Drawing up a will can be an emotionally taxing process. But it’s one that becomes especially difficult when a spouse is left to cope with the task after their partner passes away. Suddenly, what was once a joint decision made with a lifelong partner becomes a task a widow must face alone.
Cinda J. Collins, senior vice president and financial advisor at RBC Wealth Management, knows this all too well. Despite having two years to prepare for her husband Bob’s passing when he was diagnosed with acute myeloid leukemia, Collins found the financial and emotional implications of settling his estate after he was gone were often overwhelming.
To help other widows cope with the process, Collins, along with Deborah Johnston, senior vice president and financial advisor at RBC Wealth Management, offer some advice on how couples can approach estate planning together, as well as what a surviving spouse should do in the unfortunate event their partner passes.
Start with a professionally drafted will
To be as prepared as possible in the event of a spouse’s passing, Collins emphasizes the importance of speaking to an estate attorney as a couple, to ensure all affairs are in order. This way, if a spouse passes unexpectedly, the surviving partner will have less to tackle.
“A widow gets bombarded with all the things she’ll have to do, so it’s essential to have everything as organized and up-to-date as possible,” Collins says. Johnston agrees. “No matter what your net worth … just to have a professionally drafted will is a big step in the right direction.”
After contacting an estate attorney, a couple will likely be provided with an information packet outlining all the topics to consider and documents to bring to the initial meeting.
“If they have life insurance, they should bring that policy and a net-worth statement helps a lot that tells how different properties are titled,” Collins says.
In addition, couples with young children should consider guardianship before sitting down with an attorney. “It’s going to be more cost effective and make the meeting more meaningful,” Collins says.
If a spouse dies without a will in place, the consequences can be far reaching. “You really do a disservice to your family. They are already grieving, and then everything is tied up in courts and someone else is interpreting what is going to happen to your family’s assets and it’s out of your hands,” Collins says.
Remember, even with a will, the probate period can be arduous. While it varies from state to state, Johnson says the process for settling an estate once a will enters probate takes an average of six to nine months.
Open a bank account in your name
One of the biggest surprises for widows, says Collins, is that joint accounts are frozen when a spouse passes away. “It was a big issue for me personally because, like many couples, we had all of our investments, prepayments and home equity line of credit [paid out of] our joint account, which was frozen for 60 days.”
Thankfully, Collins had a separate account in her own name that she used to handle immediate expenses. She also had the foresight to put her joint account in a trust before her husband’s passing, which stipulated in the event of his death, the assets would transfer to Collins, allowing her access to the funds within 24 hours.
“If someone was strictly to have a bank account, they’re going to have to go somewhere else because the bank doesn’t free up those assets until they have a death certificate and the necessary documents to say who is going to be the owner of this money,” Collins says.
Update beneficiaries and titles of ownership
To avoid a long, and potentially expensive, probate process, it’s essential for widows to update beneficiaries in cases where the spouse was a named heir, says Johnston. They should also ensure the beneficiaries in the will match those listed on the assets themselves.
For example, if the will states that the grandchild will inherit the funds from a life insurance policy, but the actual policy states that the child is the beneficiary, then it is the child and not the grandchild who will inherit the funds. Beneficiaries listed on assets such as insurance policies, 401(k)s and IRAs take precedence over designations in a will.
“It’s a process. You don’t just have a beneficiary and never readdress it,” Collins says. “Whatever the beneficiary is with the institution where you have that account – that’s where it’s going and not where your estate documents may say. It can create cause for emotional duress and confusion for family members,” she warns.
After the passing of a spouse, it’s also a good idea to ensure all titles for assets are updated, says Johnston. She recommends changing titles on anything with ownership attached, including bank accounts, cars and boats. The titles need to reflect the correct owner for sales, borrowing money against them and more.
“So many times we see people get the documents in place, but don’t do the final step of retitling things and renaming beneficiaries,” Collins says.
Have a good support system
The complexities of estate planning make it important to rely on experts for help. Estate lawyers, accountants and financial advisors are invaluable resources who can help ensure the estate planning process runs smoothly.
Just as it’s important to rely on experts for technical support in the estate planning process, Collins suggests a bereaved spouse also turn to a third-party expert—like a grief counselor or clergy—for emotional support.
“Remember, family and friends are grieving too, so it’s good to have someone else to help you stay focused and organized,” says Collins. She also suggests that the recently bereaved may find it beneficial to bring a friend to any estate-related meetings. “In a state of grieving, it can be very easy to forget things. Bring someone along with you who can take notes and remind you of things you should be doing.”
This article was originally published on Forbes WealthVoice.
RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC.