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Money August 2016

Legal Ease

Handling the Important Legal and Financial Matters after a Spouse’s Death

By Jonathan J. David

Even with the best and most complete estate plan, there are always matters that need to be addressed when one spouse dies.

Dear Jonathan: After my wife and I retired several years ago, we updated our estate planning documents which included financial durable power of attorneys, health care durable power of attorneys, wills, and a joint trust. My wife passed away a couple of months ago and I assume that there is nothing that I need to do at this point because of the plan we have in place. Am I correct?

Jonathan Says: Actually, even with the best and most complete estate plan, there are always matters that need to be addressed when one spouse dies. Once you are beyond the funeral, one of the first things that will need to be determined is whether your wife’s estate requires to be probated.

Probate is required any time someone dies with assets titled in just their name alone. Consequently, if, at the time of your wife’s death, she had anything titled in her name alone, whether it is a bank or investment account, real estate, a stock, a bond or a mutual fund, for example, then in order for those assets to pass to the intended beneficiary, those assets would first have to be probated. On the other hand, any assets that your wife had retitled to your joint trust while she was alive, or that were jointly titled with you, or are contractually required to pass to a beneficiary upon her death, will not need to be probated.

You should meet with the estate planning attorney who prepared your estate planning documents for the purpose of helping you determine whether your wife’s estate needs to be probated, and if it is determined that probate is necessary, he or she can initiate probate on your behalf. In meeting with that attorney, there will be other things that should be reviewed or considered, such as:

  • Updating your estate planning documents for the purpose of removing your wife as a fiduciary and as a beneficiary on your documents, as well as making any other recommended or required changes at this time.
  • Removing your wife’s name as a beneficiary on any of your investments such as a life insurance policy, annuity and/or an IRA.
  • Applying for the death benefits of any life insurance policy for which you are the beneficiary and for which your wife was the named insured.
  • If you haven’t done so already, contacting Social Security for the purpose of applying for survivor benefits.
  • Rolling over to your IRA any of your wife’s tax deferred investments which name you as the beneficiary.
  • Cancelling credit cards, magazine subscriptions, memberships, cell phone plan, etc., that are in your wife’s name.
  • State-specific laws that you may need to comply with as a result of your wife’s death.

The above list is not a comprehensive list of what needs to be addressed, and I am sure that when you meet with the attorney there will be other issues that he or she will bring up that will need to be addressed as you move forward in this process. Good luck.

 

Jonathan J. David is a shareholder in the law firm of Foster, Swift, Collins & Smith, PC, 1700 East Beltline, N.E., Grand Rapids, Michigan 49525.

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