)s with Tax Planning

When you become a widow(er), your tax liability could increase. This is because single filers have different, lower tax brackets as well as a smaller standard deduction. In addition to a higher income tax burden, you could find premiums for Medicare to be higher. Medicare premiums are based on your modified adjusted gross income [MAGI] and the thresholds are different for married couples as opposed to single individuals. Additionally, the percentage of your Social Security payments that are taxable could increase as your filing status changes.

All of these factors should be a part of your financial plan. An experienced financial professional can help you project your income tax liability as well as your Medicare premiums and explain how these will be impacted if your spouse dies.

A Financial Advisor Can Help Couples Plan for and Widow(er)s Navigate Social Security Survivor Benefits

When your spouse passes, whether still married or divorced, you may be entitled to Social Security survivor benefits. These benefits can be instrumental in supplementing your income but there are certain challenges that you could face when planning for Social Security as a widow(er). For example, your benefits could be reduced if you take them before reaching your full retirement age [FRA] and they could be subject to the earnings test.

Additionally, if you are eligible to receive retirement benefits based on your own earnings record this could impact your plan for when to take survivor benefits. A financial advisor can work with you to determine which strategy will allow you to maximize your Social Security income over your lifetime.

Take Control of Your Life and Legacy with Financial Fingerprint™ by Meld Financial

Planning for your spouse’s financial wellbeing after your death can be difficult. Likewise, after a spouse dies, there can be a challenging financial transition. At Meld, our team of tax, legal, and financial professionals can help you every step of the way.

With our proprietary wealth management program, Financial Fingerprint™, you can rest assured that you and your spouse are prepared for the worst-case scenario. Financial Fingerprint™ is a comprehensive financial plan that is quick to assemble, easy to understand, and simple to modify as your circumstances change. It considers your estate plan and is standing ready to adjust for a change in your situation.

Contact the team at Meld Financial today to discuss your Estate Plan and your Financial Fingerprint™.

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Why Meld Financial?

Meld Financial, Inc. is an independent wealth management firm located in Birmingham, AL.

We specialize in financial planning, investment management, employee benefits and executive benefits for individuals, families, trusts, foundations and institutions.

We provide independent and objective services melded with customer-driven financial goals.

Mark McGarvey - Founder - Meld Financial

“We will always recommend the same course of action we would choose for ourselves, given the same circumstances.”

-Mark McGarvey, Founder