By Sarah Stewart Legal Group, PLLC
There are more than 20 million widowers currently living in the U.S. That number grows each year by about 1.4 million, with women being 3 times more likely to lose their husbands than husbands are to lose their wives.
More than 75% of married retirees interviewed in a Merrill Lynch study admitted that they would not be financially prepared for retirement if they lost their spouse. And more than 50% of people interviewed who lost their spouse said they did not have a plan in place for their spouse’s death.
Losing a spouse is not only emotionally difficult, there are financial burdens as well. Most couples are two-earner families. The death of a spouse immediately turns your family into a single-income family. Planning for the probability that one spouse will outlive the other is crucial to providing your family with security and comfort during an already heart-wrenching time.
How to Plan
(1) Know What Your Spouse Owns
Keep a list of all the assets you own jointly and individually. For anything not owned jointly, explore the possibility of naming a beneficiary or “payable on death” on the asset or placing the asset into a Trust that allows ownership to pass directly to your spouse after your death without needing to go to court for a probate.
(2) Have Cash Available
You need to have a plan in place that allows your partner to access money quickly to help keep the family afloat if something happens to you. Build up a savings account for emergencies, put life insurance policies and other accounts into place, and name your spouse jointly or as a beneficiary.
(3) Own Separate Credit Cards
This may help you deduct some debt when a spouse dies. It will also help you more easily attribute debt to the right spouse.
When you are nearing retirement age, there are additional steps you can take:
(4) Social Security
Claim your benefits. They have the potential to increase a surviving spouse’s own benefit.
(5) Joint and Survivor Annuities
If you choose to have an annuity, or have a pension, in your plan, consider a joint and survivor annuity. These kinds of annuities will provide income to a surviving spouse when the other spouse dies.
(6) Long-term Care
Consider purchasing long-term care insurance and making other plans for long-term care. With the average costs of assisted living in the U.S. running about $4,000 per month and the average costs of nursing care running about $7,000 per month, long-term care needs can quickly drain your retirement savings. Without proper planning, a spouse can be left broke while struggling with their grief.
Stay in contact with family and friends. When something happens to one of you, you or your spouse will need and want their emotional support.
The best way to show your love for your partner is to make a solid plan for your death. Planning allows the partner to move forward with their emotional healing without the stress and complication of financial burdens.
Reach out to your team of trusted advisors today to start your financial and estate plan for your family!