5 Estate Planning Musts after Your Spouse Dies

The death of a loved one can be extremely difficult to deal with. When a spouse passes away, the surviving spouse is often left to grieve the loss of their partner and to wade through a seemingly unending list of things to do. If you’ve lost a close family member, you’ve probably experienced needing to make final arrangements, settling final bills, going through financial records, etc. While it may not be at the very top of the list of things to do during this emotional time, surviving spouses should look at several estate planning considerations in the year following the death of their partner.

1. Settle the deceased’s estate

If your deceased spouse’s assets were held jointly, had named beneficiaries or were owned by a trust, the estate should be able to be settled outside the probate courts. If not, the estate will need to go through the probate process. This process differs by state, so it’s important to work with a knowledgeable probate attorney to get this settled.

Additionally, if your spouse had a trust, it’s essential that you follow the trust’s instructions at their passing. Sometimes, a family trust is formed, or assets are distributed in a specific manner. If you’re named the successor trustee, it’s important to faithfully follow the trust’s instructions.

2. File IRS Form 706 – for the portability election

The current federal estate tax exemption for 2024 is $13.61 million per person¹ with portability between spouses. Portability is one spouse’s ability to use the unused portion of the deceased spouse’s exemption amount. However, this is not automatic; portability needs to be elected (within nine months from the date of death) by filing Form 706 with the IRS.

Many widows with estates significantly less than $27.22 million don’t think they need to file for portability. However, the estate tax exemption amount is subject to change with the political climate, and it is currently set to sunset in 2026 to the pre-2018 level of $5 million (will be adjusted for inflation).² Again, we recommend working with an attorney and also your Corient Wealth Advisor to wade through these complex legal and financial issues.

3. Jointly titled assets

If you and your deceased spouse had jointly held assets, at their death, they transferred to you through that joint ownership. Once it’s transferred to you as an individual, you may wish to apply transfer-on-death instructions to those assets in order to ensure a smooth transition at your passing.

4. Beneficiary designations

Many times, spouses name each other as beneficiaries on retirement accounts and life insurance policies. As in the case of joint assets (above), it’s important to review who (if any) the contingent beneficiaries are on these assets.

5. Powers of attorney, wills and trusts

Was your spouse named as your power of attorney for healthcare and property? Once the estate is settled, it’s time to review who is named on your own personal documents and make updates as needed. If you have adult children who can now take on the responsibility of some of these roles, it may be a good idea to communicate your wishes with them and let them know they will play these crucial roles for you (assuming they are willing and able to do so).

In summary, although these estate planning items are not always the most urgent things on your list, it’s nonetheless crucial to review them at some point after your spouse passes. At Corient, we help our clients (widowed or not) review their estate plan regularly and make amendments when required. Lastly, please remember that you’re not alone; there are many caring and competent professionals out there to help you get through this challenging time!

¹ https://www.investopedia.com/terms/f/form-706.asp
² https://www.irs.gov/newsroom/estate-and-gift-tax-faqs

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